Events like World Wars, new inventions (autonomous cars) and pandemics all bring “second order effects” that require time after their immediate precipitating events have faded away to become apparent. One of the more interesting, and economically concerning, to me is Covid’s impact on real estate.
No one expected the surge in residential real estate during the pandemic, nor what appears to be the lasting impact on commercial office space. Almost every business relies directly or indirectly on real estate. To understand what’s ahead, check out these two analyses.
First, from McKinsey is a report Empty spaces and hybrid places: The Pandemic’s lasting impact on real estate.
Second, from Knowledge at Wharton “What’s Ahead for US Real Estate?” which forecasts a “rise in home prices but…dim days ahead for commercial real estate..” and the small to midsize banks that have financed them.
