The real estate business is on the downward trend due to Covid-19, as people are not coming forward personally to see the built houses owing to the social distancing orders of the administration says Hirsh Mohindra. As a result of this, people will tend to go outside the city where the area of the houses is more significant comparatively, and proper social distancing is maintained there.
In April this year, home sales went down by thirteen to twenty percent, which is a considerable number, but the property prices increased by four percentage, which was better than expected during April. The only challenge for the property dealers is that they could not show the houses personally due to the social distancing norm, which was revealed by Corcoran to Fox.
The property prices are expected to remain stable for the potential buyers as big institutional investors are missing as compared to the 2008 financial crisis when they ruled the market. However, real estate business in urban areas will remain inactive for the time being.
Trends of the Market:
The real estate business boomed in the last ten years. Little ups and downs were there, no doubt, but the market fundamentals remained strong. The environment has become conducive for both buyers and sellers with a lesser rate of unemployment, consistent economy, and low rate of interest says Hirsh Mohindra. Nevertheless, peaking prices of the property and less availability have kept the potential buyers out of the market. Non availability of the houses is the main concern and in order to overcome this, various state governments have brought rental reforms to protect the exchange of real estate from falling.
Real estate builders are hopeful of the present state of growth. According to one survey by The National Association of Home Builders, it has been found that the leading cause of worry for the builders is shortage of labor and the increasing prices of different construction materials despite the constant demand for new homes. Lennar, one of the influential builders of New York and others have changed their approach towards homemaking by doing more construction on a minimum land, thus reducing the expenditure.
The upturn and the downturn in the real estate is a regular feature, and another recession is in the pipeline says Hirsh Mohindra. As per the survey done in September 2019 by Yougov, forty six percent of the people in America think that the coming two years would be difficult for the real estate business.
The trends of the real estate business would undergo a change in the future by forecasting. It is also revealed in the survey that it is profitable investing in real estate than in equities.