The Domino Effect of COVID-19 and Closed America on the Housing Market

[starshipcat]

I've been expressing concern about the housing situation ever since I heard that a third of US renters did not pay their rent at the beginning of April. I haven't heard any statistics on how many renters failed to pay their May rent, but I'm expecting that it's been even worse as people run through their savings and their stimulus money

Comments

[wombat_socho]

The small landlords can't even look forward to writing the losses off on their taxes for the most part; between expenses and depreciation of the properties, most of them that I've dealt with during my career with H&R Block are writing off passive losses even in years when they're collecting rent all year. On the other hand, the realty companies won't be in much better shape for the same reasons. It's going to be a mess, one way or the other.

[starshipcat]

Thanks for the empirical evidence to back up the generalizations from the article I was reading. I know from experience that most small business have razor-thin profit margins, but I hadn't really realized just how tight it was for landlords.

[whswhs]

In my experience, in at least large parts of California, you simply can't find an apartment whose monthly rent isn't in four figures (or perhaps more). When we were searching for rentals in Lawrence, I checked listings for Riverside, where we lived, out of (perhaps morbid) curiosity, and I couldn't find much of anything for less than around $1300-and that was for small one-bedroom apartments. And Riverside's not an expensive city by California standards.

[starshipcat]

When my youngest brother moved out to San Jose, he and his friends ended up going in together to rent a house because it cost less than any apartment they could find. When one of the friends was getting married right about the time when the landlord wanted to sell the house, the guys ended up pooling their money to buy a small apartment building, so they each have an apartment in the building they co-own. And they're all in the tech industry and making good money, and have been buddies since they were all working on their EE degrees.