Many folks are asking about what the pandemic will do to our economy and the future of real estate. One thing we can say is that there is an impact happening to both and there will be for the near future. Some industries are thriving, others are dwindling, and some are status quo at the moment.
The thriving industries such as online shopping and delivery services are on the upswing. This fact has in turn affected many brick and mortar retail businesses leading to large commercial property vacancies. This is coupled by an increase in companies adopting the Work-From-Home concept. A concept that appears to be continuing, and more than likely will be a permanent policy for 50-60% of the workforce. With some companies opting for the satellite office concept as more and more folks are choosing to forego Urban living for the suburbs.
The housing market in the south has been booming for a while, but with the mass exodus from the northern states to the south, the real estate market is on fire. The desire for more low-density areas, more affordable housing, and for Florida, no state income tax, has really added fuel to the fire. We ponder, what fate is in the future for those cities being vacated now, such as Boston, New York, Los Angeles and San Francisco?? Urban Land Institute (ULI) survey indicates these vacated cities will struggle for the next 3 to 5 years. Predicting these major hubs will re-emerge in a few years to their pre-pandemic highs due to their dominance in the entertainment, technology and finance industries. And as trends were once to urban, they are now trending to suburban…. we can be assured at some point, the real estate world will trend back to Urban living once again in 7-10 years.
Many businesses vacated retail store fronts, malls and even office buildings. And in central Florida, hotels are at incredibly low occupancy leading to closures as well. The need for affordable housing is paramount due to the financial hit on the lower income workers. This will lead to more low income Housing tax credits and Section 8 voucher programs.
There is also a large shift to more satellite offices versus the entire company in one large office space in the urban location. Struggling locations in urban areas provide opportunities to anyone purchasing now and holding until the market returns. These struggling housing and retail locations in the urban areas can lead to some discount when purchasing now, for future growth.
Think about what the COVID-19 pandemic is causing to real estate in our communities. We should take this time to Re-think how we view adversity, re-invent how we all can move forward with our own investments in a positive and productive way. I am positive there are new opportunities and growth for us all. I want to be there to assist you and help get our communities back on track and there is no better way than with Real Estate!! If you are ready to talk about your goals for 2021 and beyond as an investor, homebuyer and/or home seller, give Schulte Realty a call at 407-721-0611 today!