The pandemic shifts the trend to digital opportunities
Canceled gatherings. Closed shops. Suspension of classes.
The COVID-19 pandemic brings drastic changes worldwide. Based on the report from the World Health Organization, there are more than 17 million confirmed COVID cases worldwide as of August 2020 with more than 600,000 confirmed deaths. New policies are introduced to help people from around the world cope up in both personal and economic aspects.
The widespread repercussions of the pandemic in 216 affected countries have made a huge difference globally. Needless to say, the outbreak causes unprecedented changes in the real estate market. Measures are undertaken to contain the spread of the virus. In the United States, a recorded 20.5 million jobs were lost in April due to the pandemic. Putting all these into consideration, financial security becomes truly important now more than ever.
Key impacts in Socioeconomics
A lot of predictions in the market do not hit the expected mark. The correlation between the supply and demand rapidly changes. The global stock markets sunk due to unpredictable factors. Studies show that this US stock experience becomes a dilemma, its worst fall since 1987. The main US share indexes closed a percentage downfall and some believe that a recession will happen anytime soon.
According to the International Monetary Fund, the proportion of U.S unemployment has hit 10.4% in relation to the pandemic. Many Americans lost their employment because of the lockdown measures implemented by the government. Many industries suffered, the travel and leisure companies being the worst affected.
Demand for automation
The imperative to stay at home is becoming the new trend. Online applications providing meeting platforms such as Zoom, Microsoft Teams and Google Meet become highly in-demand. The number of Zoom users has multiplied from 10 million to 200 million a day based on an article released by the company itself. Some companies even started shifting to the work-from-home arrangement in order to continue operations.
Coordinated efforts are introduced to help the people and the economy. Washington enacted the largest economic stimulus package in history, with a $2 trillion allotted budget. Funds are given also to the Paycheck Protection Program and open loans to small businesses.
Last June, U.S firms created 4.8 million jobs. Notably, the employment rebound is a positive development, with over 2 million jobs added to the leisure and hospitality sector. The Americans are moving forward day after day.
Why invest in real estate now?
The rise of inflation is inevitable as the economy is still adjusting to the effects of the pandemic. Some states are still on lockdown protocols to slow the spread of the coronavirus. In April, The Commerce Department said that consumer spending dropped 7.6% for the last 3 months. Efforts are given to encourage spending, including lowering interest rates and giving direct aid to families.
We must not think only how to survive today, but we must have a long-term plan to keep us going. Keeping cash is difficult because it may easily depreciate. It is highly advisable to invest your cash into something that will appreciate in value.
Surprisingly, the crisis has trickled down some positive effects in the real estate market. For the last few months, more people are looking for rural properties for them to work from home. US house prices continue to rise in March proving that the real estate market is still a smart investment.
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Steve Liang is the Co-founder and CEO of Real Estate IQ. He is a national speaker and a member of the Real Estate Advisory Board of North Lake College. Some of his achievements include being the REIQ’s Market Leader in Real Estate Intelligence Augmentation; co-founder of Real Estate Deal Finders Meetup, which hosts over 20 monthly real estate networking and deal-finding training in Texas; and a goal-setter and motivational speaker that helps entrepreneurs to unleash their potential and achieve their goals. Steve has spent most of his career practicing leadership, management, marketing, strategy, and execution