COVID-19 With a Hint of 2008
As the year slowly comes to an end, the fact that there may be a potentially viable Coronavirus vaccine is incredible. With this in mind, however, the recovery of our overall economy remains in question with some reminders of the Great Recession of 2008.
Tale of Two Cities
The effects of COVID-19 has left many top-tier economists to wonder how and when the economy will recover given the unprecedented nature of the recession the country is experiencing. In June of this year, Morgan Stanley had predicted that we would experience a sharp but short recession, and that the global economy’s output would return to pre-coronavirus levels by fourth quarter. That has not happened.
While the stock market has soared especially after positive news of an upcoming vaccine, high unemployment and jobless claims remain. Due to this disparity, a K-shaped recovery is a more apt description of the economic situation, where the economy recuperates unevenly with some able to recover while others see things go down and get worse.
During the pandemic, both federal and state law provided eviction and foreclosure moratoriums in order to safeguard those who could not afford their rent or mortgage due to financial hardship brought on by COVID-19. However, unless there is an overriding law or new mandate, some of these moratoriums will expire by the end of the year.
The New Wave
Should the moratoriums truly expire at the end of this year, one may aptly describe this upcoming wave of evictions and foreclosures as I had indicated “the foreclosure crisis of 2008, but unfortunately on steroids.”
What does this all mean?
While one cannot guarantee the future, mortgage and rent delinquency rates, minimal job growth for those lowest wage earners, added to the eventual end of both eviction and foreclosure moratoriums will inevitably fuel an overwhelming wave of evictions and foreclosures in the first half of 2021 unless more government stimulus is timely introduced.
We are here when you need us, and have weathered the storm during the Great Recession with you.
From the Trenches,