COVID and Real Estate Predictions for 2021
The release of the COVID-19 vaccine stands to change more than just the rate at which the virus spreads. Widespread vaccine availability will likely change social interactions, the economy, and real estate as well.
Though the vaccine alone is not enough to contain COVID-19 in the US unless over 70% of citizens are vaccinated, the societal changes that stand to take place are worth discussing.
How will the COVID-19 Vaccine Affect Real Estate?
Market professionals predict that the release of the COVID-19 vaccine will help improve the economy and the real estate market. Additionally, interest rates are likely going to increase as the economy becomes more stable.
However, these predictions will likely take quite some time to come into effect. Though the release of the vaccine is positive overall, it may take years for the US to see the changes that market professionals are predicting.
Let’s take a closer look at the market predictions, as well as reasonable timelines for them to take effect.
Interest Rate Predictions
Despite vaccines becoming available, interest rates are unlikely to climb significantly until approximately 2023.
Because so many people are out of work and will likely continue to be out of work in the near future, there is not much pressure being placed on inflation or interest rate hikes.
Residential & Commercial Real Estate Predictions
There are both positive and negative predictions made about the world of real estate. For residential real estate, there are more positive possibilities on the horizon than there are negative risks.
There is still a high demand for residential spaces and though the drive has decreased since 2020, residential real estate is still likely to appreciate in 2021.
Unfortunately, the same cannot be said for commercial real estate, which may experience difficulty in the next few years. With offices trying to reduce their need for spaces and many Americans now working (and struggling financially) from home, the need for office spaces, hotels, restaurants, malls, etc. continues to decline.
Recovery is predicted, though it may take more time for the commercial industry than the residential industry.
COVID-19 has changed nearly every aspect of American life, and as such, the release of the vaccine is likely to bring about even more changes.
Releasing a vaccine is overall a massive benefit, but in order to make significant changes occur sooner rather than later, more people need to receive vaccination than the current number of willing participants. According to the NPR, this turnaround may be well on the way.