The 2020 Covid-19 pandemic has upended the country’s real estate market but some regions are in better positions to bounce back than others. The shift to working from home for many Americans meant households across the country rethought where they lived. There was a surge in interest in vacation towns as wealthier Americans opted for second homes to wait out the pandemic. Meanwhile record-low mortgage rates drove millennial households to leave major cities for the suburbs.
With the first round of doses being administered to elderly Americans along with hospital staff, there is seemingly an end to the pandemic in sight. Just as a rise in cases helped fuel property sales in some parts of the country, the return to normalcy could do the same. But not all regions will be benefitting from the end of the pandemic.
“The strong demographics that were fueling the housing market pre-pandemic will remain in place post-pandemic, which should continue to drive healthy home sales across the country,” said Ali Wolf, chief economist at housing market research firm Zonda. “The markets I’m watching in the vaccine-economy are those that were turbocharged solely due to COVID-19.”
Before the pandemic began, big city markets were stagnating because they were too expensive for your average American. On top of high costs, the pandemic took away the appeal of big-city living, especially since the bigger cities had higher cases and tougher lockdowns.
“The pandemic shut down all the reasons people live in cities, whether that was the nightlife, cafés, live music, or information sharing at the office,” Wolf said.
But falling prices combined with low mortgage rates could see the markets in cities like New York and San Francisco bounce back. “Don’t write off the cities,” Wolf warned. “Places like New York City, Los Angeles, and Miami are not dead.”
In a Realtor.com round-up of the top markets for 2021, a number of places were identified as burgeoning tech hubs. Sacramento, California claimed the number one spot because homes in the capital are much cheaper than San Francisco or San Jose. Sacramento is only a two hour drive so tech industry employees could commute to and from those bigger cities.
“Affordability is attractive at all points in time,” said Danielle Hale, chief economist at Realtor.com.
“The tech industry will continue to thrive, because even though we probably won’t be 100% remote, the way that many people are right now, remote work has been tested in this pandemic time period and is going to continue to be a feature of white-collar working life for the foreseeable future,” she added. “That’s going to position tech cities to do well.”
In the same realtor.com article about the top markets for 2021, Charlotte came in at number three.