The widespread effects of the coronavirus pandemic have infiltrated nearly every industry. The real estate sector is also feeling the stress of the unknown. Riding high on the recent boon in the commercial and residential markets the past few years—at the end of 2019 supply was at near record lows nationwide, and demand was near an all-time high—builders, architects and realtors are now scrambling to navigate the crashing near-halt the industry has faced.
While the effects are different depending on the sector and region, the snowball of layoffs, shutdowns and curfews continues to impact the economy. Places known for social gathering have been the hardest hit, but many builders and architects have seen a decrease in residential activity that doesn’t look to be stopping anytime soon.
The National Association of Home Builders has conducted two online surveys, thus far, in order to get a pulse on the industry. In the latest survey, the top three adverse areas of impact have been traffic of prospective buyers, rate of inquires for remodel jobs and cancellations or delays of existing jobs.
The residential construction industry continues to be impacted by the coronavirus pandemic. (Image courtesy of NAHB.)
Although some construction is continuing, additional impacts are being felt from the supply chain. Since many of the materials used in construction come from China and other countries, the availability is becoming scarce.
Like other industries, what lies ahead still remains to be seen. Since the industry is facing a unique scenario in which supply and demand are being affected, the long-term effects will likely depend on the how soon the pandemic ends.
In the interim, technology has gained ground in helping to keep the industry alive and may just revolutionize some aspects of how things are done. Virtual reality (VR) continues to be a new alternative to open houses, as well as a tool for architects to continue moving projects forward when possible. Many builders are limiting on-site personnel and adapting safety measures and robotics to help monitor progress.
Although the near future might still be unclear, the real estate industry is no stranger to massive ups and downs. Low interest rates and the federal moratorium on foreclosures may be two highlights in avoiding a similar situation as the 2008 crash.
To learn how the coronavirus pandemic is affecting industries, check out Chemical and Oil Companies to Slash Capex, Slowing Investment Wave and COVID-19 Hard Hit for US Manufacturing Supply Chains, Revenue.