Real Estate Predictions: What Will the Second Half of 2020 Fair?

"New normal."

"Unprecedented times."

"Alone together."

These phrases seem to be used whenever the pandemic is part of the discussion. While it's true that we don't have the faintest idea of when life in this country will regain some normalcy, 49% of real estate agents who participated in the HomeLight Q2 survey say that they've seen an increase of business as of June 2020.

So, what does that mean for the real estate landscape going into the second half of the year? Let's take a look!

Low inventory

When April began, 76% of real estate agents who participated in the Q2 survey reported there was a decline in inventory. Not only had there been a significant decline in listings, 66% of agents said they've seen houses being taken off the market all together. What this means is that while business is picking up in many markets, the number of houses being put on the market isn't increasing. A shortage of inventory can lead to bidding wars or people settle for houses they aren't fully in love with because they're afraid of not being able to find a home.

Long term seller's market

With housing inventory so low, those who do decide to list will benefit from it being a seller's market. Not only could multiple people make offers on a house, thus igniting a bidding war, sellers could also have higher asking prices because inventory is so low. Of course, if there is a need to sell quickly, sellers are in luck in that regard too because houses tend to sell quickly when it's a seller's market!

Vacation homes sold off

The real estate industry hasn't taken as much of a hit as other industries. The travel industry, on the other hand, has seen better days. With millions of people losing their jobs and are without an income, they just aren't going on many vacations. This spells disaster for people who rent out their vacation homes on sites like AirBnB or VRBO and don't own their homes outright.

Yes, it's true that the homeowners have several mortgage relief options to help them from losing their houses, not everyone will qualify for these programs. As a result, we can expect to see more rental or vacation properties hit the market as the year goes on.

Different home features are in demand

Before the pandemic, buyers wanted large open floor plans with high end appliances and finishes. While these are still highly sought after, buyer's wants have shifted. People have been cooped up in their homes for several months and they're craving privacy. Plus when you take into consideration that many businesses have given their employees the option to work from home on a permanent basis, they're also looking for multipurpose rooms where they can close the door to avoid disruptions. Buyers are also showing an interest in large outdoor spaces so they can go outdoors and enjoy some fresh air while still socially distancing.

Real estate in the second half of 2020 is optimistic

Although the pandemic has had a negative effect on many facets of our lives, the act of buying or selling a home hasn't changed that dramatically. While it's true that the first half of the year has been an uphill battle, the second half is likely to be a smoother ride - especially for those who are ready to put their homes on the market!