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In 2020, one of the biggest surprises is the real estate market’s resilience that has attracted many Americans who are looking for houses.
The COVID-19 pandemic, the loss of millions of jobs, the weak economy-has not stopped millions of house hunters from flocking to Zillow, Redfin and other online platforms to browse, plan their relocation, and in many cases Next purchase their first home.
In the past few months, house prices have been rising steadily. Industry insiders predict that certain markets may reach their peaks this fall. This has caused a rebound in the market due to reduced supply and long-term economic recovery.
Real estate companies are preparing for the next step in the new environment and buying houses, optimizing sales channels, retaining high-value potential customers and improving profitability (sales may peak in certain markets) will become increasingly important.
Zillow’s CEO Richard Barton said of the company’s market momentum on the last earnings call that we can’t expect this kind of thing to continue. Zillow predicts that home sales “are expected to peak this fall and then gradually decline by 2021, although they will remain above pre-pandemic levels. ” As shown by the Census Bureau data, new home sales in August increased by 43% compared to the same period last year. In many markets, the demand for suburban properties by millennials and first-time homebuyers has driven sales because the work-from-home policy has become the standard in many industries.
This Time Is Different
The housing market in 2020 is in sharp contrast to the previous recession, as the COVID-19 pandemic and working from home have defined most of the market demand this year.
“It’s really not comparable to previous recessions. “The whole pandemic has changed our view of work/life balance,” said John Campbell, managing director of Stephens Inc. “You take into account lower interest rates, better purchasing power, the arrival of millennials, and the feeling of first-time buyers is like a perfect storm. According to data from the American Association of Home Builders, as of August, the US housing inventory level has fallen to 3.3 months, which is the lowest level since 1963.
As an ever-increasing number of people look for new properties, the traffic of online and mobile applications has also soared.
You start to see demand…stabilize.” “We think the market may reach a peak sooner. “She also expects higher sales in certain markets next year. ” Not everyone on Zillow has to complete the transaction. The app has become a national entertainment, and some people use it to study the residence of their date or escape from pandemic blues disease, or to scroll through insomnia.
Now, the company is looking to convert its record traffic and these eyeballs into sales. “”For the big brokerage companies-Zillow, Redfin, Realtor. You can add it to the list on sites like Zillow. This feature can create a 3D model of the house and click to redisplay Zillow’s Senior economist Jeff Tucker said.
” “This is a fair niche feature, only some listing agents were using before the pandemic, and the frequency with which they were added to listings skyrocketed in the spring and has remained high since then. Last month, Zillow announced plans to further expand the real estate brokerage business in 2021 similar to Redfin and others. This will broaden the “from beginning to end” of Zillow Offers’ customer journey. Campbell believes that companies like Zillow may one day expand to services like Quicken.
Literally, they jumped from a few market shares to number one.
The Polarization of The American Dream
Despite the strong development momentum, the real estate market has not benefited everyone.
Future affordability issues will present unique challenges for every company, potential homeowners, real estate companies looking to expand their customer base, and the entire economy.
The longer the epidemic lasts or, the weaker the economy, the greater the gap between those who can afford to house and those who are less likely to own it.
Redfin’s Fairweather said: “As long as the pandemic continues, I think we will see more demand at the top of the market because these people are learning from employers that they can work from home as needed.” “The government’s delayed response to stimulus measures has already had a negative impact on the bottom of the market. Campbell said: “Any company out there that is helping to adopt the new regulations, anyone who is helping to bridge the digital divide, anyone who is helping you become a remote area, will do well.” Supply declined further.