US Real Estate-Economic Outlook and Housing Market

By the time this column goes out, the US presidential election will be judged, but no matter which party or president takes power, the prospect of recovery for the current coronavirus outbreak is blurred. A number of economic scholars are voicing that it is difficult for a full recovery of the job market in the years to come. The aftermath of the novel coronavirus hitting the job market has already been in full swing. With the sudden disappearance of income, American households are unable to cover debts including credit cards, home loan payments, auto loans, and apartment rents. Therefore, in the absence of government and banking support measures, many bankruptcies in 2021 are inevitable.

 

In an interview with CNBC, Economist Michael Gaffen Barclay, "A sudden employment shock is shaking the US economy due to the spread of Corona 19." It is predicted that by the end of 2022, it will be difficult to recover 3.5%, the level before the virus hit. Earlier, the investment banking (IB) industry, including Goldman Sachs, is weighing on the possibility that the US unemployment rate will jump to double digits in the near future. The Congressional Budget Office (CBO) has issued an opinion that the unemployment rate will remain at the 9% level by the end of 2021. In particular, it warned that if small businesses with less than 500 employees rebound and it takes longer than expected, the employment stagnation could deepen. The public opinion is that it is difficult to avoid a deep recession, as the virus-induced simultaneous disruption of supply and demand has been combined with an employment cold.

 

"It's hard to find a precedent like this," said Gregory Dako, the Economist of Oxford Economics, in an interview with the Wall Street Journal (WSJ) and "literally an economic disaster." Although a significant number of companies are struggling to maintain the employment of their existing workforce, they choose to cut wages instead of cuts, so even households who are not unemployed will inevitably lose income. The aftermath of the job market shock is already strong. Consumers' requests to cancel or postpone repayment of various debts such as credit cards, auto loans, and student loans on banknotes are rising. The so-called monthly rent crisis is also in the same vein. From apartments to retail stores and restaurants, the real estate market is expected to shock as tenants claim they do not have the money to pay the rent.