The U.S Real Estate is in a tighter position in the recent COVID crisis. Looking back at the 2008 financial crisis, many considered the real estate market will end soon. But nothing happened then.
Now after 12 years, some experts are again having a negative outlook on the COVID hit real estate industry. But not everyone is having the same stance. According to Chris McAllister, “Real estate will have the best year after the pandemic.”
Studies show that the real estate market had a significant consolidation from 2008 to 2015 before going back to the normal stage. So the real estate market in the U.S is not dying soon.
The U.S Real Estate Performance in 2020
The first half of 2020 was a bad year for most of the global businesses. Most of the industries took harder financial hits including retail, transportation, restaurants, tourism, and real estate.
When the first COVID-related death was declared in the U.S stock market plunged immediately. Similarly, real estate agents found themselves out of business due to lockdowns and restrictions. In March, most of the construction sites were abandoned.
IREI published some vital information regarding unemployment and stock market of the U.S on the March 2020 performances-
- Unemployment rose to 3.2 million on March 26, 2020.
- The stock market had the fastest decline in March 2020 since 1931.
The blow to the real estate market was critical with 75% short-term rental income losses. Moreover, considering real estate as a “non-essential” market by some politicians in the U.S made the situation worse.
The post-COVID real estate reports are showing promising numbers. Statista.com published that commercial real estate transactions will cross $478 billion in 2020, just $22 billion behind 2019 numbers.
Analysts anticipate that the total cost of the pandemic will have accumulated to a staggering $8.8 trillion by the end of 2020, which is almost nine percent of the global GDP.
Besides, digital technology is teaching real estate agents new ways to do business. For instance, agents are now giving virtual tours on online platforms like Zoom, Facetime, and Facebook. Already orders are gaining momentum in the 2nd half of 2020.
So it will be interesting to see how fast the real estate market will recover from the pandemic crisis in the age of “New Normal.”