The Coronavirus is on everyone’s mind right now. It’s inescapable that the effect is being felt in business. The stock market has plunged as a result of corporate uncertainty and fear over a possible global pandemic.
The NYC real estate market and construction worlds are looking at the real possibility of rising costs of materials and delays as Chinese shipping has slowed down considerably. The impact of declining tourism and slowing retail business in NYC has landlords and restaurant owners worried. Supply chain issues – steel, millwork, plumbing fixtures, electrical fixtures, concrete boards and flooring tiles are the biggest concern for the construction industry.
Contractors are concerned whether or not the costs of higher priced materials and delayed shipments will fall on their shoulders. Joseph Natarelli, the head of the contractors industry practice group at the accounting firm Marcum LLP says “the best contractors are taking proactive steps to plan for the possibility that they’ll need to buy their materials elsewhere and negotiating potentially higher prices with their clients now”.
A concern in the construction industry is also that if there is a major outbreak of the virus, workers may not want to risk coming to the job site.
Chris Smith, a senior director on CBRE construction cost consulting has a calmer outlook on what the NYC construction industry is seeing at the moment. “We’re not really experiencing a major negative impact from the Coronavirus yet”. “Most of the raw materials and products we use in construction are in stock and already in shipment from China. The impact will be over the next few months”.
The real estate industry in NYC hasn’t seen anything happen like the potential effect of the coronavirus before. With a more proactive plan and definitive approach by state, local and the federal government being initiated to create public awareness and advocating common sense methods (washing hands, sanitizing, not touching your face after being in a public place etc…) to try to stop the spread of the virus, hopefully an end to this virus can happen.
To be continued
Accord Real Estate Group
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