Eduard Shapshovich Looks at 4 Ways That COVID-19 Has Impacted the Real Estate Market
( Newswire.net — February 10, 2021) — The COVID-19 pandemic has had a profound impact on nearly every facet of society, and the real estate landscape is no exception. According to experienced real estate investor Eduard Shapshovich, here are four key ways that COVID-19 has impacted the real estate market:
The second coming of the Great Depression and its drop in real estate prices is not going to happen. And while there are many reasons for averting disaster, the biggest and most important can be captured by three very powerful words in the financial vocabulary: low interest rates.
In earlier recessions such as the one in the late 1970s, interest rates surged well into the double digits,” commented Eduard Shapshovich, who prior to becoming a real estate investor was a city planner. “But policymakers learned some key lessons from that financial pain and suffering, and in 2008 in the aftermath of the Great Recession, the Fed kept the benchmark rate low, which in turn meant that banks, credit unions, and other lenders followed suit. The same thing happened in 2020. As a result, millions of people across the country are buying their first home or upgrading to a better or bigger home — not because they won the lottery or received a massive inheritance, but because they want to take advantage of these historically low-interest rates while they last. Who knows if we will ever see rates this low again in our lifetime.”
For about the last decade or two, a growing number of people have been forced to make a difficult choice: over-pay to live in densely populated urban centers or live somewhere more affordable in the suburbs, yet deal with a tedious commute. The coronavirus pandemic — and more specifically, the massive work-from-home migration triggered by the pandemic — has dramatically changed this paradigm, and now millions of people can get the best of both worlds.
“Nobody is predicting that cities will suddenly become ghost towns, as workers flee to the suburbs where they can save tens or in many cases hundreds of thousands of dollars in housing, not to mention enjoy perks like ample green spaces, lots of good schools, and an abundance of free parking,” commented Eduard Shapshovich. “Many people will still want or need to live in cities, but thanks to remote working those that don’t will continue purchasing properties in the suburbs — even if it means they still have to commute into work once or twice a week. And while we are already seeing prices in many suburbs rise as demand outstrips supply, it is still significantly more affordable. Essentially, people can get more house for less money.”
Witnessing the COVID-19 crisis unfold has been an exercise in seeing the best in people, and also the worst. Indeed, we have seen enraging stories of businesses trying to gouge customers by massively (and illegally) spiking the price on everything from basic grocery items to personal protective equipment. And conversely, we have seen heartwarming stories of ordinary people doing extraordinary things for others in their community.
In the same sense, during the pandemic some landlords have seized the opportunity to be a hero that their tenants urgently and desperately need — while, unfortunately, others have decided to make an already unfortunate situation even worse. In 2021, landlords will need to choose whether they are going to be part of the solution, or part of the problem.
“There are many ways that landlords can work with their unemployed or under-employed tenants to help them get through this very difficult time,” claimed Eduard Shapshovich. “For example, they can offer short-term discounts, offer flexible payment arrangements, defer payments, and find other practical and meaningful ways to help. We are all in this together, and when the crisis is over landlords who rose to the occasion will be remembered for all of the right reasons — while those who didn’t will also be remembered, but for all of the wrong reasons.”
When the pandemic erupted in early 2020, the smart individuals who make advanced technology for use in the real estate market dialed things up a gear. The result is a spectacular range of new tools that are enhancing the buying and selling experience.
From software that enables high resolution 3D virtual tours, to SaaS platforms that facilitate secure eClosings, to live streaming open houses in real-time, the suite of advanced tools and technologies being launched these days in the real estate space are nothing short of game changing. Likewise, these solutions are going to remain and continue to get even better into the future.
The Bottom Line
Nobody knows for certain how the post-COVID-19 world will look like. However, we can say with certainty that the pandemic has dramatically impacted the real estate market — and set the tone for years, if not decades or even generations to come.
Originally published at https://newswire.net on February 10, 2021.