Covid-19… Good or bad impact on the Real Estate Market.
This depends on many elements. The residential markets are challenged by lack of inventory due to lack of consumer confidence. The lower markets are achieving increase in value with low conforming interest rates, while the upper markets are dependent on outcomes from financial investments due to lack of jumbo accessible funding options. The landlords unfortunately have the challenges from the tenant’s lack of funds to pay rents. With many out of jobs along with the states mandate on evictions. Landlords, like always have to endure the rental laws and with the challenge of the ruling of evictions and lack of courts opening. Many have lost over 3-4 months of rental income without any source of recovery in comparison to debt on their investment. On the commercial side, the new way of doing business creates more people finding ways to work from home. This will impact the office space requirements and commercial real estate will start seeing demand increases for these types of smaller units. Like Residential, the smaller office sales will increase along with demand for smaller units. The larger units will have much more space availability which may cause a decrease in value for rental income and sales prices in the future. The impact is good for short term investors and most of the impact of the markets will come from the forbearances and what the banks decide to do with the inventory. If there is no recovery for the consumer these loans will then become foreclosures and cause another increase of bank owned property to the residential inventory. This is all speculation but good or bad is always determined by if you are the Buyer or Seller in these scenarios. History proves that Real Estate has always been the best long-term investments for any consumer. It’s always determined by the timing that will create who will achieve the best return on their investments.