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Covid-19 Weekly Economic & Industry
Update
July 29, 2020
0% 25% 50%
Don't know/NA
Never
Longer than 6 months
4-6 months
1-3 months
Less than 1 month
Have already
When do you expect to resume normal operations?
Economic Impacts
• The National Association for Business Economics (NABE) Business Conditions Survey was open from July 2-14 and surveyed 104 private sector business leaders and trade association executives.
• One-third of respondents reported being back to normal operations while 29% expect it to take more than 6 months.
Source: National Association for Business Economics Business Conditions Survey July 27, 2020.
0% 25% 50%
Strongly disagree
Somewhat disagree
Neither agree nor disagree
Somewhat agree
Strongly agree
My company’s experience with COVID-19 will lead us to have more geographically flexible hiring and working arrangements
(e.g., more office locations, high-rise to lower-density,office to home office, etc.).
Economic Impacts – the Future of Work
• More than two-thirds of respondents somewhat or strongly agreed that the Covid-19 crisis will result in their firms becoming more flexible geographically as well as in hiring and working arrangements.
Source: National Association for Business Economics Business Conditions Survey July 27, 2020.
0% 25% 50% 75%
Don't know/NA
No
Yes, we will allow all employees towork from home
Yes, most roles will be able to workfrom home
Yes, some roles will be able to workfrom home
Do you plan to allow employees to work from home post-crisis?
Economic Impacts – the Future of Work
• Half of the respondentsreported that some of theiremployees will continue to work from home post-crisis.
• More than 1 in 5 expect toallow their entire workforces to work from home.
• Only 6% said work from home will definitely not be an option post-crisis.
Source: National Association for Business Economics Business Conditions Survey July 27, 2020.
Economic Impacts
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-20.0
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-ove
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ar P
erce
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easo
nally
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just
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S&P/CoreLogic Case-Shiller 20-City Composite Home Price Index
Source: S&P Dow Jones Indices LLC, S&P/Case-Shiller 20-City Composite Home Price Index, retrieved from FRED, Federal Reserve Bank of St. Louis, July 29, 2020
• The S&P/CoreLogic Case-Shiller Home Price Index continued to make moderate gains, increasing 3.7% year-over-year in May.
• Phoenix, Seattle and Tampa experienced the greatest increases in home prices.
• Over the last severalmonths, prices werestrongest in the Southeast and West and weaker in the Northeast.
May 2020
Economic Impacts
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Thou
sand
s of U
nits
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Annu
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Rate
New Home Sales
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Residential Sales, July 24, 2020
• New home sales continued to rebound in June, returning to pre-pandemic levels.
• Low mortgage rates coupled with more reopenings resulted in a 13.8% increase from May and 6.9% from June 2019.
• Sales in the Northeast, which experienced longer shutdowns and slower reopenings, nearly doubled month over month.
June 2020
Economic Impacts
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
< $100K $100K-$250K $250K-$500K $500K-$750K $750K-$1M > $1M
Perc
ent C
hang
e Ye
ar A
go
Existing Single-family Home Sales by Price
Total All Price Points
• June sales of existing homes set a record for monthly increases (20.7%) but declined 11.3% on a year-over-year basis.
• The number of closed transactions in the $250K-$500K range actually increased.
• The median price rose 3.5% in June and marked the 100th consecutive month of year-over-year increases.
Source: National Association of Realtors ®\
Economic Impacts
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60.0
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69.0
Perc
ent,
Not
Sea
sona
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djus
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Homeownership Rates
Source: U.S. Census Bureau
• The homeownership rate soared to 67.9 % in Q2 2020, the highest level sinceQ3 2008.
• Already on an upward trend, pent-up demand afterlockdowns were lifted plus low interest rates spurred new homebuyers to make a purchase.
• The rental housing market remained strong, however, with the vacancy rate declining to 5.7%, the lowest level since 1984.
Q2 2020
-9.0% -8.0% -7.0% -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0%
Cincinnati
San Antonio
Miami
Phoenix
Los Angeles
West Palm Beach
Orlando
Seattle
Las Vegas
New York
Hardest Hit Metro Areas for Rent Collection(Change from prior year in percent of households paying partial or full
rent)
July 1 - July 27
Apartment Industry Impacts
• Compared to last week’s RealPage report (July 1- July 20), new entrants to the bottom 10 cities for rent collections were either located in Texas or Florida, both of which remain hot spots for Covid-19.
• High-rise propertiesexperienced lower rentcollections than mid-rise or garden properties, decreasing 2.5% since last year.
Source: RealPage, Inc. Rent Payments July 1 – July 27, 2020
Apartment Industry Impacts - Student• 85% of universities tracked by RealPage have elected to instruct in-person or hybrid classes for Fall 2020.• Fall enrollment growth is expected to remain modest and to slightly accelerate beyond 2020, but at a pace lower than peak years.• Properties are now averaging 76% pre-leased, down 3% from Fall 2019.• Properties less than 0.5 mile from campus continue to be the preferred choice for students. • Effective rent growth stood at 1.3% in June, at the low end of the typical range. • 25% of properties offered concessions, usually offering an equivalent of one-month free rent.
Source: Critical Pricing Decisions for Student Housing by RealPage, July 23, 2020
Top Universities for Rent Growth Through June
Bottom Universities for Rent Growth Through June
North Carolina A&T State University Coastal Carolina UniversityMississippi State University Florida International UniversityVirginia Tech University of California-Santa BarbaraVirginia Commonwealth University Wichita State UniversityUtah State University University of Nevada-Las Vegas