Coronavirus Peak in California

by | Apr 7, 2020 | Jim's Take on the Market, Local Flavor, Virus | 0 comments

Hat tip to Hank for sending in this research – they have California peaking next week:

The Institute for Health Metrics and Evaluation (IHME) is an independent population health research center at UW Medicine, part of the University of Washington, that provides rigorous and comparable measurement of the world’s most important health problems and evaluates the strategies used to address them. IHME makes this information freely available so that policymakers have the evidence they need to make informed decisions about how to allocate resources to best improve population health.

The announcement of the 10-year, $279-million investment in IHME by the Bill & Melinda Gates Foundation this year provides a moment in time to reflect and to look ahead. The Institute has grown from a core of three initial members in 2007 to a staff of more than 300; developed a powerful and constantly innovating research infrastructure; built a global network exceeding 2,000 collaborators; and perhaps most importantly, strengthened the field of health metrics science.

Throughout it all, IHME’s overarching objective, our true north, has been to create the most complete and up-to-date roadmap to help policymakers and donors determine how best to help people live longer, healthier lives.

Most states and the federal government are using their data for planning purposes:

https://covid19.healthdata.org/united-states-of-america/california

Encinitas Toilet Paper Man

by | Mar 15, 2020 | Encinitas, Jim's Take on the Market, Local Flavor, Virus | 2 comments

From the UT:

Jonny Blue, a 33-year-old physical therapist and avid surfer from Encinitas, was seriously bummed Friday night.  He saw reports across the country of people hoarding toilet paper in the wake of the coronavirus outbreak, and one of his good friends had a difficult time finding diapers and essential supplies for his kids at a nearby store.

So on Saturday morning Blue took a cardboard sign bearing the simple request — “Share your toilet paper” — and camped out on the corner of El Camino Real and Encinitas Blvd.

“It just inspired me to remind people, listen, if you have a lot of something that probably means there are people who probably don’t have very much of it, because you took it all,” Blue said. “So sharing it is probably a good thing to keep in mind.”

The response was immediate and positive, with motorists honking horns in support. Drivers stopped to drop off rolls of toilet paper and, just as quickly, Blue would hand them off in an impromptu TP stock exchange.

“This guy came here and said he just ran out and was going to a bunch of stores and couldn’t find any,” Blue said as cars whizzed by. “Somebody had given me some so I gave it to him. He was stoked.

“He was like, ‘Do you want me to pay you?’ I said, ‘No, man. Somebody gave it to me. Take it.”

A moment later, a driver in a white pickup truck slowed down just enough to toss out a roll to Blue’s burgeoning bundle.

“People are loving it,” Blue said. “People are honking, smiling, laughing. It’s actually been good because it’s actually been kind of a rough time right now.”

The run on toilet paper and other items such as hand sanitizers and disinfecting wipes has led local grocery stores and national chains such as Target and WalMart to limit the amounts shoppers can purchase at one time. Last week, three women in a supermarket in Australia got into a hair-pulling brawl over toilet paper.

Blue opened his fledgling Robin Hood enterprise at 9 a.m. and, while taking a break at 2 p.m., said he would resume for a couple more hours later in the afternoon.

“I think people want a sense of community,” Blue said. “When things are really challenging, people are looking to band together and be unified. It feels like I kind of struck on a common theme where people were thinking, ‘Why are people hoarding toilet paper?’ Blue said.

“It’s a simple thing but it’s something that’s really tangible and really affects people’s lives, and when people saw my sign it really resonated with them.”

Blue said he planned to return to his post Sunday.

“I just want to encourage everyone to be better,” he said. “Difficult times can reveal us to ourselves and help us see ourselves more clearly.”

Coronavirus and the C.A.R.

by | Mar 5, 2020 | Jim's Take on the Market, Local Flavor, Market Buzz | 0 comments

Will the paranoia kill us?

From the California Association of Realtors:

The rapid growth of COVID-19 (“Coronavirus”) cases continues to create turbulence in the global economy and in domestic financial markets. However, C.A.R. is not revising its current 2020 housing market forecast, but will continue to monitor the market for negative macroeconomic impacts on the demand for housing as well as the supply chain impacts that could adversely affect the cost of new home construction in the coming months and quarters.

C.A.R. has created a list of the Top 10 potential impacts that could elicit questions from buyers and sellers over the near term:

Forecasts Have Been Downgraded, But Few Economists are Calling for Recession Yet: Last week, the International Monetary Fund (IMF) cut its forecast for global economic growth by 0.1%, but is still calling for an expansion in 2020, albeit at a slower pace. Similar orders of magnitude have been forecast for the domestic economy, with groups like Wells Fargo and others expecting GDP to grow by 10-20 basis points slower than their pre-Coronavirus forecast. Growth is expected to be slower, but the economy is still expected to grow.

Mortgage Rates Will Likely Remain Low, Or Even Fall Further As A Result of Coronavirus: The Federal Reserve issued an emergency 50 basis point cut to their target interest rates, and guidance suggests that the Fed may be open to future reductions in order to counteract the negative impacts to financial markets. This should help to reduce the cost of borrowing and make housing more affordable over the near term, which should help to offset some of the negative impacts to housing demand associated with rising uncertainty.

Domestic Buyers May Be Discouraged By Rising Uncertainty and Recession Risk, But Is It Still a Good Time to Buy?: This week, mortgage rates fell to an all-time low level of just 3.13%. That is down from 3.80% at the start of the year and represents significant cost savings over the life of a 30-year loan. For buyers who can afford their monthly payments, the economic uncertainty that is driving rates lower provides an opportunity to capitalize on significantly reduced borrowing costs that they will enjoy for years to come. Short-run risks to the economy exist but are arguably offset by long-run benefits of lower rates at the individual level.

Financial Market Volatility Could Reduce Demand For Luxury Homes, But Also Create Potential Opportunities for Luxury Home Buyers: The recent turbulence in financial markets has already impacted household wealth. This could reduce demand for luxury homes in California in particular. However, with less luxury buyers, there could be opportunities for price discounts for buyers who choose to remain in the market for high-end properties. Real estate may also act as a buffer against potentially larger declines in the financial markets.

(more…)

Job-Market Rankings

by | Feb 25, 2020 | Jim's Take on the Market, Local Flavor, Where to Move | 0 comments

Maybe more people would move if they knew the best job markets?  From the wsj.com:

The two hottest U.S. job markets in 2019 were growing Southern state capitals with vibrant music scenes and an influx of technology jobs.

Austin, Texas, topped the list for the second consecutive year, according to a Wall Street Journal ranking of new data collected by Moody’s Analytics. Nashville, Tenn., jumped to the No. 2 spot from seventh. Both cities anchor metropolitan areas of around two million people.  The Journal worked with Moody’s Analytics to assess the labor market in 381 metro areas. Each region was ranked on five metrics: the unemployment rate, labor-force participation rate, job growth, labor-force growth and wage growth.

Austin—a tech hub and college town—remains attractive to workers thanks to low unemployment and high wage growth. Nashville has low unemployment and high labor-force growth.

Apple Inc. is among companies bringing jobs to Austin. In 2019, it started construction of a $1 billion corporate campus with a capacity for up to 15,000 employees. It already has 7,000 workers in Austin.  Amazon is building a campus in downtown Nashville with the goal of hiring 5,000 people, adding to the city’s growth spurt in recent years.

Denver moved up in the ranks to third place from ninth. Seattle and San Francisco also moved up to round out the top five large metropolitan areas.

Among smaller metropolitan areas, Boulder, Colo., beat out Midland, Texas, for the top of the list. Two other Colorado areas—Greeley and Fort Collins—made the top 10.

Housing and Pot

by | Feb 11, 2020 | Jim's Take on the Market, Local Flavor, Local Government, Market Buzz | 1 comment

From the MND:

It seems as though legalized marijuana is said to be good for almost everything. Now a new study from the National Association of Realtors (NAR) has added real estate to the list. The impact is clearer when it comes to commercial properties, but agents saw differences in the residential sector as well where medical and/or recreational use of the substance has been legalized.

The NAR study, Marijuana and Real Estate: A Budding Issue (yes, NAR went there) grew out of a survey conducted with over 150,000 of its members, equally divided between those who operate in the commercial area (including building owners and managers) and those who practice residential real estate.

The study looked at states where marijuana has been legalized for medical purposes, for recreation, and for both, examining how it is grown, harvested, stored, sold, and consumed within those states. NAR found more impacts from legalization over time so divided some of the findings according to whether it occurred after or prior to 2016 which accounts for the dual percentages reported.

“As more states legalize marijuana, the real estate market will progressively have to adjust,” said Dr. Jessica Lautz, vice president of demographics and behavioral insights for NAR. “From property owners, to manufacturers, to those who simply want to engage for leisure – it all touches real estate in some form.”

In states were marijuana is legal in some form, between 9 percent and 23 percent of members who responded to the survey said they believe the inventory of available homes is tight for multiple reasons, including all-cash purchases from within the marijuana industry. While most respondents hadn’t seen any changes in property values near dispensaries, between 7 percent and 12 percent said they had seen an increase in values while 8 percent to 27 percent said they had seen values decline.

“Residential practitioners are getting used to the new normal of having marijuana legally used within rental properties, while homeowner associations are tasked with setting new rules to address consumption and growth,” said Lautz.

The majority of respondents reported that homeowner associations have rules that place certain restrictions on smoking and growing marijuana in homes or common areas. Only around 3% answered that specific homeowner associations do allow growing or smoking in home or common areas.

Three-quarters of members had never tried selling a grow house but among residential practitioners who had, 29 percent said they had a difficult time doing so. Twenty-seven percent of those in more recently legalized states reported difficulty compared to 25 percent in states that legalized before 2016.

Because Federal banking laws prohibit use of checks or credit cards to purchase marijuana, it is usually an all-cash business. About one-fifth to a quarter of landlords said they were unwilling to accept cash for rent in any instance, while about 10 percent said they would only refuse cash from an illegal federal activity. Forty-two percent of those in states where only medical marijuana is legal would accept cash rent, as would two-fifth of those where both medical and recreation use is allowed.

Among commercial practitioners, NAR found an increased demand for land, warehouses and store fronts that are intended for marijuana. In states where both uses are legal, more than a third of those polled said they saw an uptick in requests for warehouses or properties used for storage. In those same states, up to one-quarter of members said the demand for storefronts grew, while one-fifth said there was a greater demand for land.

“When the business of marijuana is discussed, some have a tendency to focus on only the buyers and sellers of the product,” said Lautz. “However, these numbers show that marijuana has been a boon to commercial real estate.”

Marijuana as a business has prospered for more than a decade and that growth continues to evolve. In the states where medical and recreational marijuana have been legalized for three years or more, each saw increases in the demands for commercial properties. As in residential uses, the effect on commercial property values near dispensaries was mixed, but about 20 percent reported an increase. There were fewer reports of declines.

Many respondents said leases had been modified to accommodate the marijuana industry, especially where legalization occurred prior to 2016. About half of respondents in medical marijuana states reported no issues leasing a property previously used to grow marijuana as did 35 to 49 percent of those where both uses were legalized. The most common problem among these properties were lingering odors, followed by moisture issues. Both matters were more common in areas where recreational marijuana has been legal for a longer period of time.

It reminds me of this REO we saw on the way to Valley Center. It sold for $950,000 with 5% down in 2005, was foreclosed and sold for $276,500 in 2009 (when this video was taken), and just resold for $775,000 in September.  What a country!  This video has 27,500+ views too!

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