When 2020’s pandemic hit, real estate brands all over the world started bracing for a shift. It wasn’t yet clear what the year would bring, but many were anticipating a challenging leasing season. It seemed that with the need to shelter in place would come fewer tours, fewer new leases, and more frugal prospects. On the other hand, the pandemic could also encourage more renewals as residents chose to put off moving into a new home for more stable times, or, more pessimistically, as hiring freezes contributed to less job mobility and residents were therefore less likely to move for work.
Indeed, COVID-19 has had a complex array of impacts on moving trends in 2020. But real estate professionals may actually be surprised at some of the trends that have emerged. Early research shows that the story is far from simple, especially when considering that behaviors have undergone different shifts for different markets. Let’s talk 2020 moving trends.
Likeliness of Moving
One study, called the America at Home Study, surveyed a representative group of 3,001 renters and homeowners aged 25-55+ making housing incomes of $50,000 or more per year. This group was asked to rate their likelihood to move from their current homes as a result of COVID.
The segment of respondents who were 55 and over represented the majority of homeowners planning to move sooner than expected due to COVID-19.The same group also represented the majority of homeowners that had no change in moving plans, meaning that they still planned to move.
Meanwhile, respondents 35-44 were more likely to say they planned to stay in their current home longer as a result of COVID-19, while most respondents aged 45-54 were split between no change to their moving plans or a desire to stay at home longer.
Interestingly, respondents aged 25-34 were amongst the most likely to have changed their moving plans due to COVID, but like the group 55 and over, they were more likely to be planning to move sooner rather than being inclined to stay in their current home longer.
Likeliness of Homebuying
Perhaps even more interesting are the results from a question that asked renters to rate their likelihood of buying a home as a result of COVID.
Of the people polled, 50% of renters said that they have an increased desire to buy a home after living through the pandemic. Of those renters that said they were more inclined to buy, 25 to 34-year-olds represent the majority. But interestingly, 25 to 34-year-olds also represented a majority of renters that were less inclined to buy. This could simply be because this age group represents a majority of renters considering buying a home for the first time, as they are statistically most likely to be marrying, expanding their families, and growing in their career. In other words, this age group is likely to be in transition, so it’s unsurprising that they have plans to buy and that those plans are affected by the particular timing of COVID, even if they are split on the nature of that impact. Still, the relatively even split among this group between those more inclined to buy and less inclined to buy is interesting in its own right.
Meanwhile, a significant number of 35 to 44-year-olds were also interested in buying a home, but tended to be somewhat less inclined to buy due to COVID. Conversely, respondents in the age range of 45-54 were overall the least interested in buying a home, but if COVID influenced their likelihood at all, it tended to make them more inclined to buy, not less.
And interestingly, respondents 55 and up were the least likely to report being influenced one way or the other by COVID with respect to their plans to buy a home. A significant portion of this age group did have plans to buy a home. In fact, they were more likely to express interest than the group aged 45-54 and about as likely to express interest as the 35 to 44-year-olds.
While this study offers useful insights, it must be said that it does not offer a full picture. It does a good job of breaking down the data from respondents that fall into the categories it surveys (25-55+, homeowners/renters, minimum salary of $50k). However, it does not account for people 18-24 (which may include students and first-time renters) or people who earn a salary of less than $50k a year.
In other words, it excludes a lot of people from its scope, and these exclusions are likely to predominately apply to minority populations and disadvantaged groups like Blacks, Latinx folks, and people with disabilities. It’s also more likely to exclude people in lower-paying industries like retail and food service or people who may have lost their jobs and income due to COVID-19.
So with that grain of salt in mind, what have we learned from existing market research?
First and foremost, we’ve learned that people are still moving. Whether they were looking to rent or buy, folks across all age groups are not seeing COVID as an insurmountable barrier to moving. In fact, for some, it provides reasons to move sooner than they may have before.
This isn’t necessarily surprising. After all, people will always need a place to live, and now more than ever, it’s important that they be satisfied with where they live. Among those who can still afford to move, moving may present an opportunity to find a space more suited to their needs, especially now that they’re likely spending more time at home.
Younger Millennials and older Boomers are the groups most likely to move right now, likely for opposite reasons. While Millennials may be looking to build families or find a home closer to their new job, Boomers may be looking to downsize or transition to active or assisted living environments.
Something we’re also seeing is that most rent is still being paid, in spite of COVID. One analysis showed that in June 2020, 94% of rent payments were collected. However, this data is collected through rent tracking software like Resman, Appfolio, etc, which means it only accounts for properties and property management companies using this kind of software to collect and report on rent collections. This likely excludes smaller property owners and Mom & Pop landlords and may in turn be more likely to exclude renters of minority racial or ethnic groups, folks making below a certain salary, and other groups.
Here at Threshold, our data confirms these trends. Across digital campaigns, impressions, clicks, and conversion results are strong and driving qualified traffic. Occupancy rates that were falling are now starting to climb again. Our clients are filling spaces where people have moved out, keeping occupancy rates strong by offering concessions and renewals with no increase in the rental rate. In other words, conditions are stable enough that properties are making it work.