The coronavirus pandemic upended the housing market. With vaccines being widely distributed, new Zillow surveys signal what’s likely to change and what’s expected to remain when the pandemic ends
“As the pandemic subsides and the economy begins to recover, lowered health risks and renewed homeowner financial confidence should bring more sellers to the market,” Zillow Economist Arpita Chakravorty said in a release. “That increased inventory would ease buyer competition that has driven prices higher during the pandemic, but expect a steady pace of home-value growth to persist into the near future.”
An overwhelming majority (95 percent) of economists and real estate experts surveyed by Zillow said the shift to working remotely, at least part time, is likely permanent. With widespread teleworking expected to continue, boosted homebuying demand is likely to persist due to the flexibility offered by remote work.
The experts were split on whether the housing preference shift during the pandemic toward living in the suburbs over urban areas will continue. The same percentage said the shift was permanent as said the shift was temporary (46 percent), while 8 percent said there was no shift at all.
A majority of the experts surveyed (53 percent) expected housing inventory to grow this year, likely during the second half of the year. An increase in existing homes being listed for sale is expected to be the biggest factor for the growth, with 38 percent saying that is the most likely catalyst for more inventory.
“As the economy continues to recover, more potential sellers will enter the market as they gain confidence in their employment,” ONE Street Co. President and founder Samer Kuraishi said. “It’s been tough on homeowners who want to sell but might have lost their job or cannot work remotely. Increased employment stability will only raise confidence and push people off the sidelines.”
The experts surveyed on average expected home prices to grow 6.2 percent in 2021, two percentage points higher than when surveyed in the fourth quarter of 2020. Several respondents predicted double-digit price growth this year.
Demand for digital tools is expected to continue once the pandemic ends. One in three respondents to another Zillow survey said they would prefer taking a virtual or video home tour instead of touring a home in person after the pandemic, and 79 percent of Americans said they would like to view a 3D virtual tour when buying a home.