COVID-19 pandemic affected almost every sector and real estate was no exception. The Covid-19 virus made previous year and to a good extent, this year as well very unpredictable for everyone, whether it be economists, real estate agents or the general public. The epidemic has affected various countries throughout the world and still continues to wreak havoc. With businesses around the world having to close their doors or adjust to a virtual workplace, the global economy looks unrecognizable.
Real estate is one of the industries that has borne great losses due to the pandemic. However, different countries have their ways of dealing with the issue at hand. This article will discuss how the Covid-19 has affected and continues to affect the real estate sector throughout the world. We will specially focus on United States but will also discuss few other notable countries as well.
United States:
2020 was a hard year for the economy. Talk of a recession kept growing and a lot of small businesses faced the prospect of low to no revenue. Which led and is leading to mass layoffs and downsizing still in this year, 2021. Real estate developers and agents saw things very weaker previous year.
In the housing market, there was an expected pullback from the buyers. This year is unexpected rather, if the country is vaccinated before July, then hopefully United States will see improvement. The recent plan that President Biden has initiated will hopefully pump the stalling economy of United States. As the worst hit country in the world by the epidemic, the incomes of Americans were at risk during pandemic. Due to the reductions in income and closure of businesses, the real estate sector also saw price falls.
Since, USA has an open house culture in the real estate sector, which requires the buyer’s physical presence at the location. Open houses are normally a crowded event, where all potential buyers come to the location to inspect it and ask questions about it. These open houses are looking much different now, due to social distancing. With a lot of restrictions and total bans in some areas, selling houses is becoming very difficult. However, people are finding ways to go around the problem.
Pre-registration with a limited number of visitors is an effective way to ensure that a crowd does not gather at an open house. Some agents are conducting virtual open houses, where they give the potential buyers a virtual tour of the house and answer any questions the buyers may have.
Last year, Federal Reserve offered $3 trillion dollars in loans and asset purchases to prevent the economy from seizing up. Along with that, a stimulus package of $2.2 trillion was also introduced to make sure that the poorest of the country are taken care of.
Other Countries:
The situation was almost the same in other countries as well. 2019 was a great year for real estate in Milan, the economic engine of Italy. But the Covid-19 pandemic changed the face of the Italian economy within just two months. Likewise India, UAE, UK and almost all the countries of world had to see the same situation.