NEW ORLEANS, La. (WVUE) - Commercial real estate brokers say it is the right time to invest but tough to be a landlord or a tenant right now.
As more places close up shop due to economic difficulties stemming from COVID-19, landlords are becoming more desperate to lease out their property. Yet, when it comes to residential real estate, professionals say the demand nearly outweighs supply.
At least 40 million Americans were laid off due to COVID-19. In a month, the extra $600 a week they currently see on their unemployment check from the CARES Act will disappear.
Even so, in places like Arizona, Colorado, Ohio, New York and New Orleans, the housing market is booming, but it can be tricky for buyers.
Real Estate professional Jamie Magee wants more people to sell their homes.
“We need as many folks who have homes that they’re looking to either up-size, downsize or if you have a rental property that you’re not using anymore,” Magee said.
Magee says the residential market is flooded with buyers and houses are going fast.
"We are seeing some go under contract in eight to 24 hours. Sometimes, there are 50 to 100 buyers that look at a property within the first 24 hours on the market," Magee said.
Magee says the shift started about four weeks ago. Early on in the pandemic, she tells us the uncertainty spurred many to wait and watch.
"I think there was a lot of fear early on in the market so, I personally experienced a couple weeks where it was pretty quiet. And a lot of sellers didn't want people going to their homes so, for a while, we were doing things virtually and only showing vacant houses in person," explained Magee.
Magee expected a surge in summer months, as she usually does, but when the minimum credit score dropped for mortgage qualification.and interest rates declined, she says buyers went all in.
"It is a tough market right now if you are a buyer. You may be up against other buyers but your real estate professional, along the way, should be able to advise you as to how you can win the scenario," Magee said.
On the flip-side, those who have commercial property are becoming desperate for takers.
"For every month that goes by, that's another month someone can't make a rent payment. That's another month that a landlord cannot pay a bank," said Founding Partner and Head of Brokerage at Urban Properties, Tim Thompson. "You're starting to see tenants closing down, a lot of vacancies starting to pop up."
Yet, there is movement.
“I think people wanting to, maybe, change up what type of office they’re looking at. Maybe there’s a small company in an (office tower) that wants to get out of that tower. They might decide, ‘hey, we want our own, more of our own little space so, why don’t we go from a tower to maybe backfill this Magazine retail space or maybe we want to buy our own building,’” Thompson explained.
For those who have been waiting to buy or rent, Thompson says it’s a perfect time.
"The newer deals that are getting cut during the pandemic, you're seeing things happen like free rent for the first year, force majeure clauses which basically would allow tenants to get out of leases or whole payments," Thompson explained.
Despite the deals, Thompson does not expect vacancy rates to slow. In fact, he believes they could continue to rise for the next few years.
Magee says the home buyer's market may be more uncertain.
“It’s all up in the air as to what exactly will happen but we do know there are more shifts to,” Magee said.
Based in New Orleans, Magee says two of the hottest areas she's noticed are Uptown, near the river, and
Holly Grove near Black Pearl. She says the most popular properties are those recently renovated or constructed.