College town’s have historically been an ideal spot for those who want to invest in real estate. College students and those who work at the school generally fill up the housing rentals located around the campus, making it easy for landlords to find tenets to fill apartments and houses. However, due to the COVID-19 pandemic, a lot of colleges and universities in the country are opting for online classes and are coming up with ways to keep students from having to congregate. In the past few weeks, since most schools began their fall semester, real estate agents in the country have taken note of the effects on college town housing markets in the country. Here are some ways they are being affected.
Not as many homes are being bought
Buying a home in a college town before the pandemic was a no-brainer. You constantly have a supply of new tenets, and the competition among renters is generally pretty high. By purchasing a home in a college town, you have the opportunity to earn more than what you originally bought the house for in a short amount of time. However, COVID-19 has slowed this down. According to insights from top agents, 45% of agents in the country report that house prices and buyer activity are still strong. This means that a majority of agents have noticed that college town markets have at least somewhat slowed down in the past few months.
The local housing markets haven’t collapsed
In March, when most students were sent home, a wave of panic spread across the country. In the coming months, millions would lose their jobs as businesses and schools closed down at least temporarily. While the housing market in general remained strong, those located in and around colleges were even more at risk. Despite this, 82% of agents have noted that their local markets have not collapsed and only 6% have reported struggling markets due to business shutdowns and college budget cuts.
Rentals are adjusting to the new normal
Because of social distancing, some college students aren’t returning to campuses and are opting for either primarily online or fully online classes. The lack of returning students, which is higher in some areas than others, is affecting the number of rental vacancies in some college towns. Around 30% of agents report that rental vacancies are unchanged or that there are even less of them. Considering the circumstances, 30% is an impressive number. Depending on how the next few months pan out among college campuses, this number will likely increase.
What can we conclude?
COVID-19’s impact on college towns has varied as distanced learning continues to become the new normal. Despite some students not returning to campus for in-person learning, the local markets remain somewhat strong as people continue to apply for rentals and buyers bid on houses in the area. While we can’t totally predict what is going to happen in the upcoming months, we can assume that if cases remain low in these college towns, the housing markets will gain traction again.
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