The post-pandemic real estate market is one characterized by a single factor; uncertainty. No one was expecting a pandemic like Covid-19, and so no one was prepared when it struck. 2020’s turbulent timeline shook the stable growths and predictions of the real estate market into a chaotic state of flux.
Amidst all this turbulence, some opportunities are ready to be grabbed by pioneering spirits. While inner-city neighborhoods have their links with social and economic problems, their prices have reflected another story entirely. Regularly having the highest year-over-year increase in house prices, inner-city homes offer their homeowners quite a lot.
History of Inner-City Homes
In the 1970s, inner-city neighborhoods, and housing, were often synonymous with economically poor and socially troubled areas. This association was stronger in the USA than Canada but the prevalence of the term spread here as well.
The reason for this social and economic downfall was simple; age. Inner-city areas were often the oldest parts of the city, built near or within the city’s center or downtown area. These old parts were overcrowded as the population began to boom during the early 1900s and then again during the 50s and 60s.
Inner-city areas also paid hosts to many industries at the beginning of a city’s development. These industries slowly died out or were moved away due to environmental concerns. As these industries were a major income source for inner-city residents, they were suddenly struck with economic hardships.
The more affluent residents moved out to more suburban areas, while those who could not relocate were relegated to be ignored by civil authorities.
The presence of old buildings, lack of industry and easy access to employment opportunities, and general disregard from public authorities lead to slow degradation and a culmination of social and economic problems in these neighborhoods.
To deal with such problems, governments started enacting urban renewal plans with all the necessary details. In Canada, the Neighborhood Improvement Program was started in 1973 and ran for a decade. Its objectives were simple; improve the inner-city neighborhoods by bettering their physical environment, amenities, and communities at large.
While the effects were not immediately seen, they can be clearly seen today. Inner-city areas have undergone an urban renaissance. Increased opportunities for work, modern amenities, inter-city connectivity, and gentrification, in general, have greatly influenced inner-city real estate.
Inner-City Home Amenities
An inner-city home will give you access to the best amenities in the city. Being right in the city’s downtown area means that not only you’ll have access to the best schools, parks, pubs, and restaurants, but that you will always be within walking distance to the hub of employment within the city’s center. Transit options like the subway, busses, and taxis mean that homeowners don’t even need to invest in a vehicle to enjoy all their community amenities
Inner-city neighborhoods present a new cultural and urban center to the city, from art galleries to recreational facilities to bustling condos and shopping strips. Easy commute to the workplace and back means less time wasted in traffic. You get the best public utilities and general neighborhood safety as well.
It’s for this urban renewal that inner-city homes cost nearly twice as much as metro area homes per square foot. Inner-city homes are highly valuable properties and often cost more than larger homes out in suburban areas
However, this all changed with the pandemic.
With the pandemic hitting the world hard, the real estate market was particularly affected. Many people lost their jobs, and so they lost the ability to purchase homes anytime soon as they had to dip into their savings funds to survive during unemployment. Prices started to drop slowly, and interest rates soon followed as the economy began to grind to a halt
People started moving out of urban areas in masses as soon as possible to cope up. While the urban exodus was already a phenomenon that Canadian cities were undergoing, the pandemic only hastened the process. Apartments and condos started to empty. Many young professionals saw this as the final straw in their decision to move to suburban neighborhoods.
The urban exodus hasn’t stopped yet, but it will start to slow down by the end of the year. As transactions started again, urban living will start seeing an increase by next year.
The Investment Opportunity
As prices and interest rates are relatively low currently, this makes now the best time to invest in inner-city homes. You might be wondering why it would be a good idea to buy a property where residents are actively leaving, and you’d be right in wondering. The answer to this question is simple, provided that you have enough funds, investing when the market is at a low point is the smart financial choice.
As markets start to stabilize and then start rising again to pre-pandemic levels, you will see a huge ROI in your property. Urban living is by no means ended just because of the pandemic. Not to mention, offices are shifting from huge commercial complexes to tinier, more modest premises in inner-city neighborhoods.
Inner city homes for sale in Calgary often start from 300,000 CAD, for example. A far cry from the prices in pre-pandemic times where prices of condos and even the interest rates on mortgages were much higher. Purchasing a home in Calgary now, for example, could end up saving you hundreds of thousands when factoring in reduced prices, discounts, and low-interest rates.
While the real estate market remains in flux, those pioneers who realize the opportunity it provides for great returns and bargains should consider looking into inner-city homes. The loss this pandemic has brought cannot be understated and it will take a long time to recover. At the end of the pandemic and the great turmoil that has followed it, this may be the dream chance many young professionals have been looking forward to—a chance to buy an affordable home in the city. A chance to fulfill their dreams.