The pandemic has changed the housing market in more ways than one
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The S&P Case-Shiller Home Price Index came out on Tuesday, showing that in August the year-over-year increase in home prices was the lowest we’ve seen since the early days of the pandemic.
Some of the hottest markets in the country are seeing price growth cool off as seasons change —sort of like they did in the “before times.”
If you squint hard enough at the data, you may be able to make out a return to normalcy. But even if and when the pandemic eases, home buying may end up pretty different than what we were used to.
Let’s start with the home search — the fun part, when you’re “favoriting” Zillow listings with reckless abandon, not thinking about your down payment. Going forward, those listings will be much more high-tech.
“Now you pretty much have to have some kind of virtual media,” said Erin Stumpf, a real estate broker in Sacramento.
Virtual tours operate like Google Map’s Street View, except inside a living room — one that may have virtual furniture. “You can actually pay some photographers to virtually stage the house, so stage a vacant photo with furniture, and it looks pretty real,” Stumpf said.
As with many other industries, the pandemic accelerated technological change in real estate. Appraisals can be done remotely and documents signed electronically, which means “we may continue to see shorter escrows, just because we can,” Stumpf said.
Think 21 days instead of 30, even if the market regulates.
Daryl Fairweather, an economist at Redfin, swears the market will cool off someday. She doesn’t expect concessions buyers are making now — like waiving home inspections and other contingencies — to continue forever, nor the even crazier stuff she hears from agents. “In Atlanta, there’s even a practice of, like, giving essentially a cash gift to the sellers,” Fairweather said.
Caily Langston didn’t have to give a cash gift to buy her first home in Northern California in June; she just had to pay $30,000 above asking.
Langston said the pandemic’s housing market legacy will have another aspect: If she ever decides to sell, she’ll have very high expectations. “When we sell if we don’t have multiple offers waiving everything and giving us well over the price, I’m going to say, ‘What’s going on here?'” Langston said.
She’s kidding … kind of.
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