The real estate industry is being clobbered by the coronavirus, and it’s going to get worse before it gets better.

The effects on real estate will vary by sector and market, and the extent of the effects will depend upon the duration of the economic shutdown. The sectors of real estate that have been hit hardest so far are hotels, restaurants, bars and other entertainment retail (particularly in tourist-driven areas) followed closely by retail and housing (particularly second-home and luxury homes).

Supplies that the builders and developers need are being interrupted more and more as workers stay home, and due to business shutdowns, quarantines and curfews. Huge numbers of layoffs will lead to further contraction in consumer spending, starting a downward spiral of economic activity. Together, these forces are already pushing the economy into recession.

China’s factories and businesses are now restarting, which could be cause for optimism regarding a fairly rapid return to normal economic activity and strong real estate markets. That said, China took swift steps that the United States is only slowly and begrudgingly taking now. There are a lot of moving parts, so let’s dig deeper.

Impact Will Be Different Regionally