While things seem to be remaining relatively constant in the residential real estate world, the commercial world has been rapidly changing. It seems that every day there is something new that has impacted leasing, rent prices, occupancy, company operations, etc.
Before we dive into commercial real estate, let’s talk about some residential numbers. As seen on a previous post, the number of new homes listed for sale and the amount of total homes for sale has greatly decreased in the months of this pandemic as compared to the same months in the previous two years. People are very wary of attempting to buy or sell a home now. Those who are able to postpone a move may very well choose to do so until the end of the year or even into 2021 if the world does not get back to the new normal (whatever that may look like) soon. Housing prices seem to be rising, while housing sales are falling. Experts have said that housing sales for May have decreased by anywhere from 25%-75%, depending on the area of the United States and how drastically that area is affected by COVID-19.
Though residential real estate is experiencing changes and some difficulties in this time, it appears that things are more stable than in commercial real estate. Various different experts have released statements of their analysis and opinion about when the commercial real estate world will get back to “normal.” It seems that no one can agree. Many people are saying the return to normal will take a while, at least into 2021 or 2022 depending on the industry (retail vs. office vs. multi-family vs. hotels, for example), while others are saying the return to normal will be in Q4 of 2020, which is in just a few short months!
Though it is unclear how long commercial (and possibly even residential) real estate will be affected, a few things are certain. Right now is a messy time to be involved in real estate. The uncertainty of the future is causing difficulties in negotiations, viewings, contract signing, etc. One thing we know for sure is that this industry will forever be changed because of this pandemic. It is likely that virtual viewings, virtual meetings, virtual negotiations, and virtual contract signings will continue into the future. It is also likely that renters of office space will realize remote working is a smart move that can save them rent money and will therefore continue to work remotely in some capacity, in the future. With that being said, people may want to keep implementing social distancing practices long after we are given the “all clear” just to be safe from a potential second wave of COVID-19. This can greatly impact office space needs if cubicles need to be further spaced out or if open office concepts are thrown out the window after having been so popular and successful recently. Continuing social distancing practices can also impact the capacity of restaurants and retail stores, which can have negative effects on their revenue.
Because the real estate industry seems to be changing every day, check the “Georgia Real Estate News Update” for major headlines regarding residential and commercial real estate. Be sure to keep an eye on the “In The Press” for the real estate industry for daily news articles, as those are updated in real time!