This pandemic has been terrible, fantastic, excruciating, liberating, difficult, and the list goes on. Everyone has been affected by the pandemic in different ways. My heartful prayers go out for all of those that have been affected by difficult losses, let us all press forward in hope!
With the ever-changing environment we continue to see others around us adapt. Our initial response to the pandemic was to make short term changes whether it be; purchasing a desk to work from home, getting into mountain biking to get outside more, or camping instead of traveling overseas to find retreat.
But as time continues to pass and the future is hopeful but uncertain, we are beginning to see long-term decisions made that will change our environment. Homeschooling “Pods” are being created to provide more consistent education for children and some are purchasing toys such as ATV’s or Campers to enjoy the weekends with. But most important for this article are the long-term decisions affecting real estate.
With the ability to work from home, employees first started out with retrofitting their current home to be more conducive to work. With the pandemic not letting up, employees are now realizing they can work anywhere, and therefore are deciding where they want to live. So where are they going?
Well first and foremost, they are leaving the big cities. We have seen populations decrease in big cities like New York, San Francisco, San Diego, and others over the past few years (paraphrasing WSJ article 2). The good news for real estate values elsewhere is that they are leaving high income areas, with expensive homes and going somewhere that they can comfortably pay top market prices. These individuals are increasing home values in many of the smaller metropolitans.
Where else are they going? A WSJ article back in October of 2020 came out stating “people fleeing big cities amid the pandemic are swarming mountain towns in search of more space and the great outdoors.”1 Has anyone else seen that the market in our resort areas such as Sedona, Flagstaff , and others have been exploding? Imagine using the time you used to spend on the I-10 freeway to do what you really love in the place you would really love to do it.
Our office has seen an increased demand in Phoenix from flippers wanting to buy mountain properties and restore them. These mountain properties come with different hurdles than the typical city properties. Where does the water come from, what is being used for a sewer system, can the property handle the elements, and many more. Although there are great opportunities, we must realize that with the reward must come the risk.
Good luck and stay safe!
by David Neilson