Did you write down your predictions for 2020 a year ago? If you did, no doubt your prognostications were rather timid as compared to what actually happened to us.
No one could have predicted the COVID pandemic, or George Floyd, or widespread social unrest, or that we would deliberately create a flash economic depression to try and control a viral outbreak. Truth is indeed stranger than fiction.
I love these quotes –
It’s tough to make predictions, especially about the future.
Yogi Berra, New York Yankee legend
Methods for predicting the future: 1) read horoscopes, tea leaves, tarot cards, or crystal balls.. collectively known as “nutty methods” 2) put well-researched facts into sophisticated computer… commonly referred to as “a complete waste of time.”
Scott Adams, creator of the Dilbert comic strip
Those quotes make me chuckle, but there is more than a little truth in them.
Here’s one more quote from William Shakespeare –
If you can look into the seeds of time and say which grain will grow and which will not, speak then unto me.
As landlords and business people, we don’t have the luxury of throwing up our hands and saying, what will be, will be. We have to make decisions today based on the best information available. To that end, I offer my thoughts for the coming year and what might happen in the rental markets.
For starters, I vote for a more boring year overall please – no more elections, impeachments, riots, pandemics, social strife, lockdowns, economic disruptions, and all the rest we lived through last year. We need a break. Let’s take a year off from the drama.
As for the residential rental markets, here are my thoughts on 2021 –
In 2020, the number of rental listings in New York City skyrocketed, rising 166% year over year. Other major cities experienced similar results. That means people are fleeing urban areas in large numbers. When the COVID crisis is over, will this trend continue? Yes, it will. It’s only a matter of degree.
My first prediction is – in 2021, residential real estate rental demand will be strong in Westchester County and elsewhere in the USA, especially in areas near major urban centers.
On December 29th, the New York Legislature approved a sweeping eviction ban, effectively preventing residential evictions for non-payment of rent until at least May 2021. Also included was a provision that allows landlords who own less than 10 rental properties to file hardship decelerations with their mortgage lender to prevent a foreclosure.
Hear that tinkling, metal sound? That’s the eviction can being kicked down the road. The National Council of State Housing Agencies says that U.S. renters owe about 34 billion dollars in past due rent. This situation can’t continue long term.
Prediction number two – in mid-2021, after the COVID crisis is basically over, the Feds and Albany will restore the ability to evict tenants for non-payment of rent, but provisions will be made to prevent mass evictions from rent debt accrued during the “COVID era.”
Demographics are destiny. COVID accelerated an already burgeoning work from home trend. Commercial real estate markets will have to adjust to the need for less office space. As more Millennials and Gen Z folks enter the rental markets, landlords will have to adjust to meet their needs, which differ substantially from Baby Boomers.
My third forecast – when the dust from the pandemic settles, rental markets nationwide will tighten further as younger people who were forced to remain on the sidelines until they were more economically stable will seek rental housing in large numbers.
Finally, I say 2021 will be a “Back To The Future” year. What I mean is that people are anxious to go to the movies, hold in-person weddings and funerals, attend professional sporting events, and just go to the store without wearing a mask. No doubt COVID has changed some attitudes and practices longer-term (the extent of this remains to be seen), but people aren’t seeking a “new” normal as much as they want to return to normalcy.
By mid-year 2021, while we will never forget the pandemic, New Yorkers and all Americans will be reveling in the freedom of normal social life, going out to eat in restaurants, watching live sports, attending birthday parties and, simply put, living life again.
2021 will be a year of challenges and opportunities. Every year is, right? But my hope is that this year will be remembered for recovery, for the restoration of joy, for a return to us just being who we really are. That’s not only good for landlords and real estate investors. That’s great for everyone.
If you have a residential property or properties in Westchester County that you are interested in renting, now is the time to put them on the market. At Sterling Property Solutions, we have a team in place that can answer all your questions and address any challenges. If you are already a landlord and no longer have the time or desire to handle rental property management on your own, we can help. Maybe your current property management company is not giving you the top tier service you deserve. If so, reach out. We are there for you.
Please give me a ring at 914-355-3277 or send me an email at Linda@Sterlingpsi.com. Together, let’s form a plan for you to take full advantage of the current conditions and put in place a robust, long term program for your success.