According to CNN Business, “the coronavirus pandemic dramatically changed the landscape of the housing market.” In many expensive urban housing markets, such as Manhattan and San Francisco, vacancy rates are high as people are moving to the suburbs; rents are low in these markets because workers are free from their office jobs.

When combined with low interest rates, this is putting a higher demand on homes in less populated markets. Many people are watching the real estate market closely as vaccines on the horizon promise a return to normal. How could the housing market be affected?

Homeowners still want to work from home to enjoy their sanctuary

The coronavirus reminded people how important home life was. Working from home eliminated commutes and gave workers back some of their time. Even with all the complications of working from home, buyers are looking for homes with a big backyard and space for a home office.

In the Dallas market, starter homes are high in demand. In urban markets that are more expensive, second homes in the rural areas are popular.

People should return to urban areas

As the vaccine gives Americans a return to normal, people will return to the big cities. CNN Business reports that the vacancy rate in Manhattan is 6.14%. Median rental prices are down almost 15% over last year.

As the pandemic comes to an end, it may be a renter’s market until the Fortune 500 companies bring people back to work. A vaccine could also lead to non-US buyers returning to the market, which would make the market more stable.

The vaccine could reverse mortgage rates

Some economists believe that the interest rates will continue to decline, but others suggest that a vaccine could switch the trend. Even so, Marketwatch predicts that many homeowners will still refinance as rates go. Homes will still be in demand, leading to a surge in the housing market.

In fact, a vaccine could mean that more homes will go on the market. Homeowners who hunkered down to ride out the pandemic could be more willing to host open houses and make a move themselves. A vaccine could contribute to supply, which will help buyers get better deals.

The Austin market is strong

Residential sales in the Austin area have increased by 31.5% over last year. Prices have also surged. The median price of a home in Austin’s city limits was $435,000 in August. Sales are expected to slow as supply dwindles. Inventory is limited because people are choosing to stay in their homes. Competition for homes on the market is high, driving prices even higher.

A vaccine is promising for the real estate market

A vaccine should even out the market, but without a crystal ball, it’s hard to know what will happen. Record sales in the Texas market certainly weren’t predicted to be an outcome of a pandemic. It will take time for the economy to level out and for people to get back to work in the entertainment and restaurant industry. How the vaccine impacts the market may depend on location, just as it always has.

The Austin, Texas real estate market looks set to be just as hot post-COVID-19 as it was before the coronavirus pandemic—though it may look a little different.

In October, the Austin Business Journal convened a panel of experts to discuss the future of real estate in the Texas capital. These included Sean Bukowski, the owner of the Bukowski Law Firm, Investors Alliance Inc., President Diana Zuniga, Affordable Central Texas CEO David Steinwedell, Presario Ventures Principal Darin Davis, and Sabot Development Managing Partner Jim Young.

Despite COVID-19’s adverse effects on the economy, the residential real estate sector has continued to remain hot, with industrial space booming as well.

According to the Urban Land Institute’s annual report, Austin is the second-best real estate market in the country going into 2021, though it did hold the top spot in the institute’s previous reports. That doesn’t mean the Austin real estate sector has come away completely unscathed from the pandemic, however, as leasing seems to be an area of concern.

“In terms of leasing, leasing just came to a screeching halt. We had several good prospects for our building — it’s 123,000 square feet and by April everybody was just on hold.” Zuniga said, “A few people now are stirring but the transaction volume overall, if you read the reports, is really down.”

Downtown offices are also feeling the current effects of the coronavirus. Zuniga stated that the latest surveys found office buildings downtown to be “running at 20% capacity” at the moment. This would affect not only the businesses who are leasing downtown area buildings but the restaurants and retail spaces who make a large part of their revenue from the office crowds. Although many experts on the panel believe that the sector will rebound, it will most likely be with different companies that are there currently.

“The downside is that it’s likely going to be with a lot of different players than it was before.” Bukowski said when asked about the downtown area, “Because we represent a number of music venues, for example, and they’re not coming back anytime soon and probably not going to make it, unfortunately.”

Exactly what things will look like in Austin when the COVID-19 pandemic is over is anyone’s guess, but things are certainly shifting across the country—and Austin might not be immune.

Over the summer I had to move out of the SF Bay, my home and a famously high-rent hotspot. Life there had never been cheap, but the economic crash at the start of the year had made it nearly impossible to stay. (Not to mention the yearly wildfires were pretty inconvenient.)

It’s strange to admit, but going to a suburb on the other side of the country was easier than trying to continue living in my home city.

I’m not alone in feeling that way. Plenty of other workers in the digital sector are making the same choice, leading to the emergence of ”second cities” where predominantly white-collar workers have been moving to comfortably work from home.

Remote work has evolved from a once-privileged exception to practically being a hot business trend, and the merits have been widely embraced across industries where remote work is possible. In a study performed by UK employment firm Robert Walters, 86% of employers across 31 countries replied that they intend to keep their remote workforce in some capacity. In other words, the second city is here to stay.

Economics lecturer Michel Serafinelli suggested to The Guardian that cities will become less congested, high costs of living will begin to balance out, and skilled workers will be more widely distributed as a result of this transition.

Minnesota is one state that’s counting on these “second cities” to continue flourishing. By investing high speed broadband infrastructure, it hopes to attract wayward telecommuters to come live there and boost GDP.

So the flight from metropolis seems bound to continue, at least among certain workers. Based on 2018 statistics from the US Bureau of Labour, Black and Hispanic men in particular disproportionately work in the service sector, where just 1% of jobs can be performed remotely.

2020 has marked a major turning point for the US housing economy. In areas like New York, Seattle, San Francisco, and Los Angeles, residents have protested unaffordable rent for decades. Yet gentrification has slowly but relentlessly escalated, driving costs-of-living sky high and displacing long-term local residents. California has actually been slowly losing residents to this process over the last four years, saying goodbye to just under 200,000 in 2018 alone according to MSNBC.

Bloomberg City Lab breaks it down like this: “From the Bay Area and Los Angeles, Phoenix and Las Vegas are typically the most popular destinations. And New Yorkers showed a tendency to move to Florida — a state that had 22,000 more users looking to move there in the third quarter than leave.”

The effect is so dramatic, it may have had an impact on this year’s election results.

In other words, these second cities aren’t exactly new. And if this year is any indication, they are only going to grow in influence in the future.