The Housing Market Is the Most Volatile It's Ever Been: Here's Why
The housing market always ebbs and flows in different markets. After all, people constantly move around for jobs and other issues. On average, each American moves about eleven times within his or her life. That necessity for transition is partially what helped sparked the "housing crisis," where previously affordable housing has rapidly become the opposite.
Shareholders have been enjoying this market for quite some time. Due to artificial scarcity, apartments that cost a trivial amount to maintain rent for several thousand dollars a month in some markets. However, with many jobs currently reverting to "work from home" roles, people are increasingly realizing that they may not need to live in these markets. This idea has sparked fear in the market and is beginning to lower starting rent rates in many regions.
The First Time People Have Mostly Worked from Home
Due to COVID-19, most white-collar jobs where employees could feasibly work from home are working from home. Many companies, such as the Bank of America, had previously prohibited working from home for most employees. They had used the reason that it's harder to supervise and keep coherent teams together when employees can work from home.
However, many of these corporations no longer have the luxury of making that determination. With remote job listings at a record high, any company that forces its employees to come into work at this time could risk losing its top talent. As a result, many workers are working from home for the first time. This has sparked reasonable questions, such as why they must pay so much to live in a certain locale or city when their jobs could be done remotely.
In a form of informal unionization, it's likely that employees will push to be allowed to permanently work from home, largely due to the previous greed in the housing market. If corporations oblige, chances are that housing markets in notoriously expensive areas, such as Silicon Valley, will start to see massive decreases in price as their educated workforces leave for cheaper pastures.
Rental Markets are Hit or Miss
With more uncertainty as to which regions of the country are "safer" from COVID-19 than ever before, rental markets in some areas are booming and stalling in other areas. As a result, many property management companies are offering unprecedented incentives to those brave enough to move during this time. Examples include giving potential tenants three months of free rent if they sign a year's lease. Many companies are also foregoing traditional "administrative fees" that have put off potential renters.
Another huge change is that companies are taking credit score into less account than before when determining whether they are willing to rent out an apartment or house to a prospective tenant. This is likely a reaction to the realization that they don't have as much choice as they used to. While federal law will still prohibit them from leasing to a person who would very likely default on rent, most people with technically qualifying credit scores won't need to worry as much when they apply for rental housing.
Moving or Staying
The housing market right now is in an odd state. Many homes that are for sale are temporarily off the market, so it's hard to gauge how well the buying and selling market is doing. The rental market is easier to gauge because most renters don't seem to be pulling listings off the market.
If anything, rental companies are pushing even harder to convince potential tenants to apply to live in their properties. This is likely because the companies will be paying property tax for empty apartments and houses if they cannot rent them out. If you're planning on renting a house or apartment, remember that, in most markets, you currently have the upper hand simply by being willing to move. You should also note that the moving industry is trying to avoid going into default by offering moving trucks and employees at record-low prices across the country.
In short, those planning on buying or selling a house should definitely stay put. However, those planning on renting housing may benefit from pursuing this desire during the COVID-19 crisis. Especially for those on a budget, the market is shifting towards favoring renters more than it has for awhile. With so little fees and great deals on initial rents, there isn't a reason to not try!