Remote-Work Boom During Covid-19 Pandemic Draws Real-Estate Startups

Park in San Francisco social distancingDavid Paul Morris/Bloomberg via Getty Images

A group of real-estate startups is aiming to cash in on the remote-work phenomenon.

With many corporate offices closed because of the pandemic, many young professionals have left cities like New York and San Francisco for warmer, cheaper places. A number still plan to return after their offices reopen, leaving them reluctant to buy homes or sign long-term apartment leases.

That situation is creating fresh demand for furnished housing on a short-term basis, a fast-growing niche that many property startups and their venture-capital backers are rushing to fill.

One of them is Landing, which runs a network of furnished apartments across the U.S. When it launched in 2019, the Birmingham, Ala., and San Francisco-based company initially planned to operate in about 30 cities last year. Instead, it expanded to 75, largely because demand grew much faster than expected, said Landing Chief Executive Bill Smith.

“Covid has taken a decade of change that I was thinking was going to happen between now and 2030 and kind of compressed it into a year,” he said.

Legions of remote workers also offer these firms a chance to make up for reduced tourist and corporate business. San Francisco-based Sonder, which rents out furnished apartments by the night, ramped up its marketing of extended stays during the pandemic, according to Chief Executive Francis Davidson. Stays of longer than 14 days now account for about 60% of the company’s business, up from less than a quarter before the pandemic, he said.

Kulveer Taggar, CEO of corporate-housing operator Zeus Living, said his firm experienced a steep drop in demand as companies hit the pause button on employee travel and relocations. But he was able to make up some ground by renting apartments to individuals. People working from home now account for about a quarter of the company’s business, Mr. Taggar said, up from virtually nothing before the pandemic.

Unlike Sonder and Zeus, remote workers were a key part of Landing’s business before the pandemic. Its customers pay an annual membership fee, which gives them the right to rent furnished apartments in any city. The minimum length of stay varies from 30 to 60 days, and the company asks for a month’s notice before a customer moves out.

The company is popular with college-educated young professionals who don’t want to be tied to a single location. Since the start of the pandemic, it has seen a growing number of customers leave New York and San Francisco and move to cities like St. Petersburg, Fla., and Denver, Mr. Smith said.

In November, Landing raised $45 million in venture funding from a group of investors led by Foundry Group and including Greycroft and Maveron, along with $55 million in debt. Mr. Smith said he hopes to expand to 25,000 apartments by the end of this year, up from around 10,000 today.

That growth carries risk if demand from remote workers were to disappear again after the pandemic is over. Still, Chris Moody, a partner at Foundry Group, said the number of furnished apartments available under flexible terms is still so small that he doesn’t worry about a lack of customers.

“Even at the end of 2021, we won’t really have scratched the surface,” he said.

The post Remote-Work Boom During Covid-19 Pandemic Draws Real-Estate Startups appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

5 Rude Awakenings You’ll Experience Moving to the Burbs

rude awakenings you get when you move to the suburbsmonkeybusinessimages/iStock

You moved to the suburbs for a reason. You didn’t go there naively. You knew it would be different. It was clear from the start that you would trading your innovative restaurants, exciting nightlife, and cool cultural attractions for more space and, well, mostly the extra space.

But there are other things you may not see coming. I am here to warn you about the rude awakenings you’ll experience when you leave city living for the burbs.

Some streets don’t have sidewalks

no sidewalks in suburbs
Nice, but where the hell are the sidewalks?

The Odyssey Online

So we’re walking to Trader Joe’s (because we’re still holding out on buying a car), enjoying the springlike weather and sunshine when all of a sudden, we cross the street and boom: no sidewalk. The lawns go right up to the street with no  friendly path to guide our way.

How does this happen? How do you build an entire neighborhood of houses and not include a strip of concrete where people can walk without getting hit by a car? What is happening in these sidewalk-less neighborhoods? Do the kids just never visit one another? Do you walk in the street or on people’s lawns? Regardless, I feel like we’re taking our life in our hands.

It’s a driver’s world and pedestrians had better watch their butts

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Get outta the street!

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The mysterious disappearance of sidewalks is just the first sign that you have no business walking around in public. There’s a new world order out here, and we pedestrians are no longer in charge.

In the city, there are so many people walking everywhere the cars have to drive more slowly and carefully. We vastly outnumber drivers, but not so in the suburbs. Drivers don’t expect to see people using their legs to get places. You are a novelty, with your “I’ll just walk the five blocks to the movie theater.” And you’d better be aware of drivers’ unawareness of you or you’ll get mowed down, fast.

panda hit by car
Panda, move!

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It’s nothing personal. It’s just that drivers are totally not expecting you to be out there. You’re like deer to them. They’re driving along and all of a sudden, OMG, person! What the hell is she doing out here, trying to cross the street? Doesn’t she know? It’s a STREET.

You will get lost in the supermarket

lost in grocery store
Where am I, even?

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They’re huge here. They carry everything, and yet you can’t find anything, partly because you’re spending a half-hour in front of the vast pasta aisle unable to make a choice. Grocery shopping in the suburbs becomes a huge time suck, because you have to cover so much ground to find anything and there are way too many distractions.

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But there is so much food here!

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Where are the green onions? Hey, look, fresh guava! Why can’t I find coconut oil anywhere? Oooh, a whole shelf of Sriracha!

The mall will suck you in and make you its own

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Let’s go to the mall!

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Enjoy your limited days of being “too cool” for mall shopping, because it’s only a matter of time before you have to replace a broken wine glass. Or you’re just curious and want to indulge in a totally self-conscious ironic afternoon at the mall, as in, “haha, let’s do the mall today, stroll under the artificial lighting, and see what’s 40% off at Banana Republic.” (Answer: everything.) Because the trajectory beam of the mall will draw you in, sooner or later. And you’ll kind of like it, because all the stores are there and you have your Godiva right across from your Teavana. And then you’ll hate yourself for liking it. But you’ll go anyway, again and again. Who are you, anymore? Shh, shh, baby. It’s all right. There’s a sale on hurricane lamps at Crate & Barrel.

People are so gosh darn nice all the time

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Well hello there!

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Prepare yourself for this, because it’s going to throw you the first few times and you won’t even know how to respond: The people in your neighborhood may be nice. Like, sincerely friendly and helpful. The office staff at the doctor’s office. The shopkeepers. People who have no business being so nice. What is with all the smiling and hopes that I have a good experience in the waiting room?

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I can do this smiling thing.

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Don’t worry, you’ll adjust to this culture shock. Just surrender to it all. Stop worrying and learn to love the mall, the huge supermarkets, the kindness. Just be really careful crossing the street, OK? All that niceness ends once people get behind the wheel.

The post 5 Rude Awakenings You’ll Experience Moving to the Burbs appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

How COVID-19 is Affecting Mortgages

Coronavirus cases are increasing at a phenomenal rate and sending the economy into free-fall. Every industry will be affected in some way, but the housing market could be one of the hardest hit. Borrowers are struggling to pay their mortgages, lenders are seeing far fewer applications, and we could be just around the corner from a housing crisis akin to the decline of 2008.

So, what’s happening here, how is COVID-19 affecting mortgages and are we likely to see any major issues on the horizon?

How Will COVID-19 Impact Mortgages?

In early March, mortgage rates dropped to an all-time low, hinting at things to come. The rate for a 30-year fixed-term mortgage fell to 3.29%, compared to March of 2019 when rates were 4.14%. That may not seem like much of a difference, but the difference between 3.29% and 4.14% on a $200,000 30-year mortgage is around $35,000.

And this is just the tip of the iceberg; the start of the problem.

Experts predict that rates will continue to fall as we progress through 2020 and COVID-19 continues to wreak havoc on the US economy.

As noted in our recent guide to Coronavirus Mortgage Relief, lenders are already providing lenders with debt relief options to help them manage their mortgage in this difficult time. Foreclosure is expensive and it’s an expense that banks and credit unions can’t afford right now. They want homeowners to pay their bills and keep their homes and they will do everything they can to make that happen.

The federal government is also lending a helping hand by way of the CARES act, and we could see more significant moves on behalf of lenders and the government before the year draws to a close.

In other words, although big moves have been made and huge changes have taken place, all of this could pale in comparison to what happens when the pandemic is eradicated and the rebuilding process begins.

Can You Benefit from this?

If you’re a homeowner tied to a high-interest rate, you could benefit from the current reduced interest rates by refinancing your mortgage. You could do that now and capitalize on the all-time low rates mentioned above or wait to see what happens in the next few months.

In any case, you can get a much lower rate than what you already have and potentially save thousands of dollars over the life of your loan.

It’s not about profiting from a bad situation, it’s about making life easier for yourself so you can navigate through this chaos. If your monthly mortgage payment is reduced, you’ll have more money in your pocket every month, which means you can put more cash towards unsecured debts and your monthly grocery bill.

It also reduces your chances of defaulting and being foreclosed upon in the future.

COVID-19 and the Housing Market

In the spring of 2019, the housing market was booming. It was a good time to invest in bricks and mortar and it seemed like there were some bright years ahead for homeowners and investors. 

In 2020, the shadow of the coronavirus pandemic fell on the country and now, a year on from that boom, the housing market has ground to a screeching halt. No one is selling because no one is buying. The market hasn’t necessarily crashed, but it has paused, and that could cause some huge problems in the near future.

What happens to all the homeowners who were selling their homes before this crisis and wanted to sell during? As soon as the pandemic fades away, they’ll all list their homes at the same time, and they’ll no doubt be joined by countless other homeowners who are selling because of the pandemic.

Once the market reopens, it will be flooded with homes for sale. At the same time, homeowners once ready to buy will now be struggling to deal with the consequences of the pandemic, while others will be hesitant of buying and will want to bide their time. Sellers will get desperate, prices will drop, and it will be a buyer’s market.

It’s hard to predict just how far house prices will fall or even if they will fall at all, but if the last few months are anything to go by, it’s fair to assume that the damage will be considerable.

Could it be a Seller’s Market?

While it seems most likely that post-pandemic USA will be a buyer’s market, it could also go the other way. Millions of Americans could be looking to purchase homes in 2020. If all of them are waiting for the end of the pandemic in the hope that the prices will be lower and the interest rates more favorable, they could overload the market.

Buyers may also be desperate to sink their money into bricks and mortar, believing it to be a safe investment and protection against any future economic issues. After all, when you rent, you’re always at the mercy of the landlord and have few guarantees that your home will still be your home months down the line.

That’s a scary thought in the middle of a pandemic, where it may be difficult, and in some cases impossible, to move into another property on short notice.

To remedy this, renters may be desperate to buy and may jump into the housing market as soon as the chaos dies down. A sudden rush of buyers will send the market in the opposite direction, allowing sellers to jack up their prices. 

COVID-19, Mortgages, and the Future of the Housing Market

Most of which we discussed above is speculation. We can predict the likelihood of it being a buyer’s market and of interest rates falling based on everything that has happened thus far, but we can’t say that it will happen for certain.

COVID-19 has made life very unpredictable. In December 2019, when word of the first Chinese cases began to filter to our shores, few could have guessed that just 3 months later, the world would be in lockdown, everyone would be going crazy for toilet paper, and people would be dying in their droves. 

At the beginning of the outbreak, when Europe was on its knees, President Trump was dismissive of the risks and suggested that everything would be okay, the US would be safe, and the virus would be fleeting. A few weeks later, the United States became the worst affected country and fatalities entered double figures.

It’s a novel pandemic that few predicted, and no one was prepared for, and as things stand it’s less about fighting the disease and more about avoiding it. 

As a result, we can’t be certain that the housing market will decline or that mortgage rates will drop. We just have to wait and see and hope that we all get through this with our lives, properties, and professions intact.

How COVID-19 is Affecting Mortgages is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

What Could a Second Wave of COVID-19 Mean for Housing Markets?

Will a second wave of COVID-19 mean “boom” or “bust” for the housing market? With the trends we’re seeing now, there are a couple of possibilities to expect.

The post What Could a Second Wave of COVID-19 Mean for Housing Markets? appeared first on Homes.com.

Source: homes.com