Could housing bounce back even more unequally after COVID-19?

Even as rents dropped in some major cities during COVID-19, might increased interest now reinforce existing issues in the housing market where those with resources have options and those with fewer resources cannot easily get a foot in the door? From Chicago:

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Trisler is among the buyers showing renewed interest in the downtown housing market after attention waned during the past year, as the lure of amenities and access to offices, restaurants and bars took a back seat in many cases to space and relative quiet…

In March, more homes were sold in the Loop and the surrounding neighborhoods than during any other month in at least a year, according to data from the Chicago Association of Realtors. A total of 531 homes were sold across those neighborhoods in March, compared with 418 in March 2020…

Low mortgage interest rates are making downtown condos more affordable to first-time buyers, such as those renting in luxury apartment buildings and looking to buy in similar buildings, he said. Homeowner’s association fees tend to be higher in buildings in dense neighborhoods, but the lower monthly mortgage payments can offset that. And buyers can negotiate good deals on homes in some parts of downtown, he said…

Despite the uptick in sales, lower-priced, one-bedroom condos have been slower to sell than bigger spaces, said @properties real estate agent Chris McComas. He speculated the smaller spaces appeal more to first-time homebuyers, who might have been furloughed earlier in the pandemic.

Some people did just fine during COVID-19. They had good jobs in particular fields that weathered the storm or even thrived during the pandemic. They may have been able to work from home. They already had homes, whether they owned or had rents they could afford.

Others had a tougher time. They have been laid off or furloughed. It could have been hard to find work. They might have become sick. Their housing situation might have been more precarious going in.

Now, as COVID-19 and its effects look like they are winding down, people can think about real estate again. Those who came out relatively unscathed will be able to more easily buy and sell. Those who did not will have a tougher time. This is not solely the fault of COVID-19; this bifurcated housing market has existed for some time. Starter homes are limited in number, somebody is buying the luxury condos that have continued to go up in the biggest cities, and younger adults have several obstacles that could limit their entrance into the housing market. At the same time, this could become another legacy of COVID-19: the ongoing splitting of the housing market.

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