When March 2020 arrived and we realized that Covid-19 was here to stay for a while, our expectations were that the virus would finally stop the historic real estate market we have experienced here with low inventory and sky high prices. Paired with that, our assumption was that potential unemployment and uncertainty with the universities as they closed in the spring would make leasing investment properties difficult this year.
The reality has been the exact opposite - I think of this summer’s sales market (2020) with this ‘equation’:
(There have been 25% less homes for sale) + (Buyer demand has INCREASED) + (Historically Low Mortgage Rates) = a 13% INCREASE in sales prices comparing summer 2019 with summer 2020!
At Townside, where we manage around 700 rentals, only 3 went unleased for 2020-2021.
What does the future hold for Va Tech and Radford?
In this, the first of a 2 part series, I want to share some research we’ve done on what we can expect in the future for the real estate market based on experts’ predictions about what will become of the university system that has been upended by Covid.
While we cannot predict the future, I am encouraged to read that many experts believe that large, public institutions like VT have a good chance of surviving and thriving coming out of the pandemic.
Here is what Christopher Merrill, CEO of Harrison Street that has $12 Billion invested in student housing says about the future of student housing:
Here are a couple of key takeaways we’ve found that look positive for the future of VT - a major economic engine that drives the New River Valley and therefore directly affects the real estate sale and rental market:
If social distancing continues, there will have to be less ‘dorm density’ - so fewer on campus housing spots. This should drive up demand for off campus housing. Investors should keep social distancing principles in mind, attempting as much as possible to provide ‘bed bath parity’ so that as few tenants as possible need to share bathrooms.
Even in remote only situations, students still desire to be near campus. We saw this last spring. When VT and Radford shut down, students living off campus stayed and accomplished their remote learning here in the community. Va Tech enrollment actually grew this year if you can believe that!
If a move towards online learning causes smaller colleges to close, it will likely mean greater interest in large, public schools with endowments & robust online options.