Every city in America faces risks in the midst of the coronavirus pandemic. Many cities are cutting budgets and hunkering down. Perhaps the number of coronavirus cases in their cities warrants this move.
Top-tier cities have taken a hit to their allure as restaurants, museums and other cultural amenities close. As we look across the nation, regardless of politics, these cities are the epicenters of the pandemic.
Pain is coming. The threats include business closings, job losses, the over-leveraged disappearing and people hitting a breaking point mentally. Although most developers still work on current projects, projects scheduled to come on line in 2021 and 2022 are being cut. Get prepared for that since it will be critical to get through the downturn.
The full effects of the pandemic likely won’t be felt for some time. Certain aspects of the real estate market are affected more than others. Nationally, hotel, retail and restaurants are in bad shape. A higher number of loan defaults are likely in the next two years. However, the industrial and multifamily sectors are likely to experience only minor effects. The prospects for the office market are somewhere in the middle. Demand for office space is likely to continue it’s slow decline as the now 30-year-old trend of employees working from home continues.
Meanwhile, second- and third-tier cities are bolstered by evidence they’re safer and could be in a better position as the pandemic wanes. A new opportunity to thrive is beginning to reveal itself. Cities that promote healthy living with plenty of opportunities to practice this lifestyle can seize the chance. Communities with smaller, historic walkable city centers will have advantages with their sense of community, distance and safety as well as their authentic cultural amenities. This will be especially true if healthy living is easily practiced outside and at a social distance.
Another potential silver lining is a downturn offers opportunities for a new crop of buyers who’d been blocked by rapid growth and little inventory. The longest period of economic expansion in American history has left many of these younger people no opportunity to buy anything. This group, coupled with those who will seek to relocate so as not to experience what they’ve endured in their big cities, will look for places with room to grow. That and places with endless opportunities to enjoy affordable and healthy lifestyles.
While others remain hunkered down, small cities prepared to promote their safer and socially distanced outdoor lifestyles to younger homebuyers and investors and build in ways to accommodate those lifestyles will possess endless opportunities to flourish.
People need to hear from us and know we’re on top of this situation, that we have a plan. Our plan should be to capitalize on the attractive assets of our community, a small city with huge natural resources. By building a community that aligns with these values, we won’t be fighting to survive. We’ll thrive as we transition out of this period.
Jeffery Fleming is principal of Colorado Land Advisors, a land development, civil engineering and urban planning consulting firm with offices in Grand Junction. Fleming brings to his duties more than 25 years of experience in real estate development and urbanism. Reach him through the website at https://coloradolandadvisor.com.