Junaid Raza Syed (Senior Editor/Department Manager FS)
The turmoil in the market these days is evident. A substantial number of jobs have been eliminated, and employers of shops and small factories are unable to pay their employees in full. Many are merely fulfilling the terms mentioned in the Paycheck Protection Program (PPP) with resolve to lay off much of their workforce after the stipulated period is over.
But while the PPP is providing for people currently, it’s only natural to wonder what is going to happen when the money received through the program runs out! How will the economy, investment market, and real-estate survive in such scenarios?
Let’s delve a bit on this.
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What will happen when PPP funds exhaust?
The answer to that question is straightforward – an alarming incline in unemployment! The United States is one of the worst affected countries by the Coronavirus, where infection and death rates are the highest in the world. When coupled with unemployment caused due to businesses shutting down, experts predict that the economy is on a downward trend, unlike anything the world has ever seen.
Despite slight spikes in the American Stock Exchange recently, the economy is still severely affected, and among the indicators of this is the number of unemployed people reaching 32 million.
Read – Parker Couple receives 19 Unemployment Debit Cards in the Mail
The real estate market is already witnessing the impacts
In response to the increase in the unemployment rate, sellers in the housing market are already taking preemptive action. They’re preferring to buy property situated far away from cities, have a larger area, and contain facilities that are not found in urban homes (such as outdoor spaces). Perhaps the most important benefit that they’re extracting from such deals is that these properties are much cheaper.
Initiating such actions may be logical now for many reasons. An increasing unemployment rate means that people are less connected to their workplaces, and therefore they have the freedom to live elsewhere and search for new work there. In addition to that, many Americans have begun to work online, which doesn’t require being tied to a specific place of residence.
But in many areas, the prices of houses have still increased, such as in Tampa. The city has witnessed an increase in real estate prices by almost 8% during the current year. Some experts attribute this to the fact that people want to compensate for their losses by selling their property at higher rates. The high rates could also be due to the small number of homes offered for sale.
All in all
Corona’s influence is there for everyone to see – suspended airports, thousands of closed restaurants and cafes, extensive facilities such as Disneyland suspended from work. Even the businesses that are still working and providing services can barely pay the salaries of their workers.
Unemployment is one of the worst impacts the pandemic is going to leave behind. Only time will tell how the world will heal and recover from the losses people suffer personally and professionally.
