As a Real Estate Licensed Salesperson, in the State of New York, for over 15 years, I have observed, several previous, various types of markets. While, we often, think of only, buyers, sellers, and/ or, a neutral market, the present – day, pandemic, and associated, health, and economic crisis, will, most likely, have, some longer – term impacts, and ramifications, which might, permanently, change this horizon. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 specific, real estate components, which, will probably undergo, game – changing, longer – term, changes, and ramifications.
1. Housing market, pricing, buyers, etc: Since, in many states, restrictions imposed, in the so – called, social distancing, requirements, housing sales, marketing, etc, have, for the time being, stopped, completely! When this crisis, eventually, ends, how might this market, be affected? While the combination of low – interest rates, and pent – up desire, by some, to participate in this essential part of the American Dream, might, to some degree, balance other factors, I believe, we will witness, overall, in most areas of the nation, reduced pricing, because, there will be fewer qualified, potential buyers. This is, largely, because, of the dramatic drop in stock market, etc, prices, and, thus, many will find, their personal asset value, greatly reduced. Perhaps, there may be some, government programs, to help, but, these, would have to be certain, we don’t witness another real estate bubble, caused by incoherent financing programs!
2. Storefronts/ retail: Because, many have had to develop, alternative, technology – based ways, to sell their goods, the current trend, which, already, was challenging, to the conventional retail market, become, even more stressed! In the foreseeable future, we will probably, not see, any significant improvement, and, thus, more vacancies. How might this impact, especially, those smaller, property owners, in terms of their ability to maintain, and afford, ownership? It is also, probable, many companies, will decide, they need less space, and, obviously, that will have considerable impacts!
3. Office space: This crisis has made it necessary, for many companies, to have employees, work remotely. The longer, this continues, many corporations, will probably, believe and realize, they do not need, nearly as much office space, and associated expense? How would that affect the number of vacancies, and lease pricing?
4. Rental apartments: Since, fewer people, will, probably, be able to own, their own homes, more will seek apartment rentals! However, since many will probably have, more of a post – Depression mentality, because of the economic, and fear aspects, of this crisis, it is probable, luxury apartments markets, will suffer!
The immediate ramifications of this crisis, from an economic perspective, are probably, significant, in the real estate industry, and associated markets! Be prepared!