Top 30 Markets Affected

We are #24 on the Top 30 markets to be affected by the coronavirus, which is pretty far down the list – and we’re still relatively affordable when compared to other higher-end areas.

For those who are thinking of moving to a more affordable area and aren’t affected by the statistics, here are my favorites that still have a 2020 median SP under $300,000, in order of how they rank on the list:

Las Vegas – $283,000 (1st)

Miami – $275,900 (5th)

Orlando – $245,000 (6th)

Ft Myers – $235,000 (8th)

Fresno – $265,000 (12th)

Lakeland FL – $193,000 (13th)

Memphis – $145,000 (21st)

Jacksonville – $210,000 (25th)

Daytona Beach – $202,000 (26th)

Phoenix – $288,000 (28th)

And their surrounding suburbs might be an even greater value!

https://www.usatoday.com/story/money/2020/05/20/cities-on-the-verge-of-a-covid-driven-housing-crisis/111782790/

Move to the Suburbs?

At least this was based on a survey, rather than ivory-tower speculation:

Where people choose to live has traditionally been tied to where they work, a dynamic that through the past decade spurred extreme home value growth and an affordability crisis in coastal job centers. But the post-pandemic recovery could mitigate or even produce the opposite effect and drive a boom in secondary cities and exurbs, prompted not by a fear of density but by a seismic shift toward remote work.

Now that more than half of employed Americans (56%) have had the opportunity to work from home, a vast majority want to continue, at least occasionally.  A new survey from Zillow, conducted by The Harris Poll, finds 75 percent of Americans working from home due to COVID-19 say they would prefer to continue that at least half the time, if given the option, after the pandemic subsides.

Two-thirds of employees working from home due to COVID-19 (66%) would be at least somewhat likely to consider moving if they had the flexibility to work from home as often as they want.  Only 24 percent of Americans overall say they thought about moving as a result of spending more time at home due to social distancing recommendations.

Many employed Americans are trying to square the desire to work remotely with the functionality and size of their existing homes.  Among employees who would be likely to consider moving, If given the flexibility to work from home when they want, nearly one-third say they would consider moving in order to live in a home with a dedicated office space (31%), to live in a larger home (30%), and to live in a home with more rooms (29%).

A Zillow analysis finds 46 percent of current households have a spare bedroom that could be used as an office.  But that percentage drops off by more than 10 points in dense, expensive metros such as Los AngelesNew YorkSan JoseSan Francisco and San Diego, where far fewer homes have spare rooms.

When it comes time to move, home shoppers who can work remotely may seek out more space — both indoor and outdoor — farther outside city limits, where they can find larger homes within their budget.

“Moving away from the central core has traditionally offered affordability at the cost of your time and gas money. Relaxing those costs by working remotely could mean more households choose those larger homes farther out, easing price pressure on urban and inner suburban areas,” said Zillow senior principal economist, Skylar Olsen. “However, that means they’d also be moving farther from a wider variety of restaurants, shops, yoga studios and art galleries. Given the value many place on access to such amenities, we’re not talking about the rise of the rural homesteader on a large scale. Future growth under broader remote work would still favor suburban communities or secondary cities that offer those amenities along with more spacious homes and larger lots.”

Zillow Premier Agents from Silicon Valley to Manhattan say anecdotally, they’re seeing the early beginnings of a shift.

“We are seeing more buyers looking to leave the city,” said Bic DeCaro, a member of Zillow’s Agent Advisory Board serving Washington, D.C., and Northern Virginia.  “Buyers, who just a few months ago were looking for walkability, are now looking for extra land to go along with more square footage.”

Keith Taylor Andrews, a small business owner in Denver, started home shopping on Zillow the week Colorado issued a stay-home order.  The first-time homebuyer is now under contract on a house in Fayetteville, Arkansas that he plans to use as his home office.

“We learned from COVID-19 that we could operate our business remotely,” said Andrews, who has 40 employees working from home. “Arkansas is a good place to move, it’s economical and there are far fewer people.  It feels like a breath of fresh air to get out of the city.”

http://zillow.mediaroom.com/2020-05-13-A-Rise-in-Remote-Work-Could-Lead-to-a-New-Suburban-Boom

“Stunning Recovery”

I called it a Stunning Recovery on Monday, and they used the same words today. Coincidence? 🙂 Hat tip Mitch!

If mortgage demand is an indicator, buyers are coming back to the housing market far faster than anticipated, despite coronavirus shutdowns and job losses.

Mortgage applications to purchase a home rose 6% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase volume was just 1.5% lower than a year ago, a rather stunning recovery from just six weeks ago, when purchase volume was down 35% annually.

“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” said Joel Kan, an MBA economist. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”

As states reopen, so are open houses, and buyers have been coming out in force, if masked. Record low mortgage rates, combined with strong pent-up demand from before the pandemic and a new desire to leave urban downtowns due to the pandemic, are driving buyers back to the single-family home market. It remains to be seen if this is simply the pent-up demand or a long-term trend.

Link to CNBC Article

Appraiser Interview Today 3pm PT

The leaders of Kayla’s real estate team will be speaking with America’s most famous appraiser today at 3pm. There will be a NYC-focus, but I’ve heard all three of these speakers before and it will be worth a listen:

Join us and guest speaker, Jonathan J. Miller, industry-leading commentator, appraiser, consultant, and author of real estate reports, for an in-depth discussion:

  • Valuations then, now and the day after tomorrow… Where are the bargains?
  • The banking industry. New Corona lending guidelines.
  • Re-opening the real estate industry – what, when, and how?

Register Here to receive the Zoom link.

We look forward to “seeing you”.

https://thejackyteplitzkyteam.elliman.com/home

When Will Real Estate Come Back?

Home sales are likely to plummet, and take a while to come back.

When will the market start up again?

It will depend on which channel you watch.

Excerpted from this article from Fox Business – hat tip GW:

https://www.foxbusiness.com/real-estate/real-estate-coronavirus-threat-house-market

For people who have been considering selling, it might not be necessary to wait. One benefit of Americans being home all day is that they are online all day long. ALL DAY.

I’m online while I’m typing this. My screen time on my iPhone is up to embarrassingly high numbers. I’m literally averaging 14 hours a DAY on my phone.

Eventually, we will all find a way to a real estate site, or at least search homes on Instagram. It’s inevitable, kind of like those cookies in your pantry are going to get eaten by the time you’re done reading this article.

The most unconventional aspect of this new age real estate industry is the fact that touring homes is currently impossible, as it should be. I’ve taken a hard stance for ALL OF US to STAY HOME for almost a month. Ironically, people are staying home – as they should be.

Prospective buyers will most likely remain hesitant to buy before they can physically tour a home but we can all pivot and redefine the way we work.

The minute that people are legally allowed to take a physical tour, the market is going to boom. It’s like when the new iPhone comes out. We want and expect lines out the door, just no tents, please.

People will be lined up at the doors of those homes they have obsessed over for months.

In the meantime, real estate professionals are utilizing virtual tours to keep buyers excited, and it is working, and relationships are getting back to the core — the heart.

We are entering what is usually the busiest season of real estate, that usually lasts through the end of the summer. I am confident that the busy season will last through the fall, and possibly through the winter.

Momentum is building, so there is no need to fear putting your home on the market.

Now is our chance to build and maintain confidence in the real estate market, because as soon as our world begins to shift back into normalcy, the market will be at its height.

We’ve all heard this a million times over, but right now, it’s more true than ever — home is where the heart is. You may not love where you currently are, but we know you love who you’re currently with. Get online, shop for your new forever place, and get excited about something that’s going to be there when this nightmare ends.

In the meantime, stay home, technology has us covered.

Interview with Ryan Serhant about the market and what to do:

https://video.foxbusiness.com/v/6144904232001/

“Wealth is the Vector.”

Rich people will get a lot of the blame…..

“Wealth is the vector.” That’s what sociologist Tressie McMillan Cottom tweeted last week, in reference to the spread of COVID-19 across both the globe and the United States.

Wealth is not the cause of every concentrated outbreak dotting the United States. But it’s the common denominator of so much of its spread outside of major urban areas. It’s the reason why so many of the coronavirus hot spots in the Mountain West — Sun Valley, Idaho; Gunnison County, Colorado; Summit County, Utah; Gallatin County, Montana — overlap with winter playgrounds for the wealthy. The virus travels via people, and the people who travel the most, both domestically and internationally, are rich people.

A party in the tony bedroom community of Westport, Connecticut, all the way back on March 5, became what one epidemiologist referred to as a “super-spreading event,” with infected attendees dispersing throughout Connecticut and New England, and one party-goer falling ill on a plane ride back to South Africa. In Idaho’s Blaine County, home to Sun Valley, more than half of the residential properties are second homes or rental properties, and more than 30,000 people fly into the regional airport during ski season alone. As of March 31st, 187 people in the county of 22,000 have tested positive, including local emergency room physician Brent Russell. Two people have died. The town’s small hospital has two ICU beds and a single ventilator.

“People come here from all over the world,” Russell told the Idaho Statesman. “Especially this time of year. When I’m in the ER, I get people from New York, Washington D.C., San Francisco, Seattle. Every week there’s people from those places. Most likely someone from an urban area or multiple people from urban areas came here and they just set it off.”

All over the United States, people are fleeing urban areas with high infection rates for the perceived safety and natural beauty of rural areas. Some of them own second homes in those areas; others are paying upwards of $10,000 a month, depending on the area, for temporary housing. The common denominator among those populations is, again, wealth — either their own or their families’. They can flee the city because their jobs can be done remotely, or they don’t work at all. They either had a vacation house already, or they can afford to fork over what amounts to a second rent, or second mortgage.

Not everyone leaving a big city because of the pandemic is heading for a vacation home; many people with mobile jobs are relocating to stay with family in suburban and rural hometowns. And many of the rural places that will eventually be hardest hit by the coronavirus are not upscale ski and beach towns, but small and often poor communities that have no tourist economy — or any of the infrastructure that comes with it. The resort areas seeing an influx of potentially virus-carrying city dwellers now are a kind of canary in the coal mine: a preview of how desperately overwhelmed rural areas across the country will be by the coronavirus, whenever it arrives.

From the coast of Maine to the North Shore of Lake Superior, hundreds of thousands of people have either already arrived or are scrambling to find vacant rentals. Some are taking precautions when they leave their primary dwellings, fully isolating themselves for 14 days or more in their new, temporary towns, as the White House has recommended for anyone leaving New York City. But many, presumably, are not.

“The worst part is that these second-home owners are coming up and acting like isolation is a vacation,” said Jen, 39, who lives in the northwest Colorado Rockies.

Link to Full Article

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