July '20

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Page 36 of 87

JULY 2020 THE SHOP 31 OUR BIGGEST CHALLENGE COVID-19 has been a confusing experi- ence for our industry, as it's a different breed of economy-damaging animal from 2008, though producing similar results in some cases. In an article from, A Look at the Economy of COVID-19 vs. The Great Recession, the similarities are explored. Currently, as in 2008, we've seen sig- nificant dislocation in the stock market, banking sectors and the Real Estate Invest- ment Trusts (REITs). Additionally, in both instances, oil prices plunged and home- builder stocks fell. On a positive note, both during the Great Recession and now, so far, multi- family properties remain strong with high occupancy. In 2008 we couldn't afford the high cost of gas. With the coronavirus pandemic, gas prices are low, but so is demand because we've been ordered to stay inside and social- distance. Americans who can afford to travel for spring break and on road trips are left with open roads leading to a closed destination. The article also illustrates the big differences between COVID-19 and the Great Recession and their economic effects. First and foremost, of course, the causes of the recessions differ substantially. The impending recession is driven by a dra- matic economic contraction caused by a pandemic, and the impact on real estate is one of the main consequences. Contrarily, a real estate market crash was the cause of the downturn of the Great Recession. Another key difference is the state of the single-family rental market then and now. Leading into the Great Recession, home Now is a great time to get your financial affairs in order.

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