Coester Real Estate News – Weekly Real Estate Round-up – 4.26.2020

April 29 21:10 2020
Coester Real Estate News - Weekly Real Estate Round-up - 4.26.2020

The Coester Weekly Real Estate round-up summarizes for you all the information around the globe that is real estate related.

Without question, the corona-virus pandemic is having a significant impact on real estate. A recent survey from the National Association of Realtors indicated as of March 17th, 48% of agents, noticed a decrease in buyer interest, a number likely to continue to increase in the subsequent weeks as states issue orders to non-essential business to close.

A record 6.6 million Americans applied for unemployment benefits last week and sent a booming U.S. economy into a free fall. A large number of claims were double the 3.3 million who requested benefits two weeks ago. Not all industries are as affected. With technology advances, many industries, including real estate, have learned on technology to work from home and are doing video home tours, virtual closing, and making deals through online video chat.

Week Highlights:

• Jobless Claims Soar – 6% of the U.S. labor force has filed for jobless benefits in the last two weeks, up from 0.3% at the end of February.

• Retailers not paying rent – Major US retailers, including Subway, JC Penny, Kohls, Macy’s, Nordstrom, Gap, Cheesecake Factory, Urban Outfitters, and Mattress Firm, has told landlords they either cannot pay rent or need reductions.

• International and U.S. Markets See 50-75% Drop in New Listings – As the pandemic and the associated effect on the real estate market spread, one of the best leading indicators of a decline in transaction volumes — new listings — has dropped an average of 63 percent in the earliest hit markets. Seattle, the Bay Area, and New York City — along with Italy and the U.K. — were among the first markets hit, and are the best examples of what comes with strict lockdowns.

• Small Business Layoffs – Layoffs have been particularly widespread among small businesses. Such firms operate on lower cash reserves and quickly resorted to layoffs. Employees at such enterprises tend to be lower-skill workers who suffer most from layoffs. The roughly $2 trillion stimulus package signed into law last week, and the money is going to help ease some of the financial pain many laid-off Americans are experiencing. (WSJ).

• Not Paying Rent – With nearly a third of American renters failing to pay rent during the first week of April, landlords are scrambling to determine which tenants were excused because of lost jobs—and which ones are using the Coronavirus as a cover for not paying. Building owners have started means-testing en masse, trying to uncover which of their residents are eligible to miss payments without penalty because of job loss and creating payment plans for affected tenants on a case-by-case basis. (WSJ).

• WeWork’s occupancy rate fell to roughly 64 percent at the start of April, down from 79 percent at the end of September. One person cautioned that the drop did not yet account for the full economic fallout of the crisis and the surge of cancellations the company was still girded for.

In Los Angeles as of mid-March, 45% of agents said their sellers were pausing sales, and 50% said their buyers were doing so. And in California’s San Francisco Bay Area in mid-March, inventory dropped by 20% in just three days. Some economists are predicting that nationally, home sales will fall by 35% this spring.

The long term effect of the Coronavirus on real estate is still to be determined. Short term, it appears that businesses all across America are feeling the pain and trying to manage cashflow. They are laying off all their employees and not paying their rent. The economic uncertainty of the Coronavirus affecting the entire globe is enough to keep investors and business owners holding onto cash and fending for themselves. I would not be surprised if most considered bankruptcy, and to wait it out. For most American workers, the best option is to file for unemployment. For U.S. Companies, the best option is to hold onto cash, keep expenses low, and consider yourself a startup.

Thank you,
 – Brian Coester

Media Contact
Company Name: Coester.com
Contact Person: Brian Coester
Email: Send Email
Phone: 240-455-3170
Country: United States
Website: http://coester.com

  Categories:
view more articles

About Article Author