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Pay Rent Reminder

America’s Struggling Rental Market Could Bring New Housing Crisis For The Nation

A large number of renters have been unable to pay some or all of their rent since the Covid-19 pandemic began impacting the US back in March.

Jobless Sign

Weekly Jobless Claims Drop To Lowest Level Since Beginning Of Pandemic 

New filings for jobless claims in America totaled 787,000 last week, marking nearly the lowest it’s been since the beginning of the coronavirus pandemic in March. Once the global health crisis hit America, citizens were losing their jobs by the millions every week, now, as the pandemic continues on and election day gets closer and closer, individuals are gearing up for an unpredictable rest of the year; luckily the entire year has prepared us for that. 

Economists surveyed by Dow Jones were initially projecting the claims to hit 875,000 by the end of the week of October 11th, the nearly 100,000 difference is huge for the professionals who have been closely monitoring the economy since it began to dwindle in march. 

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Last week’s total marks the second-lowest new claim amount since March 14th; in seven months. March 14th also marked the first week that companies and businesses across the country began laying off their employees to cope with the initial economic impact of the first shutdown efforts. 

The previous week – October 3rd – saw 842,000 claims, meaning there was a 55,000 decrease in claims this week. One of the biggest reasons for this decline in claims is likely due to the fact that a lot of workers in America have now exhausted their regular benefits and are moving to the Pandemic Unemployment Assistance emergency compensation program. 

During the week of October 3rd 509,828 Americans filed to receive compensation from the Pandemic Assistance program, bringing the total number of citizens using the program up to 3.3 million. The recipients in this program get an extra 13 weeks of financial compensation once they’ve gone through their initial 26 weeks of eligibility. 

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Continuous claims are also declining in America, meaning the individuals who are filing jobless claims for two or more weeks consecutively are also going down. That level dropped by 1.02 million citizens to 8.37 million individuals receiving continuous payments. Ian Shepherdscon is a chief economist at Pantheon Macroeconomics who recently spoke with the media about the improvement that comes along with these declining rates. 

“Some people no longer claiming benefits may have dropped out of the labor force, while some might have taken non-payroll gig or freelance jobs. Moreover, continuing claims lag initial claims, so if initial claims start rising again, continuing claims will follow.”

Claims initially surged the week of March 21st amid the government imposed lockdowns that appeared all across the nation. In late March the weekly total of jobless claims peaked at 6.9 million. Since the beginning of the pandemic about 11.5 million people have become employed after being laid off for pandemic-related reasons, however, a little more than half of the total number of citizens who lost their jobs due to Covid-19 are still unemployed. 

Opposing factions in the nation’s government have delayed another round of stimulus payments from being distributed to Americans, however, a deal is likely to come into fruition before election day.

China’s Economy Shows Steady Recovery As Pandemic Is Brought Under Control

China reported a 4.9% economic growth in its third quarter, making it the only major global economy in the world to show an economic increase during a worldwide pandemic.

United States Covid Cases

US Covid-19 Cases Surging As Indoor Gatherings And Travel Increases Throughout Country

Small gatherings and interstate travel is leading to a massive surge in Covid-19 cases in the US as 36 states are now reporting increases in hospitalizations and deaths nationwide.

LGBTQ Flags

HRC Study Reveals LGBT+ People Are Disproportionately Facing Employment Challenges During Pandemic 

The Human Rights Campaign (HRC) recently collaborated with PSB Insights on a study that revealed that LGBTQ+ individuals are disproportionately facing employment challenges as the economy begins to reopen in the US. These challenges are nothing new for the community, however, the pandemic is adding a whole other layer of increased risk. 

LGBTQ+ individuals have already been dealing with an increased risk of contracting Covid-19 due to a systemic lack of access to sufficient medical care. Additionally, LGBTQ+ people are more likely to be working in industries heavily affected by the virus, and are more likely to experience homelessness. 

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As a majority of states in the US begin to reopen, citizens in general are noticing a massive increase in pay cuts, and a decrease in available working hours/jobs available. For the LGBTQ+ community, these obstacles are even more prominent, as they existed long before the pandemic began as well. HRC President Alphonso David recently released a statement on this study and its staggering results. 

“As some communities start to go back to work, many times in fear and without choice, we’re seeing that LGBTQ people, especially LGBTQ people of color and transgender people, are being left behind.” 

According to the report, LGBTQ+ individuals have been 20% more likely to experience a cut in their work hours, LGBTQ+ people of color have experienced a 44% increase in the likelihood that their hours would get cut, and transgender individuals specifically have experienced a 125% increase. 

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LGBTQ+ people have also been 30% more likely than the general population to lose their jobs; the reported stated that bisexual people have been discriminated against the most in terms of job losses during the pandemic. Bisexual people have been 80% more likely to lose their jobs, and LGBTQ+ people of color are 70% more likely to become unemployed. All of this data was specifically taken from when states began reopening to ensure the numbers were exclusive to the pandemic and its economic impact. 

LGBTQ+ individuals were 50% more likely to receive a pay cut since the economies general reopening, and LGBTQ+ people of color have been 150% more likely to receive a pay cut. A majority of LGBTQ+ people who have the ability to go back to work are going back with the understanding that they would be receiving a cut in their salary; and for many, this is their only option of potential income. 

“We must make sure that elected officials at all levels are ensuring that LGBTQ people, especially the members of the community who are living at the intersections of multiple marginalized identities, receive the support they need.”

When states began reopening the study also found that 69% of the general population and 80% of the LGBTQ+ population believe prioritizing containing the virus is more important than reopening the economy. For more information on HRC’s study, click here.

Real Estate Meeting

Global Real Estate Leader Discusses Covid-19 Impact On Design And Commercial Industry

Jack Paruta is the senior project architect with Gensler; one of the largest architecture, design, and consulting firms in the real estate industry.

NYC Real Estate

Manhattan Real Estate Stronger Than During The Great Recession

According to a recent analysis by real estate market data firm UrbanDigs, the Manhattan real estate market is currently in much better shape than it was during the Great Recession. Like most industrys adjusting to pandemic life, however, the future is still very unclear and fearsome. 

The report claimed that there were much more sellers than buyers during the Great Recession but now, during the Covid-19 pandemic, that gap is much smaller. Noah Rosenblatt and John Walkup are the cofounders of UrbanDigs, and recently claimed that they believe this gap has lessened because the Great Recession was a strictly economic crisis in America while the coronavirus has halted every single aspect of life for everyone, regardless of socioeconomic status. 

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“The lack of sharp spikes in supply and a corresponding drop in demand suggests the market is not as one-sided as the Great Recession, although lingering virus fears will keep a lid on demand for the time being.”

The report heavily focused on comparing the supply and pending sales of the past six months with the first six months of the recession as well. They also focused on what’s known as the “market pulse,” which essentially is the ratio of pending sales to actual supply. A lower ratio number would reflect that there are more sellers than buyers. 

In September 2007, supply increased by 10% every quarter and pending sales were dropping at a rate of 30%, according to past analysis’. The 15 quarters that followed showed a steady increase in supply, and a major drop in pending sales; 50%, dropping the market pulse from 1 to .16. When the pandemic initially shut everything down in March, there was a major drop in pending sales, which boosted supply, however, it was nowhere nearly as quickly as it dropped in 2007. 

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The market pulse is currently at a .22, which has been expected due to a general pulse decline within the past five years in Manhattan; in late 2019 the pulse was at .3. Rosenblatt and Walkup noted that sellers today in the metropolitan are still facing the heaviest competition in nearly a decade due to the increase in properties available, and willingness from sellers to negotiate their pricing. “Clearly, the economic impact of the pandemic has yet to be fully tallied, but in the meantime, it appears that the market for Manhattan real estate is functional, just fearful.”

Overall, however, the two believe that comparing the state of the market now to what it was during the Great Recession is like comparing “apples to oranges.” While there may be many general similarities the differences fully outweigh them. There have been spikes in the unemployment rates during both events, however it’s broken major records within the past six months because the job losses are more sudden and frequent. The two do believe, however, that whenever this pandemic does come to an end unemployment will hopefully bounce back quickly, and the supply and demand of the market will follow. 

“NYC real estate and the economy, in general, are weighing other exogenous forces so with that in mind, certainly, there is more room for real estate to go down, but in the long run, the city will renew itself, even if the process might be bumpy.”

Industry workers believe now would be a great time to invest and negotiate in real estate if you are lucky enough to have that ability right now. They also believe that Manhattan hasn’t seen the absolute worst that the pandemic can do in regards to negatively impacting the market and sales, so like the rest of the country and its many industries, they’re taking every precaution currently imaginable to stay afloat.

Florist at Work

UK’s Largest Wholesale Horticultural Market Struggles For Survival As Rent Rises

The New Covent Garden Market has been operating since 1670 and has held the same name despite moving locations three times in the past due to space restrictions. The market has a proud and deeply-rooted heritage that all vendors know of.

PPP Loan

Why Some Businesses Are Hesitant To Apply For PPP Loan Forgiveness 

This week, the Small Business Administration opened up their forgiveness portal for the Paycheck Protection Program (PPP) loans. The CARES Act initially made these loans available for small businesses who were struggling to stay afloat during the pandemic. The Act went into effect in the beginning of April, and since has dealt out more than 5 million approved loans which equated to $525 billion. 

To qualify, small businesses had to show that at least 60% of the loan would be going towards payroll costs for employees. The repayment terms of these loans are also relatively casual in terms of federal loans, as most firms will only pay an interest rate of 1% and have at least a six-month grace period before needing to start payments. Loans that were given before June 5th must be repaid in two years while those dealt out after have five years. 

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Even with all of these seemingly attractive qualities, accountants nationwide are noting that many small businesses are choosing to sit out this round of PPP loans after the initial round of loans began going more towards large corporations and wealthier employers who didn’t really need the financial support as badly. 

Additionally, many small businesses are still asking Congress the same question in regards to these loans with no real answer: will expenses covered by these PPP loans be deductible on future tax returns? Ann Kummer is a Certified Public Accountant in New York who claims to be giving a lot of her clients the advice to wait before applying for a federal loan. 

“My advice to all of these clients is that you don’t want to be the first to rush into the forgiveness process. Things will probably continue to change, do you really want to be the guinea pig?”

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Many small businesses feel the same way, especially considering so much change has already occurred in terms of the pandemic and its impact on the economy. There’s still no word from Washington D.C. on what the next Covid-19 relief bill will look like either, something many Americans have yet again been waiting for. 

According to the IRS, forgiveness of the loan will be tax-free, but business owners who take out a PPP loan will not be able to write off expenses that in any other context would be deemed deductible if they use the PPP funds to cover that cost. However, many Congress members disagree with the IRS’ claims and want small businesses to be able to deduct those costs, making this one of the many points of contention that’s delaying the release of another relief bill. 

Overall, many business experts and accountants nation-wide are urging their clients to hold off and wait in terms of applying for one of these PPP forgiveness loans. While many businesses are suffering now, depending on how much this loan program changes the damage could become a lot worse for them down the line. 

Experts recommend that all businesses maintain a separate business account for all of their loan proceeds so they’re able to see exactly what they’re receiving and when they are spending it. Additionally all businesses should maintain any and all documents that show how their funding has been spent throughout the duration of the pandemic. This way, no matter how much the pandemic and the forgiveness program changes in the coming months, businesses will have a formal record of spending and receiving.

Buying Real Estate

Why Investors Are Continuing To Buy Real Estate During The Pandemic 

Investing in real estate property in the middle of a global pandemic and nationwide recession may seem like one of the worst financial decisions one could make, however, many are finding it to be quite the opposite. Real estate prices in major cities all across the country are dropping as many individuals have been fleeing the close, busy life of the city to return to their suburban homes while they wait out the rest of the pandemic. 

The market is extremely slow, the economy is weak, and property listings are going down, which is leading to a lot of buyers receiving amazing deals on homes and apartments they may have not been able to afford nine months ago. 

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Specifically, if we look at New York City as an example, we know that this metropolitan is one of the most expensive markets in the country. In the second quarter of 2020, real estate sales in NYC unsurprisingly plummeted by 54%, which has been the largest decline in the market in 30 years. As a result, sellers have grown more desperate, which is placing many buyers in the position of power in terms of negotiations. 

The average sales price for properties in Manhattan has dropped 18% to $1 million when compared to 2019’s sales; the biggest sales decline in the past decade for NYC. In California, a state that’s relatively equal to New York in terms of real estate market, Orange County reported a 5.2% drop in pricing, and that number is expected to increase by another percent within the next year. 

Besides the market being more in favor of the buyer, people are beginning to become a lot more appreciative of the spaces they consider home. Now that we’ve all, for the most part, been quarantining or working remotely in our homes, many are beginning to realize they want a space that truly makes them feel safe, leading to even more sales. People are being inspired to invest in their property more and push their spending to match up with what they truly want. 

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Along those same lines, for those of us working from home indefinitely, we’re beginning to realize that our homes now need to be divided to have an area dedicated to work, and the rest as our own personal work-free spaces. Separating your professional brain from your at-home brain has grown to be extremely difficult for many, which is obviously understandable considering home and work have taken over the same space. 

Working from the couch or your dining room table without an actual office space and environment can be really difficult for some, especially if you’re sharing that space with family or kids. Now, people are realizing that we really don’t know when life will return to normal, so they’re yet again choosing to invest in their property. 

Market-wise, upgrading your home for one that has even just one more bedroom has never been more feasible based on current trends. Hot tip: if you’re a buyer looking for a new space where you’ll also be working-from-home, a portion of your mortgage can be claimed on your taxes as a home-office deduction. Talk with your real estate agent about the specifics with your area and potential new mortgage as well.