Shalom Lamm has been an investor in the real estate industry for an extensive period of time. His career has spanned decades, during which he’s operated under circumstances that have in some cases been incredibly challenging and even arduous. But the Coronavirus pandemic has brought changes to the way investors view their real estate assets, in a way that no other crisis ever has. The changes in the industry have been dramatic, as has been documented in a myriad of different publications that have released statistical and raw data about the changes in patterns and trends that have been documented.
According to investors like Shalom Lamm, there has been an uptick in demand in rural areas as a consequence of the flight that the industry has experienced of investors and residents seeking to relocate from urban and major metropolitan city areas to the suburbs. This flight has led in some cases to an appreciation in the value of real estate assets that have otherwise remained somewhat static in recent years, in suburban areas.
There are a variety of reasons that there has been a substantial amount of relocation (however temporary it may be for now), for NYC, Chicago, Los Angeles and other city residents from their respective cities to the suburbs and more rural areas on the outskirts of their cities. Because of the health pandemic and concerns about social distancing (in some cases where guidelines have been mandatory and state-wide), there have been an incredible amount of commercial operations shut-down in the city.
The cluster effect that any city naturally has, certainly does not bode well for those seeking to comply with social distancing guidelines. In such a perilous environment one has a wish and desire to be in an environment that’s more spacious and affords people the opportunity to breathe and walk and engage in outdoor activities in a way that they wouldn’t otherwise be able to, in the city. Of course, dwellings in the city by definitions are also substantially smaller than residences outside the city.
This is a pattern and trend not only applicable and true of New York City; but also true of other areas that are heavily populated metropolitan locales across the nation. So the health pandemic is certainly responsible for this move. The question will be whether or not this flight that we’ve witnessed of city inhabitants to more suburban-oriented areas will be temporary or more durable.
The answer will frankly lie in the speed with which a vaccine to the Coronavirus is developed; and if not, how quickly herd immunity develops among the populace. Most analysts in the industry have forecasted that the worse the pandemic is, the further values of real estate in suburban areas will appreciate to the benefit of those investing in these areas. But if the pandemic ends up being severely mitigated or resolved in a more expeditious manner than anticipated, this certainly won’t be the case. People will move back to the city, and real estate prices in the suburbs will have reverted by then to the point where they were prior to the pandemic.