On March 30th The Washington Post reported that The National Association of Realtors believes that 2020 will see an estimated 10 percent reduction in sales. However, this number could potentially be higher depending on how hard the economy is hit by the coronavirus outbreak, how long the shutdown will last and whether people can recover from the pause in their employment. The restaurant and service industries are expected to take the largest hit and many will not be able to get back on their feet.
As of now there is still hope, as commercial real estate has not completely stopped. Many deals that were in the works before the outbreak are still active. Businesses that are on a tight time schedule still need to get deals done to remain, even slightly, on schedule with future plans. Whereas, many Investors have placed deals on pause to wait-out this situation and see what things look like on the other side.
Though things have slowed for now there is still potential for growth once citizens return to work. Don Epley, an economics consultant and former professor at South Alabama was quoted in a Fox10 report that, “one lesson from the Great Depression is the need to keep money circulating through the banking system. He said the Federal Reserve Board has taken steps that should keep that system functioning. And he said that if the COVID-19 outbreak recedes sooner rather than later, the economy could come roaring back.”
Essentially, there are many conflicting reports on how COVID-19 will affect the economy. As of now it is hard to predict exactly what the future holds. For the real estate industry, how business will be affected depends on the banks’ ability to weather the storm of this pandemic. Currently it seems that the government is taking precautions to ensure the safety of the economy but unfortunately it is still a waiting game.