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There Is Going To Be Calamity On The Payment Side

A report from The Real Deal on Florida. “With hundreds of Floridians losing their jobs on a daily basis and the economy on crutches, Florida Gov. Ron DeSantis suspended evictions and foreclosures for a period of 45 days. But experts say it is far from enough. ‘It is nice that the governor is protecting people from losing their space,’ said attorney Josh Migdal, a partner at Miami-based Mark Migdal & Hayden. ‘However, it doesn’t change the fact that there will be defaults, and it is only a temporary band-aid.'”

“The action could have a major impact on landlords who are seeking to rent out their residential properties for income. In South Florida, many condo owners put their units on the so-called shadow market for rent. The market was already facing challenges due to the influx of new apartment complexes that are competing directly with condo rentals, causing some unit owners to offer sharp discounts. ‘We are anticipating a significant amount of payment defaults,’ said attorney Jay Sakalo, a partner with Bilzin Sumberg’s business finance and restructuring group. ‘There is going to be calamity on the payment side.'”

“Attorney Bruce Jacobs of Miami-based Jacobs Legal, who represents homeowners in the foreclosure process, warned that many banks will eventually demand full payment. And that will probably lead to an onslaught of foreclosures – likely greater than the last recession, he said. In the last crash in 2008, people were told to ‘stop paying your mortgage and we’ll help you,’ Jacobs said. ‘And then people didn’t pay their mortgage, and at some point the bank filed for foreclosure.’ He sees a similar situation playing out now. ‘If you don’t pay your mortgage or don’t pay your rent, even Gov. DeSantis’ order says you still owe that money.'”

From Realtor.com. “‘This is the best buyer’s market I have ever seen in my career,’ says Ryan Serhant of Nest Seekers and Bravo’s ‘Million Dollar Listing New York.’ ‘Sellers are nervous, there’s excess supply, and interest rates have been hovering at historic lows.'”

“With fewer home buyers out there looking, you have less competition in your way. ‘Unmotivated and uncommitted buyers have dropped off,’ adds Maggie Wells, a real estate professional in Lexington, KY. ‘Less competition is a huge leg up in this market.’ Besides mortgage rates, home buyers are probably wondering about the stability of their income, as fear of layoffs loom. ‘We are entering uncharted territory,’ says Michael Zschunke, a real estate agent in Scottsdale, AZ.”

From KSNV in Nevada. “Prices and demand surged in Southern Nevada until a pandemic is leaving open houses bare. Alberto Saab with Berkshire Hathaway has seen a 40 percent drop in sales since the coronavirus pandemic forced people out of work. As new homes continue to be built, it likely means there will be a surplus. ‘I’m obviously going ‘this is not the time to put money in the market.’ With all the income not coming in and the market, I don’t see how it couldn’t go down,’ said Saab.”

From Business Den in Colorado. “Denver’s residential real estate market started strong in March, then ended with uncertainty. Despite the jump in withdrawals, 6,663 new listings still came onto the market in the region. That was a 30.2 percent increase from February. The number of showings in March peaked between the fourth and 10th of the month. They fell 50.4 percent by the last week of the month, when stay-at-home orders were issued, according to the monthly report. David Bovard, founder of Greenwood Village’s Realty Group, has seen a growing consensus between sellers and buyers to avoid inspections and opt for seller concessions.”

The Dallas Morning News in Texas. “North Texas home sellers are retreating in the face of the COVID-19 pandemic. Asking prices for homes listed for sale in Dallas-Fort Worth fell 3% in March from a year ago — a sign of what might be to come in the next month or two. Real estate agents have reported a sharp decline in homebuyer traffic. The decline in home buying activity caused by the pandemic is coming at the time of year the housing market typically takes off. ‘April and May are going to be the telling months,’ said Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University. ‘The first half of March, we were still gearing up for all the shelter in place.'”

The Texas Tribune. “Another area that might see an economic downturn is the border because of a slowdown in commercial trade with Mexico. ‘[Regions] like El Paso, McAllen, Laredo and Brownsville will also be hit hard because they weren’t doing that well before the COVID-19 sudden stop, and their economies will also be affected by the recession in the Mexican economy,’ said Luis Torres, an economist with the Texas A&M Real Estate Center. ‘Housing markets will be hit differently depending on the region. Yes, Houston would be hit harder, but Midland-Odessa would be hit even more.'”

The Department of Housing and Urban Development suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration until the end of April. But some fear these policies are postponing a larger problem: the delinquencies that might come from unemployed homeowners. ‘That’s when you can have falling prices,’ Torres said. ‘[Homeowners] might try to sell a home at the best price that they can, and that might be with a discount, and that could have an effect on home values.'”

From KEYT in California. “The COVID-19 pandemic is hitting local Airbnb host hard. They are suffering from the loss of business and finding it hard to get help from the vacation rental giant. ‘It’s so frustrating, we have lost that part of our business. And we are out of so much money, ‘ said Gail Kemble from Rainbow Ventures Property Management. Kemble and Kelly Rojas run Rainbow Ventures Property Management in Oceano. ‘When COVID hit, Airbnb decided they are not paying us at all and they still owe us about $40,000,’ said Rojas.”

“Most local Airbnb hosts are suffering from the loss of business, and say Airbnb is not available to help. ‘We have no one to talk to, no one to call, no one to email,’ said Rojas. ‘Airbnb is not taking any phone calls, they are not replying to any emails,’ said Airbnb host Michelle Arturo. With the national epidemic, the company chose to allow all guests to cancel all reservations with no penalties, which has left hosts with the financial loss. ‘For us to lose 22 vacation rentals, and thousands of dollars… our housekeepers, our maintenance people, they are all out of work,’ said Kemble.”

“Arturo has a multi-tenant property and uses Airbnb to pay her mortgage. ‘Any of the reservations I’ve had for several months that I was counting on aren’t coming, all that money is just gone,’ said Arturo.”

From Curbed Boston in Massachusetts. “The novel coronavirus pandemic may have drastically (and understandably) slowed the pace of development in Boston, but projects have wrapped in the early part of 2020. Among these is the four-unit condo conversion at 4 West Cottage Street in Roxbury. And among those four units is Unit 1. It’s a 685-square-foot one-bedroom, one-bathroom with high ceilings and modern finishes as well as central AC, in-unit laundry, and storage in the building’s basement.”

“Also of note: its price. Unit 1 is asking $300,000, or $437 a square foot, through Matt Marshall. Both sums are on the southern end of the Boston price spectrum. The latest data put the city’s median condo sales price at $700,000, for instance.”

From WKBW in New York. “At this time last year, the housing market in Western New York was at a historic high. ‘Last year if you would have asked me I would have said we were experiencing the single most robust housing market we had ever seen in Buffalo and Western New York, and this year, we have zero activity,’ said Chrisopher Mekker, licensed real estate broker and owner of Buffalo City Living, LLC.”

“This downturn, due to COVID-19, could have massive effects on the market once things reopen. ‘I would anticipate that there will be a flooding of the market that a lot of people who wanted or needed to list their homes for sale of the last month of the coming months are probably going to list all of those homes right at once,’ Mekker said. That means, a good time for buyers, and bad time for sellers. ‘It would be a higher supply than normal and it would stand to put a downward price pressure on the market,’ Mekker said.”

The Wall Street Journal. “A growing number of property investors are preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices. Many of these firms are eyeing hotels, retail properties, mortgage-backed securities and other assets that have come under stress in recent weeks as the spread of the coronavirus pandemic has closed businesses across the country, leaving them unable to pay rent and their landlords unable to pay their mortgage bills.”

“Commercial real-estate prices in the U.S. more than doubled over the past decade, according to Real Capital Analytics, leading many investors to conclude that the market had settled near a peak and so afforded few obvious buying opportunities. Now, many of these assets could soon hit the market as lenders and desperate landlords look to raise cash.”

“Investors concede there is a risk, and they won’t be pouring all their money into distressed assets. Prices could remain depressed for a long time, and there is always the danger of buying too early, before the market bottoms out. David Schechtman, a broker at Meridian Capital Group, predicts that bankruptcy auctions in the property market will become a regular occurrence. He said he is currently marketing a handful of distressed assets for sale, including an unfinished luxury condominium in Manhattan.”

“‘Our thoughts and prayers are with all of our fellow Americans and nobody wants to capitalize on anybody’s misfortune,’ Mr. Schechtman said. ‘But I will tell you, real-estate investors—when you take the emotion out of it—many of them have been waiting for this for a decade.'”

This Post Has 74 Comments
  1. ‘A growing number of property investors are preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices. Many of these firms are eyeing hotels, retail properties, mortgage-backed securities and other assets that have come under stress in recent weeks…leaving them unable to pay rent and their landlords unable to pay their mortgage bills’

    Still no bubble WSJ?

    ‘he is currently marketing a handful of distressed assets for sale, including an unfinished luxury condominium in Manhattan’

    But, inventory loans?

  2. 🙏😇Federal Re$erve 🏦: 💰💲💰💲💰💲💰💲💰🌊 = 🏡🎈… 🏘🎈… 🏗🏢🎈… non.🏦🎈… 📈📈📈🎈… 🎨🖼🎈… 🔋🚘🎈… 🏟⚾️🏀🏈⚽️🎾🏌️‍♂️🎈… 📱🎈… 🎬🎤🎈… 🛥🎈…🎰🎈…🚜🎈…💊🎈…📰😷🤧🤒 📉📉📉😱… 👾👾👾👾👾👾👾📌…🤫

    1. $orry it’$ 5day$ old new$, the good new$ i$ that knot to much financial damage$ can happen in just 5 day$. Right?

      Home / Economy & Politic$ / The Fed’$

      Fed’$ balance $heet expand$ to record $5.81 trillion$ in late$t week

      MarketWatch / Published: April 2, 2020 / By Greg Robb

      Central bank continue$ program$ to repair financial market$

      The Federal Reserve’$ balance sheet expanded to a record $5.81 trillion$ in the week ended April 1, an increa$e of $557 billion$ from the prior week, the central bank said Thursday.

      The balance sheet is expected to continue to $et weekly record$ as the Fed continues its full-out pre$$ to keep credit flowing in all corner$ of the financial market$. The central bank is purcha$ing ma$$ive amounts of Treasury$ and mortgaged-backed $ecurities, and makes loan$ to financial firm$ in return for collateral. While the Fed can’t stop the economic damage due to the $udden $top in economic activity, it can try to mitigate second-round effect$ on market$, busine$$es and investor$.

      (Wait$ until the “Tea.Partie$.Member$” get wind$ of this T&B’$ #’$, … they’ll bee long.gone.beyond angry!)

    2. That’s a pretty good string, Hwy. I don’t even know how to use those emojis here.

  3. ‘We have no one to talk to, no one to call, no one to email,…Airbnb is not taking any phone calls, they are not replying to any emails’

    Ring ring!

    Hello?

    Kelly, this is Ben with the HBB helpline.

    Yes?

    You are fooked!

    1. Had a friend tell me yesterday that last week she cancelled a stay at an AirBnB (with some buddies) in Newport Beach. The “host” told her point blank that she wasn’t going to issue a refund because she “had multiple mortgages to pay, 100% cancellations and a sick kid” ending with a comment that “everything is falling apart!”. Or something along those lines that conveyed the mindset of being a victim.

      My friend is going to go to her credit card guys to get her refund.

      She called me because I told her about what I was reading here and she was shocked that my prediction about the response she might receive from the AirBnB FB was pretty much correct.

      1. I hope her reply was “not my problem, lady, now give me my money back or I’ll be suing.”

        1. “…give me my money back or I’ll be suing…”

          We all are going to be treated to some great Courtroom TV in a few months.

          Judge Judy (addressing defendant)

          “Your telling me you have multiple unpaid mortgages, you have a sick kid and life is unfair?”

          Defendant (addressing court)

          “Yes your honor. My ex-boyfriend / real estate agent told me that any Newport Beach property listed on AirBnb is an endless money machine”

          Judge Judy (addressing defendant)

          “Whose dumber, you or your boyfriend?”

          1. “Whose dumber, you or your boyfriend?”

            “Uhhhh…what do you mean? I’m just trying to work hard and achieve my dreams like everyone else. Nobody could have seen this coming.”

      2. Do your part and offer them $5 for night. It will cover the yearly depreciation of 1 square foot.

      3. I was planning a stay in Tucson AZ a few weeks ago and reserved through the hotel not a priceline kinda sevice for the very reason a few extra bucks is worth paying in the remote chance i had to cancel. I had to cancel. No problem because they don’t hit your CC until you stay unlike the other online services,

        1. I had made a reservation at a hotel in Mexico for late March. They had a policy of no refunds for cancellations – just credit – but they don’t hit the card until the day of. A few days before I called to move my reservation and when they tried to run the card it was declined.

          I had forgotten that the card had been used in fraud shortly after my initial booking so the credit card company sent me a replacement card with a new number.

          Hotel asked for my card over the phone and I declined. So I will have to pay upon arrival. De facto refund…

          1. I think those green dot refillable cards are going to really be widely used in the future just for this reason alone.

          2. I looked at Acapulco today via a webcam. The beaches are deserted. During week before Easter (Semana Santa) Acapulco is usually packed to the gills with Mexicans who take the week off. When I lived in Mexico City my parents took us there once that week. We swore to never do it again.

            Anyway, I’m sure the tourism biz in Mexico is hurting big time.

    2. One thing to keep in mind is how many of these airbnb “hosts” bought earlier in this bubble like 2012 and on, at much lower prices than say, the guy who just closed on that $900k house in Austin. When these earlier people with a lower cost basis panic sell, they can undercut the recent buyers by quite a lot (assuming they didn’t refi to buy more airbnbs, which many probably did.) Elevator down to 2012, anyone?

    3. You are fooked!

      BK time. Bye bye, Lexus. Bye bye credit cards. Bye bye not working for a living. Hello reality.

      Now, having a 9 to 5 job with a steady paycheck and benefits is going to be highly desired.

  4. ‘We are entering uncharted territory,’ says Michael Zschunke, a real estate agent in Scottsdale, AZ.”

    No Michael, this actually has been charted precisely for years at the HBB.
    Surely you pros do your research right?

  5. ‘Despite the jump in withdrawals, 6,663 new listings still came onto the market in the region. That was a 30.2 percent increase from February. The number of showings in March peaked between the fourth and 10th of the month. They fell 50.4 percent by the last week of the month…a growing consensus between sellers and buyers to avoid inspections and opt for seller concessions’

    Where did 6,000 shacks come from in this “sellers market”? Denver has UHS bursting with BS.

    1. Denver median house price (per recent Denverite article): $446K
      Denver median household income (various sources): $65K-79K

      Denver UHS should strongly consider getting a real job 🙁

      1. Denver UHS should strongly consider getting a real job 🙁

        Does “stripper” count as a real job?

        1. absolutely strippers count as real work.

          They have to find and convince the clients, they have to execute, and they want client satisfaction to turn it into repeat business.

          What the hell do politicians, bureaucrats and real estate agents do?

  6. “‘This is the best buyer’s market I have ever seen in my career,’ says Ryan Serhant of Nest Seekers and Bravo’s ‘Million Dollar Listing New York.’

    So Ryan Serhant, as a member of the REIConplex, how long has been your career? 3 weeks?

    When median prices drop 60% (or more) you may start re-posting your nonsense.

    Otherwise, stay inside, binge watch some TV, and enjoy the ride down.

    1. When housing mean reverts it seems like previous corrections indicate at least 18 to 24 months of knife catching on the way down.

  7. “The action could have a major impact on landlords who are seeking to rent out their residential properties for income. In South Florida, many condo owners put their units on the so-called shadow market for rent. The market was already facing challenges due to the influx of new apartment complexes that are competing directly with condo rentals, causing some unit owners to offer sharp discounts.

    Gosh, I’m beginning to think being a landlord isn’t all it’s cracked up to be.

  8. ‘This is the best buyer’s market I have ever seen in my career,’ says Ryan Serhant of Nest Seekers and Bravo’s ‘Million Dollar Listing New York.’

    You keep trying to drum up that non-existent demand, Realtor Boy. Just remember: coffee is for closers.

  9. ‘Unmotivated and uncommitted buyers have dropped off,’ adds Maggie Wells, a real estate professional in Lexington, KY.

    Now only stupid knife-catchers remain.

  10. Real estate agents have reported a sharp decline in homebuyer traffic.

    Don’t confuse looky-loos and tire kickers with homebuyers.

    1. People hiding under their beds and only going out in public when necessary to buy food and wearing a mask while shopping are not interested in looking at or buying a home.

  11. “Most local Airbnb hosts are suffering from the loss of business, and say Airbnb is not available to help. ‘We have no one to talk to, no one to call, no one to email,’ said Rojas.

    If you stamp your little feet, someone might notice. Or not.

  12. ‘It’s so frustrating, we have lost that part of our business. And we are out of so much money, ‘ said Gail Kemble from Rainbow Ventures Property Management.

    Yeah, well, it was frustrating for the prudent and responsible to be priced out of decent housing because of speculators like you, Gail. Now that’s going to be rectified, and it’s long overdue.

  13. ‘It would be a higher supply than normal and it would stand to put a downward price pressure on the market,’ Mekker said.”

    FBs who bought at the peak of the market are well and truly buggered. And the patient and prudent will finally be rewarded.

    1. And the patient and prudent will finally be rewarded.

      FWIW, that’s what we thought would happen last time. Instead, we got to watch hedge funds engorged with QE cash snap up the foreclosures and quickly reinflate the bubble. Hopefully that won’t happen again, but as George Carlin said, you ain’t in that club.

      1. FWIW, that’s what we thought would happen last time.

        Exactly.

        Instead, we got to watch hedge funds engorged with QE cash snap up the foreclosures and quickly reinflate the bubble.

        …using free money from the fed that we didn’t have access to. It can’t go on forever. But can it be done one more time? They will try…we will see.

  14. “A growing number of property investors are preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices.

    Remember, kids: the second mouse gets the cheese.

  15. ‘We are anticipating a significant amount of payment defaults,’ said attorney Jay Sakalo, a partner with Bilzin Sumberg’s business finance and restructuring group. ‘There is going to be calamity on the payment side.’”

    Cascading defaults will be a beautiful thing to behold, as true price discovery, long deferred by 11 years of radical Keynesian monetary experiments by the Fed, comes storming back.

  16. ‘That’s when you can have falling prices,’ Torres said. ‘[Homeowners] might try to sell a home at the best price that they can, and that might be with a discount, and that could have an effect on home values.’”

    Gosh, I hope this doesn’t affect the neighborhood comps.

  17. ‘It’s so frustrating, we have lost that part of our business. And we are out of so much money, ‘ said Gail Kemble from Rainbow Ventures Property Management.

    Suffer, bitchez. You foolishly bought into an asset bubble. Now it’s time to pay the piper.

    1. Meh, they bought at zero down with someone else’s money, which they won’t have to repay after the BK. Remember how quickly they were given new loans last time?

      The only downside for them is that they will lose the BMWs, the boat and other toys, and the McMansion and will have to work at a real job for a few years.

      1. Now is everyone getting the idea this could apply to student loans too??? Hand back your degree cancel it….you never legally graduated… and any job that requires you to have a valid degree you cannot apply for or keep. (Union rules.)

    1. I have about $100K in unvested RSU’s. I don’t think of them for even a second as money in the bank or something to borrow against.

    1. The opening and closing numbers do a good job of hiding what had to be on the high end of the intraday price volatility scale from view.

  18. https://www.cnbc.com/2020/04/07/patients-with-autoimmune-diseases-running-out-of-hydroxychloroquine.html

    “Patients with autoimmune diseases are running out of hydroxychloroquine”

    “…Gleason is one of many who rely on hydroxychloroquine, but face uncertainty as other hoard the drug hoping it could help against COVID-19.
    Hydroxychloroquine has been touted as a treatment for COVID-19 by President Trump and others, despite the lack of scientific evidence.”

        1. The S&P 500 was at 2,000 when The Donald said, correctly, it was in a bubble. It is at 2,650+ now.

          We’ve been screwed over and over and over again. Can they keep it up at those levels? And if they do, does everyone in the C-suite deserve a big fat bonus for blackmailing the feds again? And who will be made worse off in what way to pay for all of this?

          1. “The S&P 500 was at 2,000 when The Donald said, correctly, it was in a bubble. It is at 2,650+ now.”

            +1

            – I think there will be huge push back this time against Wall St. bailouts, since Main St. got mostly crumbs. Time will tell. Congress is certainly not doing their job of representing the citizenry. Reference quote here:

            “Then he went up the chimney himself, the old liar, and the last thing he took was the log for their fire. On their walls, he left nothing but hooks and some wire. And the one speck of food that he left in the house was a crumb that was even too small for a mouse. Then he did the same thing to the other Whos’ houses: leaving crumbs much too small for the other Whos’ mouses!” – Dr. Seuss, How the Grinch stole Christmas!

            – Yes, he said that in the Fall of 2016 while campaigning against the Hildebeast. While I’m grateful for the outcome of the election, it’s still “interesting” how that narrative changed once he was elected. Same outcome mind you, since all asset bubbles pop, but a different narrative as the bubble continued to inflate (until just now anyway).

            “They’re keeping the rates down so that everything else doesn’t go down,” Trump said in response to a reporter’s request to address a potential rate hike by the Federal Reserve in September. “We have a very false economy,” – Donald Trump – 9/5/16

            “At some point the rates are going to have to change,” Trump, who was campaigning in Ohio on Monday, added. “The only thing that is strong is the artificial stock market,” – Donald Trump – 9/5/16

            “Now, look, we have the worst revival of an economy since the Great Depression. And believe me: We’re in a bubble right now. And the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down.” – Donald Trump – 9/26/16

            “We are in a big, fat, ugly bubble. And we better be awfully careful. And we have a Fed that’s doing political things. This Janet Yellen of the Fed. The Fed is doing political — by keeping the interest rates at this level. And believe me: The day Obama goes off, and he leaves, and goes out to the golf course for the rest of his life to play golf, when they raise interest rates, you’re going to see some very bad things happen, because the Fed is not doing their job. The Fed is being more political than Secretary Clinton.” – Donald Trump – 9/26/16

  19. From Realtor.com. “‘This is the best buyer’s market I have ever seen in my career,’ says Ryan Serhant of Nest Seekers and Bravo’s ‘Million Dollar Listing New York.’ ‘Sellers are nervous, there’s excess supply, and interest rates have been hovering at historic lows.’”

    “With fewer home buyers out there looking, you have less competition in your way. ‘Unmotivated and uncommitted buyers have dropped off,’ adds Maggie Wells, a real estate professional in Lexington, KY. ‘Less competition is a huge leg up in this market.’ Besides mortgage rates, home buyers are probably wondering about the stability of their income, as fear of layoffs loom. ‘We are entering uncharted territory,’ says Michael Zschunke, a real estate agent in Scottsdale, AZ.”

    – OK, we’re only a few weeks into a massive and historic social and financial dislocation, and yet the pom-poms and cheerleaders are coming out with a decidedly “buy now” bias. This is fine. I don’t see any blatant conflict of interest here (snark). There’s certainly no fiduciary responsibility in terms of forward price risk from the REIC. The seller’s agent is working for the seller, not you. Remember, this is sales only, and not investment advice, for either the buyer or seller. Prices might fall further (wink, wink, nudge, nudge). Do your homework. Add a large helping of common sense. Caveat emptor.

    – Translation: “It’s always a good time to buy.” – Any Realtor at any time

    – It could be the end of the world as we know it and it would “still be a good time to buy.”

    – Let’s revisit the market next year (Spring, ’21) and see whether or not now is a good time to buy. I’m thinking later than sooner, but hey, that’s just me. I’m not a Realtor.

  20. …👨‍🎓👩‍🎓🎓🎈… 👾📌

    (Will have to add+ it to the li$t. Forgot$ ’bout it & luxuriou$.student$.shelter$., $illy.me.)

    Financial hit$ pile up for college$ as some fight to $urvive

    AP New$ / By COLLIN BINKLEY and JEFF AMY, 4/7/2020

    “This crisi$ is causing ma$$ive di$ruption to students, in$titutional operation$ and in$titutional finance$. On some campuses, it is creating an existential threat, potentially resulting in closure$,” Ted Mitchell, the group’s president, wrote in a letter to Education $ecretary Bet$y DeVo$.

    Even colleges with deep reserves are expecting a painful financial blow from the pandemic. Brown University was among the first to announce a hiring freeze, citing “dramatic reductions in revenue.” Yale University followed on March 31, asking departments to update budgets in preparation of a “significant loss” in revenue.

    The University of California, Berkeley, and the University of Wisconsin, Madison, each expect losses of about $100 million, and that’s assuming campuses reopen by this fall.

    Many schools draw from their endowments to pay for scholarships, faculty jobs and campus operations, but those reserves have taken deep losses as markets tumble.

    Bucknell University in Pennsylvania says it has lost $150 million from its endowment after recent investment losses. At the College of the Holy Cross in Massachusetts, the endowment has dropped by 15% and officials fear a similar drop in fundraising.

    “Financial aid is going to be a bigger hit this year,” said Rev. Philip Boroughs, president of Holy Cross. “We’re going to be looking at all current expenditures and going through them with a fine-tooth comb.”

    Perhaps the greatest question for colleges is fall enrollment. Recent surveys have found that large shares of high school seniors plan to take a gap year before starting college. At the same time, colleges have been forced to cancel campus visits and other events designed to court students.

    It’s a major concern for colleges that have come to rely on international students, especially those from China. At the University of Connecticut, which hosted nearly 3,000 students from China last fall, officials are bracing for international enrollment to drop by 25% to 75%, a loss of up to $70 million next year.

    Still, the financial shock is likely to be strongest at smaller private colleges and regional public universities, which hold smaller reserves and run on leaner budgets. Some are adding significant costs to move classes online even as they lose revenue.

    “It’s this major double whammy with multiple hits on the revenue side and new hits on the cost side,” said David Tandberg, vice president of policy research and strategic initiatives at the State Higher Education Executive Officers Association. “I’m afraid we’re going to lose some private institutions.

    Mississippi’s Millsaps College, which has fought to maintain enrollment in recent years, expects to refund $1 million in housing fees out of $33 million in yearly revenue. Amid uncertainty around the fall, the school’s faculty and staff have been making daily calls to help attract prospective students.

    Other colleges face more pressing threats to their survival. At Central Washington University, a public university of 12,000 students, the school’s governing board has declared a “state of financial exigency” authorizing the school’s president to take any action to stay afloat, including faculty layoffs.

    And for some schools, the latest losses have proved insurmountable. MacMurray College, a private school in Jacksonville, Illinois, announced that it will close permanently after this spring. Disruption caused by COVID-19 wasn’t the only factor in the decision, officials said, but it “complicated” the school’s financial health.

    Other schools are postponing campus maintenance and asking faculty to cancel future travel, but some say layoffs are unavoidable. At Miami University in Ohio, which is bracing for a 20% drop in new students, officials are drafting plans that would cut half or all of the school’s visiting assistant professors.

    Papazian, the president at San Jose State, has urged Congress to provide additional aid to help avoid damaging cuts. Her college will try to prevent layoffs, she said, but needs to do “whatever it takes” to survive.

    “This is what we had in 2008, but many times worse,” Papazian said, referring to the Great Recession. “The hurt is deeper this time, and the recovery period will be longer. And there will be many students who are lost or injured because of it.”

    (Ya reckon$ Mr.& Mi$$e$ Market$ 📈📈📈has priced.in the Future$ … Carnage💲?) 🤔

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