COVID-19 and Real Estate
Updated: Sep 1, 2020
The COVID-19 pandemic came all of a sudden and affected significantly all aspects of people’s lives all over the world. Around 2.6 billion of people around the world are now living in worry and precautions due to this pandemic.
What Is COVID-19?
COVID-19 is a new form of Coronavirus disease due to the novel virus SARS-CoV-2 that causes acute infection with respiratory symptoms (American Thoracic Society, 2020). COVID-19 is a disease cause by corona virus that can spread from person to person. It is an illness that can be caught by anyone regardless of race and ethnicity. The symptoms of Covid-19 range from mild to severe illness. People who are elderly and people with pre-existing medical illnesses like diabetes, heart or lung disease are at the highest risk of dying from infection due to COVID-19 (CDC, 2020).
In the United States alone there are already 1.13 million of people with COVID-19 and 62,406 deaths due to COVID-19 as of May 2020 (CDC, 2020).
How COVID-19 spread?
A person can become infected by coming into close contact with a person with COVID-19. The virus can be transmitted from person to person through respiratory droplets like when the infected person coughs, sneezes or by merely talking (CDC, 2020).
Is there a Vaccine for COVID-19?
Currently, there is no vaccine yet for COVID-19. This is the reason why necessary precautions are needed so that a person can protect himself/herself and others from COVID-19.
What is Social Distancing?
According to Health University of Utah (2020), this is the practice done to stop or slow the spread of a highly contagious disease such as COVID-19.
The goal of this action is to have limited face-to-face contact in order to decrease the spread of the disease within the community.
Implications of COVID 19 on the Economy
The level of uncertainty in the economy is at an all-time high. With no vaccine yet and the cases of COVID-19 has been accelerating, strong measures were implemented to combat the outbreak of the virus. One of which is reduction of economic activities. Lockdowns of citizens and shutdowns of businesses had been implemented all over the world which resulted to the impairment of the economy.
Millions of Americans filed for unemployment claims. And it is unclear the amount of people that will lose their jobs in the weeks to come. The severity of effect of COVID-19 still uncertain as the virus has not been contained and no vaccine is available yet. Although, some estates in the U.S had already opened to business with the “new normal” settings, there are clouds of uncertainty all around.
Real Estate Implications of COVID-19
Over the past years, real estate investments have been growing steadily. Investments have created steady cash flow and created significant returns. With the outbreak of coronavirus, the situation has changed. Due to the COVID-19 pandemic investment activities has cooled all across the world.
Across the world, many developers had to stop construction works. And the delays brought to the construction also resulted in potential slow and shrinking return rates. Commercial properties are greatly affected. But not all real estate assets are performing the same way during this pandemic.
Meanwhile in the United States, single residential properties became more valuable than ever. Single family rental properties have become a great investment option because of the situation right now – more and more people would like to take shelter from COVID-19. People who are living in multifamily apartments may transfer to single residential properties in order to protect themselves from COVID-19. Living in a single residential property became a greater option. With this, single residential properties are still the best investment option.
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American Thoraric Society. (2020). Patient Health Information Series: What is COVID-19?
Centers for Disease and Control Prevention. (2020). Corona Virus Disease 2019 (COVID-19)
Cases in the US Available from https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html
Centers for Disease and Control Prevention. (2020). What you should know about COVID-19 to protect yourself and others
European Center for Disease and Prevention and Control (2020). Coronavirus disease 2019 (COVID-19) and supply of substances of human origin in the EU/EEA
Health University of Utah (2020). CORONAVIRUS (COVID-19) FAQS Available From https://healthcare.utah.edu/healthfeed/postings/2020/03/covid19-faqs.php