Although COVID 19 caused initial uncertainty in real estate markets, prices in many areas rose month over month. This caused some observers to suggest that the home buyer’s market would no longer follow traditional cycles. But, it’s never wise to make oversimplified and broad predictions in real estate. There is always merit in careful analysis of local markets to help determine whether prices might change erratically or return to pre-pandemic patterns. For example, if working from home remains common, urban real estate with proximity to major corporate, government and/or educational institutions may be under less demand, potentially giving more relative value to communities further away.
Conversely, increased employment opportunities for on-site workers at specific locations such as hospitals and distribution hubs, can affect demand for home ownership and rental housing in certain areas. Meanwhile, interest rates and inflation are strong factors in triggering population mobility, with every basis point giving house-hunters less or more buying power. Government decisions regarding taxation and subsidization can also become a stimulating or stabilizing counterbalance. Even in regions with seasonal population cycles, such as winter tourism destinations or university towns, it’s wise to have a thoughtful discussion about market variables before making any decision regarding your real estate future.
