Housing going forward in the age of Covid-19

[ShokWaveRider]

We were thinking and talking with friends this weekend (suitably distanced), and we all commented how comfortable we thought we felt living in Detached single family homes. Being able to be in full control of our own direct environment and cleanliness. We all agreed we would not be comfortable purchasing a Condo or apartment anytime soon.

Not to say that housing in the USA & Canada will all of a sudden change to more and more single family vs Multifamily dwellings, but that builders may start focusing on single family homes vs others in the future.

We all know and understand this virus is not going away anytime soon. As a result we think that there will be more of a market for SFH and perhaps Semi-Detached vs other, more dense multi family accommodation, especially where there is more land available. And that some folks, especially the more vulnerable may be looking for small but detached or semi-detached properties. Especially if they are thinking of retiring early or are already retired.

What do you all think?

 

[Spock]

I read an article stating the same... and it went farther to say that city dwellers would actively look for suburban is not actual rural property. The reasons stated we many of the same as you mention... if you're going to be couped up at home you're going to want a bigger coup... and once things get rolling everybody is going to want room for a garden. Add in expansion of work-from-home policies.

 

[CRLLS]

If we see a shift away from multi family dwellings, it will be relatively small and short lived IMO. The next generation of home buyers will surely not have the same experiences as those of us who lived thru this pandemic. Their desires will not be formed by the pandemic. I remember the energy shortage occurred and prices rose. Everyone back then thought that larger houses were too expensive to operate and would go the way of the DoDo bird. That never really happened, did it? If this shift occurs at all, it will never happen long term. There will always be multi occupancy buildings being built. And there will always be those who want to leave the big cities in favor of suburban life. I don't see a large change either way.

 

[davebarnes]

We live in a side-by-side duplex.
See no need for "Detached single family [house]".
In our neighborhood, land sells for $4.2M/acre. So, the only "affordable" housing are duplexes on 3000 sqft lots selling for $900K.

 

[statsman]

We live in a side-by-side duplex.
See no need for "Detached single family [house]".

With our audio system, especially when playing music at moderate volumes, I would disagree. Our close neighbors have no idea how loud it is because our house is extremely well-insulated.

Of course, there are people in detached houses a few blocks away who see no problem blaring their music off their back patio on a Friday or Saturday evening.

 

[W2R]

Real estate is local so let me discuss our local real estate. Right now, real estate sales in New Orleans is in a sharp decline overall.

https://www.nola.com/news/coronavirus/article_534afefe-9164-11ea-86a0-df995baa98cd.html

The article says,

"The condo market is always the first to get hit and takes longer to come back," said Dare, who notes that New Orleans is particularly skewed toward those spending discretionary money on a second home. "I think the high end will feel the pinch more quickly."

Once things pick back up, I am not convinced that the virus will make much difference in whether people want condos or SFH's.

Here in New Orleans, it seems out-of-towners will always want condos as a pied-à-terre for Mardi Gras, JazzFest, and a multitude of other festivals. According to everyone I talk to, locals here almost never buy condos because "the idea never took off" (whatever that means). I guess most people here prefer SFH's, especially older, historic homes.

Maybe less demand for vacation B&B's?

 

[ShokWaveRider]

My OP was with respect to close proximity from a Virus perspective not sound and other things, although that is a good reason to have a SFH. We also though Semi's would be OK. It is the dense multi family dwellings like apartments and condos in blocks, high rises etc. that we were referring to.

 

[Midpack]

It wouldn't surprise me if the trend from suburbs>urban does an abrupt about face now as well. For years I dreamed of moving into the heart of a biggish city so we could walk everywhere, ditch a car, it was mostly the high real estate prices and prop taxes that kept me from doing it. Thank goodness we bought in another suburb after all the city SARS-CoV-2 hotspots. Sometimes you're good, sometimes you're just lucky (as I was)...

 

[ShokWaveRider]

We are curious to see how it will effect home prices

 

[Dtail]

Hard to tell. Depends probably what the medium term lasting effects of the virus is.
More like the flu, or will it be much worse?

 

[ShokWaveRider]

I did read this.

https://www.cbs58.com/news/doctors-...omplex-have-a-higher-risk-of-getting-covid-19

 

[gwraigty]

I see that they're not having a bit of trouble selling homes in the brand new 55+ active adult resort-style community about 5 minutes away from us. I drive by there every time when I take DD to work. I feel like I blinked and 5 new homes have gone up. Construction there has continued throughout the pandemic. Zillow shows that recent sales have been made through May 1st.

 

[6miths]

I expect the pressures that are driving people together are much stronger than anything that this virus is going to exert. And given that most home buyers are not at significant risk for adverse outcomes from the virus I would think the impact would be minor. I expect that it will impact the LTC business in many ways and elderly people will be much more reluctant to go into retirement villages and especially nursing homes.

 

[rodi]

This has been a hot topic in my household and with some local community activist friends.

I'm involved with the local community planning group (an advisory group that recommends (or not) various development in our neighborhood/area of the city to the city council.) I also serve a member of a subcommittee of this group that is working on the update to the community plan (which defines zoning) for our area. Our area includes a lot of high end biotech companies as well as expensive residential real estate.

San Diego has a very real shortage of affordable (middle class and lower) housing. Because of this the city planners are pushing hard for denser high rise development. Our community area is in a coastal/upscale/job center area. So the land value alone makes affordable single family homes a pipe dream. Local developers prefer the high rise condos because the profit margins are greater. (But not affordable... only luxury... which doesn't help the problem.)

Covid is not only changing the planning group and subcommitee meetings format to zoom meetings... but the discussion is shifting to push back against the city planning department's emphasis on high rise condos. Hard for the planners to argue when they are presenting from their living rooms over zoom because of the pandemic. The pandemic is the elephant in the room for this month's meetings.

That said - I think you can have condos/apartments without a high risk - as long as you are careful in the common areas. I have extended family in Sicily who all live in condos... No one has caught the virus, but they are being very careful, staying at home, washing surfaces, etc. To quote them: #iorestoacasa

 

[BeachOrCity]

I think you guys are right in the short term, but wrong in the long term.
Short term is 1-3 years, long term after.

By the time we are at year 3+, our collective recency bias and short term memories will forget about the impulse to distance as the virus will have either infected everyone, or we will be vaccinated....and not worrying about covid-19.

The thought of another pandemic will be "fleeting".

my humble opinion anyway.

 

[copyright1997reloaded]

Redfin CEO:

MW: What’s your take on the state of secondary markets and vacation markets right now?

Kelman: Toast. Those are going to be in tough shape. There’s a whole economy that was built around the liquidity there that Airbnb provided. You could get pretty deep into debt and still have somebody pay your mortgage every month because Airbnb and other travel websites were so good at finding someone to rent it out. And I don’t think many of those folks have the reserves that Marriott MAR, -4.56% or that Hilton HLT, -3.91% does.

Investors who own Airbnb properties are looking for immediate liquidity. At some level it’s Redfin, Zillow Z, +5.01% and Opendoor picking up where Airbnb left off. If they can’t get cash flow through one website, they’ve got to sell it through the other.

source: https://www.marketwatch.com/story/vacation-real-estate-markets-are-toast-because-of-the-pandemic-as-airbnb-owners-rush-to-offload-their-homes-redfin-ceo-says-2020-05-11