Over the last few decades, the popular aesthetics of home design and preferences of the American people have changed many times over, but one trend of real estate has remained: The desirability of the location of the home has always been directly tied to the job opportunities in the area. Homebuyers have historically flocked to home locations that were convenient for their work, whether it be to guarantee a short car commute, to find a job within walking distance, or to be close to the local train. However, as the pandemic swept across the globe, many individuals were required to transition their lifestyles – People were forced to transition to working at home, many of them in order to avoid the risks of contracting the virus in densely populated areas and offices. These aspects are now expected to alter the typical buyer’s perspective regarding home location, both in the luxury and middle-tier real estate markets. The questions are, how will preferences shift, and how long will the changes last?
The Luxury Market
The luxury market, over the last few months, has seen a shift in consumer demands. Individuals accustomed to living in popular cities, such as New York and San Francisco, have retreated to more remote living in places where the can find comfort and serenity away from the concentrated areas where the pandemic has hit. Without worrying about commutes, the top priority has been to find a comfortable place that facilitates their ability to happily and safely continue working.
Now, the cities have begun to reopen, but we are not witnessing an influx in people returning to their previous homes as you might expect. Instead, we are witnessing a more lasting change in consumer demands that is reshaping the buyers in today’s real estate market. Recent analysts have broken down what they see as the most likely enduring trends in the market, and here are a few:
Semi-Remote Locations: As mentioned, these homeowners are moving to more remote areas. They are looking for semi-remote locations, those that are still relatively near local communities and towns that offer them some access to entertainment and amenities, but just far enough away to avoid serious risks if the pandemic cases continue to rise. As a result of this trend, penthouse and condo prices in more urban areas are likely to take a hit.
Dual Home Offices: This is a common demand you will find across all markets right now. As companies have been forced to restructure systems and find ways for as many of their employees as possible to work from home, many of them have now found that their bottom line has actually improved without having to pay the substantial overhead that maintaining a physical office demand. This is allowing workers to move further from their place of employment into more serene environments that they’d prefer to work from. For the luxury market specifically, it is expected that homebuyers will seek out homes that offer them two offices – privacy and a dedicated work space for both working adults in the home.
Amenity Rich Upgrades: Touchless appliances, in-home movie theaters, and upgraded kitchens have always been items of desire for homeowners, especially in the luxury market. However, what used to be considered a luxury is now being viewed as a necessity. The reasons behind their demands are all a direct result of the pandemic. For example, home buyers are looking for home gyms so they can avoid the crowded public gyms full of common, high-touch surfaces. They are also demanding technological enhanced homes, fully upgraded kitchen with wine cellars, outdoor kitchens and pools, and some are seeking spa bathrooms – All amenities that will make staying at home more of a retreat. Taking it one step further, many buyers are even requesting copper appliances due to the fact that copper transfers less bacteria than other materials.
Middle-Tier Market: The Difference
Just as with the group of buyers mentioned above, the middle class is anticipated to shift toward a new work-from-home lifestyle. However, they have not been afforded the same indulgences in home buying as those purchasing luxury homes. Rather, their demands have been more dictated by how much they can afford, and what they can get at that price point. Now that typical work commutes are not the primary concern of daily living for as many Americans, more middle-class people are looking to buy larger homes further from cities. This is not so much a result of the fear of the virus, but instead to provide more space to adopt a new lifestyle of working at home – Often, a small condo in a city is just as expensive, or even more expensive, than a full-sized home in the suburbs or in the country. Therefore, many families are taking advantage of the opportunity to work from home and provide a cushier life for themselves. Still, like members of the luxury sector, middle class buyers don’t want complete isolation, and they are still considering proximity to some restaurants and local entertainment – This consistent factor means that analysts don’t expect the demand for particularly rural homes to rise substantially.
There is no doubt that life will continue to change as we proceed forward. From the looks of it, homes that used to be vacation homes for the wealthy may now transition to become their primary residence, and those city homes that used to house them for most of the year may transition to their vacation spots. At the moment, the transaction velocity and reports assessing current consumer demands are supporting this understanding of changes the future will bring, but in reality, only time will tell for certain – Will the American people return to their old way of preferring to live in densely-populated urban centers once the number of COVID-19 cases drastically declines, or will their preferences for work and lifestyle forever have been changed?
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