Defeated in round 1 of Covid-19

[Justin Thorpe]

June is over and it seems to me that in the battle royals between the United States and Covid-19, the latter has prevailed in this first round.

To me this phase and especially the last 3 weeks were critical.

Coming out of May, things looked very promising but now at the end of June things look dire and I feel we have a chance to go off a cliff in coming months for a few reasons :

1) High unemployment will persist. Furloughs are ending and most people are not being invitee back to their old jobs.

2) Stimulus is running out

3) Extra unemployment benefits are expiring in 4 weeks

4) PPP program expires at the end of July

5) Second round of corporate layoffs are just starting now

6) The shoe is going to drop on commercial RE

7) Residential RE will likely start to face the music soon

8) Persistence of Covid means single economy towns are at grave risk. I am talking about Las Vegas or Orlando or the hundreds of college towns all over the country

9) Increasing odds that Trump gets voted out in November

10) Massive financial pressures on state and local governments

11) 2nd quarter financial results will pull the stock market down

Another massive dose of stimulus and extended unemployment will be needed to keep things going.

I wish I had a more optimistic view but it does not look good.

[Jenni Utz]

I understand your concerns, but in the world of owning rental properties this should be a good thing. If people can't afford to stay in their homes anymore, they will be moving into a rental. The one thing that we know for sure is people need somewhere to live. If they can't do it on their own, they will do it through landlords. When the real estate economy tanks, I usually find the property management world doing extremely well.