Published on: May 28, 2020
BY TED C. JONES, PH.D.
The economic impact of the Coronavirus varies from one city to the next just like medical symptoms and severity of those infected by the virus differs from one person to another. A myriad of factors affect how each local housing market will respond under these pressures and economic uncertainties. My favorite economic and real estate term is, “It’s all about jobs.” Jobs create effective demand for housing. While some jobs have persevered in the face of Coronavirus, more than 30 million jobs have disappeared – at least temporarily. As discussed in a blog yesterday, one out of every two Leisure & Hospitality jobs (46.8 percent) were lost in April 2020 alone. See http://blog.stewart.com/stewart/2020/05/26/most-at-risk-metros-for-unemployment-due-to-leisure-hospitality-employment-coronavirus-impact/ Every major job sector notched job losses in April.
To estimate which housing markets face the most risk from Coronavirus, 24/7 Wall Street created an index, including metrics of the overall health of the respective housing market and local economy:
Findings and select summary metrics are shown in the following table which ranks the 30-most-at-risk housing markets due to Coronavirus. There is no one stereotypical description for metros on the list. While there are many tourist destinations with high-numbers of Leisure & Hospitality jobs such as Las Vegas, New Orleans and Orlando, some others include manufacturing (Akron and Cleveland), regional service and agricultural centers (Fresno and Bakersfield), seasonal and permanent retirement destinations (the Florida metros and Phoenix-Mesa-Scottsdale) and even the largest Metropolitan Statistical Area in the Country – New York-Newark-Jersey City. There is no one-size fits all description among the top-30.Corona
To read the entire article printed in USA Today click https://www.usatoday.com/story/money/2020/05/20/cities-on-the-verge-of-a-covid-driven-housing-crisis/111782790/
Ultimately, supply and demand will govern how these housing markets perform under the Coronavirus Pandemic. When it comes to the effective demand for real estate, jobs are everything. But 35 million (and counting) jobs just disappeared – hopefully temporarily.