Housing & Mortgage
Under COVID, Everybody's Moving, They Say. Maybe You Shouldn't
Risk in transit vs. staying put — and an economic shift that hasn't yet occurred
Americans are on the move. According to Pew Center data, around one in five people in the U.S. has either relocated due to the pandemic or knows someone who has. Some are swapping cities for the country, while others have returned to their childhood homes. For nearly 30%, it was a simple question of needing to be somewhere with less risk of contracting coronavirus, and fast. Another 20% wanted to be with family. For many others, the reasons were financial, either due to a lost job or some other change in their earnings.
Weighing a move yourself? Here’s my advice: If you don’t need to, don’t do it.
Even under the best possible circumstances, moving can be hugely challenging. In a 2015 survey of 2,000 people, 62% said it had been their most stressful life event, ahead of either starting a new job or the breakdown of a romantic relationship. Add in the complications of sudden lockdowns, the dangers of getting sick, and any unplanned changes to your finances, and you could be setting yourself up for a deeply trying experience.
Financial and health risks
Assurances from airlines and car rental companies aside, there isn’t a risk-free way to travel right now. Experts point to airports and particularly the boarding process as potentially dangerous situations.
Driving, meanwhile, has problems of its own. After 9/11, when Americans opted to drive long distances instead of flying, the number of road deaths soared, with as many as 2,300 driving deaths attributable to the attacks, according to a paper published in Applied Economics. In March 2020, the fatality rate per mile driven went up by 14% year on year, according to data from the National Safety Council, with many people tackling too-long distances without taking a break. Taking a break, meanwhile, might expose you to undesired health risks.
Perhaps you’re desperate for some green space, especially if you live in a built-up area or don’t have access to a backyard. Whether you’re hoping to go entirely rural, or stick to the suburbs, you’ll pay a premium for it, due to so many others quitting the city for the great outdoors. Median suburban home prices at the end of June were up 3.3% year over year, according to analysis by Zillow. Homes in rural zip codes also saw an increase in viewings, with a 34% year over year jump in viewings. At the same time, urban home prices remained flat, or fell in some areas — meaning right now isn’t the best time to sell if you’re hoping to get out.
Stimulus efforts have also helped people hold on to their homes, keeping house prices across the country relatively buoyant. If you’re hoping to get into the market, you may be better off waiting until the predicted downward pressure on real estate prices, from people downsizing or moving away, comes to fruition. One recent prediction, from Corelogic, forecast a national year over year drop of 6.6% by May 2021, suggesting current prices may be at or close to the top of the market.
A frustrating experience
On top of that, it’s a tricky time to be looking for your dream home, with the risk of virus transmission still high in many U.S. states. Moving in the pandemic may mean settling for remote tours, Google Street View, and ample well-lit photographs, rather than seeing the place yourself. It’s a risky proposition — and one that may be hard to get out of, if you don’t love your new home.
Those who have already headed for the hills are counting on a future in which remote work remains the norm — or something like it. The trouble is, it’s really too early to tell what the future of the office looks like. While some jobs, like those in the tech industry, readily lend themselves to being done anywhere, many don’t. That’s especially true of client-facing jobs or financial services firms that require sophisticated technology that can’t be easily replicated at home.
With the country sliding in and out of lockdown for the foreseeable future, it’s frustrating not to be able to make plans or be exactly where you want to be. But hunkering down for a while longer could pay dividends, across financial and health risks. By waiting to buy or move, you arm yourself with more knowledge about the state of the market and the unknown future of the office — knowledge that, right now, is hard to put a price on.