What Moved Us: Stories that Shaped the Year in Real Estate
SEATTLE, Dec. 16, 2020 /PRNewswire/ — Home became more important than ever in 2020. Kitchen tables were repurposed as classroom desks, basements turned into home offices and backyards became sanctuaries. Those changes sparked the Great Reshuffling, as many searched for a new home that would better fit their evolving needs.
For some, home became more unstable than ever. The pandemic’s economic impacts disproportionately hurt renters, young adults, women and minorities, increasing the risk of housing insecurity for many Americans.
For others, 2020 opened up new housing opportunities. The freedom to telecommute allowed renters in pricey cities to potentially become homeowners in more affordable markets, and offered the possibility to turn a favorite vacation destination into a hometown. Record low interest rates brought first-time buyers to the market, and refinancing made homeownership more affordable.
The pandemic also changed the way people moved, cementing the preference for a digital-first experience. Digital tools like 3D Home virtual tours and self-tour technology enabled faster, safer and easier home shopping for buyers, while renters could search, find, apply for and lease a home digitally.
Remote Work Opened Up New Housing Options
The rise of remote work could be one of the most significant and enduring shifts in the post-pandemic world, and strongly impact future housing preferences. A Zillow survey from the Harris Poll found two-thirds of those working from home during the pandemic said they would consider moving if given the option to continue working remotely, at least occasionally.
Working from home was more appealing near the water, the beach or the mountains. Page views of for-sale listings on Zillow in 20 popular vacation destinations were up nearly 50% from last year.
The freedom to telecommute also opened up the American Dream of homeownership to nearly two million renter households who couldn’t afford a starter home in their expensive metro, but could afford monthly payments on the typical U.S. starter home. Black renters could benefit the most: they are 29% more likely than other renters to potentially afford a first home because of the rise in telework.
Sky-High Demand Drove the Red Hot For-Sale Market
The for-sale housing market was driven to new record highs by intense demand. Buyers returned to the market in force this summer, while uncertainty kept many potential sellers on the sidelines, creating intense demand for tightening inventory. One in five homes sold above list price and homes flew off the market at their fastest pace in more than two years.
Zillow expects robust demand to continue well into 2021, driven by the Great Reshuffling, low mortgage interest rates and demographic shifts as millennials age into their home-buying years.
A Digital Revolution in Real Estate
2020 cemented the shift to eCommerce in many industries, including real estate. New technology was rapidly adopted to help people safely move on to life’s next chapter. The creation of Zillow 3D Home virtual tours spiked this spring, up 750% in the month after many stay-home orders went into effect, and remained around twice as high through late November. Integrated floor plans augmented the shopping experience and allowed buyers to better understand a home’s layout. Real estate agents offered video tours in lieu of private showings or open houses.
Digital tools improved the in-person tour experience, too, with the accelerated rollout of self-tour technology that lets shoppers tour a vacant Zillow-owned home in person on their own schedule.
An all-digital rentals transaction allowed renters to search, tour, apply for and lease a rental all from the comfort and safety of their living room.
The Urban Exodus Myth
Early reports that homeowners were fleeing cities turned out to be premature. Zillow’s data found suburban housing markets were not outperforming urban housing markets. The notable exceptions were New York City and San Francisco — where the housing markets had been softening prior to the pandemic.
Zillow did find a divergence in the rental market, where rent price growth slowed significantly nationwide. However, rent price growth in urban ZIP codes slowed more than those in suburban areas since February, an outcome of unemployment affecting urban renters particularly hard and a possible signal that renter preferences are inching toward the suburbs.
The Pandemic’s Uneven Impact
Renters were hit the hardest by the pandemic and the expiration of added unemployment benefits in late July. Not only do renters typically have higher housing-cost burdens and lower incomes, they are more likely to be in high contact-intensity occupations. While a federal eviction moratorium remains in effect through the end of the year, renters were not able to defer housing payments in the way mortgage forbearance programs helped offer some protection to homeowners.
Women and minorities were especially vulnerable to COVID-19-related job losses and, in turn, are at greater risk of housing insecurity. Young people were also hit with higher unemployment rates, prompting nearly three million young adults to move back home with family in the spring. Gen Z renters slowly started returning to the rental market this fall, enticed by rental concessions like free rent or parking.
Changing Home Preferences Sparks Zillow Surfing Trend
The pandemic forced a reckoning for homeowners about what they really need and want, prompting many to go Zillow surfing for a new home. Traffic to for-sale listings on Zillow surged more than 50% in May and continued to reach new year-over-year highs in the months that followed.
Privacy became a luxury as families found themselves living, working and schooling under one roof, prompting home builders to predict the demise of the open floor plan.
As people settled into remote work, for-sale listings on Zillow mentioning a home office in their listing description jumped 10%. A Zillow survey found getting a home with a designated office space was the top reason why employees working remotely say they would consider a move if they could continue occasionally working from home.
More than 40% of Americans said they valued a well-equipped kitchen and a large outdoor space more as a result of social distancing recommendations, a sign home shoppers will be seeking out these features in 2021.
For more stories, trends and data on What Moved Us in 2020, click here.
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life’s next chapter.
As the most-visited real estate website in the U.S., Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and nearly seamless end-to-end service. Zillow Offers® buys and sells homes directly in dozens of markets across the country, allowing sellers control over their timeline. Zillow Home Loans™, our affiliate lender, provides our customers with an easy option to get pre-approved and secure financing for their next home purchase. Zillow recently launched Zillow Homes, Inc., a licensed brokerage entity, to streamline Zillow Offers transactions.
Zillow Group’s affiliates and subsidiaries include Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
 This survey was conducted online within the United States by The Harris Poll on behalf of Zillow from May 4-6, 2020 among 2,065 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].
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