The Coronavirus Pandemic is now a fact in all our lives. It will get worse, before it gets better. Yet humans have endured far tougher calamities. Pandemic means worldwide. It does not mean 100% fatal.
Friend, you and I haven’t experienced anything like this before but people on this planet have endured far worse many times. In 1918 the Spanish Flu pandemic ravaged the whole world. Someone awoke healthy, in the morning coughed and sneezed, and was dead before midnight. The Spanish Flu killed more Americans than World War I. Still, many more people lived than died.
The plague took 25% of the world’s population in the Middle Ages. Carts rolled through the streets of London filled with bodies, to the call of “Bring out your dead!” Many more people lived than died.
The Economist magazine reports experts projecting between 1,000,000 – 2,200,000 US deaths. Horrible! People over 60 are at substantially higher risk than folks under 40. Truly the virus is a disaster. If those projections were proportional, San Diego County might suffer 10- 20,000 deaths. Shocking! But many more of us will be spared.
Come September, both you and I will likely be alive. Probably we will each know many people who were infected. We might even know somebody who passed. We’re told the economy will be ravaged. Does that mean that apartments will be selling for 1/3 less than what they sold for last month?
Probably not. In January San Diego County was 100,000 rental units short of what our population needed. People live in Riverside County, Imperial County and Tijuana and work in San Diego County because we have jobs but not enough rental housing.
Suppose the county suffers 20,000 deaths. Then the County might need 10,000 fewer housing units. Homeowners tend to be older than renters. Suppose that we needed 6000 fewer homes and condos and we need 4000 fewer apartments. 100,000 shortage -4000 decreased demand = 96,000 rental shortage.
Do we really think that more than 96,000 rental households will go to … New York? Louisiana? Where? Pandemic means worldwide. Every state will face the it. No city can avoid the virus and then create an explosion of jobs and apartments for newcomers.
What’s happened for the last hundred years will happen in the next six months. Thousands of households will leave San Diego County. Other thousands will move in. Some young people will leave home and some couples will divorce. Natural increase, births over deaths, will create more new households. There will be lots of movement, but it is extremely unlikely our county will lose 90,000 rental households by September.
Most people who live in San Diego County now will be here next year. Government won’t cut construction fees and upzone to triple the apartment construction. Even if they did it would take more than a decade to correct accumulated shortfall of rental housing.
Remember all the things we worried about. World War III did not happen. Y2K didn’t end civilization. Ebola didn’t eliminate humanity. Coronavirus is wretched but we will get through it. San Diego’s economy is better diversified than 80% of US cities. No for-profit employers have more than1% of our jobs. San Diego will continue to have a robust and extremely diverse economy plus a spectacular climate.
Stay calm. Pray. Be more encouraging and nicer. Show more compassion and generosity. Enjoy time with people you love. Rental owners will still do well in the coming years.
Oh, and remember, wash your hands for 20 seconds and pray longer than that.
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”