The COVID pandemic has brought on a lot of unexpected twists and turns to our whole way of living. It’s interrupted the job force, disrupted small business and now we’re finding that it’s impacting the housing market as well. People are fleeing major cities by the masses causing major disruption in the real estate industry. Boy oh boy, the games have begun and the nightmare continues.
There are multiple factors that have caused this sudden exodus. First and foremost 8% of adults have expressed that they are likely to move from their city as a direct result of COVID and jobless Americans are almost twice as likely to consider moving. On top of that, many people are being forced to move due to mass evictions across the country. Secondly, people are growing more accustomed to the “work from home” lifestyle. Because many jobs have transitioned to virtual attendance, more people now have the opportunity to relocate at will without the hassle of finding a new job. This has pushed people to who would have normally been bound to city limits due to their job to expand their horizons. Lastly, people are simply seeking refuge from the crowded spaces of city living. With the mass hysteria surrounding the contagiousness of COVID, people don’t want to be in crowded spaces. Suburban areas have become much more attractive because of their lower populations.
You may be asking yourself, why is this such a bad thing? Well…if the projected tens of millions of people really decide to move away from their current cities and into suburban areas, there will be billions of dollars lost in state and local income tax revenues. Not to mention, widespread municipal bankruptcies. Property values in cities are plummeting and the price of suburban real estate is skyrocketing. Plus there are many more buyers than there is a property for sale putting the housing market at risk of bursting. Good luck with catching a good deal in this climate.
The stress is put on the housing market right now is yet another issue that 2020 has brought about. Major cities may be at the highest risk with people fleeing in the masses, but this is something that will impact the whole country. Cities will lose funding, the prices of homes will continue to rise and pretty soon the suburbs will begin to suffer from overcrowding. The impact of this mass exodus will be massive and is one effect of COVID that should not be overlooked.