Distance learning and COVID-19. This combination is every parent’s worst nightmare. It creates the perfect storm of stress, madness, and desperation. But, parents are making the best out of a terrible situation because education can’t be put on hold due to a global pandemic.
The real question is what if you have kids in college? The question many people have is regarding COVID-19’s impact on college towns.
HomeLight’s Q3 survey reveals that the coronavirus has left college towns in a tough spot. Local businesses such as bars and restaurants rely heavily on college students to keep business afloat. However, 2020’s fall semester has proven to be more detrimental than some would expect.
University towns become ghost towns
Many colleges and universities have shifted from in-person learning to distance learning and sent their students home. The result of the mass exodus has rendered many of these towns a proverbial ghost town.
According to insights from top agents who participated in HomeLight’s Q3 2020 survey, this student housing market in these cities are predicted to increase from 5.2% during the 2019 fall semester to 7.4% in 2020’s fall semester. Unit vacancies have increased by 1% during that time and because of this, property owners will have no choice but to lower their rental fees just to get people through the door.
Some towns are unaffected
Although some major universities said they were discontinuing in-person learning in favor of remote learning, there are universities who are keeping in-person classes. In these towns, landlords are likely to see an influx of rental applications if/when on-campus housing closes.
Real estate investing is on shaky ground
For real estate investors, buying rental properties in college towns seems like a gold mine – especially if the rent is going to be cheaper than an out-of-state student paying for room and board on campus. For example, the average monthly rent for Ann Arbor, Michigan is about $1,600 and room and board at University of Michigan is $11,996.
Now, room and board at the university may be cheaper, but when you factor in other living expenses, it could add up quickly. However, if four students rent a 4-bedroom apartment that costs $3,300 per month… Each student would pay $825 per month or $9,900 per year, which is quite a bit cheaper, especially when you factor in that the students aren’t staying on campus the entire year.
Inventory fluctuates
Thirty percent of real estate agents that participated in the survey state the rental vacancies in their area have either stayed the same or are starting to decline. Even though the housing market in a particular area may differ from others, 81% of agents said their inventory is at an all time low, despite the fact that many landlords are selling their rentals.
The truth of the matter is this, COVID-19 has affected almost every aspect of our lives and the housing market in university towns remains on shaky ground. As more students and faculty contract the virus, universities are closing their doors and students are going home. Even students who live off campus are leaving the area and are going back home to save money.
Local businesses in university towns are suffering due to a lack of patronage. Unless schools open back up in a safe manner, who knows what the 2020 Spring semester will fare. Will students return to university? Will real estate investors start investing again? Will the economy pick back up?
There are just so many questions that cannot be answered right now. But, we’re keeping our fingers crossed and are hoping for the best.
