Even as the pandemic nears its end, its impact on the way we work and live will in many ways be permanent, and Americans will migrate to homes that fit their new lifestyles.
We already saw much of this movement in 2020, as home sales surged over 20% this fall, but many homeowners were nervous about listing during the pandemic and will be ready to sell in droves next year. This will send home sales to highs not seen since before the Great Recession of 2008.
In 2021, migration will continue to set records as more than 30% of homebuyers will look to leave their current metro area. The normalization of remote work means that Americans will continue to move to suburban and rural areas, or decide to move to cities that fit their personal preferences instead of just their careers.
The increase in movement will mean many more Americans will have new neighbors. A large majority of Americans are open-minded about moving to a place where their neighbors don’t share their ethnic or religious background. Small towns could start attracting more residents with high-income tech jobs.
We could see more people moving in next door to neighbors who have different backgrounds or beliefs. I am actually part of this trend—I moved from highly liberal Seattle to a swing county in Wisconsin in the fall of this year.
As more Americans move across the country, they’ll need to lean on technology more than ever to help them buy homes. We saw buyers get familiar with these tools during the pandemic. Views of 3D walkthroughs on Redfin have increased 560% since February.
Video tours, where an agent views a home while the buyer is on a video call, represented less than 1% of all tour requests on Redfin before the pandemic, but at the height of the initial stay-at-home orders in early spring surged to about a third of home tours. Since that initial surge, video tours have held steady through the summer and fall, representing about one in 10 home tours. By the end of spring, 45% of recent homebuyers reported they had made an offer on a home sight-unseen during their home-search process.
Making sight-unseen offers can be a winning strategy for buyers seeking out highly desirable homes in a competitive market, especially if they are moving in from out of town and don’t have time to travel to visit homes. Virtual home tour technology coupled with increasing migration will cause more than half of homebuyers to make offers sight-unseen during their search for a home in 2021.
Throughout the pandemic, buyers have become more confident using the technology available to them, and in 2021, we’ll see more home sales as a result.
People who may not have relied on technology before – like your grandparents, or friends with higher health risks – will explore a video tour and realize that it gives them plenty of information to make their buying decision. And since migration is going to drive much of the housing market in 2021, buyers will feel more willing to move out of the city and into a vacation town if they can virtually walk through the homes on the market in their new location and visualize what their new life will be like.
Overall, 2021 will still be a seller’s market, with homes selling faster and more people buying homes than in 2020, but a growing number of buyers will find themselves in their dream homes in new corners of the country—especially those who partner with savvy agents who leverage technology to help them win.
This is the latest installment in our HW+ 2021 economist forecast series that features top economists in the industry. In addition to this HW+ article, we will be hosting a Q&A discussion with each economist on our slack channel each Tuesday at 11 AM CT, with one bonus episode on Thursday, December 10th at 11 AM CT. If you’re not a part of our slack HW+ community, email [email protected].
