The past year has seen a real estate boom despite several areas of the economy still struggling due to the pandemic. CBS News reports that home prices grew 15 percent by the end of 2020 compared to the year prior. According to Realtor.com, home prices have risen 14.3 percent since the onset of the pandemic, there are 50 percent fewer homes on the market, and new listings are 27 percent lower than expected for March 2021.
While the increase in home prices and historically low-interest rates have created a “red-hot” seller’s market, according to The Washington Post, Realtor.com’s Chief Economist Danielle Halle stressed that the “housing market bounced back so much faster than other sectors of the economy that many have forgotten that housing activity slowed to a crawl during the early days of the pandemic.”
Halle is correct to point out that the boom in the real estate market over the past year has dramatically overshadowed the screeching halt it came to at the start of the pandemic. According to The Washington Post, February 2020 saw an 8.5 percent decrease in home sales, and once the pandemic struck the US economy, the loss of 40 million jobs only made the situation worse.
While the real estate market fell into a slump during the first month of the pandemic, like several other areas of the US and global economy, a turning point came during the summer when city residents began moving to the suburbs for more space and larger homes, according to The Washington Post.
CBS News reports that larger homes at more affordable prices are drawing people away from cities who are working remotely and seek a better space to do their jobs.
Boise, Idaho, is just one of these places, attracting people from Seattle, San Francisco, and other expensive cities looking for more affordable housing and a change of scenery to do their remote work. Rochester is a popular spot for New Yorkers looking to get out of the city and find a more comfortable remote work spot in the tristate.
CBS News also reports that home prices are being pushed by millennial homebuyers who are drawn to the record low-interest rates of the market.
In a year that has turned the economy upside down, the real estate market made perhaps the largest come back out of any other economic sector thanks to suburban migration from big cities to more affordable housing with lower interest rates. Buyers and sellers are eager to see where 2021 will take the market as the pandemic-fueled economic roller coaster carries on.
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