The COVID Effect on the Washington DC Metro Housing Market
February 2021
In real estate we are always looking for trends to see what the future may hold to make sure we are prepared and responsive to our clients’ needs. The COVID-19 pandemic has absolutely caused one thing – we are spending more time in our homes than ever before. So, what should we expect in 2021? Are home owners fleeing the city for the suburbs? Are suburban housing markets booming because of migration from cities? There is not a straight answer – yet. Let’s dive into it a bit more.
Yes, the pandemic has caused some homebuyers to search for homes in a different area than originally planned. Various surveys indicate single-family homes are in high demand as people try to get more space, while interest in urban areas is down over-saturating the condo market. This makes logical sense. The effort to avoid contracting a virus in a condo environment is ever-present. Therefore, condo owners are looking to escape multi-unit buildings for single-family houses to mitigate exposure to the virus. Others just need more space to accommodate working from home and children attending virtual school.
Overall, experts are predicting another strong housing market in 2021. Especially, as mortgage rates are expected to hold at all-time low levels, making buyer’s purchasing power go further. It’s also important to note the expected emergence of the Millenial buyer (with the Gen Z group close behind). These groups are entering into their home-buying prime and have more interest in larger, more expensive single-family homes as compared to the ‘first-time home buyer’ groups that came before them. Let’s not forget about the boomer cohort – who are looking to downsize and move to smaller more manageable homes. But, where will they go?
There are many experts who believe the move from urban living to larger suburban homes is just an acceleration of a trend that was already in place. According to a recent Bloomburg article, the perception that the pandemic created a mass migration is not supported by the data. Americans moved less during the pandemic than they normally would have. They believe many leaving the city for the suburbs were likely to make this move eventually and the pandemic just accelerated the migration. The data show subtle regional shifts, and no overwhelming evidence of a large move out of urban areas. As many have noted, cities have recovered and thrived after past disease outbreaks. They expect this will be no different.
The difference between other regional real estate markets and the Washington DC Metro area, is primarily based on employment. Our area has been less affected as many residents are employed by the US Government and its agencies. We have seen less unemployment and more job stability with the ability to work from home. Real estate is a local business which means this area may be experiencing trends that differ from the regional trends. What we do know is the market is still very active in the Washington DC Metro area! As more data becomes available, the picture should become more clear. Check back with us as we continue to monitor the housing market in our area.
Even during a pandemic we have safe and effective strategies in place that meet all CDC guidelines. If you’re considering buying, selling or investing, we’re available anytime to start the conversation. Contact me at [email protected] or 703-798-1803.
