Most Younger Generations Still Can’t Afford to Buy

Many would-be homeowners in the Millennial and Gen Z generations are going to need to wait. Despite the fact that some who wished to buy are instead renting, apartment vacancies are on the rise as 27.7 million have moved back in with parents or other relatives, if they ever left home at all. The good news is that this number is dropping, but only the luckiest of them will be able to snatch an opportunity in the coming months amid heavy competition.

11% of renters were excited to make the transition to homeownership in the beginning of 2020, but the COVID-19 pandemic and the recession squashed those dreams for many of them. Those who experienced income loss as a result of the pandemic are twice as likely to have trouble with paying bills, rent, or mortgage, or need to withdraw savings or retirement or borrow from friends or family. That isn’t the whole of the problem, though: California has been lacking affordable housing for decades as a result of mere population growth, an issue that was only accelerated by the recession and lockdowns, which have slowed or halted construction.

Photo by Georg Bommeli on Unsplash

More: https://journal.firsttuesday.us/homeownership-remains-elusive-for-young-adults-amid-recession/74939/

LA County Tightens COVID-19 Restrictions

The number of COVID-19 cases spiked dramatically in November, spurring LA County to increase safeguarding measures, effective tomorrow, November 20th. The number of customers at any time can be no more than 50% maximum outdoor capacity at outdoor restaurants, breweries, wineries, cardrooms, outdoor mini-golf, go-karts, and batting cages. This number is 25% at businesses permitted to operate indoors, such as retail stores, offices, and personal care services. In addition, restaurants, breweries, wineries, bars, and all other non-essential retail establishments must close from 10:00 p.m. to 6:00 a.m. At personal care service locations, both staff and customers must wear a mask at all times, disallowing services that would require the mask to be removed, and these establishments cannot serve food or drinks. The maximum number of people at outdoor gatherings is 15, with a limit of 3 households. LA County has also established potential future guidelines that will be implemented if the number of cases or hospitalizations increases beyond certain levels.

Photo by Bill Oxford on Unsplash

More: https://covid19.lacounty.gov/covid19-news/los-angeles-county-to-implement-tighter-safeguards-and-restrictions-to-curb-covid-19-spread/

Businesses Are Preparing for Smaller Thanksgivings

Throughout the US, COVID-19 is threatening to put a damper on people’s Thanksgiving celebrations. Families don’t want to break tradition, but many will have to settle for smaller gatherings of only close family members. With fewer people, the normal Thanksgiving fare will surely create plenty of leftovers, even with the tradition of stuffing yourself to overfull. Luckily, businesses are ready for it, so you don’t have to buy a 25 pound turkey.

Some companies are offering measly four-pound turkeys — wouldn’t cut it during your traditional festivities with all your distant relatives, but perfect for a family of six. Restaurants are preparing full meals, available for takeout, serving four to six people. Others are banking on people bucking the trend and buying prime rib, pork, sausage, ground beef, or even lobster. Vegan restaurants are also making necessary preparations. One thing is for sure, though: grocers and restaurants are definitely not going to be losing money. They’re actually expecting far more sales, since there will be a greater number of smaller celebrations.

Photo by Annie Spratt on Unsplash

More: https://www.lancasterfarming.com/farm_life/food_and_recipes/smaller-turkeys-yams-to-go-or-a-thanksgiving-lobster-covid-19-will-transform-holiday-meals/article_b68d5e9c-54ea-53a0-a571-2207005ed16a.html

Investors Expect Remote Work Trend to Continue

In a previous post (found here: https://www.beachchatter.com/2020/10/29/post-covid-real-estate-predictions/) we made some predictions about which trends during the pandemic may be permanent and which may be temporary. In that article, we predicted that the drop in urban desirability as a result of being able to work from home would be temporary, and though people would be moving South, others would eventually take their place in urban industry centers. Investors seem to be willing to bet on remote work, though. We do see people moving away from industrial centers such as San Francisco to cheaper areas like Sacramento, at the same time that commercial investors are putting money into Sacramento. The consensus appears to be that even though job centers will recover slightly after the pandemic is over, there are enough businesses embracing remote work that putting money into cheaper areas now before their popularity skyrockets is a worthwhile investment, and expensive urban areas aren’t a solid investment anymore.

Photo by Austin Distel on Unsplash

More: https://journal.firsttuesday.us/commercial-investors-are-betting-the-remote-work-trend-will-continue/74870/

Harvard Professor Explains How Masks Work

Joseph G. Allen is an Assistant Professor of Public Health at Harvard and Director of their Healthy Buildings program. The New York Times has worked with him as well as several other professors to explain the process behind masks, to demonstrate that they do indeed work. In essence, particles get bounced around inside the fibers and trapped there. Interestingly, in the case of most masks, which are generally made of tightly woven cotton, the particles least likely to get trapped are medium size particles, as they’re big enough to be less influenced by surrounding air molecules yet small enough to not randomly make contact with the fibers as often. Large particles are most likely to get trapped, followed by small particles. Coronavirus particles are small and often get carried inside large particles, so they are in the two categories more likely to be caught by the fibers.

Photo by Photoholgic on Unsplash

NY Times has created an infographic demonstrating the process. You can find that here: https://www.nytimes.com/interactive/2020/10/30/science/wear-mask-covid-particles-ul.html

Second Project Homekey Purchase Approved

Los Angeles County and the City of Long Beach have been working with Project Homekey, a California state project designed to create more affordable housing by converting hotels into homeless housing. The project was started during the pandemic. The purchase of a Holiday Inn location in Long Beach had already been approved on October 13th, and on October 20th another location was approved in Los Angeles, the Motel 6 on 5665 E. Seventh St.

Long Beach is aiming to purchase another yet undisclosed location as well. The city has asked for up to $36 million from the Project Homekey fund, majority funding for which is from Coronavirus Aid Relief Funds. The city council isn’t expecting to be approved for the full amount, but is hoping to get at least $15 million to go toward acquisition and operating costs.

Photo by Gabriel Alenius on Unsplash

More: https://lbbusinessjournal.com/supervisors-approve-purchase-of-second-hotel-for-conversion-to-homeless-housing

Post-COVID Real Estate Predictions

Some trends are already appearing in how COVID-19 has impacted real estate decisions. The economy is going to recover at some point, so some trends are likely to be temporary. However, there will certainly also be long-term impacts as experiencing the pandemic has altered people’s outlook on approaching real estate decisions, and even decisions made for the here and now could have lasting effects.

The less permanent changes include fiscal troubles at the state and local levels as revenue from commercial real estate taxes drops, retail vacancies, and a drop in urban desirability, expected to be temporary because of urban districts’ importance in certain industries once job recovery is underway. With this drop in urban desirability comes people wanting affordable suburban housing. This is being achieved now by many people moving to the Southern US, which already features low-cost suburban housing.

In the long term, however, we expect plenty of attention to enabling more affordable housing through government action and zoning changes, as well as programs to help traditionally low-income groups, such as minorities, get into the real estate game. These programs would be a direct response to COVID-19, but with lasting impacts. Another such change is greater attention to health and safety within the technological infrastructure of commercial buildings such as hotels and restaurants, which need not be eliminated post-pandemic. But there’s also a major change that was brought about by the pandemic, but addresses a different issue entirely, and that is office size. The prediction is that companies will want more, smaller offices, in more spread-out locations. This is because companies recognize both the feasibility of remote work and also the importance of office space for coworker cohesion and training. Their solution is small offices where a few coworkers can reliably meet up regardless of where they live while they aren’t working at home.

Photo by You X Ventures on Unsplash

More: https://magazine.realtor/daily-news/2020/10/15/8-real-estate-trends-emerging-from-the-pandemic

Homebuyer Priorities Shifting in Wake of COVID-19

While confined to their homes during the pandemic, people have had plenty of time to take a good look at what their homes offer them — and what they don’t. Homeowners are reevaluating what’s important in a home purchase. Previously, many homebuyers were looking for a place close to everywhere they may want to go — likely in the city. Now, buyers don’t care too much about proximity to destinations if their own home offers them most everything they could want. That means single family residences with plenty of square footage and extra rooms.

Reshaping the home’s function is so important to people now that they don’t even want to wait until their next purchase. According to a survey by Porch.com, 78% of houseridden homeowners are increasingly looking at renovating their homes, commonly by adding a pool, home gym, or home office. A third are considering upgrading their home internet connection.

Photo by Ярослав Алексеенко on Unsplash

More: https://magazine.realtor/for-brokers/network/article/2020/10/what-will-homes-look-like-in-a-post-pandemic-world

[UPDATED] What Will Halloween Look Like During COVID-19?

[UPDATE] As of Oct 18, there is some additional guidance regarding holiday activities. Buying and carving of pumpkins is allowed, as long as the pumpkin patches follow safety guidelines. Some outside gatherings are now permitted, a change from the prior guidelines. These gatherings can have a maximum of 2 other households, can last no more than 2 hours, and require face coverings and social distancing across households. There are also new recommendations for Dia de los Muertos. These include displaying your altar outside or in a front window, utilizing virtual spaces such as email or social media, and limit cemetery visits to your own household with masks and social distancing.

LA County has issued its regulations regarding Halloween activities, if restrictions continue through October 31. Many traditional activities won’t be permitted, and others are allowed but not recommended. The activities not permitted include carnivals, festivals, haunted houses, live entertainment, gatherings, and parties with non-household members, whether or not it is outside. Of note, trick-or-treating is not listed as a non-permitted activity, but LA County Public Health does not recommend it.

The guidelines also provide a list of suggested activities that are safer. Drive-in movie theaters, outdoor dining, outdoor museums, and car parades are still allowed, subject to the normal regulations. Public Health Director Dr. Barbara Ferrer is hopeful that no more COVID-related regulations will be necessary by Thanksgiving or Christmas.

Photo by Benedikt Geyer on Unsplash

More: https://www.laweekly.com/trick-or-treating-discouraged-in-l-a-county-this-year/

The Impact of COVID-19 on Senior Housing

It’s been demonstrated that senior citizens are a vulnerable group for COVID-19 and experience worse symptoms, with 73.6% of COVID-19 related deaths being those age 65 and over. It’s important to keep them safe and isolated. Senior living communities, on the other hand, are often multi-family. Even though they do frequently have health care workers on-site, that doesn’t negate the proximity to other people. This means fewer seniors are going to want to live in a senior living community if they can avoid it, instead living at home.

Those not yet at the normal retirement age have also had to change their plans. Some purposefully retired early in order to lessen their exposure to COVID-19. Others were unfortunately forced into early retirement, as a result of losing their job at an age when it’s near impossible to re-enter the workforce. These groups will also be living at home. They’ll be hoping to later sell, but in the meantime will suffer from reduced or no income and have no guarantee of getting a good price when they do eventually sell. This in turn impacts other age groups, as more homes are occupied and unavailable for purchase by first-time prospective buyers, especially with residential construction being inadequate.

Photo by camilo jimenez on Unsplash

More: https://journal.firsttuesday.us/is-covid-the-end-for-senior-housing/74433/

Companion robots: Are they a good thing?

Companion robots, whether for practical or sentimental purposes, have been around for a while. But this pandemic presents an opportunity for their popularity to grow. With many people isolating themselves, they’ve grown lonely or are lacking in vital assistance. Some things robots are able to do are provide comfort, tell jokes, recite Bible passages, play music, or, for those with more physical needs, feed you, bathe you, or lift you up out of bed. Benefits of robotic companions are that they are always available and never get angry at you, won’t forget important dates or times, and won’t be abusive or fraudulent.

There’s fairly solid consensus that robot companions are useful during a pandemic. Some worry, though, what may happen to human companionship or caregiving if robots catch on beyond their use during a pandemic. As much as social robots can try to fill the void for people who are truly isolated, humans still require interaction with other humans for their mental health. Family members may feel their elderly relatives are completely fine because they aren’t totally on their own, but that would be a mistake. And there are also concerns with the robots themselves — some of them have built-in cameras to monitor when they are needed, which, while they are intended as a safety feature, may be a privacy concern for many people. It’s also inevitable that some caregivers would lose their jobs to robots.

Photo by Brett Jordan on Unsplash

More: https://www.vox.com/future-perfect/2020/9/9/21418390/robots-pandemic-loneliness-isolation-elderly-seniors

Unemployment delays homebuying for adults under 30

As of July, over half of adults under 30, 52%, are now living with one or both parents. The previous recorded high was 48% in 1940, eight decades ago. No data is available for the period including the Great Depression, but it’s likely the number was higher during that period. The majority of this increase comes from those in the 18 to 24 age range, with particularly large spike in April.

In some instances this could be a conscious choice, at least initially, as people moved in with their parents during lockdowns so they could isolate with family members instead of alone while working from home. Even for those for whom this was the plan, their stay has been extended longer than expected. For most people, though, it’s because they aren’t working from anywhere — it correlates strongly with rising unemployment numbers. Unemployed young adults aren’t financially stable enough to become independent homeowners. Increasing student loan debt is also a significant factor.

Photo by Thought Catalog on Unsplash

More: https://www.huffpost.com/entry/young-adults-living-with-parents-covid_n_5f53a937c5b6946f3eb291b0

Predictions for the 2020 recession’s impact on inventory

The real estate journal First Tuesday asked readers in July how they felt the 2020 recession would impact for-sale inventory. The votes are now in.

A plurality of respondents, 45%, felt inventory would go down. This would likely be a result of both anxiety from sellers and not enough construction. However, the number who instead felt construction would increase and there would be rental vacancies, leading to more listings, was 39%, not too far off from the plurality. The third and final category, those who felt there would be little to no impact, totalled 16%.

But that was July. It’s now August, and there certainly has been an impact. It turns out the 45% were right. Inventory has declined steeply, and construction companies are even more wary about building than they already were before the pandemic. Fortunately, declining rental vacancies points to an increase in inventory as soon as construction starts back up. Changes to California zoning laws also hope to speed up construction.

Photo by Macau Photo Agency on Unsplash

More: https://journal.firsttuesday.us/the-votes-are-in-how-the-2020-recession-impacts-californias-for-sale-inventory/72705/

Automation is coming to restaurants

As a result of COVID-19, restaurants are looking for ways to reduce the interaction between workers and customers. One solution? Robots. Robot chefs have been around for a while, but weren’t always successful. They’re now gaining more traction as restaurants see them as becoming a necessity.

New plans include a burger-flipping robot named Flippy at White Castle and a smoothie-making robot called Blendid, which is expected to have more widespread availability. Chowbotics reports 60% increased demand for Sally, a salad-making robot, and Wilkinson Baking Co. said they have also been getting more inquiries about their BreadBot.

Some are skeptical, though. Max Elder of Food Futures Lab warns that automation can’t solve all the problems within the food industry, and that offering it as a solution may take attention away from issues that were already in existence before the pandemic began. Elder also says the human factor is important — “Food is so personal, and it needs to involve humans,” according to him. Automated food companies insist they aren’t trying to replace human workers, only streamline the process so that workers can be more efficient, but nevertheless automation does reduce the demand for labor.

Photo by David Levêque on Unsplash

More: https://apnews.com/8782f38c9bfb0955a5f1dfd952a9e866

Many lockdown layoffs may be more permanent than temporary

Of course, no one who was laid off during the lockdowns was happy to lose their job. But at least initially, the expectation for most was that they would be returning to their job once the lockdown was over. In most cases, that hasn’t happened, both because COVID-19 has not yet been contained and because many of those positions simply don’t exist anymore.

The economic recession has been difficult on small businesses with tight budgets that are not getting as many customers, but still have the same costs without laying off workers and often even closing down facilities entirely. This means that the same businesses won’t have the extra income to rehire the workers they laid off. Businesses that are transitioning online rather than closing down may be hiring people again once a vaccine is widely available, but probably not the same people — they’re going to need a different skillset. People nearing retirement may be forced to retire early, as most businesses won’t want to hire someone who will only be working there a few years before retiring. All in all, a currently estimated 50% of jobs lost during COVID-19 will not be recovered, despite the estimate being 17% in April.

Photo by Markus Winkler on Unsplash

More: https://apnews.com/89992979ca3c3ba72eb2cd31a9ca0e5d

How To Safely List Your Home During COVID-19

If you’re worried about listing your home during the pandemic, or if you want to take advantage of the increased inventory and buy a new home, there is a protocol for doing so safely, even in heavily impacted areas of California.

You should discuss with your agent the things that can be done to curb the spread of COVID-19. Some things you can do while others your agent will be better able to do. You can leave interior doors open prior to a showing to ensure visitors don’t need to open doors. Also, you can open windows before and after showings to let in fresh air.

In addition to opening windows for a showing, use disinfecting wipes or spray to clean surfaces that you expect may have been touched frequently, such as countertops, cabinets, light switches, and door knobs.

You and your visitors should wash hands or use hand sanitizer, wear masks or other protective face covering, and practice social distancing. Any disposable protective gear should be discarded when leaving.

The listing agent can discuss the precautions with the buyer and/or buyers’ agent. They can discuss taking care to avoid touching surfaces as much as possible and other safety measures, as well as check to make sure everyone is symptom-free.

The California Association of Realtors (CAR) provides a poster guiding the actions of visitors to minimize risk, which should be posted near the entry. CAR also provides a form called the Coronavirus Property Entry Advisory and Declaration (PEAD) which requires all involved to certify that they are aware of the safety requirements. That form should be signed by the agents, seller, and any visitors.

Be sure to call or email us for more information about safely showing property during the pandemic or regarding other aspects of buying and selling in difficult times. We each have over 25 years of experience in good times and in bad.

Photo by Clay Banks on Unsplash

More: https://journal.firsttuesday.us/farm-health-precautions-when-listing-your-home/72565/

New LEED guidelines established for COVID-19

In order to help combat COVID-19, the U.S. Green Building Council has established new LEED safety guidelines. The new recommendations cover layout, materials, air quality, and smart technology, and are focused on senior care facilities.

The guidelines suggest that facilities renovate to create more single-occupancy rooms. Flexible layouts and multipurpose rooms can help to address both current and future concerns without needing additional space. Uncoated copper alloys are best for knobs and rails, as the copper alloys have an antimicrobial factor. Curtains should be replaced with glass or plexiglass. Countertops and floors should use nonporous or less porous materials such as quartz and Corian for countertops and porcelain, vinyl, or wood for floors. Ventilation is of utmost importance, particularly in bathrooms, and should be maintained regularly. Touchless features go a long way, such as automatic doors, touchless faucets, and voice activated lights.

Photo by CDC on Unsplash

More: https://magazine.realtor/home-and-design/feature/article/2020/07/elder-care-updates-to-counter-viral-spread

Living with parents is the norm for young adults

During the months of March, April, and May, approximately 2.9 million adults in the US moved in with parents or grandparents. Many of these were college students whose classes were cancelled due to the COVID-19 epidemic, but the enormous spike during those months is also a result of the economic downturn. Young adults aren’t able to justify the expense of living on their own during these times, even if they are able to afford it, which many aren’t.

An adult living with their parents has been stigmatized in the US, seen as the mark of a lazy or irresponsible person. Current events are demonstrating that this isn’t necessarily the case. And the numbers also disagree — in fact, it first became the most common living arrangement for young adults all the way back in 2014. This isn’t a new trend, and it’s not a bad thing. The upward trend may have started with economic imbalances, likely the Great Recession in the late 2000s, but this serves only to obscure the fact that non-economic factors are also at play. More people are going to college and graduate school. Couples are marrying later and having their first child later. The timeline of a young adult’s life has been shifting for nearly 15 years. Of course they would be buying homes later as well.

Photo by Nikola Saliba on Unsplash

More: https://www.theatlantic.com/family/archive/2020/07/pandemic-young-adults-living-with-parents/613723/

Coronavirus exposes the wealth gap

For some people, the impact of coronavirus was minimal and short-lived. These are the people who had job security and a place to work from home, enabling them to continue to earn money while many people were left unemployed or temporarily out of work. Many low-income workers, a group with a large percentage of minorities, were already priced out of owning a home before COVID-19. The economic shutdown exacerbated this issue, while those able to live in relative comfort are looking to enjoy low interest rates by purchasing additional homes, beyond what they already own. This has meant that the housing market has started to rebound relatively quickly, especially in tech centers such as San Francisco, since those with money who are most able to engage in the process were only minorly inconvenienced at the same time that lower-income people fall further behind.

Photo by Sean Pollock on Unsplash

More: https://www.forbes.com/sites/brendarichardson/2020/06/22/coronavirus-housing-rebound-exposes-the-wealth-divide/

Forbearances down overall, but not for private loans

Data has been showing that forbearances on mortgage loans have been trending downwards in June from the peak on May 22, albeit at a slow rate. However, this doesn’t tell the whole story. The downward trend totalling 158,000 is almost entirely from loans backed by Fannie Mae or Freddie Mac or FHA/VA loans. Loans backed by banks or private securities are actually up 6000.

This trend points to trouble particularly for self-employed borrowers. Even with some people returning to work or working from home as lockdowns are phased out, in an uncertain economy, self-employed people don’t have the same reliability of income. Most private loans are held by self-employed workers. Without a stable income, self-employed people aren’t certain whether or not they’ll be able to pay back their mortgages until the economy re-situates itself, so more of them are requesting forbearances.

Photo by Jp Valery on Unsplash

More: https://www.cnbc.com/2020/06/19/coronavirus-mortgage-bailout-shrinks-further-but-bank-held-loans-are-faring-worse.html

Scams are an increasing threat to online real estate

Don Sabatini, a real estate agent in Willow Glen, CA, relates his true story of his client becoming the victim of a digital real estate scam. The COVID-19 outbreak meant that Sabatini had to conduct much of his business via email, though he and his client agreed to present the cashier’s check in person, while following social distancing guidelines. Despite this agreement, a scammer had been looking in on the email exchange. The client received several emails posing as the title agent, lender, and even Sabatini himself, increasingly threatening in tone. The scammer told the client that the offices will likely be closed, so she should simply wire the money. Feeling pressured by the barrage of threatening emails, she did so. The client and Sabatini realized she’d been scammed the next afternoon, but by then some of the money was irreparably lost. Fortunately, she was able to recover most of it, losing only $2000, and complete the transaction.

This story isn’t an isolated incident. The most recent data is from 2018, with the FBI estimating 11,300 people became victims of an online real estate scam in that year alone. It was an increase of 17% from 2017. Even without data from this year, you can imagine that with current pandemic increasing the rate of online real estate transactions, the rate of scam attempts is also increasing.

We are still conducting business, so don’t hesitate to call or email us if you are looking to buy or sell, but do be careful of scams.

Photo by Markus Spiske on Unsplash

More: https://www.mercurynews.com/2020/06/15/new-pandemic-concern-digital-real-estate-scams/

Foreclosure and eviction moratorium extended

As a result of the COVID-19 outbreak, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac (the Enterprises), had instituted a moratorium on foreclosures and evictions for Enterprise-backed single-family mortgages. The moratorium was scheduled to end on June 30th, but on June 17th, the FHFA announced that the date will be extended to August 31st. The FHFA plans to continue to monitor the situation and make further adjustments as needed.

Photo by Mangopear creative on Unsplash

More: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-Foreclosure-and-Eviction-Moratorium-6172020.aspx

Impact of COVID-19 on current market

As of June 10, while the California housing market has started to recover, it appears that recovery is slowing, not speeding up. California officially entered the recession in February, and we’ve come a long way since then, but there’s still plenty more to go.

Average home sales per day decreased in the second week of June following a modest increase in the first week, and the overall trend has been downward. Pending listings are still going up, but by less than 3% in 3 of the prior 4 weeks before June 10. New listings have been mostly flat. Two-thirds of buyers are expecting to get lower prices than they’re getting, and more of them are backing out because of financial considerations, despite high demand.

On the bright side, sellers are more optimistic. 40% of sellers believe it is a good time to sell, up from 29% in May, though still far below the pre-crisis level of 60% or more. Sellers recognize that while buyers may not have the funds they wanted, they’re still looking to buy. More buyers are applying for mortgages while mortgage forbearance has dropped from almost 1.1 million in mid-April to only 34 thousand in early June, and home showings are finally above the levels in 2019 and still going up.

Recovery has certainly slowed, but we’re going in the right direction. Now is a good time for both buyers and sellers. Call or email us and we’ll discuss business.

Photo by Frank Busch on Unsplash

More: https://www.car.org/knowledge/pubs/newsletters/newsline/covid61020

Housing Recovery Will Take Both Time and Action

According to a recent poll of readers of the Real Estate journal First Tuesday, the most optimistic recovery date from the current recession is late 2020, with 30% of respondents hopeful for a quick rebound. A quarter of respondents believe that recovery will be tied to a COVID-19 vaccine, which is predicted to arrive no earlier than mid-2021. 45% don’t expect recovery until 2022.

Benjamin Smith of First Tuesday agrees that a COVID-19 vaccine is important to recovery, but warns that there are other aspects at play. Real Estate as a business does depend heavily on in-person interactions, even though much of the work can certainly be done online or via email, and lockdowns have, without a doubt, slowed down business. Smith is careful to note, however, that the market was already on a downturn before COVID-19 hit, merely speeding up and exacerbating an impending recession. Two important factors in the downturn were falling inventory and insufficient construction.

While a vaccine can help open up agents, buyers, and sellers to safely meet up and discuss business, the underlying causes still need to be addressed, and people will need time and government intervention to recover their finances. This places recovery almost certainly later than mid-2021, and very likely further out. Fortunately, low interest rates mean buyer purchasing power will be relatively high once they regain their financial stability, meaning home prices aren’t likely to suffer as long as interest rates remain low.

Photo by Jens Behrmann on Unsplash

More: https://journal.firsttuesday.us/the-votes-are-in-housing-market-slated-for-a-late-recovery/71917/

COVID-19: A boon for the rural real estate market?

As we recover from COVID-19, experts are saying it may benefit the rural real estate market. California Association of Realtors deputy chief economist Jordan Levine explains why. Levine notes that rural housing is generally more affordable, which may become one of the most important decision factors as people are recovering from temporary unemployment and business losses. In addition, more and more businesses are looking at a work-from-home model, which will enable employees to live away from urban commercial centers and not have to commute long distance to work.

Real estate personnel working in rural areas seem to agree. Cindy Young, president of Shasta Association of Realtors, predicted an increase in business since their first virtual meeting after the stay-at-home order. Real estate agent Sandy Dole, who works in Shasta County, didn’t experience any drop at all and is actually on pace to surpass last year.

Despite all this, the outbreak did mean California’s market overall experienced its worst month-to-month decline in over forty years. The crisis isn’t over, even in rural areas like Shasta County. The overall market is expected to be sluggish for the next couple of months, with no solid predictions beyond then. Market declines invariably mean lower prices, at least in some areas, while others perform better. 

If you’re thinking of buying or selling, and are looking for a good price on a comfortable rural home, send us a note on our contact form, or give us a call.  We are active agents throughout California.  At the moment, we are seeing some very attractive properties in Ventura and San Diego counties.

Photo by Karol Kaczorek on Unsplash (cropped)

$ Money Matters $

The Federal Reserve Bank (the Fed) moved to lower the federal funds rate by a half-point to a range of 1% to 1.25% March 3 in response to the “evolving risks” of the COVID-19 corona virus outbreak. The Fed doesn’t directly impact housing loans, but they generally move in tandem.

Mortgage rates in the U.S. roughly track the yield on the 10-year Treasury note which has been dropping as the corona virus epidemic expanded. As the yield on the 10-year note drops, there is typically a drop in mortgage interest rates.

Yesterday, purchasers and refinance borrowers were looking at rates of about 3.7%. Today that’s about 3.5%. Some lenders are forecasting that rates could drop as low as 3% before COVID-19 is controlled.

Some analysts report that the stock market anticipates a least a quarter-point rate cut at the Fed’s meeting in April.

Around the world some other central banks have dropped rates as well. Since consumer spending is a large measure of our economys, there is reason to press for more cuts.

In the words of the President, @realDonaldTrump, “The Federal Reserve is cutting but … more easing and cutting!”

Photo by Vladimir Solomyani on Unsplash