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It may seem like the housing market is as hot as it can ever be, but a new survey shows that millions of Americans could be on the verge of relocating, sparking even more buyer activity.
The survey is part of Zillow’s first-ever “Mover Report.” It shows that people are waiting for pandemic worries to go away as they ponder new homes and new locations. Zillow researchers were motivated to find out more about the spring home shopping season, and the people and emotions that are making it happen.
What they found was that as many as eight million homeowners say they are more likely to sell their homes and relocate because of the pandemic. And that’s on top of a market that’s already experiencing high demand and low inventory. But these homeowners will also be putting their own homes on the market which is why Zillow is calling it The Great Reshuffling.
Many of the potential sellers have been thinking about doing this for quite some time, but have held back due to pandemic worries and uncertainty about their circumstances. In another survey done at the end of February, 70% of homeowners said they would be “mostly or completely comfortable” about selling their homes once the COVID-19 vaccinations have become widespread. Only 52% said they’d feel that way at the time of the survey. The 70% number represents about 14 million homeowners.
The latest survey shows that 1 in 10 Americans have already moved since the beginning of the pandemic. Most of those people moved for positive reasons like being closer to family or friends or to live in a place they’ve already dreamed about. And the flexibility of remote work has allowed many of them to fulfill those dreams. Technology has also helped because people moving during the more dangerous parts of the pandemic have been able to tour homes and neighborhoods virtually. That’s given many a lot of confidence about moving to a completely different location.
So where are all these people moving to? According to Zillow and information from North American Van Lines, the top destinations are Phoenix, Arizona; Charlotte, North Carolina; and Austin, Texas. Those three markets had the largest number of inbound moves during the first 11 months of last year. But many other Sun Belt cities are seeing population growth as well.
Zillow’s senior economist, Jeff Tucker, says: “The pandemic brought an acceleration of trends we were seeing in 2018 and 2019. More affordable, medium-sized metro areas across the Sun Belt saw significantly more people coming than going, especially from more expensive, larger cities farther north and on the coasts.” He also says the pandemic and remote work motivated many millennials to buy their first homes.
The pandemic also gave many people the opportunity to do some “Zillow surfing.” Spending so much time stuck at home was a catalyst for searching through the listings for a new home, and a new reality. The Zillow survey says that almost a third of the people had been dreaming of a new home for a year or more. But stress and other worries about money and the process of moving have held many of them back -- according to the survey, about 76%.
Among those who have moved, more than half say they are happy about the move or relieved. 80% said the move was worth the effort, especially the part about starting a new chapter in their lives. Almost 60% said they’ve experienced positive life events since they moved to a new home.
Zillow has also done another survey on the work from home trend and found that an overwhelming majority of economists and real estate experts feel that it’s here to stay. 95% said they see a permanent shift to a hybrid model where employees work remotely on some days and go to the office on others. 45% also see a permanent tilt toward smaller cities instead of larger ones, and a suburban lifestyle instead of one in a busy city.
Researchers also weighed in on housing inventory with more than two thirds saying inventory will grow during the second half of this year or the beginning of next year. That’s mostly due to an increase in existing homes being listed for sale.
As more homes hit the market, home price growth is expected to cool off a bit but not by much. They expect to see values increase 6.2% this year, and then drop to 4.5% next year and around 3.5% in each of the three years that follow. Researchers say the price growth is great for sellers, but will keep many renters from buying a home.
That’s good news for landlords, although panelists are expected to see a surge of evictions when the moratorium is over. They are predicting 15% of currently distressed renters will end up being evicted. The other 85% will find ways to remain in their current homes or will avoid eviction by finding less expensive rentals.
I’ll have links to all these reports on the podcast player page for this episode at: www.NewsForInvestors.com