Updates on The Real Estate Market

Weekly Pardee Blog Images 3 20 2020 nolabels 02

We understand it is an uncertain time for both physical and financial wellness. We want to keep you updated with what we know. We have decades of collective experience to draw from and we’ve been monitoring all of our sources closely and what we know is…

Update for Friday, June 12th, 2020

According to Redfin:

Demand is 25% above pre-pandemic levels. Buyers haven’t “batted an eyelash” over the possibility of a resurgent pandemic or now protests.

Read the full article here

According to Zillow

Almost 3 Million Adults Moved Back Home in Wake of Coronavirus

  • There were 32 million adults living with their parents or grandparents in April, the highest number on record.

Read the full article here

Also, according to Zillow’s Weekly Market Report

New listings are back on the upswing, but not keeping up with buyer demand

Read the full article here

Update for Friday, May 29th, 2020

Post-Pandemic Migration from Expensive Cities Likely As 1 in 4 Newly Remote Employees Expect Work-From-Home to Continue

Survey shows more than 50% of people in New York, Seattle, San Francisco and Boston would move if work-from-home became permanent.

Read the full article here

We wonder if some of those people may be drawn to the beautiful climate, open spaces, and plethora of activities found here in Southern California. If so, we’ve got them covered.

How the Coronavirus Is Changing Some Boomers’ Real Estate Plans for the Better

Many are feeling the pressure to ramp up their decision-making and act fast—between concerns over COVID-19 contagion, rampant layoffs, and new rounds of self-reckoning where they ponder “Why wait to realize my dreams?” Many believe that the time is now to make real estate decisions they’ve been putting off—or they’re changing course entirely.

Read the full article here

“It was a positive week in mortgage news. Purchase applications in California rose by 5.7% – down only 15% year-over-year.  This is a massive improvement from only weeks ago when purchase applications were down 49% year-over-year. Additionally, for the first time ever, 30-Year Fixed rates on conforming loans (up to $510,400) ended the week below 3.00%.  Hopefully, conforming rates will drive jumbo rates lower too, adding further momentum to our housing market.” – Jonathan O’Donnell

Longtime friend of Halton Pardee’s, Jonathan O’Donnell is a Senior Loan Officer at Mortgage Capital Partners. He can be reached at jodonnell@mortgcap.com

Update for Friday, May 22nd, 2020

DelPrete: How the pandemic has impacted international markets —

Evidence suggests that once restrictions are lifted in the hardest-hit markets, new listings rebound quickly

Read the full article here

Mortgage purchases signal housing recovery may be here —

Odeta Kushi, the deputy chief economist at First American, said the increase in mortgage applications is part of a long-term trend, not simply pent-up demand

Read the full article here

Coronavirus Not Yet Driving a Surge in Suburban Home Searches —

After rebounding in April, overall web traffic to for-sale listings on Zillow has continued to surge beyond year-ago levels so far in May. For the week ending May 10, overall traffic was up 42% from the comparable week in 2019, suggesting a wave of pent-up demand from home buyers stymied by the pandemic so far this spring.

Read the full article here

Update for Friday, May 15th, 2020

On May 7, 2020, Governor Gavin Newsom released updated industry guidance to begin reopening with modifications that reduce risk and establish a safer environment for workers and customers. This guidance includes, among other things, information pertaining to real estate transactions.

Read the full plan here

Purchase loan mortgage applications rose 11% this week according to the Mortgage Bankers Association. They note that this level of purchase loan application activity is the highest since mid-March, when Covid-19 lockdowns started.

The Refinance Index decreased 3 percent from the previous week and was 201 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 11 percent from one week earlier. 

Experts say it may be a good time to invest in the real estate market — including our own CEO, Tami Pardee who was asked by Fox11 this week to comment.

“The market is still moving but it’s more being accurately priced and sellers and buyers are more willing to work together,” said Pardee. “People are really realizing ‘oh maybe I won’t do all those extra things like traveling. Maybe I’ll invest the money in my home.'”

Read the full article and see the video here

According to Showing Time data,  as of this week, showing activity across California is only down around 23% from the same time last year. That is an amazing recovery from the lows at the end of Marco/beginning of April.

Update for Friday, May 8th, 2020

With California’s economy starting to re-open, showing activity in California has continued its recovery from the Covid-19 lows. As of yesterday, showings were only down around 32% from the same time last year and are now about the same level as the second week of January 2020. In comparison, during the last week of March 2020, showings were down almost 80% from the same time 2019.

Inman published a state-by-state guide to reopening the economy.

Along with the general overview for each state, they’ve noted “if states designated real estate as ‘essential’ or not. This matters because it speaks to how much reopening will impact agents. In states without essential designations, agents may be dependent on the wrapping up of broader isolation mandates in order to conduct basic business activities. In states that designated real estate essential, on the other hand, agents generally had more freedom during the pandemic, though reopening should give them additional flexibility as well.”

Read the full article here

One lender many of our clients work with reported to us that he has seen a “noticeable uptick” in pre-approval requests during the past two weeks. The Mortgage Bankers Association data this week confirms this, with purchase mortgage applications increasing. This comes as mortgage rates are essentially at record lows, with the average 30-year mortgage rate around 3.26% and average 15-year rate around 2.73%.

Mortgage purchases increased 6 percent week-over-week, according to the Market Composite Index, a weekly measure of loan volume published by the Mortgage Bankers Association. Overall, the index increased 1 percent compared to the previous week, due to a week-over-week drop in refinances. – Inman

Read the full article here

Update for Friday, May 1st, 2020

Zillow published an article announcing Web Visits to For-Sale Listings Rebounding as Spring Unfolds

  • Page views on for-sale listings on Zillow fell as much as 19% year-over-year in mid-March, but have rebounded sharply since then.
  • Traffic on listings in some metros have recovered more quickly, including Los Angeles, Houston, Dallas and Atlanta.

Read the full article here

Redfin released an article with predictions for the real estate market based on historical data: “Rochester, Buffalo and Hartford Least at Risk of a Housing Downturn in the Next Recession”

With the Great Recession still fresh in Americans’ memories, the idea of a housing crash is psychologically linked with an economic recession for many people today. But historically that usually hasn’t been the case.

Since 1980, there have been five official recessions in the United States. In all but the 2007-2009 Great Recession, inflation-adjusted home prices only declined an average of 2.7 percent from the month before the recession began to the final month of the recession, according to the home price index data from Robert Shiller.

Read the full article here

Update for Friday, April 24th, 2020

Experts — including Tami Pardee herself, are betting on a “V” or “Checkmark” shape recovery for the real estate market.

Past analysis has shown that the Covid-19 pandemic and associated lockdowns will cause a significant dip in real estate activity. The latest U.S market data shines a light on what the dip and recovery will look like — a checkmark shape — with an immediate drop, 3-4 weeks at the bottom, and a slow recovery period. – Mike Delprete

Read the full article here

The average rate on a 30-year, fixed-rate mortgage could hit 2.9% in 2021, according to Fannie Mae’s April housing forecast – Inman

See Fannie Mae’s April Housing Forecast numbers here

Mortgage applications slowed slightly but refinance demand is still up overall as compared to last year.

Total mortgage application volume decreased 0.3% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 70% higher than a year ago, but that’s all because of refinances.

Refinance demand did slip 1% for the week but was a sharp 225% higher than one year ago, when interest rates were over 1 percentage point higher. – CNBC

Read the full article here

Update for Friday, April 17th, 2020

The comparisons to 2008 are being analyzed by many experts — in all industries. In real estate, experts agree that this time, despite all the uncertainty, will not lead to another recession like the one 12 years ago.

Let’s be honest, the Great Recession was created out of a few things — the American dream, greed and too much optimism. Real estate was right in the middle of where those three combined to create unsafe lending practices that lead to the Great Recession. Today is very different. This crisis is a medical one. Humanity did nothing consciously to create this, and the economy is being shut down for health reasons. This will make for a much quicker recovery. – Inman

Read the full article here

“To try to help, the Fed has unleashed more than $6 trillion (and counting) to support everything from municipalities to homeowners – including the purchase of mortgage backed securities to drive down mortgage rates. The impact of these purchases has become evident in “conforming” mortgage rates, which are now close to 3.0% on a 30-Year Fixed. While jumbo rates have not benefited in the same way, the Fed stimulus should improve overall market liquidity and drive all rates lower. If conforming rates are any indication, homeowners and buyers alike will eventually reap the benefits.” – Jonathan O’Donnell

Longtime friend of Halton Pardee’s, Jonathan O’Donnell is a Senior Loan Officer.

Patrick Stone, of WFG National Title Insurance Company, said Tuesday that home sales will likely be down in 2020, but overall, he’s optimistic about an economic recovery from the current pandemic…

As many observers have noted, plummeting mortgage rates have driven a massive surge in refinancing. Stone described this activity as ‘off the charts’

‘It does really put a lot more spendable money in the average American’s pocket and that will benefit us when the recovery occurs,’ Stone explained. He also believes mortgage rates will stay low this year, then rise in 2021, though the rise shouldn’t be enough to negatively impact the real estate industry. – Inman

Read the full article here

Update for Friday, April 10th, 2020

With millions of Californians suddenly out of work and a steady stream of paychecks drying up, the typically vigorous spring real estate market has been reduced to a simmer.

But it’s too early to say definitively whether prices are falling…

Buyers who are sitting on piles of cash (thanks, grandpa!), have financing lined up, or kept coming up against multiple offers and losing out when the market was brisk, might decide now is a good time to commit.

Read the full article on Curbed LA: What LA homebuyers need to know during the coronavirus pandemic here

Why the Housing Market May Weather Coronavirus Impact Better Than the Great Recession

Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.

‘This time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.'”

Read the full article from firstexchange.com here

In C.A.R.’s latest weekly survey of California REALTORS®, more than 30% of respondents have had a sale close escrow since March 15th when the shelter in place rules went into effect. And, although roughly 30% have had a transaction fall out of escrow, most REALTORS® who were supposed to close escrow were able to do so. Many transactions are facing delays due to financing, appraisals, and notary/signatures amongst others, California’s market for residential real estate continues to function under unprecedented circumstances.

Read all of this week’s updates from California Association of Realtors here

Update for Friday, April 3rd, 2020

Residential real estate is now classified as an essential service

This means that no open houses should be held. Showings should be done virtually, if at all possible to protect against the spread of COVID-19.

We know it is imperative that we practice strict health and safety protocols to protect ourselves, our clients and our community. California Association of Realtors released documentation to guide the real estate industry in doing just that.

According to CAR: Not withstanding this new development, all real estate licensees must take into account the health and safety of their clients and fellow licensees, and follow the existing protocols for protecting against the spread of COVID-19. If such heath safeguards and protocols are not followed, the rule for the state could easily change to stop or restrict all real estate activity. To that end, in conformity with current health guidelines, real estate licensees should follow all CDC and local health mandates.

You can read the full statement from CAR here

California Association of Realtors also released a set of guidelines for COVID-19.

  • Showings should be done virtually, if at all possible.
  • All activities should be completed electronically, if at all possible.
  • Sellers are to be advised that they should not be present within a dwelling at the same time as other individuals. 
    • Sellers are to be advised that they may remain on the property 
    • If a seller insists on remaining on the property, that seller is to agree to the terms and sign the declaration that is required for persons entering the property.
  • Any persons on the property must agree to adhere strictly to the social distancing guidelines at all times by remaining at least six feet apart per the recommendations established by the CDC. 
  • Sellers and buyers must be expressly made aware of the risks of showing and visiting properties

You can read the full COVID-19 guidelines here

Update for Friday, March 27th 2020

Here are the top 3 tips we want you to know:

1) Looking for mortgage payment relief?
Call your mortgage servicer or bank and ask, it just takes a phone call.

2) Changes in pay or concerns about income?
Learn about what stimulus benefits you are eligible for at IRS.gov

3) If you are still in the market, you’re not alone.
Time is on your side to prepare for launch so that you can enter the market without delay, when you are ready. Buyers, interests rates are very favorable for expanding your purchasing power.

Mortgage and Rent Forbearance, Eviction delays

Landlords may be allowed to fall behind on their mortgage payments amid the coronavirus outbreak in return for not kicking renters out of apartments.
More information at: latimes.com

CNBC Make It rounded up a list of what many major banks are offering to do for Americans affected by the current health crisis. Keep in mind that most banks are providing relief on a case-by-case basis and you may not qualify for all of the programs. If your bank or financial institution is not listed, you should still reach out directly to ask about what assistance it can provide. We will update this list as we receive more information.
More information at: CNBC.com

Fannie Mae wants to help ensure families are given options in these uncertain times in the case of job loss, a reduction in work hours, illness, or other issues.We want to remind those impacted by COVID-19 of available mortgage assistance and relief options.
More information at: fanniemae.com

Update for Friday, March 20th 2020

Real Estate Hasn’t Come to a Halt

We’ve put 3 homes into escrow this week. Some buyers might think they want to slow down and wait to see what the market will do – but we don’t think that is the answer.

We also just closed 4 new leases this week; we think that it is a great time to diversify your real estate portfolio with investment properties, like rental buildings.

mls westside 15 year chart

Over the past 25 years, the real estate market has dipped several times, including during the dot-com crisis in the 1990s and the financial crisis in 2008. As the market recovered, real estate values ultimately met and then exceeded prior values.If you’re in it for the long term, real estate is a strong, safe investment that continues to trend upward, despite occasional drops.

Other headlines we think our community would benefit from:

Mortgage Interest Rates Are Slightly Up, But Still Historically Low

Our partners are advising buyers to make offers that include a longer-than-standard loan contingency period. Because lenders are busy with a flood of borrowers refinancing and buyers taking advantage of low rates, allowing more time for loan approval will be helpful. If during that time the market changes – renegotiate. Time is your friend in this market.

“While a rate cut alone won’t directly impact mortgage rates (except for home equity-lines), the Fed may also propose other types of economic stimuli, which could improve mortgage rates.  Similar to stocks, mortgage rates rise and fall based on demand. Recently, there have been more sellers than buyers, which has actually caused mortgage rates to go UP. If the Fed starts buying mortgage backed securities (MBS) as part of its stimulus package, it would relieve some of the stress and bring mortgage rates down.” – Jonathan O’Donnell, Mortgage Broker

There is Relief for Homeowners Who Have Lost Income…

According to NPR, “Federal regulators, through the mortgage giants Fannie Mae and Freddie Mac, are ordering lenders to offer homeowners flexibility. The move covers about half of all home loans in the U.S. — those guaranteed by Fannie and Freddie. But regulators expect that the entire mortgage industry will quickly adopt a similar policy.

Under the plan, people who have suffered a loss of income can qualify to make reduced payments or be granted a complete pause in payments.”

Source: NPR

And for Renters

California Gov. Gavin Newsom on Monday evening issued an executive order making it clear that local governments can impose eviction protections for tenants who are unable to pay their rent because of the coronavirus or loss of income as a result of the outbreak…

According to the governor’s order, such ordinances should spell out that if a tenant cannot pay the rent because of COVID-19, that tenant’s rental payment is deferred for a reasonable period but not waived.
Source: CAA.org

Closing Escrow From a Safe Distance

Social distancing restrictions and business closures are making it hard for the people required to conduct a home closing to gather in one room. Plus, with some municipal buildings closed, recording a sale might not be possible. But, as much as they are able, parties appear to be trying to make the closings work. – Source:CNN

At Halton Pardee + Partners, we’ve closed many sales remotely. Our partners have even facilitated the sale of properties without ever meeting their clients in person when those sellers primarily live in another state (or country. Rest assured, there is not much that can’t be accomplished by phone, text, email, and digital applications such as Docusign.

When Life Events/Changes Make Moving Necessary

If you’re currently on the market to sell – remain steadfast, you don’t have anything to lose. Buyers are still making offers and you are not obligated to accept any offer you don’t want to. If leasing your property makes more sense than selling at this time, then that is also something to consider. The question is common — “should I sell, lease, or stay?”. We are happy to discuss options and strategize with you. After all, this is our area of expertise and it’s what we love to do.

We know this is a challenging time but we’ve got this. We are here for you.