US Real Estate: A Pandemic Or Just a Cold?

Published on: July 28th, 2020

Brisk suburban activity might suggest residential real estate is in rude health but, with finance tightening and weak urban activity, the momentum won’t last. Cashflow and debt are huge problems for commercial real estate and city office space could be impaired for years as firms embrace new work practices. Not only will that imply real estate is going to be a drag on growth short-term, but the ubiquitous presence of real estate-related assets in most portfolios requires some careful reassessment.


  • DB
    Daniel B.
    30 September 2020 @ 20:41
    There is 25 Trillion in treasury bonds that have little to no yield. Much of this will likely find a home in the real estate market. Add to that inflation, and we could easily see a bull market in real estate despite the credit challenges.
  • MB
    Michael B.
    4 August 2020 @ 17:06
    This was great. I'd personally like to see more real estate analysis, content, interviews from variety of sources on the platform.
  • MG
    Miguel G.
    29 July 2020 @ 12:20
    Julian, Id like to buy a condo in Ft. Lauderdale/Miami. When do you think these price cuts begin to show up in these markets? Should I wait 6-12 months for government intervention to be taken away before I could begin potentially bargain shopping?
    • HM
      Harry M. | Real Vision
      29 July 2020 @ 12:54
      Forgive me for offering an answer (my guess is that JB will probably come along and answer as well a bit later). So I would start looking and studying the market now. My understanding is the Ft Lauderdale/Miami condo market is already suffering, particularly at the top end of the market where the management fees can be quite fierce. I would guess that market continues to deteriorate, but you might find that developers who are on the edge might already be willing to discount their inventory providing you keep it quiet. Thats if you are ok with buying in a new development.
    • HM
      Harry M. | Real Vision
      31 July 2020 @ 17:28
      There is another point I really should have made Miguel. Miami is still benefiting from the turmoil in South America. There is still a flow of buyers from Brazil, Colombia looking to park capital somewhere they consider safer than their home countries. Further instability in Latam will ensure that flow continues.
    • MG
      Miguel G.
      4 August 2020 @ 11:48
      Thanks for your input Harry, much appreciated.
  • JM
    John M.
    29 July 2020 @ 05:29
    Thanks for the timely update. Asking for a friend...sounds like you think single family suburban will cool off in a few months. At that point, how about buying on a fixed rate mortgage in keeping with weakening USD?
    • HM
      Harry M. | Real Vision
      29 July 2020 @ 12:50
      Hi John. So part of the squeeze reflects an absence of inventory. This is partly a function of Covid. As Covid recedes, the absence of inventory will ease. However when Covid recedes is another matter. Its also worth noting that you will be able to score some great bargains in places like NYC in the very near future. Its already a buyers market. The suburban situation depends on where you are. If you are in Florida or Georgia for example, I wouldn't worry so much provided you are happy to live in a new tract development. There is no real shortage of land and there will be a lot of new construction. But in the North East or California. That might be tougher cos its so much harder to find land to build on. I'm reminded of the 1st, 2nd and 3rd fundamental laws of real estate. Location, location, location. And yes. You do not want to stay in cash in this environment for too long. If the dollar is weak on the currency markets it should be a reminder to find something to buy. The authorities can always "print" more dollars by pressing F9 on their keyboard. Thats not my idea of a safe store of wealth?
    • RR
      Raj R.
      31 July 2020 @ 07:09
      What about the Seattle suburban area? Do you have any clue what may happen here? With the growth of Amazon, Microsoft, FB and Google in the area it is hard to believe real estate prices will go lower in suburban Seattle?
  • DB
    Daniel B.
    28 July 2020 @ 19:10
    There is no mention of consumers and investors paying cash for residential real estate. It seams to me there is a lot of money out there that will be chasing real assets. Could enough cash buyers offset the negative impact of credit tightening?
    • HM
      Harry M. | Real Vision
      28 July 2020 @ 22:11
      Its definitely happening, and it reflects both a desire for tangible assets, and the really low level of rates. There really is a lot of money which is now scrambling for a home. It may tell us a lot about why the equity markets are so strong. However it seems like whats happening on a smaller scale in suburban markets is completely different to whats happening in the large scale urban markets. If you wanna buy a condo in New York, Miami or SF you will be able to get a 10-15% concession on list price. Whereas if you go to Greenwich or Sag Harbor you will pay 10% above list to get it. And 5th Avenue is increasingly full of boarded up shop fronts and not just because of rioters. And if you want to buy an Upper East side 30 story condo building then you can pick up a debt at 80 cents in the dollar and you have a really good chance of coming out of a restructuring owning 300 apartments. That's assuming you want 300 NYC apartments with their overheads.
    • MG
      Miguel G.
      29 July 2020 @ 12:24
      Harry, do you expect condo living to fall further than that 10-15% discount in urban areas like Miami as the cycle continues to play out and forbearance is eventually taken away? Id like to potentially buy something in Ft. Lauderdale/Miami but just comparing the GFC it wasn't until 2011 that real estate finally bottomed, well in to an economic expansion. If condo space is to play out in a similar way we may still be 12+ months away from seeing much better deals. Am i thinking about this correctly?
    • DB
      Daniel B.
      29 July 2020 @ 18:24
      Thank you for the explanation Harry. It would be great to see a chart showing the total inflation adjusted dollar amount of loans over the last 5 years vs Cash purchases. Might be a good chart to keep an eye on because the impact on prices could be dramatic.
  • DB
    Dan B.
    29 July 2020 @ 10:18
    Here in Oz definitely seems to be a run for quality houses, things selling at higher prices and moving quickly. Kind of sobering really as someone who doesn’t own real estate
  • DE
    Daniel E.
    28 July 2020 @ 18:32
    Love Julian and RV but this article was incomplete. In the commercial space you looked at 2 product types, retail and office - both were hurting before covid. Covid has accelerated their decline. There is no mention of industrial, data centers or multi family. All which are accelerating to all time highs in price, spec construction and lower vacancy rates. These sectors of the industry are growing stronger so to say real estate is in trouble seems incomplete. Residential prices are at all time highs - in many states on the west coast most homes are selling for over asking, bidding wars etc. Yes when the fed stops giving out free money people may default on their rent or home loans. But there are moratoriums on evictions. In my view its the same thing as what's going on in the stock market - the fed has propped the market up effectively. SO much so that savvy investors can no longer find good deals. Hopefully the stimulus and intervention does not permanently alter the cycles of real estate. Would love to see a real estate professional come onto the show!
    • HM
      Harry M. | Real Vision
      28 July 2020 @ 22:00
      Hi Daniel. Let me comment on JB's behalf for now (although I suspect he will pop up to answer some comments too). So I completely agree. Data centers have been bid, and industrial is bid as well. But the strength is these sectors will struggle to offset the weakness in retail or office. The key distinction is urban vs suburban. The suburban markets are squeezing and hard, partly due to lack of inventory and partly to urban flight. The urban markets are suffering. Multi-family is an interesting case in question. Yes suburban multifamily is doing well, but large scale urban multifamily not so much! Not that its disastrous, but it certainly isnt good. Re: construction, as credit tightens its just really hard to imagine that we wont see lower overall levels construction. And credit is definitely tightening. We are starting to hear of failed appraisals in smaller scale multi-family deals. Regional banks are not taking proforma pricing, are questioning vacancy assumptions and are generally starting to require more "realistic" underwriting of deals. Understandably moratoriums on evictions undermine lending confidence, as does increasing unemployment. I remember in 2008 when we saw the superficially weird scenario of working people fighting to keep car payments while allowing themselves to go into default on mortgages. In retrospect, that made perfect sense. They were upside down on their real estate and they needed their car to get to work. Will we see something like this with rents - a big buildup of arrears?
  • CF
    Chris F.
    28 July 2020 @ 21:19
    Thanks for this! In Canada, like Australia, our banking sector is heavily tied to real estate. Charts of regional Canadian banks and Reits look identical. Policy initiatives are targeting individual income replacement and MBS markets, but future initiatives might focus on millenial focused programs as a form of MMT bridging the gap to retired generational RE wealth. Seems that there is much more news and policy forthcoming on this topic.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yusko is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets.

Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office. Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation.

Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.

Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authored The Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot on The New York Times Best Sellers list.

Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offering which utilizes a true online brokerage model that self-directed investors and traders have come to expect for equities, futures, and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovative ways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring. James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy.

Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channel watched by over 80,000 people. In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of human interest recordings, documentaries and films Peter has recently launched the Defiance podcast and DefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.

FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients. Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltem oversees the firm’s managed strategies group and its New York office and leads corporate development.

Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem.

Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.