COVID-19 has created a whole new reality for the real estate industry. Health and safety protocols resulting from the pandemic are prompting industries to create safe spaces for workers.
Suburban growth is impacting office patterns. Homebuilders are experiencing sharp growth. The shift to working from home has transformed the location and feature requirements of both homebuyers and renters.
Speakers at the National Association of Real Estate Editors took a deep dive into those topics and more at the 54th annual NAREE journalism conference presented via webinar to its members.
In a presentation titled Suburban Migration and Coronavirus Changes, speakers Rebecca Rockey, David Mele, and Rob Dietz broke down the demographic changes resulting in the COVID-19 pandemic that has swept the globe. Rockey and Dietz, both economists for Cushman & Wakefield and the National Association of Home Builders, respectively, outlined crucial data points that illustrated how migration has impacted their industries.
Mele, president of Homes.com, also was armed with data that spelled out how working from home is changing the home-buying landscape.
According to a Homes.com December survey, 36 percent of 1,000 consumers who moved in the past 12 months did not plan to move before COVID-19 hit. In a related finding, 45 percent of respondents said they would move if they had the option to work remotely with 20 percent saying that’s why they did move this year.
“The coronavirus pandemic is not just impacting moves and residential real estate, but driving moves,” Mele says. “Remote work/work from home is the game-changer.”
As an example, the ability to eliminate commuting as a factor in home or rental choices has substantially revised consumers’ location requirements — 32 percent of agents and brokers report city-to-suburb moves as the No. 1 change and 23 percent ranking fewer requests for proximity to public transportation or highways in the No. 2 spot.
Counter to other data, a majority of these moves are likely to be permanent, with nearly three out of four consumers who have moved or planning to move to take advantage of remote work opportunities reporting they will not return to their pre-pandemic residences, Mele says.
Homes.com data is showing a drastic one-way street when it comes to suburban migration. Of the respondents, 32 percent are moving from cities to suburbs while 1 percent are going suburb to city.
The survey also tapped 600 real-estate professionals. Nearly 80 percent of real-estate professionals cited client requests for home offices as the No. 1 change followed by larger square footage (57 percent). In a Homes.com survey in July, 40 percent of consumers wanted a home office (30 percent) and larger square footage (27 percent).
As the virus continues and interest rates remain low, 57 percent of agents and brokers expect home-buying activity to remain at current levels for the next 12 months with an additional 28 percent predicting more transactions next year.
Rockey, an economist who Cushman & Wakefield’s global head of forecasting, outlined data on leasing trends related to the pandemic and recession.
In relation to suburban growth, she emphasized how suburbs will benefit to the extent that demand will be pulled from the central business districts (CBDs). Also, companies don’t appear to be in a hurry to bring large numbers of workers back to offices.
“Working from home has really shaken things up,” Rockey says.
Dietz, chief economist and senior vice president for economics and housing policy for NAHA, presented data on the suburban shift for home building and said “2020 has just been a remarkable year” for homebuilders.
According to the NAHB/Wells Fargo Housing Market Data, builder confidence levels have hit successive all-time highs over the past three months.
Dietz pointed to robust homebuilding activity but predicted slowdowns in the coming year.
“Builders are selling more homes that haven’t even started construction yet,” he says. “(But) we’re likely to see some slowing of sales. Builders don’t want to get ahead of their skis.”
NAREE’s annual conference, which took place Dec. 9-10, curated real-estate-focused panels on industry trends and forecasts. The conference also featured peer-to-peer journalism workshops, celebrated award winners, and connected members. To learn more about the NAREE, visit naree.org.