There are two crises in this country right now: a health crisis that has forced everyone into their homes and a financial crisis caused by our inability to move around as we normally would. Over 20 million people in the U.S. became instantly unemployed when it was determined that the only way to defeat this horrific virus was to shut down businesses across the nation. One second a person was gainfully employed, a switch was turned, and then the room went dark on their livelihood.
The financial pain so many families are facing right now is deep.
Major institutions are forecasting unemployment rates last seen during the Great Depression. Here are a few projections:
As horrific as those numbers are, there is some good news. The pain will be deep, but it won’t last as long as it did after previous crises. Taking the most dire projection from Goldman Sachs, we can see that 15% unemployment quickly drops to 6-8% as we head into next year, continues to drop, and then returns to about 4% in 2023.
Our local economy is more diverse than it was in the Great Recession and we likely will be able to “hold on” for things to improve. In Davenport Florida we all are watching for how fast the tourists come back. Many will be watching how fast the vacation home booking calendars fill up. I think the return to good occupancy rates in vacation homes will be quick after the tourists start coming back. Where would you stay if coming to Disney? Would you rather stay in a vacation home with your own pool and ability to limit social contact or in a big hotel with elevators?
Predictions are much like opinions and everyone has one or two. Here’s my prediction: Just like the previous recession, but different, this deep and short virus-driven recession will create more economic diversity in our local economy making us a little less dependent on tourism. Realtors I speak with, anticipate even more people will permanently migrate to Central Florida and at a higher rate than before to escape higher taxes and the cold weather lifestyles of the Northern States. I will be asking my clients after having lived through coronavirus in a big cold and lonely city did that factor into their decision to buy a cheap, older vacation home with a nice pool here in Davenport?
When we compare the length of time it took to get back to work during both the Great Recession (9 years long) and the Great Depression (12 years long), we can see how the current timetable is much more favorable.
It’s devastating to think about how the financial heartache families are going through right now is adding to the uncertainty surrounding their health as well. Hopefully, we will soon have the virus contained and then we will, slowly and safely, return to work.