Pandemics and Real Estate
In Giovanni Boccaccio’s classic Decameron, he tells the story of several men and women who went into a secluded villa outside the outskirts of Florence to escape the pandemic raging at that time: The Black Death. There they tell stories and share their wisdom and knowledge in 100 stories, as they wait for the plague to die down. The circumstance is not alien to some of us. As the world continues to feel the effects of COVID-19, many are finding the need to move to places where space and seclusion are at a premium, which is not at all unlike the circumstances in the Decameron.
New York’s Unexpected Real Estate Boom
New York state has seen a surge in house sales in many cities and towns. Homeowners are looking to leave the city and move to suburban areas where they have more green spaces and areas for their families. Even as lockdown measures ease, many families are looking for properties that would provide more space for growing families, even as some people in other parts of the U.S. are trying to refinance their mortgage loans due to the pandemic.
Larger properties are also attractive to people who prefer to do outdoor activities. Many cities have a lack of green public spaces, and months spent in lockdown have only made it clear to many residents that suburbia could give them the respite they need from lockdown fatigue.
Canada’s Housing Market
But it has not been the same in other countries. In Canada, the housing market went into a slump as realtors couldn’t schedule viewings while buyers became more cautious. Home sales went down more than 56 percent, the worst rate in the industry since 1984. But even if the number of homes being sold is in free fall, rates remain at a steady rate.
Experts and speculation remain positive that the housing industry will survive but expect that some homeowners may become delinquent in payments in the next few months. They expect the industry to recover only in 2022.
COVID-19 and Commercial Real Estate
But it’s not only residential property values that are going down. Commercial real estate property value has fallen 25 percent. The most affected were hotels, resorts, sports facilities, and entertainment parks. Even malls, student housing, and healthcare facilities have been affected, and many in several countries have been closed or sold.
The slowdown of foot traffic in many establishments have made commercial properties not a viable investment, and consumer confidence has slowed down in many shops and stores. E-commerce and online shopping have become a better alternative for many people.
But as history has shown, living in a time of a pandemic would certainly affect human traffic and the movement of goods; but then these could certainly bounce back, as nature and science would find a way for the human race to adapt or eradicate this disease. And similar to the events in the Decameron, countries and people only need time to recover from the effects of such a disaster, even if it means moving to less congested areas. The real estate industry might seem down, for now, it is not yet out of the count for 2020.