It seems as though every economy in the country, and the world has been hit by COVID 19. Many people have been investing in real estate for quite some time and are now starting to question if this is the right time to sell their real estate investments. Job losses are starting to pile up, rents are starting to slow down, and people are starting to go into lockdown mode which means that non-essential items are going by the wayside, and even some of those essential items may be in jeopardy as well.
Which communities’ real estate will be affected the most?
A website named chmuraecon.com has come up with a vulnerability index which shows some of the most vulnerable locations in the United States. This index was looking at the impact of COVID 19 on jobs in these different cities, and cities that had low vulnerability were supposedly less likely to experience a correction than the more vulnerable cities.
Who is most affected by COVID 19?
We have been seeing the places that will be most affected by this disease are the places that use a lot of non-essential workers. For example, Las Vegas is near the top of the list, and the assumption there would be that a very low percentage of the entertainment employees which are employed in Las Vegas can work, and even if they could they would not be allowed to. Kauai’i is on the list as well which is heavily invested in tourism and other heavily tourist populated cities like Orlando and Atlantic City are the ones that are the most affected at this time.
Who is the least affected by COVID 19?
The least affected locations seem to be places that have more essential workers, and are most based around industries that every American needs. For example, Bakersfield is near the bottom of the least, which means they are least likely to be affected by COVID 19. My hypothesis is that Bakersfield is less affected due to the the Agricultural majority of employment that we have. Everyone needs food at the end of the day. The oil industry is also very large here which is still needing to be produced, although there are less cars on the road which means the demand for oil is going down, but there is still a need for oil across the country and world. Bakersfield also has large sectors for medical and transportation which are also essential items. This means that the Bakersfield people are more stable than other areas of the country and world which may not be as reliant on essential items.
What does this mean for real estate investing in Bakersfield?
Given that real estate is based around people being able to purchase property and rent properties, it seems that Bakersfield is positioned in a good location to not be as affected as other locations. We are seeing an influx of people who can no longer afford to live in higher cost locations and given the fact that a lot of our jobs are based around essential work there is still a good amount of work here in Bakersfield. This means that rents could even go up depending on the demand that is increasing from outside areas.
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