As the residential real estate market cranks into gear after the rollback of certain COVID-19 restrictions, society’s response to the virus is highlighting and accelerating some emerging home-buying trends.

These shifting trends — increasingly driven by the millennial generation’s entry into the market — begin with the way buyers shop for homes and secure financing, panelists at BizWest’s virtual Northern Colorado Real Estate Summit said Wednesday.  

Stay-at-home mandates have forced brokers to embrace virtual touring as a crucial aspect of the sales process, Information and Real Estate Services LLC CEO Lauren Hansen said.

Virtual tours, which have grown in popularity over the past several years, can be anything from a simple photo slideshow to a three-dimensional “doll house” that allows buyers to explore from room to room, she said. 

“If a property has a virtual tour, a prospective homebuyer is much more likely to look at that property,” Hanson said. IRES, a multiple-listing service in Northern Colorado and the Boulder Valley, has a new search feature that includes just homes with virtual tour options. 

“Consumers can vet properties before they go out and tour 10 [homes],” she said. “I think that is something that’s going to be a lasting change we’re going to keep seeing moving forward.”

The virus, and the millions of lost jobs it has caused, has begun to change the way lenders vet borrowers, Elevations Credit Union vice president of mortgage lending Elizabeth Million said.

Lenders are now doing more legwork to validate borrowers’ employment, even up to the day prior to closing. For business owners looking to buy a home, lenders are working harder to validate that the business is still open.

As employees settle into their third month working from home, a premium is being placed on home office spaces and outdoor amenities that can be enjoyed during off-hours.

The privacy that workers need during the day appears to be reversing a years-long trend of open floor plans, Landmark homes agent Jeremy Johnson said. 

“Because of COVID, the home office is becoming increasingly important,” he said. 

People who are stuck at home increasingly want to take advantage of outdoor recreation opportunities when they can, Johnson said. That’s led to increases in demand at master-planned communities that include amenities such as pools, trails and bike lanes. 

Appreciation for the outdoors among Colorado’s homebuyers also extends to home designs, he said, which are more frequently built with larger windows and sliding-glass doors that let in light and allow residents to look out on views of natural areas. 

Millennials have begun to transition from urban apartments in city centers to homes in “fringe urban locations” a bit closer to the suburbs, Johnson said.

Hanson echoed his point, noting that while millennials are seeking more space, they still want to be within walking distance to grocery stores, coffee shops, bars and restaurants. 

Millennials’ lower buying power relative to older generations has accelerated demand on lower-cost starter homes. It’s also slowed demand on the larger, luxury homes owned by Baby Boomers looking to downsize. 

Currently, half of all transactions are under $400,000, but those homes represent only a quarter of Northern Colorado’s inventory, Eric Thompson, president of Windermere Real Estate Services in Colorado, said. That equation flips with homes above $500,000, which represent a quarter of sales but half of inventory.

“The challenge for the developer is to deliver product under $400,000, which can be almost impossible for single-family homes,” Thompson said.

Despite that challenge, homes under $400,000 are far easier to come by in Northern Colorado than other parts of the Front Range closer to Boulder and Denver, according to Million. This helps keep demand in Northern Colorado high as younger buyers move north from the Denver metro region in search of more affordable housing.