As Sales and Property Prices Continue to Rise Landlords Continue to Struggle
Like every story, there are two sides to every one including the one surrounding real estate in 2020. Early predictions for the fate of real estate when the pandemic became "real" in early March were dire, yet the exact opposite happened due to some swift Government action resulting in historical low interest rates and the effects of the virus which made folks re-think where and how they wanted to live. Sales were and remain booming, prices continue to rise, rates continue to make historic lows...what could be better?
Sadly, one of the most important sectors in real estate is well beyond what would be considered "struggling" and because of these unprecedented events, tenants have fallen behind in rent, and far too many landlords are bearing the burden. It is estimated that approximately 9.2 million tenants who have lost income due to the pandemic are behind on their rent. The Government institution most responsible for keeping tenants in their homes in the face of eviction was the Centers for Disease Control (CDC) who created an eviction moratorium on or about September 4th that halted new and previously filed evictions from taking place until years end.
That deadline has recently been expanded to January 31st, 2021 which spells even more bad news for Landlords while helping tenants stay in their homes. It's a no win scenario, especially considering about half of the rental properties in the Country are comprised of single family homes owned and operated by everyday folks, so these unrealistic calls to "cancel rent" which is nothing more than a political stance, would be devastating to Landlords and the real estate market as a whole. The eviction moratorium was the right thing to do at the time, but in retrospect, it now seems a knee-jerk reaction as there was no substance on how to offer assistance to the owners as swiftly as it did the tenants.
To this day there is still no language or legislation that can enable Landlords to collect or be reimbursed back rent from either the tenant or the Government. January 31st is bearing down upon us and while many feel there is not going to be an "eviction tsunami", there is certainly going to be some dramatic changes in the rental market that will be addressed by owners and tenants, and hopefully cooler heads will prevail and mutual compromise will prevail. Suffice it to say, it's long overdue for the Government to step in and protect the rights and the investments of Landlords who have been called upon to bear the brunt of this escalating situation. Stay tuned.
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