The COVID-19 global health crisis is accelerating the trend away from density and reshaping real estate space demand in Dallas-Fort Worth and nationwide, according to John Chang, senior vice president and national director of Research Services for Marcus & Millichap Real Estate Investment Services.
Chang spoke with the Dallas Business Journal about how the trend of de-densification is playing out in North Texas and nationwide.
How is the residential market being affected by the COVID-19 outbreak?
The onset of the pandemic effectively stopped the housing market in its tracks. Total home sales plummeted by more than 17 percent (nationally) as people locked down to ride out the pandemic. But being cloistered at home, and in many cases working from home, for months on end, is starting to change people’s ideas about where they want to live. This is sparking an acceleration of relocations to the suburbs.
What does that mean for commercial real estate?
Ultimately, an acceleration of purchase of homes will modestly ease some of the demand for apartments. But the more important aspect is where people are buying. We’re seeing de-densification in process.
Would Dallas be one of those?
Yes. Dallas has long been leading in population growth and in-migration. You have two forces in play for people and what’s happening with the pandemic: They don’t want to be in the high-density urban markets where they have to rely on, for example, public transportation. And even in lower-density cities, like Dallas, there’s a movement to the suburbs.
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