Many companies are adapting and implementing “green” strategies to reduce their carbon footprint as the eco-friendly movement gains momentum. This also occurs at an individual level, where people are choosing more environmental friendly alternatives, especially in the housing market.
Looking Back to the 2020 Real Estate Market
There was a lack of inventory at the onset of 2020. Consequently, the prices of properties skyrocketed, disabling some buyers from participating in home ownership, especially when the coronavirus hit. This low inventory continues to be a feature in recent months, and this, combined with very low interest rates, has driven the demand for housing up.
For property owners and developers, the Covid-19 pandemic has offered an opportunity to revise their typical building planning and turn their emphasis towards sustainability. Several studies have concluded that workplaces can be hotspots for viral outbreaks, prompting realtors to step up their game and invest in features that protect their clients.
As people become more aware of the risks of the virus and illnesses that can be found in common places such as the workplace, green developers are stressing health and wellbeing in addition to environmental benefits.
New Demands of Real Estate Investors
Real estate buyers are searching for eco-conscious features while purchasing or improving homes, with millennials and the even younger yet potentially more environmentally-conscious Generation Z becoming an important target demographic. Investors are therefore pursuing greener features and greener homes themselves, a demand leading neighborhood developers, for instance, to offer things like community gardens.
Thus, when you decide to sell your house off-market, show off the green features of your home, since it is what most potential buyers are looking for. If you’re thinking of updating your property before you sell, consider energy-efficient appliances and HVAC systems, switching to energy-efficient LED lighting and using eco-friendly paints that don’t have VOC emissions.
Renters Are Going Green
People are increasingly searching for rentals in neighborhoods that offer greener lifestyle options, like the ability to walk or cycle to work. Modernized fitness centers and yoga studios are also among the most sought-for amenities in apartment buildings.
Also becoming more important is a business center, or some kind of coworking space for the ever-growing pool of tenants who work from home. Many tenants are calling for energy-efficient appliances, high-speed internet, and equipment for air conditioning and heat control with regards to their apartments. As many developers introduce the Internet of Things in their houses, realtors are also seeing the rise of demand for smart apartments.
Sustainable building features like solar panels or water-saving devices tend to rapidly pay themselves off, providing cautious landlords and real estate agents with an instant ROI. For landlords and tenants in the affordable housing market, green buildings provide various benefits, including cleaner structures and healthier lives.
Moreover, mortgage rates are expected to remain low, as in the previous year. This trend is predicted to remain static through the first part of 2021. Moreover, inventory will also stay lower than the demand. To keep it short, the real estate market will favor sellers in the following year.
Overcoming Availability and Affordability Issues
While it’s too soon to survey the economic damage of the pandemic, it’s expected that the world’s economies will be slow to rebuild. The number of unemployed low-income workers has magnified because of the virus, a trend that’s expected to continue.
The pandemic has made the widening wealth and income gaps in the U.S. more visible than ever, with a wave of home evictions predicted for the aftermath of this pandemic. Though federal and local moratoriums have postponed many evictions, homelessness rates will surely rise unless additional relief bills are passed.
While conversions of retail places and private facilities to residences could be possible, it is still not feasible to fulfill the demand for space, especially for those who are displaced because of the financial crisis. The issues of availability and affordability continue to make the lives of millions of people precarious, a crisis that all levels of government will have to address in recovery efforts.
Upward Trend in Inventory
Obviously, because of the pandemic, there has been a stronger seller’s market. This means that the real estate market is favoring sellers while buyers are struggling to overcome financial burdens.
Although the pandemic set the real estate market back in the spring, it quickly recovered, but is expected to perform more modestly in the next year.
Low interest rates are expected to gradually rise and this, coupled with continued low inventory and the staggering rise in housing prices, is expected to make barriers to entering the housing market even more insurmountable for most people. That lack of affordability will cool growth, but not slow it entirely.
“We expect sales to grow 7 percent and prices to rise another 5.7 percent on top of 2020’s already high levels,” economist Danielle Hale tells Brenda Richardson of Forbes. That is a promising number for those hoping to sell in the new year.
While it’s true that the pandemic has negatively affected the real estate market, we’re about to see the light at the end of the tunnel. Trends will continue as the economy rebounds, with environmental and financial sustainability at the forefront of people’s minds.