The COVID-19 pandemic has had some interesting effects on new home sales trends in Alpine, TX and throughout the United States. Initially, sales of new homes fell to a massive extent below normal levels, but by the fifth week of the pandemic, the numbers began to climb back up.
The coronavirus pandemic essentially brought the entire nation’s economy to a halt, so it’s no surprise that purchases of new homes and new home construction fell down by as much as 85 percent from the normal numbers at this time of year. As the numbers slowly started to climb back up after the first four weeks, however, the market was looking especially good for new home construction, particularly for first-time and entry-level buyers.
Why the increase in demand for new construction?
Part of the reason behind the demand for new construction is that renters are leaving apartments and looking for new homes. One study showed young couples with two incomes and secure employment were starting to grow weary of renting in major urban centers, but also are not necessarily willing to take on fixer-uppers. By building their own homes, they get everything they want in a house right from the get-go.
Another issue has been the changes in lifestyles under the pandemic. The lockdowns imposed by governments to contain the spread of the virus may have some lasting impacts on where Americans live, and how they live. The millennial generation has been leading a move back to denser urban areas, but worries about shelter-in-place orders may encourage first-time buyers to move away from these city centers to places where they have more space to roam and call their own.
Any concerns of future shelter-in-place orders could have people seeking areas where they’re not going to feel as confined. After all, most of your average urban apartments don’t have large back yards, basements for exercise rooms or easy areas to set up a home office.
In addition, it is expected that more companies will begin allowing employees to work from home even after the pandemic is over, which could result in some people deciding they’d rather live in a place with dedicated home office space.
Zillow, the largest real estate listing site in the United States, reported there has been a slight increase in search traffic after a drastic dip in searches at the beginning of the pandemic. As the demand increases, the supply is there—in fact, the supply of newly-built homes for sale is estimated to currently be twice the supply of existing homes for sale. There had already been a shortage of existing homes for sale even before the pandemic, but the pandemic seems to have had the effect of convincing would-be buyers to avoid putting their homes on the market until the economic situation across the United States stabilizes and values rise back up.