Real-Estate - The Pandemics Economic Anomaly - in conversation with Jay L. Moss
The real estate market in 2020 and now 2021 has been an economic anomaly. It has exceeded all expectations and pulled record-breaking performance in the secondary and tertiary markets all over the U.S. Since the onset of the pandemic, the housing market has led the nation out of the K-shape recession. No one predicted this magnitude of a rebound, and there are so many factors to consider.
We are in conversation with Jay Moss, a highly experienced real estate, who is sharing his views on the current state of the real estate market and what the future holds.
Jay, the real estate market, and every other industry too has gone through unprecedented times in the past 18 months. We often hear about how the housing market is booming, and the term K-shaped recession is thrown around. As an expert in the field, tell us more about these current phenomena and what is yet to come.
“There are so many factors to consider. Let me start by talking about the K-shaped recovery. A K-shape recovery is when one industry pulls out of a recession more rapidly than others. This leads to a “split” in the visual chart, forming a K-like figure. The economy is highly influenced by limitless external factors, making it unpredictable. Even more so when the human element is involved. The pandemic has greatly impacted human behavior concerning home-buying, which has caused shifts in the industry as well.”
The Human Factor
“The housing market was doing well before the pandemic. Then, during the first few months of COVID, we took a hit. Nobody knew what was going on, there was confusion and chaos and we were adjusting to the new normal. However, when things settled down, the interest rates were close to nothing. This allowed buyers to afford new homes, or even upgrade to larger spaces. The fact that we were locked up in our homes further accelerated the want to buy. Millennials were getting married and settling down, another reason to purchase a home. Further, with work from home, people were moving out of crowded cities and into larger homes in the suburbs where they felt safe.”
“With mass vaccination, we can see light at the end of the tunnel. Now that life is going back to normal, prices in the market have skyrocketed, making the market very heated. Resales are far and few to find as people no longer have alternatives — new homes are selling like hotcakes, making labor tight and expensive. In some cases, homebuilders are limiting sales because of delay in construction, tight labor markets, and increased costs. In some cases, builders don’t guarantee the price of the homes until the homes are close to completion due to the cost factors.
The future looks promising but with the steep price increase, buyers are becoming slightly more cautious. The market requires a healthy balance of inventory — new and used. In my opinion, the market will remain strong in 2022. However, it is crucial to remain cautious.”
How did Real-Estate Defy Power of the Pandemic
“Over the last few decades, home prices have seen an upward trend. The last major dip was reflected during the Great Recession. Since then, prices have been climbing for almost 15 years. 2020 was hot for real estate. However, the last recession caused a hit in our industry, as it did with the rest of the economy. In 2020 however, real-estate stayed strong, unlike the rest. There are many reasons why this could be the case. Lagging inventory, desirable interest rates, ever-evolving home buyer trends — just to name a few. Real estate has remained untouched by the pandemic, something which cannot be said about most of the economy. In conclusion, things are currently in favor for builders. However, in an overheated market, things can go the other way as easily.”
Thanks for sharing, Jay.
Jay L. Moss is a results oriented relationship builder. As a passionate marketing expert and cross-generation collaborator, he us unafraid to reinvent strategy, develop vital growth initiatives and tackle bold challenges. An experienced homebuilding executive, Jay Moss has a proven multiple-decade track record of turning business around with contemporary strategies and groundbreaking growth initiatives.