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How coronavirus changed home buying for good

The economy isn’t fully open across the country and the unemployment rate is still double-digits, but home shopping has roared back.

“It has bounced back incredibly quickly, more quickly than anyone thought,” Spencer Rascoff Zillow (Z) co-founder told Yahoo Finance’s The Final Round.

Pending home sales jumped by a record 44% in May, according to the National Association of Realtors. That’s the biggest one month jump since the survey started in 2001.

Transaction volume is returning to normal, but the experience of buying and selling is anything but conventional.

‘Point and click’ home buying on the way

As with other industries, Covid-19 has accelerated technological trends. Rascoff, who recently launched dot.LA, a news site covering Southern California’s burgeoning tech scene, is seeing transformational changes in the marketplace, driven by meaningful technological advancements.

“Things like virtual tours, transaction management – that's entirely online – online mortgage origination, 3D home listings... These things have been around for the last couple of years, but we're now seeing a big acceleration in those trends as a result of coronavirus,” Rascoff said. He thinks it’s a big win for consumers.

LAUDERHILL, FLORIDA - AUGUST 20: (L-R)  Claudia Teyssandier, Zillow Offers Renovation Estimator, and J Myers, Zillow Offers National Renovation Manager, evaluate a home for a possible purchase by Zillow on August 20, 2019 in Lauderhill, Florida.  Zillow Offers was unveiled in the South Florida area this week as an innovative way to sell a home where Zillow will buy a home with a no-obligation cash offer and if the home owner accepts Zillow would then prepare the home for sale and put it on the open market. The program was launched in April 2018 in other parts of the country. (Photo by Joe Raedle/Getty Images)
Zillow Offers Renovation Estimator evaluates a home for a possible purchase by Zillow on August 20, 2019 in Lauderhill, Florida.

Ali Hegener and her husband sold their suburban New York house this spring while in quarantine. They didn’t even go to the closing. A check just arrived in the mail. Now they are buying another house and that too will be largely done online.

“I almost like it better this way,” Ali says.

Goodbye, Great Room. Hello, Zoom Room

Also changing, what buyers want. According to South Florida real estate developer Jules Trump (no relation to President Trump), home offices could be the key to future sales.

“In our newest tower, we built all four and five-bedroom residences,” Trump said. “Now what we're doing is we're showing examples of how you can build it out as an office.”

ROSLINDALE, MA - MARCH 24: Kindergarten teacher Jamie Jones OBrien talks to his students as he conducts as he conducts a Zoom video lesson from his living room in Roslindale, MA on March 24, 2020, as schools remains closed to prevent the spread of COVID-19. Last week, when he first started, he had four students. Attendance went up to 9 students by Friday. (Photo by Jessica Rinaldi/The Boston Globe via Getty Images)
ROSLINDALE, MA - MARCH 24: Kindergarten teacher Jamie Jones OBrien conducts a Zoom video lesson (Photo by Jessica Rinaldi/The Boston Globe via Getty Images)

Rascoff himself is part of this changing design dynamic.

“I don't have a door on my home office,” he said. “This is a very open-floor-plan-y kind of house. it was great pre-quarantine, the kids could come in and out as they see fit. I would kill for a door now. I'm seeing home designs now where people are building out kind of like audio pods where there's really good sound, almost like a sound booth for taking calls and doing video conferences.”

New York City prices still “correcting”

While many suburban areas are seeing strength and bidding wars outside of hard hit New York City, the city itself is still seeing weakness. Brown Harris Stevens CEO Bess Freedman says it’s really a continuation of what was happening in 2020 pre-Covid.

“Prior to this pandemic, we were already in a price correction,” Freedman said. “The market was correcting and we were very fluid in doing business. Then the pandemic hit. So I would say this is a huge opportunity market for all buyers who are interested. I think for new developments, they can find incredible deals. And I think that rates are really good. So I think the prices are continuing to correct, and that sellers have to be realistic and let go of pre-pandemic pricing.”

NEW YORK, NEW YORK - JULY 01: A person walks with a Zara shopping bag as New York City moves into Phase 2 of re-opening following restrictions imposed to curb the coronavirus pandemic on July 1, 2020 in New York, New York. Phase 2 permits the re-opening of office jobs, real estate services, in-store retail services such as rentals, repairs and hair salons, and outdoor dining. (Photo by Rob Kim/Getty Images)
NEW YORK, NEW YORK - JULY 01: A person walks with a Zara shopping bag as New York City moves into Phase 2 of re-opening. (Photo by Rob Kim/Getty Images)

Another option is not to buy and just rent. Freedman says that may be where some of the best deals are right now.

“The supply for rentals is overwhelming,” she said. “You can literally pick and choose. landlords are being very flexible, offering a month or two months free. If you're interested in renting, now would be a great time to do that as well.”

Jen Rogers is an anchor for Yahoo Finance. Follow her on Twitter @JenSaidIt.

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