The coronavirus pandemic's effects have been felt around the globe. Stay at home orders, personal protection equipment (PPE) mandates and social distancing regulations have severely curtailed many activities that Americans have taken for granted including working, socializing and even completing simple errands like going to the grocery store.
The Effects of COVID-19 on the Area's Real Estate Market
It makes sense that the coronavirus would disrupt Pennsylvania's real estate market including the state's largest which encompasses the Philadelphia area. You might be surprised to learn, though, that this is far from the case.
Contrary to what you might think, the area's real estate market is actually quite active. In fact, there are many buyers on the market who are searching for a home and not enough listings to satisfy the demand. This has lead to a hot real estate market where homes are selling quickly and, sometimes, at prices above market value.
Reasons for Philly's Hot Real Estate Market
There are a few key reasons that are fueling the hot real estate market in Philly right now despite the pandemic that is gripping the nation.
Lower Interest Rates
The nation's interest rates are some of the lowest that have been seen in recent times. Since March 5, the Federal Reserve Bank has slashed the federal funds rate by a total of 1.5 percentage points. This means that both short- and long-term rates are affected, including mortgages, home equity loans, auto loans and other types of loans.
Motivated Buyers
Millenials -- that is those people around the age of 30 -- comprise a large portion of the population. Not surprisingly, this tech-savvy cohort is especially motivated to purchase their first home.
Another component that falls into the motivated buyer sector is that a significant number of New York residents are seeking to relocate outside the bustling city. The Delaware Valley, in particular, is drawing them with its many amenities and prime location.
Reliance on Tech
The COVID-19 pandemic has pushed many aspects of life to shift to technological solutions. While the mechanisms that support this have been in place for years -- just think of how much you rely on your smartphone on a daily basis -- this shift hasn't been entirely seamless.
Nonetheless, services such as virtual home tours, remote e-document signatures and other tech-centric solutions that were previously available on an elective basis have now become the norm.
Relying on technological advances like these is even more important than ever during these uncertain times. While the inability to tour a home in person, meet the required deadlines or connect with mortgage providers might have put a dent in the real estate market in the past, technology allows such activities to flourish without putting people at risk of exposure to the coronavirus.
The behavior of the Philadelphia real estate market simply highlights the resiliency of the area. It has long flourished and risen to the challenges it faces, and the pandemic is no exception.
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