How Coronavirus Will Affect Rents
Q: How will Covid-19 affect rents? Hailey, Hoboken, NJ
A: Every local real estate rental market is different with it’s own unique set of characteristics and laws so the effect of the Coronavirus like any exogenous factor will vary from place to place. It may be useful to think of how rents will be affected by Coronavirus in terms of the short term impact vs. medium and long time impact. In the short term, given that many places have instituted eviction moratoriums, landlords have no choice but to be patient. Smart landlords will be flexible, offer options to affected tenants while being clear and consistent–other landlords won’t and will ultimately suffer as a result. Regarding airbnb and similar short term rental platforms, people who rent spare bedrooms or use the platform to supplement their primary income may see limited effect this year, however, for aggressive speculators, who purchased or master-leased property at high prices hoping to meet their mortgage or rental obligation by renting them out year-round, Coronavirus is a disaster. At some point, hopefully before the end of 2020, we’ll reach a stabilization point with respect to rents, but it hinges on many unforeseen factors one of the most important being how everyone responds to the crisis. Virus or no virus, everyone needs a place to live. Although housing inventory remains low in many places, I suspect that rents and home prices in many local markets will tick lower because we’ve already lost over 30 million jobs and income and the economy more than anything else is what drives rents and home prices. Thanks for your question, Hailey.
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