-No, we don’t mean your yoga routine.
It’s been over a year since the COVID-19 pandemic threw the world into chaos and turmoil. The public was nervous that they would get the virus, or if they could pay their rent, or what the new symptoms are. But of course, there are other effects to a pandemic of this size and scale; recently, many have noticed an urban exodus that seems to be unfaltering, even as new cases decrease and vaccinations increase. Overall, it seems that COVID has ushered in a new era of flexible living and remote work, but will it last?
Since 2010, the United States has been recovering from the housing crisis of 2008. That’s not to say that the US economy was in a recovery phase all this time, but rather people had the housing crisis fresh in their minds. The general behavior of people after the crisis was to start renting and recover. Many sold their homes or had their homes foreclosed upon due to the recession, which also influenced many to start renting. In a study from Marketplace, they found that there are 7.8 million more households renting in 2018 than there were in 2010. In 2019, 54.5% of movers moved to a different state, and many of these states were in the South or South-West. People started moving then because of political and economic reasons, but also because the housing market was finally stabilizing to pre-2008 numbers. Yet, people in general were still renting rather than buying.
Of course, there was calm before the storm. The housing market seemed stable, politics were only somewhat shaky, and the economy was booming. People were still confident about the future and housing prices were reasonable but increasing due to the increased demand. Once COVID hit, it was a different story. One of the most noticeable impacts of the virus was the number of people leaving cities and urban areas. However, unlike 2019, people tended to move within their current state. For example, families living in New York City moved upstate rather than to a new state entirely. In fact, most of the nation (with the exception of Nebraska) saw a decrease in out-of-state migration over the first few months of the pandemic, and house sales were on a general decline. Additionally, cities like New York City and San Francisco saw a nominal increase in house sales, though still on the decline compared to previous years. It seems that people are more willing to rent their properties and/or live permanently in a long-term rental situation. Overall, people are taking advantage of the virtual working-environment to experiment with different areas and new ways of living.
Although it may not seem like it, the fact is we will return back to normal. It may take longer than preferred, but it will occur. However, even if most things return to normal, some things will cease to exist as we know it. One of the biggest demographics to move during COVID was people aged 22–30. In general, these people moved out of their houses or current leases and began renting elsewhere. It seems as though there is an increased demand for work-from-home situations, especially now that the world has been working in that model for over a year. This new dynamic is allowing the younger workforce members to feel more flexibility in their living and work arrangements. One definite possibility is that these people will be less motivated to buy their own house and opt for renting; this will have a large ripple effect of consequences for the generations to come. Traditionally, people used real estate to increase their personal wealth and ensure that wealth gets passed on to family. Without owning property, this will no longer be the popular option. This is not to say that this is a bad thing; truthfully, this new dynamic will allow people to gain more experiences and memories and could make people generally happier and more satisfied with their lives.
It’s been over a year since the COVID-19 pandemic threw the world into chaos and turmoil. However, we are beginning to measure the lasting effects of the virus and how it will affect our society not only economically, but personally as well. The real estate market is unbalanced, and renters are projected to supersede home-owners in the coming years. Flexibility is on the minds of Americans of all walks of life, and it’s high time we start embracing this need for locational and economical independence.