2020 & Real Estate: The effects of COVID-19 and social unrest on Real Estate Markets

Real Estate markets have experienced a great deal of turbulence these past few months. Certain cities and states had put into effect strict coronavirus guidelines which caused many to flee these areas due to the economic fallout and the personal infringement they felt these guidelines had, such as the forced closures of businesses. Economic fallout caused directly by the shutting down of business caused a further collapse in real estate as tenants could no longer pay their rent, which has led many to flee the costly housing prices of big cities. Over the course of the summer of 2020, we have seen large amounts of civil unrest which have caused massive property damage in many American cities leading to the devaluing of affected and surrounding real estate prices which also led to massive amounts of people leaving big cities. Finally, nearly all American big cities have seen a crime spike this year that has played a significant role in the driving down of prices; whether it was due to civil unrest or economic fallout. However, it is important to note that not all big cities had a real estate decline this year. Individuals staying in the same municipality but moving to the outskirts of said municipality causes no aggregate change in real estate prices for the municipality. Particularly wealthy individuals refusing to actually sell their real estate in said cities while moving out of them, which is the case in many Californian counties, can also result in little price impact. This paper will examine all of these specifics and the causes of these declines in further detail.