Looking for a little clarity on this week’s news? Windermere Chief Economist Matthew Gardner looks at the long-term effects of COVID-19 on residential real estate and how consumer behavior might change.

There’s an overwhelming amount of data and headlines circulating. This column is my attempt to make sense of it all for you, the real estate professional, from an overall economic standpoint.

A viewer wrote in to ask: What might the long-term impact of COVID-19 be on various residential asset classes? Here are my thoughts on investments of all kinds.


Although I don’t believe the ownership housing market will suffer from the current economic situation, I do see one long-lasting change: more interest in suburbs, less interest in large cities.

I don’t think that buyers’ worries about proximity will quickly fade, even if we effectively combat COVID-19. I think this will mostly apply to dense cities such as New York, San Francisco and Boston, with the impact being significantly less in cities such as Seattle, Portland, Denver and the like.

Those major decisions won’t just be dependent on concerns over infectious disease, but also people’s ability to work from home.

Over the past month, major companies including Amazon, Facebook, Google and Microsoft have all extended the work from home period beyond the end of shelter orders and through 2021. Twitter announced last week that some workers will be able to work remotely forever.

Buyers who don’t have to worry about a commute may very well opt for a community with the space that suburbs provide.


If my thought that demand for areas outside of downtown will grow, urban condominiums will certainly be impacted.

I think that markets that have not seen a massive buildup of new developments should be able to steer clear of any significant price declines, as is currently being seen in Manhattan’s luxury condominium market — but demand could certainly be impacted.

Additionally, buyers who do still want to live downtown might be driven more toward developments that are taking proactive measures, such as cleaning protocols for common areas, enhanced HVAC systems and even remote classes.

Developments, both new and existing, will have to adapt to new norms if they want to attract what could be a more limited pool of buyers.

Second homes

One might think that second-homebuyers are now, and will remain, on the sidelines because of a drop off in the wealth effect.

But even now with the economic situation, buyers are still showing interest in purchasing second homes.

Why? Perhaps it’s because the hospitality industry is all but closed down. Without hotel and Airbnb options, wealthy individuals might opt to purchase a permanent vacation home. Even as those options reappear, those in a position to might decide that it makes more sense to buy a second home as a bolt-hole, or even as a permanent vacation alternative, because they consider it safer. It will be very interesting to see how this plays out.



According to the National Multifamily Housing Council, 22 percent of renters didn’t pay their rent in April and 19.8 percent didn’t pay this month.

Although those numbers sound terrible, they actually aren’t that different from the same two months back in 2019, which does suggest that stimulus checks, and increased unemployment benefits are, for the time being, working.

However, moratoriums on evictions — as well as widespread calls for rent strikes, are certainly going to impact landlords and any post-pandemic bounce back may be limited — particularly in urban markets — with renters who can work from home, or who have safety concerns, moving out of the city.

Single-family rentals

Single-family rentals have proven, so far, to be pretty resilient.

Demand has generally remained robust, and if renters do decide to move out of the city, demand might have room to rise further.

There’s also a possibility that single-family rental demand will rise further in college towns. When universities (hopefully) reopen, how many students, or their parents, will decide that dorm life is not for them given social distancing protocols? And if they do decide that student housing isn’t safe, it’s possible we could see an uptick in demand for off-campus rental housing.

Short-term rentals

It’s clearly been very hard for investors in this space. COVID-19 has hit demand significantly, but there are also ongoing issues in markets such as Seattle, Boston, Chicago, Los Angeles and San Francisco where there are major restrictions on short-term rentals.

Even after the country reopens, I do question how comfortable we will be jumping back into using VRBOs and other similar programs. Also, demand might further be diluted if we see a fire sale on hotel rooms as hoteliers try to recoup some lost revenue. In concert with significantly upgraded room cleaning protocols at hotels, this might further limit demand for short-term rentals.

That said, and even if we do see lower demand, I think it’s quite likely investors with just one unit will decide to keep it and hope for a rebound – or they may look to move that unit into long-term rental arena, but there will certainly be other investors with larger portfolios who might be forced to sell as the carry cost of the units without rental income may be just too great.

Matthew Gardner is the chief economist for Windermere Real Estate, the second largest regional real estate company in the nation.

After 25 years, Inman Connect is coming to you. We’re transcending our legendary events in a live digital event, Inman Connect Now. Get ready for the top industry leaders plotting the path forward, new business ideas and opportunities, networking like you’ve never imagined it, and tons of exciting new magic, all straight to you. It’s all part of an epic new Inman experience, Connect Now, June 2-4, 2020. Click here to save your seat.

homebuying | recession
Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription