High Home Prices Saw a Spike Due to the Change in the Way People Live

 The pandemic has shifted our normal in more ways than one. During the stay-at-home orders, we learned to live, work and play from our home. Studies show that working from home played a huge part in the increase in home prices. Home prices saw a 23.8% increase during the pandemic according to Zillow's home price index between December 2019 and November 2021.

Everyone had to learn to do most anything remotely from home. Working remotely allowed us the flexibility to live where we wanted even if it was farther away from our place of work. It started a trend of buying larger homes to accommodate the live, work, and play way of life from our home.

"There hasn't been a peacetime period where we have changed the way we do work in such a quick fashion," Johannes Wieland an associate professor of economics at the University of California, San Diego said. "Suddenly, we are moving further away from where our work is located. We don't need the office space. We now need this home space for work."

Two factors that played a big role in rising home prices according to the Federal Reserve Bank of San Francisco and the University of California, San Diego were the demand for more house and moving to a warmer climate. Wieland suggests that the evolution of remote work is likely to have a large impact on the future path of home prices and inflation.

"We were pretty shocked remote work had this impact, once we saw the estimates," Wieland said. "We thought about how people moving to different locations would be important. And it is. But it is the people who are remaining in a metro area -- the people who need more space at home if they work at home -- that is really pushing up prices. That is the majority of the story."

This finding is backed by the economists at Zillow. The shift has been deemed the "Great Reshuffling" and can contribute to the influx of demand for larger housing in warmer climates. Before the pandemic, economists saw an increase in home purchases in Austin, Texas, and Raleigh, North Carolina, but this influx grew greater in size to more areas once the pandemic hit. Now people can choose where they want to live because they are not tied down to moving close to work.

"There is more remote work where the weather is nice," Wieland said. "When you're not tied to a location because of your job, you can choose where you want to be. Many of these places...are attractive to people who can move to a place for lifestyle and not for work."

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COVID-19 Has Changed the Way Builders Regard Floor Plans

 

The COVID-19 global pandemic has put a spin on the way people look at their home’s space.  The stay-at-home-orders shifted a home’s space to serve more purposes than ever before. Before the pandemic, home was a place where we returned from work, school and any daily activities but now it has become the place where we work, go to school and live out our days. Builders have now changed the way they are designing homes to incorporate these changes into the floor plans. Here are five ways home designs are changing.

Every room needs to serve multiple purposes

Working from home or remote learning demands a quiet space. According to Jennifer Pyatt of Indianapolis-based Pyatt Builders, she is seeing the use of barn or pocket sliding doors.  This feature allows for privacy in an open concept floor plan where space is still needed. Zillow design expert Kerrie Kelly believes that the whole home will be used in multi-purpose ways such as a guest room turned into a wellness studio or a dining room becoming a game room.

No home office? No thanks

If you work from home and are a parent this can be really challenging.  Parents need a dedicated space for work that is separate from their children. Zillow did a survey that revealed that two-thirds of those surveyed are working from home from an area that is not a dedicated home office space and a dedicated space is on the top of their wish list.

Designing for health and cleanliness

Now more than ever everyone is conscious of germs because of the spread of COVID-19. As of now, builders are integrating touchless faucets and self-cleaning toilets into their building plans but this is just the tip of the iceberg. “Just wait until the floor tile takes your temperature and the bathroom mirror checks your vitals,”  says Kelly.

Builders are already coming up with ways to build mudrooms with sinks off the garages so that before anyone enters they can get clean.  Other ways are by building more en suite bathrooms, using easy-clean flooring and building larger foyers for space to take off shoes before entering the home. Air quality is also a must: “Air cleaned by a UV light system in the HVAC can help minimize the risk of spreading germs,” notes Joe Klusnick, marketing director at Blue Mountain Communities in Northern California.

Yards need to be useable year-round

The previous year has been tough with having to stay at home 24/7.  Getting outdoors and enjoying nature is a great way to improve wellness. A good way to go about this is to turn part of your backyard into a functional room. Building an outdoor kitchen, a covered patio or a play area are all great ways to use your outdoor space for play, entertaining and cooking. Todd Pyatt, President of Pyatt Homes, agrees. “Motorized, retractable screens, heaters and fans, now considered luxury options, will become more essential because they allow families the freedom to be outside across the seasons.”

When everything happens at home, there’s more to store

Everyone staying at home has caused more of a footprint.  When you are eating every meal at home, your pantry space becomes a bigger issue. Builders are incorporating larger pantries in new homes. Closets can now serve as multi-purposes throughout the day. They can work as a home office, gym and even a classroom.

To make sure you find the right home that fits your wish list for a fair price, contact a Realtor in your area.

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Student Debt Is Not an Obstacle to Homeownership

According to a study done by Zillow.com, the only way student debt can negatively impact young professionals interested in starting a family and “settling down” to buy their first home is if that debt is combined with no degree at all.  According to the study, student debt is not an obstacle to homeownership with those students who finished with a bachelor’s degree or higher for the amount of debt they acquired.  Home buyers that are college graduates and never had to take on student loans have a higher chance (70%) of becoming a homeowner than home buyers that have student debt and at least a bachelor’s college degree, but not by much – the statistic only drops to 66% for these types of buyers.

Because of the Recession and the lack of jobs for college graduates upon completing college, many young people did not get married and start a family right away, so household formation was also a considering factor in the study done by Zillow.com.  The study seemed to indicate that people were waiting until their 30’s to have children, and the study included those couples that had actually started a family with at least one child.

High rents were also a factor as being a deterrent for young professionals to be able to buy a home.  The payment of higher rent made it impossible for them to get the larger down payment together upon trying to get financing for a conventional mortgage.  The FHA just recently reduced the percentage of down payment required for both FHA and Rural Development loans, so this factor will not be as pertinent moving forward.

The truth about young professionals becoming homeowners is that student debt is not an obstacle to homeownership, and the possession of a bachelor’s degree or higher and the acquisition of a good job after college has made it possible for these students to be able to buy a new or pre-existing home upon graduation (or later).  This is good news for the housing market as one more positive sign that the real estate market is moving in the upwards direction.

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