How Will COVID-19 Vaccines Help (or Hurt) the Housing Market?
The pandemic will end slowly, and inventory will grow only if more sellers decide it’s safe to move, which could start slowly in the spring and expand by the fall.
WASHINGTON – Some homebuyers have put their home search on hold as they wait for the pandemic to end and more sellers to list. And some sellers anxious to move may have put their plans on hold while they hunkered down to ride out the pandemic.
As a result, buyers, sellers and Realtors want to know what happens next – what will the real estate world be like as more and more people get the vaccine and the virus spread comes to an end.
“We’re going to settle somewhere in between where we were before COVID and where we were during COVID,” Realtor.com chief economist Danielle Hale predicts.
Ali Wolf, chief economist for real estate consultancy Zonda, says, “Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed. This suggests more inventory will be for sale in late 2021 and into the spring selling season in 2022.”
Robert Dietz, chief economist of the National Association of Home Builders, expects builders to construct 1 million single-family homes and townhouses next year, helping ease the crunch. “The typical new-home buyer is looking for more space, and that trend will continue,” he says.
In addition, high buyer demand should continue to keep prices high. Estimates range from 2% annual increases to around 6%, with data from Realtor.com suggesting that median list prices will not keep increasing by 13.4% nationally, year-over-year, as they did in December 2020.
While many people lost their jobs during the pandemic-caused recession, many people did not, and the latter group tended to save more money by spending less on commuting costs, going out to dinner or taking vacations.
“Demand is up, particularly among first-time buyers and Generation Xers who are looking to trade up,” says Frank Nothaft, chief economist of CoreLogic.
Source: Realtor.com (01/11/21) Trapasso, Clare
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