For the time being, the classroom is off limits to students and faculty because of the coronavirus pandemic and there doesn’t seem to be an end to it. It isn’t just pre-k to high school age students who are using distance learning – many universities are close, too. University students are missing out on the coveted “college experience” because the university is putting their safety first.
The pandemic has wrought nothing but chaos to our lives and it certainly put the economy in peril. But we have to wonder about the effects the coronavirus has had on the housing market and business economy in university cities. After all, these cities depend on students to be patrons and employees.
HomeLight published their Q3 survey, and real estate agents from all over the country are saying university cities are struggling. Here are a few reasons why.
Barren university towns
With in-person learning put on pause for the foreseeable future, students are staying home and participating in distance learning. As a result of this, these towns are more akin to a barren ghost town than a bustling university city. Because of this decline, 38% of agents who participated in the survey say they are aware of the prickly situation the housing market is in.
Agents who do business in university towns believe the number of property vacancies will rise to 7.4% in the 2020 fall semester, whereas this time last year, the vacancies were only 5.2%. Even the number of vacant units will see a 1% increase, making it 3.3% vacant for the fall semester.
Some cities remain unaffected
Although many university towns have been trying to make the best out of a bad situation, not all college towns are suffering. Some universities have reopened, allowing classes and athletics to resume – with proper precautions in place, of course.
On the other hand, while these towns may be doing well because the schools are open, it doesn’t mean it will stay that way. Goshen College in Indiana paused their athletic programs for a week because there was an increase of COVID cases. Chicago Business School is closing its doors for two weeks and doing online-only classes because students were partying recklessly and became infected.
Concerns over real estate investing
About 30% of real estate agents reported the number of people who are investing in rental properties in the university towns are declining, or at the very least staying the same as it was before the pandemic. If the market is in a precarious state, of course this is going to be concerning.
Although the rental market isn’t doing too well at the moment, it may be the perfect time to invest. Of the new listings being put on the market, 19% of agents say landlords are putting their rentals up for sale because they’re losing money because they can’t find good renters.
One would think that with former rental properties being put on the market, the inventory would be pretty decent, right? That’s not the case in many markets. In fact, it is quite alarming that 81% of agents in a university town say their available inventory is abysmally low. Who knows how long, if ever, it will take for the market to even out.
The sad fact is the housing market in college towns relies heavily on students, especially those who live off campus. Right now universities are not holding in-person classes, therefore more students are staying at home with their parents or getting an apartment in a cheaper part of town.
The big question is this; “What will the 2021 Spring semester look like? Will classes resume as normal and will students flood back to campus? Can the local economy survive that long?”
We can only wait and see…