Did 2020 really have an impact on real estate in PA, let’s explore the implications of the global pandemic on the local Main Line real estate market. Well, I’m sure we can all agree that 2020’s chaos is something we hope to never experience again. Through that chaos a lot of industries were destroyed, people losing jobs & the list goes on… But did it really have an impact on real estate? Who was buying? Who was selling? Did the price still increase? Well, that’s what we’re talking about today so let’s dive into it.
There are non-stop press coverage questions about whether there is a bubble in the real estate market and that 2020 exacerbated problems in the market, discussing the severe lack of inventory, timber shortages, labor shortages, and more, but overall, how much was real estate on The Main Line really affected? Let’s go back and see a real estate timeline.
Pennsylvania lifted its restrictions for in person activity and as a result, real estate sales in May, sales in both the city and its suburbs took off. Over the summer, inventory and days on market plummeted. New Yorkers started moving here in search of more for less, and you had those moving from Philadelphia onto The Main Line looking for more space as well. Most trends that were already occurring on The Main Line in real estate, were simply exacerbated.
One of the most notable of those trends was those New Yorkers moving to the Philadelphia area. Sales were weakening at the top of the New York City market and that the condos weren’t finding buyers the way they had been. Which was very good news for The Main Line. This is roughly a decade-old pattern of net migration from New York to Philadelphia and it multiplied in 2020. Another trend was simply the search for more space. The majority of non-rural Americans live in the suburbs, and this shows no sign of changing anytime soon.
The millennial generation is now at family-making age, and the COVID-driven desire for social distancing simply intensified a tendency to leave the city. “Demographically, the bulk of the [younger] population was reaching the point where they would naturally, say, in the next three to five years, consider moving to the suburbs because of family formation,” says Sara Doelger, principal at Argosy Real Estate Partners.
Another reason the real estate market really did not take a hit in The Main Line in general is that the Philadelphia area managed to recover jobs lost in the pandemic. According to Yardi Matrix manager of business intelligence Doug Ressler, the region recovered 56 percent of the jobs initially lost in March, when the COVID lockdowns abruptly threw the economy into reverse. According to Yardi Matrix, this region’s economy that is moderate, without being overly good or bad, also helped local real estate remain strong in 2020.
Will this continue into next year?
We have to look at the return to the office. 78 percent — expect to return to the office at least part of the time once the pandemic passes. The largest share, 31 percent, expects to work in the office for two or three days and from home the rest of the time. Since, if given a choice, most office workers would prefer to live near where they work, this should be good news for The Main Line. But since working from home is here to stay. and because homeschooling is likely to continue for much of the coming year, the types of houses and apartments people will probably shift somewhat. Buyers will want houses with enough rooms to turn one into a workplace, and COVID-driven concerns over health and wellness should make houses with yards even more prized than they are already.
The economic recovery coupled with the shifts in how people are searching for more space for less, will keep Main Line real estate in high demand, potentially higher than ever. We will continue to see those looking to downsize take advantage of the selling conditions and those looking to buy to take advantage of the record low mortgage rates. While many industries felt the hit of the pandemic, the real estate market truly took off. Main Line real estate was most impacted by trends like New Yorkers and millenials moving out of cities, but we also saw some international buyers as well.
If you are looking to buy or sell, I am happy to consult with you risk-free. We have many resources for both buyers and sellers, let’s take this next step together. Kimmy Rolph Sells The Main Line and local areas.
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