As parents muster their strength to go forth into another month, quarter, or longer indeterminate stretch of homeschooling their kids, there will be major repercussions in a variety of areas. Much is being said about mental wellness and the actual education aspects, of course, but it's interesting to think about the effects that the switch to homeschooling could have on real estate values.
One of the first things parents used to consider in a new neighborhood was: How are the schools? Many also look into after-school activities, clubs, and facilities for their children. So, now that every education level from preschool to postdoc has been impacted by the COVID-19 pandemic, what are the effects on the real estate market? We asked educators and real estate professionals to weigh in.
People are simplifying their lives
Some see the pandemic as ushering us back to a simpler time, and also a more rural one -- when people lived farther apart and valued family time over formal education and socialization.
"The COVID-19 pandemic has caused many people to rethink their priorities and where they live. Although school closings are one pain point, it is part of a bigger picture," says Sally Petrik of the Center for Quality Management in Education.
"In Michigan, we are seeing a big shift in real estate where people are moving out of the city into more rural areas," she adds. "People are simplifying their lifestyles and reevaluating homeschooling, thus giving kids more free time."
No doubt the pandemic has exacerbated people's frustrations with public school: the mysteries of Common Core, the unfairness of standardized testing, the lacking budgets, and everything else. But the silver lining is, many of them are looking at this difficult season as a nudge to leave the city and move somewhere more conducive to slow learning and family time.
"The changes in education delivery and increase in virtual or homeschool options are likely to have ripple effects throughout our economy, including real estate," says Dianne Keck, a partner at Home & Away Realty in Arizona.
"Where school choice is already flourishing, we see a lot of families having more flexibility to buy in areas convenient to their desired school, but not necessarily within a specific district or ZIP code," she adds. "This helps real estate values in all areas not be so dependent on the local school."
Others forecast doom and gloom
It's interesting to think that, while there's a lot of chatter about the effects of school closures, the true financial fallout in local and national markets may not have hit yet.
"School closures haven't affected the real estate market yet," says investor and author Matt Andrews of the Real Estate Freedom Podcast. "The bad news is that this is only temporary."
Andrews predicts a "profound and negative impact" as certain aide measures run their course.
"The government is paying people to stay home and lending money to keep businesses afloat, while at the same time, enforcing a moratorium on foreclosures and evictions," he says. "From a fundamental perspective, our economy is not healthy right now, despite how the stock market may make it appear, so once this artificial stimulus runs out and the moratoriums on foreclosures and evictions are lifted, the consequences will quickly snowball out of control."
This could lead to an avalanche of foreclosures and business closures that make previous troubles seem minimal. Folks like Andrews have been predicting it since the start of the pandemic, and those who believe it are poised to snap up the excellent deals that will ensue, even if there are doubts that many of the previously resilient real estate categories like retail and hotel will bounce back. In 2020, anything could happen -- including former retail spaces being snapped up by Amazon (NASDAQ: AMZN) or people's backyards being turned into socially distanced outdoor classrooms.
We're just seeing the first wave of effects of school closings
No matter how much parents would like to know the effects of school closings, the fact is, we're only just beginning to understand, because we're only just now arriving at that point where schools are closed semi-permanently. At first it was a break, then a once-in-a-lifetime rarity, and in the fifth month of stay-at-home, many people are realizing this could be long-term. At the same time, the effects of unemployment and decimated industry will soon be truly felt. Trends like backyard schools may become the norm tomorrow and restructure how homes are designed and whether office space is even possible anymore.