According to a report by Redfin [1], the COVID-19 pandemic and its ripple effects on the economy and housing market are revealing a great divide among the American population. Specifically, as the market rebounds, experts say that hopeful homeowners who were already at an advantage, mainly those with stable, higher-earning jobs, will be far less affected than those American homebuyers holding lower income positions.
The Redfin analysis reports that the gap between these niches will only increase as time goes on and the market recovers.
In the aftermath of the closures throughout the nation, which caused homebuyer demand to drastically decrease, with low mortgages now present, those with the security of stable employment will take advantage of these rates and snap up homes for sale.
Among those workers having the most difficulty in being able to qualify for purchasing a home are those in the lowest income bracket, which includes service and hospitality positions, among which are filled with a high ratio of African-American and minority workers versus white.
Experts say that is precisely due to this disparity and great divide that this recession that has come as a direct result of the coronavirus will be a swift sting for the wealthy and well-employed niche—and a long, arduous trudge through the tumultuous season for all else.
Redfin Lead Economist Taylor Marr commented on this great divide and how he sees it playing out in the housing market: "With record-low interest rates and relative job security in spite of the recession, higher-income homebuyers are already coming back into the housing market. Because of this quick bounce back in homebuying demand, this recession is playing out very differently than the Great Recession, and we're not seeing much impact on home prices so far.”
An increase in homebuyer demand is clear, and according to an analysis by Redfin, the areas in the nation experiencing the strongest comebacks have been pinpointed, among which include Detroit at the top, as well as Seattle and San Francisco. One area where houses are decidedly not moving, however, is New York—one of the worst-hit places by COVID-19, and thus a place where many are fleeing from rather than flocking to.
Connecticut Redfin agent Mike Dusiewicz commented on this mass exodus: "It feels like no one wants to look in New York City anymore. They are moving out to Long Island, Connecticut, Hudson Valley and New Jersey. I'm working with a lot of buyers from New York who were planning to move to the suburbs in two to three years, but the pandemic has sped up the process for them.”