The month is August 2020. We are surviving the second half of the year, and it is safe to say that this is one of the worst years in human history health-wise. As we are surviving through the pandemic chaos, one can’t help but be scared for their jobs, businesses, and lives altogether. One of the most hit industries is the real estate industry. Up until the beginning of the year, the real estate industry was thriving. People were investing and weren’t afraid to pay back as their jobs granted stability.

But today - not so much. It is uncertain, fluctuating, and unknown – to say the least. Even though we are at the peak of this pandemic crisis, one must wonder what will happen after it finishes. What follows is an analysis based on the trending events and real estate experts.

US Real Estate Market Right Now

As already said, one of the most hard-hit industries by Covid-19 globally, and especially in the USA, is real estate. Statistically, from the official start of the pandemic until now, sales of both the commercial and residential market dropped by nearly 47% compared to the same period last year. All over the USA, a drop in sales is evident in a huge percentage, including Chicago, with a severe decline of 43.6% in May compared to May in 2019. The same way, California saw a drop of 25$ in sales, and a total of 17% drop is registered nationally.

It was expected that things would turn to this direction since the pandemic took its toll not only health-wise but also hit the economy hard. In just a couple of weeks, life as we knew it changed completely. Public meetings, hang-outs, and outings were prohibited or harshly frowned upon, and the social distancing left people isolated and focused on getting through these trying times.

However, as we are fast approaching the end of this year, the whole world is trying to pick itself up and move on even under still risky, unstable economic conditions. Real estate is also beginning to stand on its feet, and trying to move things back to normal. Perhaps, there will be permanent changes in the way real estate industry functions. However, the steps of recovery taken as soon as possible will have a positive impact later.

Commercial Real Estate is Going Through Irreversible Changes

When it comes to commercial real estate, it is evident that it was affected immediately since the start of the pandemic. Take a look at the findings by Deloitte Centre for Financial Services analysis and notice how hard Covid-19 hit the commercial real estate industry.

Because of the new situation, the real-estate dependent professions felt the hard blow as well. For example, significantly decreased the work of escrow agents, inspectors, general contractors, interior designers, and the like.

What’s In for the Future?

Even though the consequences are devastating, the hopes for a better tomorrow in the real estate industry are optimistic. For example, because of the arising trend toward densification and open-plan layouts, the necessity for new or renovated commercial facilities will sharply increase. In the same fashion, public-health officials will want to limit the risk of future pandemics by amending the building codes, which could affect the standards for HVAC, square footage per person, and the amount of enclosed space necessary for a particular number of people.

Virtual Viewings and Open Houses

Another interesting fact is that the lasting effect of fear, stress, and pressure from social distancing is that it will result in real estate agents investing far more in the virtual staging of homes and commercial spaces. People will replace personal viewings of properties they intend to buy with online virtual tours and virtually staged photos to decide to check a place out. This trend is already seen to be increasing its popularity as the percentage of virtual staging users is going up. By offering such a service, real estate agents make sure that potential buyers can experience the buying process from the comfort of their home, safely protecting themselves from the threats of Covid-19 on the streets.

The Role of PropTech

Since its appearance on the market, PropTech started a revolution in the world of real estate. Today, more than ever, its power and accessibility makes it easier for the real estate market to survive the era of the pandemics with its innovative products and new business models. Some real estate technologies like IoT sensors, BIM, mobility allow people to make smarter, and more energy-efficient decisions related to their homes. This smart technology facilitates the way to make decisions online and put them into action. What is more, the proptech solutions prove to be excellent in providing increased efficiency, cost savings and time and energy.

To Sum Up

According to Deloitte Economists, it is estimated that the US real GDP growth could be -5% in the best or mild case scenario and -10% in the worst or severe case scenario in the upcoming period. Recovery will be slow, but it will be steady provided that real estate agents adapt to the “new normal” and are compliant to play by the new rules.

Hannah Derby is a real estate enthusiast who often blogs about selling, buying and designing real estate properties. Having been part of an interior design studio for two year in the past she has completely fallen in love with home and office design, so she feels that she can help people improve their homes with her experience always discussing trends and novelties in the industry. She also loves sharing her opinion and findings on current trends in the real estate industry.