Which Asset Classes Will Perform best as a result of Coronavirus

[Brit Foshee]

Here's my take. Would love to hear yours.

7 reasons on why affordable, single family homes will shine in the coming years.

With increased underwriting requirements from lenders, fewer borrowers will qualify for large mortgages, resulting in more demand for affordable SFRs.

Covid-19 fears & future virus fears will result in a shift from densely populated buildings (apartment buildings, flats, condos, high rises) to homes with space between neighbors. 

Covid-19 has revealed that working from home is a viable solution for many employees. This will push people from 1/1 apartments to homes with space for a home office. 

Home offices aren’t the only additional room you’ll need in this new world of social distancing. Home gyms will also be making a comeback and require additional living space. 

Cooking is also making a comeback which means people will want workable kitchens. They’ll leave small, apartment size kitchens for mid size, affordable SFRs. 

Because of Covid-19, people will likely be home more. Small apartments are sufficient when you’re on the go, but the desire for space will push people to affordable SFRs.

Covid-19 is expected to bring an increase in divorces (China has seen a 25% increase in provinces affected). In many cases, a split home will bring demand for two separate housing units.

A Summary:

People in smaller living spaces will move to affordable SFRs because of the social changes caused by Covid-19. People in larger spaces will move to affordable SFRs because of the financial ramifications of Covid-19, thus creating demand pressure from either side of the market.