It is undeniable that Covid has completely affected all of our lives in many ways. From the normalization of wearing masks everywhere we go to extended lockdowns and social distancing, Covid has impacted the world in a serious way. This applies to the economy at large and, more specifically, the real estate market.

The US stock market is one of the quickest barometers of what the US economy is doing in the short term. However, when we want to look at the US economy in the long term, the real estate market is a better metric to go by. The stock market can make huge changes, both positive and negative, within a day. Real estate tends to react more slowly and gives a glimpse of what's to come.

Record Lows

In April and May of 2020, real estate sales took their lowest plunge since the housing and financial crash of 2008. This isn't very much of a surprise. Because of lockdown orders and a meteoric increase in unemployment due to places going out of business from a lack of customers, it is understandable that housing sales will take a dip too.

Many people who were planning to buy a house suddenly found themselves without the income to do so. Others, who still had plenty of money coming in due to a giant leap in remote working practices, were nervous about buying a house in these uncertain times. Everyone seemed to feel like they had more important things to worry about.

Not only were people more hesitant to buy, but homeowners that were planning to sell were also becoming more hesitant. New listings on the market were down over 40% in April of 2020 compared to the same time in the previous year.

While this kind of activity would normally mean a decrease in pricing for the homes that were being sold, this didn't happen. Prices stayed the same despite the steep decline in demand.

A Bounce Back

After the initial hit to the real estate market caused by Covid in the spring of 2020, things started to look up in the summer. Real estate sales and online search activity started to increase. Sales that were pending in metro areas of the US began to rise to almost 30% over the previous year in the same month.

However, supply didn't increase as quickly. The numbers of listings raised only marginally despite the bigger spike in interested buyers. By August, there were less than two-thirds the amount of properties listed on the market compared to the same time in 2019.

While the housing market didn't cause the financial crisis like it did in 2008, it is certainly being affected by the economic downturn caused by Covid. Economic uncertainty and rampant unemployment continues to cause hesitancy in the real estate industry. This trend of uncertainty and hesitancy is likely to continue in the housing market throughout 2020 and possibly longer.

Pandemic Buying Expectations

If you're looking to purchase a new home while Covid is still a major factor in our lives, you can expect a few changes in the buying process compared to the past.

Expect to embrace technology. Real estate investors are implementing virtual tours in most cases. In person tours are reserved for only the most serious buyers. You can also expect a longer wait to find a property you like due to the low number of listings on the market.

Regardless if you're a buyer or a seller, expect things to be a little different in the housing market for some time to come.