The Economy, Housing & Commercial Real Estate for the week Ending April 17, 2020

There has been no shortage of news this week as the coronavirus continues to wreak havoc on our daily lives. Following are several articles relating to the economy, housing and commercial real estate which we found to be most significant in highlighting where things stand.

Nearly 4% Of All Mortgage Loans Now In Forbearance

Forbes – by Aly J. Yale

“According to the latest stats, nearly 4% of all mortgage loans are now in forbearance—a form of mortgage relief that allows homeowners to temporarily suspend their payments due to economic hardship. That share is up from 2.74% last week and a mere 0.25% in early March.

Loans serviced by independent mortgage banks are seeing the highest share of loans in forbearance at 4.17%. “

U.S. commercial real estate braces for defaults as pandemic cuts cash flows

MarketWatch – by Joy Wiltermuth

Delinquencies on commercial mortgage-backed securities (CMBS), which are loans on malls, skyscrapers, apartments, offices and other property types packaged into bond deals, stood at 2.57% in March, far below than their 10.06% peak in July 2012 in the wake of the global financial crisis, according to Moody’s Investors Service’s latest tally.

But those figures also don’t fully capture the economic disruptions caused by the coronavirus pandemic, Moody’s analysts warned, adding that property-level “cash-flow stress, particularly across hotels and retail properties,” will trigger more defaults.

NAR survey details evaporation of homebuyer interest

HousingWire – by Phil Hall

“According to a survey of 2,291 NAR members conducted April 12-13, 90% of respondents cited decreased homebuyer interest at this time, with 44% reporting buyer interest fell off by more than 50% in their market.

Only 8% of respondents stated there was no change in activity and 2% of respondents identified increased activity.”

CORONAVIRUS COULD MEAN ANOTHER EPIC MELTDOWN FOR U.S. HOME PRICES

FAU College of Business – by Ken H. Johnson, Ph.D.

“The housing market already was nearing a correction before COVID-19, so an effective treatment or vaccine established in the next few weeks should translate to only about a 5 to 10 percent drop in home prices, followed by a relatively quick recovery, according to Johnson.

“‘But if this lasts for many months, it could easily rival or surpass what we saw during the last housing crash,’ Johnson said.”

Private real estate investment deals tumble worldwide

The Real Deal – by Mary Diduch

“The number of private real estate investment deals plunged worldwide last month, the latest example of the coronavirus’ all-consuming effect on the global economy. And so far, April has been even worse.

Commercial real estate deals were down nearly 43 percent in March year over year, according to data from research firm Preqin. North America was essentially the same with a 44 percent drop.”

South Florida Real Estate

To learn more about the real estate market in South Florida, please visit the Real Estate Market Reports page on our web site. Every month it is updated with the latest published reports on the housing market in Palm Beach, Martin, Broward, and Miami-Dade counties as well as commercial real estate information which is provided by local market participants.

 

 

Are You in Need of Help?

If you are a residential homeowner, small to medium-sized business or commercial property investor that has been adversely impacted by the coronavirus, there are things that you can do to alleviate some of the burden during this trying time. 

Residential and commercial property owners can inquire about possible forbearance programs from their lender while businesses can attempt to negotiate lease payments deferrals from their landlords as well as apply for Small Business Administration (SBA) loans through the recently passed CARES Act.  

Our team at Quantum Realty Advisors has assisted clients through a number of economic downturns since the early 1990’s.  If you would like to discuss options and alternatives for your personal real estate or commercial property obligations, please contact Chris or Amy Losquadro at your earliest convenience.

 

Disclaimer:  This information is provided for educational purposes only and obtained form sources deemed reliable but not guaranteed.  This information does not represent legal advice. We do not provide tax, legal or accounting advice. You should seek independent representation.  If you need assistance finding representation we would be happy to help refer you to a qualified professional.