Covid-19 – How It Affects Your Real Estate

Here we are five months and 10 days since the World Health Organization first declared a global health emergency on January 30, 2020. Everything has changed since then. We have learned that we have to be aware of the risks of infection and take steps to protect ourselves from the Covid-19 virus. We are practicing “social distancing” when it comes to interacting with others, especially strangers. The government virtually shut down the U.S. economy and the economies of many countries around the world. Millions of people have been furloughed or outright terminated. Millions of jobs have been lost and most of those jobs won’t be coming back, ever. What does this mean for your real estate?

It doesn’t take an advanced, higher education degree to figure out that recovery from this pandemic is going to take time. Like most of everyone else, I have had to ponder how this pandemic is going to impact my real estate business? In the early stages of the shutdown and isolation, there was no oracle of truth we could turn to who could tell us what was going to happen. There was insecurity. Most of us know about the great economic downturns of the past century. We seen the pictures and heard the stories.

Here is what we know is certain: The impact of millions of lost jobs is going to result in a glut of homes for sale. People will be faced with foreclosure. Millions of mortgages will be defaulted. Real estate inventory will skyrocket. This will lead to price reductions. There will be a bear market in residential sales and in commercial real estate. How severe it will be will vary market-by-market. Investors with cash will have some great opportunities. Rentals will reach all-time highs because everyone who loses a home still need a place to live.

I am developing my strategy for growing my business in uncertain times. I have trusted contractors that I want to keep busy and therefore ensuring that my renovations and developments stay on-track. Buying right will be more important than ever as prices soften in residential and commercial real estate. Having a cadre of private money lenders will be crucial and we will be able to offer outstanding returns to private money lenders. You can not have too many private money lenders. Traditional commercial banking will be difficult and expensive.

Contact us  for a free consultation if you have questions regarding your investing or real estate future. We would be happy to talk with you and there is no obligation. We are not licensed investment advisors.