A second judge has now ruled that the CDC overreached with its pandemic blamed moratorium on evictions. What’s next for the real estate market and its investors?
Judges Begin Ruling Against the CDC
An Ohio federal judge has ruled that the CDC overstepped its boundaries and authority when it ordered a ban on evictions last year.
Two weeks prior to that a judge in Texas ruled the eviction ban was unconstitutional.
The NAHB has said this unfair pressure on landlords has been sabotaging their ability to provide affordable, safe and decent housing.
These rulings may be appealed. Other states, such as NY, which has extended its moratoriums until at least August 2021, are certainly going in the opposite direction. With New York’s already infamously anti landlord and anti investor environment and slow legal system for foreclosing, investors there could be waiting years to try and regain control over their units.
These differing approaches to the current issue, as well as inter state migration are likely to continue to cause markets to diverge ahead.
They are separating where the best returns and cash flow performance is, as well as the direction of capital flows.
Opportunity to Help
Almost no one wants a massive wave of foreclosures and evictions, even if it may bring big profits for some. An example would be those who repossess low and resell high, along with higher interest rate loans later. Yet, a healthier market is better for most.
As a mortgage note holder and landlord you have the ability to help millions of households as these foreclosure and eviction bans expire. A chance to get them back on track, or to at least help them move on with dignity.
Right now there is great absorption in the market. In most markets a lack of publicly available houses for sale, and reluctance of landlords to rent, means new listings are being snapped up instantly, and unless more inventory comes through the pipe growth may stall.
An intelligently throttled flow would help the market keep growing healthily, while attracting a lot more of the capital which has been sitting on the sidelines.
As more lawsuits challenge eviction bans and foreclosure moratoriums, we could see more inventory coming available. This is currently welcomed by an inventory starved market, and will keep supporting healthy growth. While no one wants to have to foreclosure or evict, this is opening up more opportunity to provide real and more sustainable help to everyone involved.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund