What Markets Are the Best & Worst Positioned For Coronavirus?

Question

What markets do you think are in the best position? What markets do you think are in the worst position? Why?

Account Closed · Answer

I personally think Section 8 regardless of market is gonna come out of this recession in a new light. Yes, you will deal with lower quality tenants and higher turnover, but the bright side is at least 70% of your rent is covered. Might mess up your cash flow but they won't have to worry about missing a mortgage payment at least.

Spencer Cornelia · Answer

@Russell Brazil I've been asked by one tenant to reduce rent. And I reduced rent for another two great tenants. Want to get ahead of it. My opinion: the rental supply is about to increase as people who just got laid off will all of a sudden not have their mandated "can't live with roommates" first world living mindset removed.

Add in Airbnb market potentially forcing owners to get some rent.

This isn't based on numbers or anything, just my hunch.

Robert C. · Answer

@Russell Brazil, You know... it sounds as if Trump may be unwilling to continue the social distancing and economic restraints beyond a month or so. If that ends up being true, and the federal government opens everything up again early, this question could get pretty "interesting". You'll end up having some states that will try to keep quarantine procedures going, and then you'll have other states that will try to go back to business as usual. You could have very different results as to which locations become economically resilient sooner even if local healthcare systems are a mess.

Alexander Felice · Answer

@Russell Brazil

I can't speak for Vegas much since I'm not there anymore, I find it likely that it'll be a highly volatile market since it's main source of income (tourism) has basically been turned off. The total amount of damage will be a product of how long things are shut down, and that I can't know.

The town I live in now, Fayetteville NC is next to a very large military base. So far we haven't noticed much of the lock down. Restaurants and bars are closed and a good portion of our economy is based on that service income so I don't want to say there is no effect, but in many ways it's business as usual here. During the last crash this town was highly insulated as well, simply because the military makes up about 15% of the total population here and they won't have any negative job ramifications and that stability trickles into the market.

We have a close relationship with the section 8 office, I think that program and other housing programs will be expanded during this. Lower income assets will increase in demand and availability to subsidies.

Scott Mac · Answer

Seems too early to tell. There are still so many variables. Such as what will the Federal, state and local Governments do to offset it, (some areas take steps to uplift their residents lives, and some areas give only lip service to it steering money to certain things that do little but continue the suffering as a profit center--such as some areas helping the homeless by giving them shopping carts vs really helping them).

Also the underlying industry base will play into it, for instance Houston makes chemicals that are used worldwide in other industries, is that a positive or a negative---(and for how long) time will tell.

Solomon Morris · Answer

Account Closed commits to will be bullet proof during a shake up in the economy.  Some voucher tenants are paying pennies on the dollar to keep a roof over their heads in comparison to market renters

Nicole Heasley Beitenman · Answer

STL's will get pummeled.

Jay Hinrichs · Answer

I closed on a flip i had here in Vegas on Friday.. buyer first time home buyer FHA price point 235k East of the strip.. She was laid off by Casino she had to get letter from Casino that she would be back to work after the 30 day shut down.. She got that letter and the loan funded and she moved in over the weekend.

I have also seen the Mayor at odds with Governor about the 30 day shut down.. so there is pressure to go no longer than 30 days.. Question will be will the public come back.. probably take some time but think they will.. people will be really tired of being couped up and want a fun weekend etc.

Plus in Vegas cant discount the flight from Hi tax states CA OR to name two.. Folks that can work from home that move for the tax and weather benefits .

other benefit for owning in Vegas is property tax's are very low  cap ex low  stucco building tile roof desert landscape does not get much cheaper to own compared to other parts of the country.

Russell Brazil · Answer

@Spencer Cornelia & @Alexander Felice what do you guys think about Las Vegas and the situation. Im assuming Vegas will be slammed pretty hard.

Account Closed · Answer

If you take a look at the AirBnB subreddit, they are all freaking out. A lot of them have lost a lot of their bookings.

What Markets Are the Best & Worst Positioned For Coronavirus?

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