A total of $1.2 trillion is the predicted overall loss in economic output for the travel industry, along with an 81% fall in revenue and 8 million jobs lost, according to the U.S. Travel Association and Oxford Economics.
Those are astounding numbers in any situation, but especially for something that started impacting the economy just six weeks ago.
It doesn’t stop there. Other industries are suffering nearly as much. Hundreds of millions in revenue has been lost because of the suspension of live sports leagues. Worldwide, shipping is suffering a loss of more than $350 million per week, according to the International Chamber of Shipping. U.S. agricultural production has dropped significantly because exports to China have been limited.
The list goes on. Gambling, hospitality, gyms, theme parks, food service, conventions, movie theaters, retail, tech, cruises and many more are being hit by incredible losses from being shut down. All of this has led to the highest levels of unemployment since the 2008 financial crisis, a very sharp contrast to the low rates that we were celebrating just two months ago.
The federal government has allowed states to take unique approaches to re-opening economies and some are scheduled to do that in the next week. Ali Wolf, chief economist at Meyers Research, points out that even if America starts opening in May, it will be a slow recovery.
Others, like CR Herro, vice president of innovation at Meritage Homes, one of the country’s top 10 builders, feel very optimistic about the impact of the pandemic on housing. Here he speaks with Philip Beere, host of the HIVE RE:think podcast about why he’s optimistic and what it means for his organization.
While the situation is changing fast and impacting all 18 markets in which Meritage is building (check this tracker for the most up to date information about every market), the feeling remains that housing could be the least impacted because it was deemed a critical business function and because it doesn’t require large gatherings of people.
Plus, the news is already showing positive reports of home sales. For instance, the National Association of Home Builders (NAHB) reported that the week-over-week change in pending home sales turned positive in the seven days that ended April 15. Then, the National Association of Realtors reports that pending sales rose 6.2% the week ending on April 19, and Zillow shows online traffic jumped 13% annually for the week ending April 13.
While those sales are improving, builders are scrambling to understand the new market dynamics and how home buyers will be motivated to purchase. Herro noted that they will be more motivated to protect their family, leaving the industry an opportunity to improve health and well-being features and amenities on a home and community scale.
Caroline Blazovsky, national home expert and CEO at My Healthy Home, is currently doing presentations to help builders understand some of the ways to improve home design. She cites the Researchers Institute of Public Health in Copenhagen that did clinical studies to show that HEPA filtration removed 60% of ultra-fine particles and gave an 8% improvement in microvascular function.
“We could improve—by the way we build, by the way we construct, by the way we use technology, and by the way we educate—we could build homes that are going to make healthier people, and on top of that, reduce health care costs,” said Blazovsky.
As the nation reopens, housing has another leg up because Jerry Howard, the CEO at NAHB, is one of 12 people on the construction/labor/workforce taskforce for reopening the economy.
Regardless, hope and resilience are definitely part of the formula for moving housing into the future.
