Nearly 90% Of Renters Paid Up in December
As the pandemic continues, American households struggle to make ends meet. According to the National Multifamily Housing Council, tracking 11.5 million residential units, only 89.8% of household paid their rent in full or partially by December 20. The collection rate slid, compared to the time between April through November, showing the financial burden on households. While President Trump recently signed the $900 billion COVID relief package, which includes $25 billion for rental assistance, industry experts believe that the stimulus provides only a short-term help. According to Stephen Bertonaschi, senior managing director of Real Estate Solutions at FTI Consulting, deferred or back rent is estimated to exceed $70 billion.
CRE Waits to See if the Suburban Migration Trend Sticks
The key question for real estate investors is which behavioral changes, triggered or accelerated by the pandemic, will continue in the long run. “The behavior changes that holds the biggest impact for commercial real estate is people’s ability to work from home,” Chang, SVP and director of research services at Marcus & Millichap, said in a recent video. “This changed office usage and has caused or enabled people to move to the suburbs or different cities.” The exodus to small cities, such as Phoenix, Seattle, Charlotte, Atlanta, Tampa, and Austin, caused demand for office space, apartments, and other real estate related industries in urban areas to decrease. While the long-term persistency of this trends remains open to further discussion, it may certainly have the potential to substantially disrupt real estate markets, presenting new opportunities to investors.