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In just one year, the Covid-19 coronavirus pandemic has surely affected the lives of billions of people all over the world. Even with the introduction of vaccines, health professionals remain wary in what appears to be a never-ending process, especially since certain regions of the world continue to experience extraordinary outbreaks and viral varieties. 

Despite a sharp decline in early spring, house sales improved in the summer. Simultaneously, the health crisis had a toll on the economy in the form of job losses and uncertainty. 

Many people are still haunted by fears from the 2007-09 housing crisis, as some homeowners have struggled to make mortgage payments and the jobless rate remains at historic highs. Many households are evaluating their housing demands as a result of the epidemic since their houses have become substitutes for offices, schools, restaurants, and amusement centers.  

The Immediate obstacle 

Real estate investments have delivered consistent cash flow and return much higher than traditional sources of yield, such as corporate debt, over the last several years, with only a modest increase in risk. This reality has altered since the viral epidemic, and real estate players have been struck severely across the value chain. Service providers are fighting to keep their staff and consumers healthy. Many developers are unable to secure permits, resulting in developmental delays, halts, and potentially lower rates of return. Meanwhile, many asset owners and operators are seeing a significant drop in operational revenue, and practically everyone is concerned about how many tenants may be unable to make their lease payments.  

During the crisis, not all real estate holdings are function equally well. The market appears to have shifted its focus away from lease duration and toward the intrinsic degree of physical closeness among an asset class’s users. 

What happened and why? 

In April and May, house sales fell to their lowest levels since the beginning of the housing and financial crisis in 2007 (Figure 1), with many homeowners hesitating to sell in the aftermath of the epidemic. According to Redfin, a major real estate firm, the number of houses delisted climbed by nearly 25% from early March to early April last year. 

In April, new listings fell by more than 40% compared to the same month the previous year. The supply of housing has plunged to new lows due to a lack of new listings and an existing low inventory. According to Redfin, the inventory of houses for sale declined 17 percent in April compared to the same month last year. 

 

 

How leading players are navigating the crisis 

While the long-term effects of the coronavirus outbreak are impossible to anticipate, the immediate financial effects have been evident—the public market sell-off in particular real estate kinds has been nothing short of catastrophic. While confronting difficult commercial trade-offs, all firms, public and private, are trying hard to negotiate the current crisis with respect to personnel, renters, and end-users of space. The majority of industry leaders are attempting to find a balance between capital preservation and increasing their competitive difference. 

Industry leaders have been diversifying income streams, adopting digital methods, and focusing on tenant experience for some years. The COVID-19 situation has expedited the need for strategic reforms, highlighting the fact that those who haven’t yet made such investments will almost certainly need to do so in the future.  

Before the pandemic, few real estate organizations were actively creating or pursuing digital and advanced analytics strategies, although such strategies may help with tenant acquisition and turnover, commercial lease negotiations, asset value, and enhanced tenant experience and operations. The need to truly engage with consumers and staff on health and safety in physical environments is another direct outcome of the pandemic.  

Now one of the many good news we can get is that US Government has started one of the programs called Employee Retention Tax Credits that will come as financial aid to many business owners whose businesses were impacted in the wake of COVID.  

Businesses can qualify up to $26000 per employee and we at Occams group have decorated financial experts who can help small and medium-sized business owners claim the rightful amount.  

 

For more details: https://occamsadvisory.com/employee-retention-credits/