Survey explores the state of post-COVID recovery
With the tides of the coronavirus pandemic ebbing and flowing, each region of the U.S. finds itself in its own state of recovery. In June, the National Association of REALTORS® surveyed its membership to track the recovery of the real estate market, and many of the findings relate directly to IREM membership as well.
To set the stage, when asked, “What phase of the recovery is your market in?” NAR members responded as follows:
- 45% see the market slowly entering recovery
- 28% report their regions are “hotter than normal”
- 19% state their markets have totally revived
- 9% are not in recovery
If the industry was caught scrambling to get on top of the pandemic, at least most practitioners (73%) feel some degree of preparedness for another outbreak. A small fraction (3%) feel totally unprepared. But interestingly, a full 25% either don’t believe a second wave will come, or are simply unsure.
In the never-ending tug of war between apartment rentals and homeownership, the pandemic apparently had little impact, with 85% of respondents logging no change at all from type to type. Thirteen percent did chart a switch to homeownership from the rental lifestyle, with the fractional remainder opting for multifamily. Given the pandemic-induced rise of the suburbs, however, it should come as no surprise that those who shifted to single family occupancies were largely coming from urban areas.
For all the ink spilled on rent forgiveness, the survey report states that:
- 42% of property managers cited no issues with tenants paying rent
- 63% of individual landlords have no issue with rent paid on time
- 40% of property managers reported willingness to accommodate tenants who cannot pay rent
- 27% cited rent accommodation as difficult
- 16% of property managers said tenants terminated their leases
- 6% of individual landlords reported lease terminations
The picture is less positive for the commercial side, where a comparably shallow 19% of property managers reported, “no issues with their tenants paying the rent” compared to 36% of individual landlords. In the multifamily sector, “16% of property managers and 13% of individual landlords reported tenants terminating their leases.”
Of course, tenant expectations for their buildings are changing, with 59% of respondents citing a diminished need for office space as more employees work remotely. Thirty percent are opting for closed offices rather than open plans for those employees who do return to the office.
You can also expect increased demand for:
- Single-story buildings without elevators (21%)
- More parking to avoid public transportation at 19% for both multifamily and commercial occupants
- Other needs, such as wider doorways, garnered less than 15% of responses
The thing to keep in mind, of course, is that responses to the current crisis are bound to change as the parameters of engagement continue to change. Given the above-mentioned ebb and flow of cases and local and national regulatory shifts, we should expect those numbers to continue shifting well into the foreseeable future.