Will Shifting Priorities Lead to More Buyers?

The nature of real estate is shifting, and we’re continuing to see the impact in the industry.

With the pandemic upheaving nearly everyone’s lives, some engaged couples are skipping their wedding, and instead using that funding toward the purchase of a property, said Adam Segal CEO of Cove. “In general, what you see is when you’re planning for a major spend, like a wedding, you may have built up the disposable income,” said Segal. “There is suddenly more income for large purchases and a home is a very logical and practical next step. Weddings aren’t happening like they used to; it’s a pandemic-related anecdote.”

While this trend may continue for the time being, Segal doesn’t predict it will continue, noting that in a post-pandemic world, people will be itching to return to social gatherings.

But young people aren’t rushing to buy in urban settings, instead eyeing properties in suburbs and smaller cities. Segal said data is continuing to show a trend toward less dense areas, especially as people continue working from home.

“If you’re in an urban core, you can’t access amenities and benefits of the urban area,” said Segal. “You realize the size of your space and the restrictions. People are realizing they can do a lot more at home and they don’t need to leverage the city the same way. In more suburban or second cities you may not have considered, you can get more space. I think that trend is very much going to continue as people think in terms of being home more, especially working from home trends. This will be a trend that is only going to expedite.”

Additionally, for those fortunate to keep their jobs through the pandemic, many have an increase in disposable income, due to lack of travel and social gatherings, Segal said. “The notion of putting that money to work, real estate is very obvious, for both residential and investment.”

However, it’s hard to predict how different generations will react as time goes on, Segal said it’s more based on human behavior, especially as people strive for work-life balance and seek more flexibility in jobs. Consumers are realizing they have the ability to live in a lot of different places, he said.

“You get to think in terms of where do I want to live,” he said. “I don’t have to go somewhere to my job. It’s going to change the behaviors and their decision process. I can have that New York City job without living in New York City.”

“Where do I go to be able to actually enjoy where I live and be productive at home?” he added.

Ultimately, there is always a challenge of supply and demand and where they meet, said Segal. With more urban dwellers moving to suburban areas and smaller towns, demand for homes in those communities has risen sharply, leaving a gap in available inventory.

“This is the new normal, it’s the new equilibrium,” he said. “The market itself will start to flatten. When that normalization happens, it will take a few years from a residential perspective.”