Life isn’t going back to normal anytime soon is Real Estate?

[Matt Higgins]

Just read an article from the MIT technology review and read up on what we already know. Life is not going back to normal tomorrow, next month, or maybe ever.

https://www.technologyreview.c... 

until we get a long term fix for carona our economy will be as bad as its ever been.  MIT predicts that this will not be the countries only bout with social distancing. Some will go back to work, and when cases rise they will clamp down again. It sounds like eventually rules will have to be enforced at the city, county, or state level. We will have to restrict travel and sacrifice some of our social liberties to live with the virus. How many business or apartment operators can withstand a 12-18 month disruption? How many people who work in US retail will be laid off by the end of this month? It amazes me that the stock market is only down 7000 points. After disastrous earnings reports for the next 3 quarters the only thing CEOs will be able to tell share holders is that we are cutting expenses and laying people off. Even if the government puts a moratorium on foreclosures who will still have a job when the moratorium comes off? The foreclosures will come in waives.

I have heard people say A and B class apartments is where it’s at because their jobs are safe and they can work from home. BS, I know a bunch of mid level executives and some are already being let go. Eventually they will trade down to C class. I am sure some of my C class tenants will be laid off soon, but at least they should be able to make most or some of their $700 rent on tax returns, unemployment, and stimulus. Even if they don’t, I would rather miss out on a $700 payment than an $2000 payment. I would rather pay my C class property tax bill than the A class bill.

Sorry if this is too doom and gloom, but I got the carona blues :(

It sounds like the government is going to bail out as many people as possible, but just like in 08, the people who had their loans modified usually ended up losing them anyway. I’m sure the fixed cost of running an apartment in NYC is high, you have a moratorium on evictions, a governor threatening civil war in a state telling citizens not to pay rent, and talking for 2 hours a day on national tv about how to make pasta. None of this can be good for the investor who was already losing residents to low tax states.

I wonder how the refi & roll, brrrr, and vrbo strategies will look 18 months from now? My least favorite BP line of all time, “I can’t wait for the next crash so I can scoop up all the good deals”. I’m sure that line is usually given by the highest leveraged of all of us or the person that will always be too scared to jump in.

Crazy times, someone talk me off the cliff :) how hard will multi family be hit when the dust settles?

[Sam Josh]

@Matt Higgins

Disagree. It might slow us down but not stop us. This may last longer but not forever. Lower Manhattan was ravaged in 2001 after the WTC attacks. The whole area came back in a few years. 2008 pushed people into foreclosures but by 2012, it was a distant memory. The world has seen tsunamis, world wars and natural disasters, things have always normalized. To me being too dark right now is the exact opposite of the “brag bro posts” that used to crowd BP forums until recently claiming real estate world invasion and imply invincibility.