The Real Estate Industry took a significant hit during the Pandemic. 2020 was a year of investment difficulties for many, and those invested in the real estate industry had to make some challenging decisions. As we move more towards accepting and adjusting to life with Covid, we need to start analyzing what that will mean for investments. Let’s take a look at what we can expect from Real Estate in 2021, as featured in Forbes.
The first thing to consider is that, unfortunately, many people are still unemployed. Every industry was affected by the Pandemic, and many people were furloughed and laid-off. A large number of jobs will never return, and businesses have started to adapt to operating with fewer workers to get ahead of the possible recession. Jobs such as restaurant and retail work experienced the most effects, but higher paid jobs have also had a noticeable loss. 2021 will undoubtedly still be an unstable environment for the workforce.
When considering where people are deciding to live, many are still enthralled with city-living. We will continue to see people migrate towards urban areas, even as some jobs show they can be operated remotely. Access to adequate healthcare, social settings, and more infrastructure will continue to draw people into the city.
In addition, with Covid impacting the economy so incredibly, many people have started to consider moving away from expensive housing. There were many experiences of people having to give up their houses and apartments in 2020 due to being unable to pay their expensive mortgage and rent during the Pandemic. Unemployment has caused a lot of people to move around the nation, specifically leaving California especially. Real Estate can still expect to see increased demand for rentals, even though the supply has decreased.
According to Forbes, investors should avoid the lower end of the market as it will be expanded by unemployed renters. The average renter takes about two years to move, so purchasing a lower-end property in 2021 will likely leave you with an empty space in 2022. Also, real estate investors should continue to pay attention to changes in the home price to income price comparison to analyze how much risk should be expected in their investment.