We all know the story. The pandemic hit the world, leading to lower mortgage rates and a greater desire for people to have their own space. As a result, we all rushed to buy properties, causing one of the tightest property markets of recent years.
But fast forward to more than two years later, and what’s happened? Some figures suggest as many people as 75% regret their decision to buy, feeling they acted hastily based on pressure. Could it be this be an ominous signs of a crash in housing market prices?
Here are five reasons why that could be the case.
A recent Zillow survey showed that 75% of recent housing market buyers regretted their decision to purchase a property during the pandemic. Why?
The top reasons were buyers felt they didn’t have enough time to weigh up their priorities and options. Realizing they chose the wrong location or ended up with too long a commute, or finding they didn’t take enough time to go with the right agent or carry out a home inspection.
Let’s start with perhaps the most obvious reason for a link between the house-buying frenzy and falling prices. Many people chose to buy houses during the pandemic means these people are no longer searching for properties.
As a result, surely there will be a lower number of people searching for homes, meaning demand will return to a typical point, and prices will either stabilize or drop? The number of buyers is also likely to be low for other reasons. Real estate investors may be reluctant to get involved in the market amid the current uncertainty. At the same time, the cost of living crises and high mortgage rates make it challenging for first-time buyers to enter.
Why did people rush to buy houses during the pandemic in the first place? One reason was the optimal conditions brought on by low mortgage rates, but another was the desire for people to own their own space. Lockdown saw many of us end up more cramped than we would have liked and with less access to public spaces. That changed our preferences and encouraged people to leave cities.