As the coronavirus pandemic rages on, the real estate industry continues to feel its impact in a variety of ways. Here are three ways the pandemic is changing the industry at large.
- Massive surplus of commercial property expected
In order to stop the spread of the virus, many cities have canceled large events, closed or restricted restaurants and even encouraged retail establishments to significantly curtail their store hours. With travel also being restricted, hotels and even travel sites like AirBnB are taking a major hit. Many smaller businesses can’t survive, which eventually creates a massive surplus of retail space. With the global economy in freefall, there just isn’t enough capital to encourage stimulus plans to refill those spaces.
- Travel restrictions also reduce movement in general
The real estate industry is dependent on turnover. New builds require new owners to buy and move into them and new owners for the homes they vacate. Those new builds also require a robust workforce to build them, however. Fear causes people to shelter in place and a global pandemic even more so but a global pandemic also creates a decreased workforce with which to try and keep up with demand. With COVID-19 taking several months to sweep across one population before moving to another, it could take months for housing markets to pick up steam again.
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