The coronavirus has touched just about every aspect of our society, and the real estate market is no different. However, it hasn’t been affected in the way we might have expected, especially in more affluent areas like Beverly Hills. The pandemic has created a massive shift in human behavior, which has no doubt changed the reasons that people buy and sell houses.
The first instinct most people have about a pandemic and the market place would be that it would have a cooling effect. People would want to stay at home, and avoid doing anything that might cause them to contract the virus. This could mean that they don’t want to move to the most affected areas, or they may be in a high-risk area and not want to go out and do the legwork to find a new home. Whatever the reasons might be, this theory makes sense, and it did come to fruition, at least in the immediate onset of the virus.
In the spring, as Covid-19 was wreaking havoc across the country, Los Angeles and the surrounding area was hit hard, just like anywhere else. The entertainment sector was almost completely shuttered, with many people finding themselves out of work. Even those who were able to buy were not able to go out and find potential homes. Showings were cancelled, and most people were hesitant to buy sight unseen.
During the first few months, home prices dropped at all price levels. Even the luxury homes that were sold in Beverly Hills during spring were purchased at discounts. The market was unsure of what the future would hold, and acted like it. This trend held through for lower-market purchases as well. These buyers had all of the same concerns, but also faced further hurdles because of the pandemic. Because of the economic downturn, lenders became very risk-averse. It was very hard for many people to get the mortgages they needed, even if they were confident enough to buy and book Mayflower Movers to move during lockdowns and business closures.
However, things have shifted somewhat in recent months. In fact, it may be evidenced that housing markets, especially in places like Beverly Hills, might be bulletproof. The summer tends to be a slow time for house sales, and there was no reason to think that this most recent summer would be any different. In fact, you could have made the case that there was likely to be a continuing downward trend. However, that is not what happened, at least in the upper levels of the market. It was, in fact, the complete opposite. Home buying during the summer reached unprecedented levels, and has not shown signs of backing off as of yet.
There are a few potential reasons for this. Many believe that the simple fact that people were not able to buy for such a prolonged period created a pent up need. People who had been considering making a move were prevented from doing so, and when they were finally able they hit the market hard. This collided with the usual summer buying period, and created a perfect storm. In Los Angeles, productions started opening back up, which means that many people have been able to go back to work and ease some of their uncertainty as well.
The other factor could be that more people took stock of where they lived, and decided to make a change to a home that they felt better about staying in long-term. If lockdowns and social distancing continued, then they would want to be in the “perfect” home for them. All around the country, including L.A, people have made the move to the suburbs and the larger properties available in those communities. Not only that, but living in a crowded city could be seen as more dangerous, since you are more likely to come into close contact with other people on a regular basis. If there is a second wave of the pandemic, then more people want to live somewhere with lots of space for their families.
That said, there’s no guarantee that the market will continue to be robust and resilient. Covid-19 continues to rage around the country, which could continue to affect the behavior of buyers and sellers alike. Not only that, but Los Angeles is a popular spot for international buyers. It provides the allure of not just an excellent quality of life for discerning buyers, but also the appeal of living somewhere they see so much in movies and on television.
Real estate markets can be fickle, even though Beverly Hills and the surrounding area have proved to be strong, even in difficult circumstances. Using big data technologies, market experts can work to try and predict where the market will be in the coming months and years. However with the coronavirus, anything is possible.