How Strong Was the Pandemic’s Influence on Work From Home Policies?
Before 2020, remote work was less common, often taking the form of an occasional day working from home when a child was sick or an employee couldn’t make it into work.
However, the COVID-19 pandemic changed that, with employers finding it safer for workers to complete their jobs at home. According to Upwork’s Future Workforce Pulse Report, 41.8% of the American workforce was still fully remote nine months into the pandemic. Additionally, the largest work marketplace predicted that remote work will continue through 2021. While some employees will return back to the physical workspace, a large percentage are expected to continue with remote work, a predicted 26.7% according to business managers surveyed in the Pulse report. An estimated 36.2 million Americans will be working remotely by 2025, according to the report, signifying an 87% increase from the numbers before the pandemic.
California was one of the hardest hit locations during the pandemic. Stay-at-home orders also changed the nature and location of work for many California workers. All of these changes have affected real estate demand.
Why Did Real Estate Demand Increase During the Pandemic?
As the pandemic took hold in the United States, the popular opinion was that it would only last a few weeks. People prepared to hunker down in their own homes and try to make it work. However, as the pandemic dragged on for months and now for more than a year, people had to make more permanent changes.
People had to find a workable solution. If they were living in a small apartment, had no home office, or had kids learning from home, they would invest in office space, coworking spaces, or bigger homes. Flex jobs also made it possible for people to migrate to new areas where they wanted to live since they were no longer required to report to their jobs in person.
Additionally, people who were not satisfied with their current living situation or who simply wanted a change after being stuck in the same place for so long purchased or rented new properties. Others wanted to leave COVID-19 hot spots for less populated areas and where they could safely spend more time outdoors.
Another trend is that as people lost their jobs or were furloughed, many had to make new arrangements. Many downsized to decrease their expenses.
Mortgage rates are now at an all-time low, providing yet another incentive to purchase property now.
All of these factors have culminated in an unprecedented demand for real estate during the pandemic.
Why Did Real Estate Demand Decrease During the Pandemic?
It wasn’t all good news for the real estate market during the pandemic. April and May 2020 saw the lowest number of home sales since 2007, according to the Federal Reserve Bank of St. Louis.
When shelter-in-place orders were put in place, many business owners did not have enough customers to stay open, leading to temporary shutdowns. As of September 2020, about 100,000 establishments were out of business after temporarily shutting down. Some of these businesses were sold while others are simply vacant properties.
Business owners who had performed well before the pandemic pulled back on their plans to expand after uncertainty about the pandemic arose.
With more employees working from home, business owners have stopped renting our or buying space for them to work.
Tips for Buying Real Estate During a Pandemic
If you’ve decided to take advantage of the low mortgage rates or you’re an investor looking for property during this unique time, you may have noticed that the process of purchasing a property is a lot different today. You might not have as much human interaction during the process and new rules may limit your access to the property.
Here are some tips to help you through the real estate purchase process during a pandemic:
- Be prepared to do much of the transaction online – New advances in technology and a desire to remain socially distanced have helped propel much of the purchasing process online. Be prepared to do much of the transaction online, including applying for a mortgage, finding properties, and even closing.
- Search California public records – You’ll still want to do your due diligence and find out about the property before you make an offer. Fortunately, you can search California public records to find out information about the property and who has owned it.
- Take advantage of virtual tours – You might find it difficult to get a real estate agent to meet you in person and give you a tour. However, virtual tours allow you to see inside a home or business without having to be physically present, which may help you narrow your search for a property.
With the COVID-19 vaccine and hope in sight, real estate investors should consider how the end of the pandemic may affect their real estate holdings while also thinking about how the pandemic has permanently shifted work culture in America.