The great divergence: U.S. COVID-19 economy has delivered luxury houses for some, evictions for othe

[Eugene]

Source: Reuters

BUSINESS SPECIAL REPORTS
OCTOBER 31, 2020 7:09 AM UPDATED 2 HOURS AGO

The great divergence: U.S. COVID-19 economy has delivered luxury houses for some, evictions for others

By Michelle Conlin
10 MIN READ

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Columbus exemplifies the economic split animating America’s coronavirus crisis.

Professionals like Kullman are thriving, thanks in part to pandemic-induced policies by the Federal Reserve that have buoyed the stock market and fueled industries such as real estate with record-low interest rates.

For many lower-wage workers, meanwhile, the crisis has delivered a cruel shove, toppling families like the McGees who were already living on the financial edge. Nationwide, millions of people including hotel workers, retail clerks, waiters, bartenders, airline employees and other service workers have lost jobs as COVID-19 fears crushed consumer demand.

Economists call this phenomenon a “K-shaped” recovery, in which those on the top continue to climb upward while those on the bottom see their prospects worsen.

Ned Hill, professor of economic development at Ohio State University, called that downward slope of the K “fat and broad and long and ugly looking.” He said there’s little hope for a return to normal as long as coronavirus continues to spread unabated in the United States. In Ohio, COVID-19 cases are soaring and hit a record of 3,590 new cases on Oct. 29. In Columbus alone, at least 643 people have died.

“People’s jobs and incomes have disappeared, and they aren’t coming back until people’s threat of dying from the virus dissipates,” Hill said. “That’s it.”

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Read more: https://www.reuters.com/article/us-health-coronavirus-usa-inequality-ins/the-great-divergence-u-s-covid-19-economy-has-delivered-luxury-houses-for-some-evictions-for-others-idUSKBN27G0H7

[spooky3]

1. She's already out of date. The stock market is "buoyed" to about 0% increase

In 2020.

[keithbvadu2]

2. Correction: The Trump economy

[Backseat Driver]

3. Oh yeah, one can get 1st time buyer pre-approval

but just try to purchase a well-maintained home in a "safe" area at a reasonable price. Flippers here are presenting homes for sale that are "cosmetically" beautiful but have major problems in their structures on inspection and in areas Franklin County would like to "clean up" before cleaning up the crime. Newbie owners, who have struggled to at last have a down payment to those neighborhoods would be prime targets and would need to rip up the flippers "nice" work to fix what really ails those "old ladies" with character masquarading as sound structures - it's sad the homes are really only suitable for annual renters on their way out one way or another. Of course, in the long term, there's also most likely higher odds of much lower appreciation than in those hot "burbs."

The situation in this area is very discouraging to a 1st time buyer who has worked diligently to save and actually wants to live in the home not "invest" or flip a fixer-upper in a better area then quickly move on. Suburban home sellers over years have improved their properties with amenities (think taking out equity) yet structure is likely still sound, but estimated appraisal values might be deceptively low for the purpose of pricing, and needed cash to win contingency bid offers are hidden in what is called "gap" where massive amounts of cash are required at closings. The pre-approval process therefore often hide true cash costs of buying and one needs to be VERY wary of homes prepared for sale by flippers or owners even in the better areas. Let's face it, crime, even in the burbs, is also increasingly iffy as time goes by, especially since CoVid-19 has wiped out the good jobs necessary to pay and maintain those suburban dwellings and desperation is seen more often in those areas. A first time buyer, even with excellent credit and a pre-approval letter into the $250K+ range still seems to have had to win the lottery or was the beneficiary of a loved one's great big insurance policy despite the touted great financing options. It's truly sad.