COVID-19 is Prompting New Round of Real Estate Questions
“As seen in the Real Estate Reality Column in the San Leandro Times & Castro Valley Forum, written by Carl Medford”
Growing up in a lower-income home, mealtimes were an adventure to see what cost-effective solutions hit the plate. Occasionally we’d splurge and visit a buffet: for us kids, it was a yearly highlight. Not to waste the opportunity of all-we-could-eat food, we never went to simply eat a meal: we attacked the tables with the mentality of bears storing up for the winter.
Recently passing a buffet, I was startled to see a “Permanently Closed” notice. A Google search of buffets revealed a trend: due to COVID-19, national buffet chains are permanently shuttering locations and laying off thousands.
It is no surprise restaurants are suffering, along with hotels, sports and performing arts venues, home furnishing stores, movie and recording industries, dentists, laundry services, clothing stores, casinos, amusement parks, sightseeing tours and the travel industry. With no end in sight, it is difficult to imagine what will be left once restrictions lift and harder yet to visualize what changes will be forced on businesses to allow reengagement. Quoting one buffet executive, “Bans on restaurant self-serve operations may spell the permanent demise of buffets as we have known them.”
While many segments of our economy are reeling and thousands have permanently lost jobs, the stock market has recorded its best comeback in over 80 years as values have rebounded into pre-collapse territory. It is hard to imagine how this is possible, given the fact that our economy is reinventing itself on the fly. Some are predicting even larger gains as reopening begins.
Real estate is another conundrum with values soaring across the country. Propelled by inventory shortages that predate the pandemic, we saw a momentary Covid-related hiccough in housing values before grabbing their footing again and continuing upward. Multiple offers have again become commonplace as buyers duke it out for their piece of the American dream.
All of which prompts a few questions. What happens when job losses and the corresponding inability to make loan payments means thousands will be forced to sell their homes? What about those unable to repay loan forbearances when banks demand? What will happen to rental housing stock as tenants are increasingly unable to pay rents, local municipalities continue forbidding evictions and landlords consequently choose to liquidate assets? What happens if companies allow employees to permanently work from home and they no longer need expensive housing within commute distance to their jobs?
Enquiring minds would like to know.
Carl Medford is a licensed Realtor with Keller Williams Realty and a licensed general contractor. This article is sponsored by the Central County Marketing Association.