During the pandemic, we’ve seen how social conditions can rapidly shape human behaviors, from reducing spending to redirecting how we spend our time. The real estate market alone is experiencing years of change in a matter of a few short months. These changes in consumer behavior that would normally take years to adopt have been accelerated by circumstance.
It’s clearly an important time for builders, remodelers and developers to be paying attention and adapting their strategy to stay relevant.
So, how are consumers behaving in these unprecedented circumstances?
Shift to the Suburbs
There is evidence that housing demand is shifting to the suburbs as a result of the COVID-19 crisis and the recession. According to the second quarter NAHB HBGI report, the economic region posting the worst performance with respect to single-family construction was the set of large metro urban core counties, which recorded an almost 17% year-over-year decline. Large metro suburbs and exurbs fared better, with declines of just over and just under 9%, respectively.
A number of factors are suspected to contribute to this shift:
- Demands for more space as more people are spending time at home
- Limits of an acceptable commute have also been extended by an expected permanent change for telecommuting
- Pre-2020 factors such as concerns over residential density, wariness of city governance and tax burdens.
Home Improvement Surging
Americans have been forced to use their houses more — and differently. Reports show that there has been a huge spike in demand for home improvement service projects.
- Houzz, an online home remodeling platform, reported a 58% annual increase in project leads for home professionals in June.
- Those working on outdoor spaces saw the biggest increase in demand, with searches for pool and spa professionals three times what they were a year ago.
- Porch, an online marketplace connecting homeowners to contractors, has reported the highest levels of home improvement spending they have ever seen
- Poolcorp, an international distributor of swimming pool supplies, parts and outdoor living products, hit a new intraday all-time high this week and is up over 54% this year
As explained in a recent article by NPR, “Home improvement spending has been on a long steady rise, so it's not too surprising that U.S. homeowners are on track to spend more than ever this year, but the surge in demand is striking.”
What new trends and patterns has your business experienced in 2020? How are you adapting your approach to accommodate your customers new wants and needs?
Let us know, we’d love to hear your thoughts on other real estate trends emerging during the pandemic. We’re also here to help you strategize and come out of the pandemic stronger than before.