COVID-19 is clobbering low income people. This isn’t just due to COVID-19 illnesses. The really devastating problems is services they rely on like health clinics, food stamps, subsidized internet, etc. are often barely functioning. The services are overwhelmed by unprecedented demand with many of their employees are still at home. Phones aren’t getting answered. Those who rely on food stamps may not even be able to get through to the automated call services to ask where is their EBT card, which obviously would be a huge, stressful, scary problem.
For those better off, a realtor friend here in Vegas says the market is still strong and there could be an influx of tech workers from SF Bay area who will be working at home permanently and will move to Vegas because the cost of living is so much lower and it’s an easy plane flight to California. One serious gotcha for the tech unwary is they move in Vegas then discover their pay has been cut. Facebook has already done this to workers who moved and are permanently working from home.
Another realtor friend, who grew up in Vegas and lives in Cedar City UT says they are seeing people moving there now from Vegas because of COVID and because they want out of the city lifestyle. So maybe real estate is doing ok now?
Maybe not. The Freddie Mac Single-Family Mortgage Delinquency rate spiked in June to the highest in seven years and July will certainly be higher. These mortgages are in forebearance now. Many may be able to restructure the loans. However, there is going to be pain.
These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.
With COVID-19, this rate will increase significantly again in July (it takes time since these are mortgages three months or more past due).
I’m a tax preparer for H&R Block here in Las Vegas and did taxes this year for several people who worked at casinos in 2019 and had good incomes. However, some haven’t worked in weeks or months in 2020. That extra $600 per week in unemployment has probably paid the bills for many, and it runs out July 31.
What happens then?