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> Meanwhile, the price of property they do own will be going down, depending on how long the crisis lasts. Could you explain why you think this will happen?
by thih9 7y ago
> Meanwhile, the price of property they do own will be going down, depending on how long the crisis lasts.
Could you explain why you think this will happen?
- deleted 7y ago[deleted]
- Enginerrrd 7y agoBecause demand for that type of property will fall and the increasing scarcity of cash will make it harder to get loans to buy property.
- vijaybritto 7y agoAs less and less people will want to buy?
- kart23 7y agoMortgages too. Same thing as 2008, although it will take longer to achieve the same result. People are losing their jobs, no longer able to pay mortgages, housing prices fall.
- Causality1 7y agoAnd, to put it bluntly, there are going to be a lot of empty houses previously owned by elderly people.
- BurningFrog 7y agoJob loss etc is temporary and should even out in less than a year (uneducated guess). But if 1% of the population dies, that's a permanent demand drop!
- lotsofpulp 7y agoDemand is not the same everywhere. I expect the in demand areas of the US to continue to stay in demand. Prices in the areas without demand will go down further.
- nicpottier 7y agoI generally have believed that as well, but wonder if there will be some flight away from cities after all the dust has settled, at least in the shortish term.
- londons_explore 7y agoWhen demand drops for housing, that's often because people have moved in with relatives, moved in with partners, etc. After whatever triggered that, many might decide they like paying less rent/mortgage costs, so demand will never fully recover.
- BurningFrog 7y agoThis inertia will probably apply also to those who die :)
- martincmartin 7y agoWith lots of companies struggling or going under, the demand for commercial real estate should be lower. Supply roughly constant, demand significantly down.
- wyldfire 7y agoI would think/expect that long term demand for the services provided would continue to exist/grow, so probably just short term commercial real estate impact?
- short_sells_poo 7y agoProbably, but the key issue is how levered WeWork is. It's the same really as taking out a mortgage you can barely pay. It only takes a short term shock to push you into default, and once foreclosed, it doesn't matter that you'll eventually recover because the losses will be locked in and you no longer participate in the recovery.
- lkbm 7y agoCompanies might also realize that now that they've figured out how to work remote, they should keep doing that and save ten grand or so a month. I believe the smallest offices in the WeWork we're housed in are $6k/mo. Those are generally used by teams of 3-6 people.
- wool_gather 7y agoEmployees are not universally going to just eat the costs of working from home (or from shared spaces) on behalf of their employers, though. If this becomes a more regular situation, employer subsidies for remote essentials will be expected features of jobs even more than they are now, i.e., not just perks. The monthly bills for 100 remote workers is easily 10K -- their internet connections alone would probably hit that. A single person renting a desk at a co-working space is going to spend a few hundred a year.
- 7y ago