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The COVID-19 Pandemic Is Transforming the Real Estate Industry

The COVID-19 Pandemic Is Transforming the Real Estate Industry

New home is suburb on sale now

The coronavirus is transforming the real estate industry in Illinois, and the Windy City is enduring the pandemic’s wrath. Listings in Suburban Chicago and similar areas, however, are drawing the attention of city-dwellers and home prices in the Burbs are on the rise. 

Suburban Real Estate Surge 

Fear of coronavirus exposure has prompted city-dwellers across the country to flock to more spacious, less populated suburban areas in recent months. According to data from Realtor.com, the number of real estate property views in suburban zip codes increased by approximately 13% in May. That’s nearly double the jump urban areas saw during that same time.

While social distancing challenges in urban centers like Chicago has certainly influenced homebuyer focus to less densely populated areas, that’s not the only reason trends seem to be shifting to smaller communities.

  • Workers are loosening their ties to job-rich cities. An increasing number of workers began working from their home offices amid the pandemic, eliminating the need to be close to traditional office areas and public transportation. Approximately half of over 1,300 workers who were surveyed recently said they would prefer to continue working from home even once their offices reopen. Many big-city firms are reevaluating their spacing requirements as their workers embrace working from home. 
  • Americans are reevaluating their living situations. With pandemic-level access to urban amenities like nightclubs, gourmet restaurants, museums, and special events, urbanites are shifting their focus to smaller cities and towns.
  • Quarantine has taken its toll. The coronavirus pandemic has forced Americans to spend more time in their tiny apartments and condos and they are beginning to trade cramped quarters for larger, less expensive homes.
  • Americans are facing financial hardships. COVID-19 has resulted in the highest unemployment rate in America since the Great Depression, forcing many people to cut housing costs. Generally, suburban living is less expensive than renting or buying a home in the city. 
  • Record low mortgage rates are boosting buying power. For the first time in 50 years, interest rates have dropped below 3%, driving buyer demand. People with good credit and low debt-to-income ratios could see interest rates of about 2.98%.

While the appetite for city spaces currently appears to be shrinking, the future holds uncertainties not unlike those of other industries. The duration of the pandemic, the availability of a vaccine, and future unemployment rates will all likely have an impact on the future of real estate in Illinois. 

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