How Pandemic Migrations Could Impact the Housing Market According to Lindsay Guion
The rise of remote working has had a significant impact on the way people live, altering everything from transportation to housing. The ‘mass exodus’ out of busy urban centers like New York, Chicago, and Los Angeles is the result of various factors, including; the ability to work anywhere with a WIFI connection, the desire to have more space during quarantine, and a longing for a simpler way of living. Dozens of cities around the United States — that might have once been too isolated, too small, or too disconnected — have become increasingly appealing to urban dwellers.
As someone who believes in the power of a digital strategy to grow and sustain a business, Lindsay Guion understands the importance of adapting to change. With over 20 years of experience in the music industry, he is the Founder, CEO, and Chairman of GUION PARTNERS. He is here to analyze what factors impact people’s decision to move and what it means for the current housing market.
To understand how people moving between states will impact the housing market, we need to understand the relationship between supply and demand. Supply and demand is an economic model that defines the price of a product or service. He claims that when there is a high demand, prices rise. However, if there is a large supply and low demand, the price falls. Throughout the pandemic, the demand for suburban and rural residential housing increased, while the demand for smaller residential spaces has decreased.
The Rise of Suburban Real Estate
The overwhelming demand for suburban real estate since the start of the pandemic has been showcased through intense bidding wars, long line ups, and record volumes of interested buyers. Lindsay Guion explains that this ultra-competitive market is happening across the country. According to RedFin, roughly 53.7% of home purchases were subject to bidding wars in June. In addition, historically low mortgage rates could also be driving people to buy homes — on July 16th the average rate for a 30-year fixed mortgage dropped to 2.98%, the lowest on record.
Understanding the motivation behind these moves during a time of financial and economic uncertainty is complicated. Lindsay Guion claims that it is possible that Americans are expressing a preference for how they really want to live instead of how they have had to live as a result of needing to be close to work, school, and other amenities. This migration offers some insight into the economic, cultural, and social mindset of American’s right now.
While people may be moving out of state, it is unclear exactly how this will impact the housing market in the long-term. Lindsay Guion says real estate is not like other industries, as it takes a long time to buy and sell homes and other properties. He explains that these transactions can take time to process, making it difficult to take stock of the market at any one time. Inventory in certain states may increase as people move elsewhere, while inventory in other states may decrease as people flood the market. The future of the housing market in America will absolutely be impacted by the pandemic, but where people move, how many people move, and whether supply and demand will level out, is still unclear.