Real Estate & Economic Insights for the week ending June 5, 2020
Where there is still evidence of weakness in certain sectors of the economy as well as the real estate market including retail and hospitality, overall sentiment continues to show improvement. In addition, the number of mortgages in forbearance has started to decline and the Labor Department released a surprising report that 2.5 million jobs were added during the month of May.
While this is cause for optimism, there are still more than 4.7 mortgages in forbearance and US employers have not added back the almost 20 million jobs lost during the COVID-19 pandemic.
During this past week we found the following articles related to real estate and the economy that are useful in highlighting both where things stand and where we are headed
By Keith Larsen, TRD National
“The federal government has extended the deadline for Opportunity Zone investors and developers to deploy capital and begin construction on projects because of the pandemic.
The rules had required that twice a year the government check to ensure Opportunity Zone funds and investors had steered 90 percent of their money into designated projects as mandated. Now, the U.S. Treasury and Internal Revenue Service released modifications allowing those funds and investors to hold their money until June 30, 2021.”
By Kathleen Howley, HousingWire
“The number of mortgages in forbearance declined this week for the first time since the start of the COVID-19 pandemic, Black Knight said in a report on Friday.
The number dropped to 4.73 million from 4.76 million in the prior week, the mortgage data firm said. Measured as a share of all mortgages, forbearances dropped to 8.9% from 9% in the prior week, according to the Black Knight data.”
By, Jeffrey Steele, Forbes
“The ways in which American employers think about work space are changing as the world slowly reopens. Companies are likely to re-evaluate both the type and amount of space they lease in the coming years. The tendency to sign long-term leases may be replaced by the search for more flexible lease arrangements. And companies seeking square footage may want spaces at once both more private and less dense than co-working environs.”
By Conor Dougherty and Peter Eavis, The New York Times
“In the middle of March, as Covid-19 was shutting down the U.S. economy, Hughes Marino, a West Coast commercial real estate brokerage firm based in San Diego, wrote an email to clients offering to haggle with their landlords for lower rent. The firm was ready to help companies “restructure their leases as rents collapse,” it said.”
By Clare Trapasso, Realtor.com
“An improving economy is turning up the heat on the summer housing market.
The unemployment rate fell to 13.3% in May as more cities and states reopened and many furloughed employees were called back to work, the U.S. Bureau of Labor Statistics announced on Friday. While unemployment is still high, it’s less than April’s rate of 14.7% and well under the predictions of many economists.”
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