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Covid Home Sale Trends and What They Mean for You

Making Sense of the Sharp Rise of Housing Prices Across the Nation

National house prices have soared by 15% since 2020! The Financial Times shares that the housing-price increase rate is higher now than it has been at any point in the last 30 years! According to Reuters, there has been a steady decrease in home sales because of high prices and low inventory.

Increased Demand for Housing

Housing demand has risen as a result of historically low mortgage rates and a coronavirus-driven flight from densely populated urban centers to homes in smaller cities which are better suited (and more affordable) for remote working.

Simultaneously, housing supply has decreased for a number of reasons. There have been insufficient new builds to meet the rising housing demand because of increased construction costs, restrictive local zoning regulations and an absence of labor.

Despite an increase in housing demand, many homeowners have been reluctant to put their homes on the market, either delaying or cancelling their plans to list. This has been due both to economic stresses as well as the unknowns that come with listing a home during a global pandemic. Nonetheless, housing inventory is slowly increasing, which seems to indicate that housing supply will begin increasing to meet the high demand.

Implications of Home Sale Trends During the Covid-19 Pandemic

  • Housing Inequality. Rising house prices negatively impact housing inequality. A new Urban Institute report showed that if real estate trends continue, US homeownership rate will decline to 62.1 percent over the next two decades, with losses felt most strongly by younger people and Black Americans. Researchers predict younger millennials will have a homeownership rate of 64 percent as opposed to the 72 percent of boomers who owned homes at their age. Further, the racial homeownership gap between Black and white Americans is set to increase among 55- to 64-year-olds from 28.9 percentage points to 33.3 percentage points.
  • Covid-Inspired City Flight. About a quarter of US workers have worked remotely through the pandemic. This has caused many people to reflect on and reconsider the geographic location of their home (i.e., the necessity of living in high-cost urban centers) and what they need out of a home (i.e., a home office, gym, a yard for fresh air, etc.). Within the first six months of the pandemic, 16 million people moved, mainly from highly populous, costly cities areas to more affordable cities, suburbs and states. With people forced to spend more time at home, the value of urban amenities such as restaurants and cultural exhibits decreased, making more affordable and spacious suburban environments more desirable.
  • A Supply Shortage. The inventory of homes for sale fell by a dramatic 26 percent. A collective hesitancy to put homes on the market, a demand for inventory and scarce new construction have resulted in a considerable house shortage.
  • Existing Homes are Not Returning to the Market. Economic stress and uncertainty caused by the pandemic, a reluctance to allow prospective buyers to tour homes in person, and low rates have all contributed to a decrease in homeowners putting their homes on the market.
  • Soaring House Prices. The exploding demand for homes in the past year, coupled with a historically low housing supply, has led buyers to bid up the prices of available properties out of desperation. This has sent home prices soaring. Of course, this boom has been welcomed by homeowners looking to sell. However, it has been incredibly difficult for a growing number of Americans who have been shut out of the market due to low supply, a competitive market, and sky-high prices.
  • Low Mortgage Rates. According to Redfin’s chief economist, Daryl Fairweather, soaring house prices are mainly the result of people scrambling to take advantage of plummeting mortgage rates that make the cost of buying a home much cheaper. Mortgage rates reached a record low of 2.65 percent in January 2021. This has major implications for homeowners. As an example, if you purchased a $300,000 house a year ago, before Covid-19 hit the US at a 3.73 percent mortgage rate, you would ultimately end up paying $498,940 over a 30-year period. However, if you purchased the same home at the low of 2.67 percent, you’d pay $436,337, a savings of more than $60,000! Unsurprisingly then, people who are in a position to take advantage of these rates are doing so. According to the Mortgage Bankers Association, mortgage applications for new home purchases increased 33 percent in August compared to a year ago. In September, the average home sold in just 16 days, down from 28 days a year earlier.
  • A Competitive Market. Again, according to the Mortgage Bankers Association, about two-thirds of people who bought a home in 2020 put in an offer on a home they had never seen in person. People who were undecided about purchasing a home ownership have jumped into the market. This is true both for first-time homebuyers and those interested in buying a second home, which has resulted in an even greater demand and more competitive market. Keep in mind, first-time homebuyers and those acquiring a second home are not putting up a home for sale as they take one off the market.

What’s On the Horizon?

Slowly, despite these notable trends, things are beginning to normalize. As an example, while mortgage rates have been low, they are predicted to rise, which will slow down consumer demand to buy, allowing for the gap between supply and demand to be narrowed. Home inventory is expected to rise, to the relief of those who have been searching for homes during the pandemic began.

Moving During the Pandemic

The All Jersey Moving & Storage team has been working throughout the pandemic to support those executing residential moves for a variety of reasons.

Moving to Apartments. Some Americans have chosen to downsize to smaller apartments and reduce their cost of living because of the economic uncertainties of the pandemic (or due to loss of or a decrease in income during the pandemic). Others interested in purchasing a home have had to move to apartments simply because of the low housing supply and soaring cost of homes. Whatever the reason, All Jersey has ample experience with professional apartment moving in New Jersey, New York and beyond.

Moving to the Suburbs. Because of the rise of workers working remotely, many Americans have chosen to relocate from highlight populated urban areas to smaller, more affordable and more spacious cities and suburbs. All Jersey Moving & Storage has helped countless families move from their city-centered homes and apartments to homes in the suburbs.

Moving Out of State. Again, because of remote work possibilities, there are those who have decided to move to more affordable states. Some have also moved out of state to be closer to family. In addition to excelling at local, residential moving, All Jersey Moving specializes in out of state moves in the Northeast and across the country.

Moving to New Homes. Many Americans – both first-time homebuyers and existing home owners – have purchased new homes motivated by record breaking low mortgage rates. Others who have been working remotely are moving because they need more space for home offices, home gyms, backyards and the like, and no longer see as much value in urban amenities (especially as Covid-19 restrictions continue to limit social and cultural outings). Whatever your reason for moving to a new home, if you have secured a new home in today’s competitive, low-inventory market, congratulations! The All Jersey Moving & Storage team has decades experience helping professionals and families with their residential moves, locally and long distance. We are here to help you execute your move safely and on schedule.

Moving Back to the City. Whereas there has certainly been a trend of Covid-19 motivated city flight, some professionals have been pressured by their companies, firms and practices to stop working remotely and return to their city-centered offices. Professionals who had left the city, have to return to the office and want to avoid long commutes are therefore returning to the city. If you fall into this category and need assistance with a time sensitive “back to the city” move, the All Jersey Moving & Storage team is here to help.

Moving From Retirement Communities. During the pandemic, many seniors living in retirement communities felt unsafe remaining there due to Covid-19 health risks. They preferred instead to move in with family members, usually adult children, where their exposure to Covid-19 would be limited and they would be able to enjoy the social benefit of being near loved ones. All Jersey Moving & Storage has a wealth of experience helping seniors move. We understand the sensitivities unique to these moves, and do our utmost to execute them with as little stress as possible. We have helped seniors move to and from retirement communities during the pandemic, as well as those who have downsized from homes to condos or apartments.

Accommodating Last Minute Moves. In today’s competitive housing market, prospective buyers who are successful in securing a new home often have to move quickly. Others moving to or from apartments or retirement communities have also had to move quickly for a variety of reasons. The All Jersey Moving & Storage team is dedicated to trying to accommodate requests for time sensitive moves. We also offer containerized storage capabilities for those who do not have time at the moment to responsibly sell (or sort through) furniture, antiques, artwork and other belongings they no longer need or have use for in their new home.

All Jersey Moving and Storage – Your Trusted New Jersey Moving Company

Whatever the reason you have decided to move, and whether you are moving locally or long-distance, to an apartment or a new single-family home, to the suburbs or a busy city center, All Jersey Moving and Storage is here to take care of all your moving needs from start to finish. While packing up an entire home and relocating might seem overwhelming, partnering with the right moving company can make that process simple, stress-free and very manageable. As New Jersey’s top movers and as the recipients of numerous awards in the moving industry, All Jersey Moving & Storage is your number one choice for the job.

With decades of experience with all kinds of moves, All Jersey Moving & Storage will handle your local, long-distance, residential or commercial move from A to Z.

Some of our professional moving and storage services include: 

All Jersey Moving & Storage is truly your one stop shop for all your moving needs. Not only do we offer every service you will need for a smooth and efficient move, we do it all with expertise, professionalism and courtesy. Just listen to what our numerous satisfied customers have to say about us and when you’re ready, give us a call for your complimentary, no-obligation consultation! We’re here to make sure that buying or selling your home was the hard part; moving with us will be easy, simple and stress-free - guaranteed!