Massive Land Grab

Governor Cuomo from NY stated that he would lift almost all COVID-19 rules for businesses and social settings when the one dose vaccination rate hits 70%. It’s currently at 68.6% which means we are very close to normalcy. Despite this, most workers haven’t gone back to the office. In New York City, the office occupancy rate is 18.2%. The 10 city average occupancy rate stayed at 29% in the week of June 2nd which is shocking because we expected the rate to improve in June. If it doesn’t improve in June, when will it improve? We are within 3 months of having a great idea of how the new workplace will look in the future.

As you can see from the top chart above, the 7-day moving average of diner reservations is 7.3% below pre-pandemic levels. Other indicators show restaurant spending is back to normal. There is a chance spending temporarily gets above pre-pandemic levels this summer. We should see if that will occur from data in a couple of weeks. The bottom chart shows the hotel occupancy rate increased to 61.8% as of May 29th. It’s about 10% below where it was in May 2019. The occupancy rate should be higher than ever this summer when pent-up demand is unleashed. There will be limits on international travel, but there will be a spike in domestic travel.  

Homebuilders Are Beefing Up Their Lot Supply

There has been a housing shortage ever since the end of the first wave of the pandemic. Prices have been rising. We need an increase in supply since rates aren’t going high enough to suppress affordability. It’s ironic that interest rates are low in part because population growth is low. Low rates make housing more affordable which allows people to start families. If the homeownership rate increases and stays high, we might see a higher birth rate. We will focus on if there is a post-pandemic baby boom. That’s a 2022 story. Therefore, we still start to get data on that mid-next year. It will be interesting to hear anecdotal evidence from friends and family as well.

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