With the spread of COVID racing across the nation, states began to shut down as early as mid-March to slow the virus’ momentum. As a consequence of that action, economies screeched to unprecedented halts and whole industries found themselves disrupted like never before.
The real estate market was not exempt from that effect.
Today’s “corona real estate market” is one that’s starkly different from the market we saw just six months ago. While many facets of real estate have been touched in some way by COVID, below, our team shares the top 5 effects that property buyers, sellers, renters, and investors are likely to notice.
1. Commercial Leases in Jeopardy
Non-essential businesses shuttered across the nation between March an April. As a result, companies were forced to adapt to a work-from-home business model.
While some companies found themselves unable to do this, many large commercial organizations stumbled onto success which will likely inform their business models into the future. That could mean the cancellation of commercial building leases as soon as they’re up which could spell doom for investors and developers.
2. Delinquent Rents Without Recourse
Provisions in legislation passed on both federal and state-levels offer renters COVID eviction protections. In some territories, these protections allow renters to go completely delinquent on rent.
In most cases, renters are expected to pay back missed rent payments over six months. As is the case with all rent delinquency though, landlords may find it difficult to collect what they’re owed.
3. It’s a Tenant’s Market
We’re seeing apartments across the country, especially high-end, amenity-driven buildings, slash prices and offer move-in specials to renters. This is in response to waning demand as renters look to conserve money.
Even low-end apartments are seeing vacancies as well since young people are flocking back home to move in with family and pool resources.
4. Lower Mortgage Rates
If you’re interested in buying a home in the corona real estate market, you’re in luck. Interest rates are sitting at all-time lows as the federal government looks to spur the nation’s economy.
Couple those low rates with aggressive prices, the 1031 exchange deadline extensions this post discusses, and other perks, and you’re sure to find an excellent deal.
5. Development Supply Lines are Disrupted
For real estate investors/developers that are building commercial properties or fixing/flipping homes, supply lines have become an issue.
Factories that deliver lumber and tools have slowed production. This is a consequence of closures and social distancing guidelines. As a result, less inventory is sitting in stores and prices have gone up on materials.
Corona Real Estate Presents Both Hardships and Opportunities
There’s no doubt that the corona real estate market is exceptionally disruptive. Depending on what your housing goals are though, you may find that disruption aids your goals.
We hope our tips offered you the topical guidance you needed to steer your ambitions. If you’d like more insight on all things real estate, technology, and more, check out the latest posts in our digital publication.