Covid Divorces

If the Big Three reasons why people move (death,divorce, & job transfers) start to increase, we’ll have more inventory next year – how much is too much?

If absence makes the heart grow fonder, what happens when you’re stuck at home all day with your spouse? Some California attorneys say they are seeing a rise in divorce cases during the COVID-19 pandemic.

Joe Wolch, a family-law attorney based in Walnut Creek, says not only are more people calling to ask about divorce, many are ready to file – immediately.

“I would say the phone is ringing much more,” said Wolch. “Where they used to be able to get away from each other, during the days or in the evenings with their extracurriculars, but now they haven’t had the opportunity. So now people are more acutely aware that they just can’t stay together.”

In some cases, however, those attempts to divorce are complicated in additional ways by the pandemic.

One Southern California attorney noted that more courts are closed or operating under reduced hours and with fewer staff, making it more difficult to resolve legal issues such as child custody. And if one parent fears the other estranged spouse has been exposed to COVID-19, they may take action without waiting for the court’s approval for a change in custody arrangements.

Some sites report online searches for divorce-related information have increased more than 30% since March.

Some California attorneys have also seen an increase in cases involving domestic violence.

“It’s much more serious when you’re dealing with potential child custody or visitation issues or safety issues, whether it’s the spouse or the spouse and the children,” explained Elaine Le, a family attorney with San Jose’s Hoover Krepelka LLP.

Another factor during this deepening coronavirus pandemic: People are becoming even more aware that life is short.

“Life might be too short to be too unhappy for too long,” said Wolch. “So they’re looking for options to make their life better, maybe their children’s lives better and overall move forward.”

That said, some unhappy couples may decide to stick together amid all the economic uncertainty, because getting a divorce doesn’t come cheap.

Divorce attorney fees can run from $400 to $600 per hour.

https://abc7.com/divorce-and-coronavirus-rate-during-surge/6338027/

Down-Payment Accounts

Here’s a way to support homebuyers at all levels without taxpayer money:

WASHINGTON (August 7, 2020) – Legislation introduced by Senators Doug Jones (D-AL) and Cory Gardner (R-CO) is being recognized as a critical component of the national effort to address the barriers to first-time homeownership in America. The National Association of Realtors®, which previously submitted a letter in support of the legislation, expressed optimism that the American Dream Down Payment Act and other similar proposals to address housing affordability would continue gaining momentum on Capitol Hill.

“The resiliency of our residential real estate market has been one of the few bright spots of America’s economy during this pandemic, but numerous would-be homebuyers are finding it difficult or impossible to save the money needed for a down payment on a home,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “This is especially discouraging given record-low interest rates are making it easier for aspiring homeowners to afford monthly mortgage payments.

“Modeled on the very popular 529 education savings account concept, the American Dream Down Payment Act would allow savings for the down payment of a principal residence to grow tax-free, offering a responsible and commonsense approach to the multi-faceted problem of housing affordability in America.”

In its letter sent Monday to Senators Jones and Gardner, NAR relayed hope that these accounts could serve as a tangible resource to aspiring homeowners who have been unable to save sufficient funds for a down payment. According to the Urban Institute, two-thirds of renters have identified the inability to save for a down payment as an obstacle to homeownership.

“We appreciate your initiative in putting forth a reasonable proposal that should attract support from your colleagues as well as the growing population of those for whom down payment assistance would help open the door to their all-important first home purchase,” Malta wrote to the lawmakers.

As described by Senators Jones and Gardner, the American Dream Down Payment Act would:

  • Let states establish American Dream Down Payment Accounts, which they would manage in the same way they manage 529 Plan accounts;
  • Allow prospective homeowners to save as much as 20% of today’s home cost, indexed for inflation, to use for an eligible down payment and other housing costs;
  • Facilitate long-term savings for a down payment and allow contributions from family and friends; and
  • Allow homebuyers to use those savings and earnings tax-free at withdrawal for eligible expenses.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

https://www.nar.realtor/newsroom/down-payment-assistance-legislation-backed-by-nar-gains-traction-in-u-s-senate

Dave Alvin

Back in the 1980s, you could count on The Blasters, Los Lobos, X, and The Beat Farmers playing at least a couple of live shows around Southern California every year.

But as time went on, there were some of us who couldn’t tell the difference between Phil and Dave Alvin.

Here’s Dave telling a story worth hearing:

More on the 2021 Selling Season

My video on Monday touched on the different groups of buyers and sellers that should be very active in the 2021 selling season.  Let’s break it down further, shall we?

SELLERS

Boomer liquidations – When we first started talking about boomer liquidations, people in their 60s scoffed and shrugged it off.  Now they are in their seventies, and the burdens of homeownership have never been so apparent. Stuff needs to be fixed regularly, and that dang property tax bill keeps coming twice a year. If you didn’t mind leaving town, a homeowner’s equity position has never been so solid, and you could go to most towns in America and buy a house for cash and live happily ever after.  It’s a temptation that aging boomers will find harder to resist in 2021.

Health considerations – Covid isn’t going away, and for those who are physically challenged, selling their house here and moving to a healthier location will feel like a life-or-death decision – they need to do it. Cashing out their equity is a nice bonus too, and provides enough grease to make it easier to leave San Diego. Let’s note that there are good doctors everywhere, and while the transition may be uncomfortable for the first couple of months, you’ll adjust.

Grandkids – Obviously, it is harder for the kids to get a foothold here than the parents who came 10-30 years ago – home prices have doubled.  If the kids pack it up and take the grandkids somewhere that is affordable, it is inevitable that the grandparents will follow.  They don’t have much time left, and they want to spend it with family.  The grandkids may be the #1 factor in real estate decisions for the next few years.

Move-Uppers – For those who want to stay local, the best time to move up is when you can sell your existing home for more money than ever, AND get a lower interest rate.  My rule-of-thumb for move-uppers is that you have to spend 50% more on the next house to make it worth the move – if you only spend 10% more, you only get an extra bedroom, and it’s not worth moving. There aren’t many in this group who finance – you still need a big cash infusion to make it work. Here’s an example:

If you bought your home for $500,000, with a loan of $400,000 at 4%, the payment is $1,910 per month. If you sell now for $1,000,000, and use $600,000 for your down payment to purchase a $1,500,000 house, the payment is $3,794 per month at 3%.

Most who are used to paying $1,910 per month will want to inject more capital into the equation.

Last Movers – You are of the age where you have one more move left in you, and it’s probably due to hanging on to the 2-story family homestead for a little too long.  The kids have been gone for a while, and you’ve been rattling around in a house that should be passed on to the next generation before you fall down those stairs.

BUYERS

First-timers or Out-of-Towners – If you don’t own a house here yet, your motivation  is substantially higher than those who do own and are just trying to re-position.  It’s why current homeowners struggle to understand why homes keep selling for record amounts – because heck, they’d never pay that much.  But first-timers and out-of-towners are more desperate to get in, and will pay an extra few bucks to finally get something.

Downsizers – Rarely do locals downsize in the same town – keeping the old house makes to much sense, and why we have such low inventory. But San Diego County is well-positioned to be a landing ground for those selling for big bucks in L.A./O.C./Bay Area and coming here where our prices look like a bargain.  This may be the largest group of buyers, judging by how fast prices go up.

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Next year’s selling season won’t be as predictable as they’ve been recently.

We are overdue for a surge of sellers.

It may be disguised in the overall stats as a blip, but if you have three houses on your street go up for sale, and two others on the next street over, don’t be surprised if buyers freeze up and wait it out. If you live in a neighborhood where most of the residents have been there for 10, 20, or 30 years, there only needs to be one from each of my five seller categories above to cause a glut of homes for sale within a week or two.  If any of them are desperate for money and undercut the pricing to get out, it will affect all.

Next year will be exciting because each seller and buyer group could grow 10%+ without notice.  Remember the graph that said 57% of boomers are delaying the sale of their home?  Add a possible covid bump in the usual number of deaths, divorces, & job transfers and we could experience a surge of inventory that nobody sees coming.

If you are thinking of selling……are you willing to get out in February or March will all-time record money, or are you going to wait until June or July and try to milk it for another 5% because you can?  And risk not getting out at all because those ‘lowball’ offers based on 2020 comps are insulting and unacceptable?

Get Good Help!

More Coming Soon

Just when we thought there was a set policy on Coming Soon listings, they change it again.

The IDX is the agreement among realtors to share each others’ listings on our own personal websites, which was a great idea before search portals.  But IDX was written off as a waste of time because now consumers have found better options like Zillow.

Are they going to change to their realtor’s inferior website, just to see the Coming Soons?

Wasn’t the idea of Coming-Soon-listings-on-the-MLS supposed to give realtors the distinct advantage of controlling the distribution?  Oh well, maybe that was just me who saw that advantage, because it sure wasn’t considered in this decision. They are all going to be out in the open now, and we might as well let Zillow have them too.

The water is already muddied by Zillow allowing the Premier Agents to do their own Coming Soon listings separate from the MLS, and by agents ignoring the rules on social media. Who knows if agents are flagrantly abusing the rules or just forgot them already (more probable) but I see the old standard Coming-Soon pitches on social media now that are supposed to be inputted into the MLS by the next day – but they show up a week or two later, just like before.

Here are the new/updated rules for those who care:

No mention of Private Exclusives – which are allowed by N.A.R.’s Clear Cooperation Policy – where any agent in the same brokerage can sell an in-house listing without any MLS or public exposure.

I don’t get the No Showings policy either.  Do they really think an agent is going to deny showing their Coming-Soon listing to a buyer who contacts them directly and promises to pay full-price cash? I’ve already showed Coming Soons listed by other agents to my buyers, and the listers didn’t think twice about it.  If they had a chance to double-end the commission, wouldn’t they just pay the fine and be on their way?  The max fine is only $2,500.

This whole topic was a mess, and now giving buyers direct access to the list is not only going to tempt them to go directly to the listing agent (which is opposite to NAR’s intent) but consumers will also get a better look at how disorganized and unruly we are.

Can’t Wait for 2021!

Next year will be here before you know it – could it get any crazier? Oh yeah!

In the video below, you’ll hear my list of buyers and sellers who we can expect to be extremely active next year. Then add in the Big Three (death, divorce, and job transfer), and we could have the most insane real estate market in the history of the world!

https://encinitasbeachhotel.com/

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