Last week, Pfizer announced positive results on its pursuit of providing a Covid-19 vaccine, with 90% effectiveness, and this week, Moderna followed suit on its trial vaccine with 94% efficacy. With the government on the ready to purchase mass quantities and logistically disperse the drug, which should take roughly six months to roll out, life as we used to know it should begin to show signs of progress next spring.
So, what does this mean for urban markets that have been shuttered and are a silhouette of their former selves? First, it means a gradual return to the office for many. Here in Minneapolis, large corporations such as Target, law firms, and stockbrokers have hopes to be back downtown by the beginning of summer. As John Wooden would say,
“You need to be prepared when opportunity knocks”. Cities such as Minneapolis, with double the number of homicides from a year ago, need to develop a plan for a safe return of a large-scale population and pursue it. Although violent crimes grab headlines, the burglaries, muggings, car robberies, and random acts of violence create fear that leads to behavioral changes and an unfortunate result, uproot from the city.
Looking at the data provided by NorthstarMLS, we are hit with a stark reality that the downtown real estate market is in a mini bear market. Comparing 2019 metrics, such as pending homes sales (that are down roughly 23% from the period commencing June 1st, 2020 through October 31st, 2020) vs. that same time one year ago, the number of homes sold are down 27% and average SOLD prices are down 4%. It’s clear that the Covid-19 pandemic, along with rising safety concerns, have been contributing factors to the depreciating urban market.
The most important obstacles we as a collective community need to overcome are: How do we achieve police reform, so all colors and creeds feel safe and secure in the streets? How do we obtain a substantial increase in police presence to protect and serve the people? If time has told us anything over the previous 6 months, it is that avoiding the conversation will lead us down a dark path. Winston Churchill once famously observed that Americans will always do the right thing, only after they have tried everything else. As an optimist, I know we will rise to the challenge and become stronger together, and through this growth, I see a floor in the urban real estate market being established.
We are officially on the clock and time is ticking to take back our great city!