COVID-19 Expert Panel

This is a real estate blog but we need facts to make decisions with – thanks Aunt Nancy:

University of California, San Francisco BioHub Panel on COVID-19

March 10, 2020

  • Panelists
  • Joe DeRisi: UCSF’s top infectious disease researcher. Co-president of ChanZuckerberg BioHub (a JV involving UCSF / Berkeley / Stanford). Co-inventor of the chip used in SARS epidemic.
  • Emily Crawford: COVID task force director. Focused on diagnostics
  • Cristina Tato: Rapid Response Director. Immunologist.
  • Patrick Ayescue: Leading outbreak response and surveillance. Epidemiologist.
  • Chaz Langelier: UCSF Infectious Disease doc

Below are essentially direct quotes from the panelists. Bracketed are the few things that are not quotes.

  • Top takeaways 
  • At this point, we are past containment. Containment is basically futile. Our containment efforts won’t reduce the number who get infected in the US. 
  • Now we’re just trying to slow the spread, to help healthcare providers deal with the demand peak. In other words, the goal of containment is to “flatten the curve”, to lower the peak of the surge of demand that will hit healthcare providers. And to buy time, in hopes a drug can be developed. 
  • How many in the community already have the virus? No one knows.
  • We are moving from containment to care. 
  • We in the US are currently where at where Italy was a week ago. We see nothing to say we will be substantially different.
  • 40-70% of the US population will be infected over the next 12-18 months. After that level you can start to get herd immunity. Unlike flu this is entirely novel to humans, so there is no latent immunity in the global population.
  • [We used their numbers to work out a guesstimate of deaths— indicating about 1.5 million Americans may die. The panelists did not disagree with our estimate. This compares to seasonal flu’s average of 50K Americans per year. Assume 50% of US population, that’s 160M people infected. With 1% mortality rate that’s 1.6M Americans die over the next 12-18 months.]  
  • The fatality rate is in the range of 10X flu.
  • This assumes no drug is found effective and made available.
  • The death rate varies hugely by age. Over age 80 the mortality rate could be 10-15%. [See chart by age Signe found online]  
  • Don’t know whether COVID-19 is seasonal but if it is and subsides over the summer, it is likely to roar back in fall as the 1918 flu did
  • I can only tell you two things definitively. Definitively it’s going to get worse before it gets better. And we’ll be dealing with this for the next year at least. Our lives are going to look different for the next year.
  • What should we do now? What are you doing for your family?
  • Appears one can be infectious before being symptomatic. We don’t know how infectious before symptomatic, but know that highest level of virus prevalence coincides with symptoms. We currently think folks are infectious 2 days before through 14 days after onset of symptoms (T-2 to T+14 onset).
  • How long does the virus last? On surfaces, best guess is 4-20 hours depending on surface type (maybe a few days) but still no consensus on this
  • The virus is very susceptible to common anti-bacterial cleaning agents: bleach, hydrogen peroxide, alcohol-based.
  • Avoid concerts, movies, crowded places.
  • We have cancelled business travel.
  • Do the basic hygiene, eg hand washing and avoiding touching face.
  • Stockpile your critical prescription medications. Many pharma supply chains run through China. Pharma companies usually hold 2-3 months of raw materials, so may run out given the disruption in China’s manufacturing.
  • Pneumonia shot might be helpful. Not preventative of COVID-19, but reduces your chance of being weakened, which makes COVID-19 more dangerous.
  • Get a flu shot next fall. Not preventative of COVID-19, but reduces your chance of being weakened, which makes COVID-19 more dangerous.
  • We would say “Anyone over 60 stay at home unless it’s critical”. CDC toyed with idea of saying anyone over 60 not travel on commercial airlines.
  • We at UCSF are moving our “at-risk” parents back from nursing homes, etc. to their own homes. Then are not letting them out of the house. The other members of the family are washing hands the moment they come in.
  • Three routes of infection
  • Hand to mouth / face
  • Aerosol transmission
  • Fecal oral route
  • What if someone is sick?
  • If someone gets sick, have them stay home and socially isolate. There is very little you can do at a hospital that you couldn’t do at home. Most cases are mild. But if they are old or have lung or cardio-vascular problems, read on.
  • If someone gets quite sick who is old (70+) or with lung or cardio-vascular problems, take them to the ER.
  • There is no accepted treatment for COVID-19. The hospital will give supportive care (eg IV fluids, oxygen) to help you stay alive while your body fights the disease. ie to prevent sepsis.
  • If someone gets sick who is high risk (eg is both old and has lung/cardio-vascular problems), you can try to get them enrolled for “compassionate use” of Remdesivir, a drug that is in clinical trial at San Francisco General and UCSF, and in China. Need to find a doc there in order to ask to enroll. Remdesivir is an anti-viral from Gilead that showed effectiveness against MERS in primates and is being tried against COVID-19. If the trials succeed it might be available for next winter as production scales up far faster for drugs than for vaccines. [More I found online.]
  • Why is the fatality rate much higher for older adults?
  • Your immune system declines past age 50
  • Fatality rate tracks closely with “co-morbidity”, ie the presence of other conditions that compromise the patient’s hearth, especially respiratory or cardio-vascular illness. These conditions are higher in older adults.
  • Risk of pneumonia is higher in older adults.
  • What about testing to know if someone has COVID-19? 
  • Bottom line, there is not enough testing capacity to be broadly useful. Here’s why.
  • Currently, there is no way to determine what a person has other than a PCR test. No other test can yet distinguish “COVID-19 from flu or from the other dozen respiratory bugs that are circulating”.
  • A Polymerase Chain Reaction (PCR) test can detect COVID-19’s RNA. However they still don’t have confidence in the test’s specificity, ie they don’t know the rate of false negatives.
  • The PCR test requires kits with reagents and requires clinical labs to process the kits.
  • While the kits are becoming available, the lab capacity is not growing.
  • The leading clinical lab firms, Quest and Labcore have capacity to process 1000 kits per day. For the nation.
  • Expanding processing capacity takes “time, space, and equipment.” And certification. ie it won’t happen soon.
  • UCSF and UCBerkeley have donated their research labs to process kits. But each has capacity to process only 20-40 kits per day. And are not clinically certified.
  • Novel test methods are on the horizon, but not here now and won’t be at any scale to be useful for the present danger.
  • How well is society preparing for the impact?
  • Local hospitals are adding capacity as we speak. UCSF’s Parnassus campus has erected “triage tents” in a parking lot. They have converted a ward to “negative pressure” which is needed to contain the virus. They are considering re-opening the shuttered Mt Zion facility.
  • If COVID-19 affected children then we would be seeing mass departures of families from cities. But thankfully now we know that kids are not affected.
  • School closures are one the biggest societal impacts. We need to be thoughtful before we close schools, especially elementary schools because of the knock-on effects. If elementary kids are not in school then some hospital staff can’t come to work, which decreases hospital capacity at a time of surging demand for hospital services.
  • Public Health systems are prepared to deal with short-term outbreaks that last for weeks, like an outbreak of meningitis. They do not have the capacity to sustain for outbreaks that last for months. Other solutions will have to be found.
  • What will we do to handle behavior changes that can last for months?
  • Many employees will need to make accommodations for elderly parents and those with underlying conditions and immune-suppressed.
  • Kids home due to school closures
  • [Dr. DeRisi had to leave the meeting for a call with the governor’s office. When he returned we asked what the call covered.] The epidemiological models the state is using to track and trigger action. The state is planning at what point they will take certain actions. ie what will trigger an order to cease any gatherings of over 1000 people.
  • Where do you find reliable news?
  • The John Hopkins Center for Health Security site which posts daily updates. The site says you can sign up to receive a daily newsletter on COVID-19 by email. [I tried and the page times out due to high demand. After three more tries I was successful in registering for the newsletter.]
  • The New York Times is good on scientific accuracy.
  • Observations on China
  • Unlike during SARS, China’s scientists are publishing openly and accurately on COVID-19.
  • While China’s early reports on incidence were clearly low, that seems to trace to their data management systems being overwhelmed, not to any bad intent.
  • Wuhan has 4.3 beds per thousand while US has 2.8 beds per thousand. Wuhan built 2 additional hospitals in 2 weeks. Even so, most patients were sent to gymnasiums to sleep on cots.
  • Early on no one had info on COVID-19. So China reacted in a way unique modern history, except in wartime.
  • Every few years there seems another: SARS, Ebola, MERS, H1N1, COVID-19. Growing strains of antibiotic resistant bacteria. Are we in the twilight of a century of medicine’s great triumph over infectious disease?
  • “We’ve been in a back and forth battle against viruses for a million years.”
  • But it would sure help if every country would shut down their wet markets.
  • As with many things, the worst impact of COVID-19 will likely be in the countries with the least resources, eg Africa. See article on Wired magazine on sequencing of virus from Cambodia.

https://www.linkedin.com/content-guest/article/notes-from-ucsf-expert-panel-march-10-dr-jordan-shlain-m-d-/

The linkedin article was taken down for an unknown reason, but it was posted at the Daily Koz and other websites so it seems legit. It wasn’t flagged on snopes.

Coronavirus and Real Estate, Part 2

The panic ensues over the coronavirus, but people want and need to move too – especially as mortgage rates climb higher. What can we do to keep the real estate market hopping?

Here’s what can we do for home sellers.

Those who are concerned about strangers coming into their house should go ahead and move to their next home first. We can give you a Compass Bridge Loan to access up to 90% of your equity in your current home to purchase your next one, and we’ll front up to $50,000 for home improvements and staging to make selling your old home more effective. Let’s go this route on every home sold – it’s easier on you!

What can we do for home buyers?

The COVID-19 might be what finally gets agents to do video tours of homes.  Selling homes by video is a real possibility, and if listing agents just walked around the house with a camera like they were showing it in person, then every potential buyer could see it from the comfort of their own home.  If making a film makes you queasy, have your kids do it – they have no problem with producing videos.

This could also be the chance for home auctions to take hold.  After a few days go by and/or the video reaches 100+ views, then conduct an online auction to determine the winner. Then have that buyer view the home in person, keeping traffic to a minimum.

Or have buyers submit written offers after seeing the video tour, and if the seller permits, have only those contenders view the home in person.  Investment properties are regularly sold this way to minimize the impact on the existing tenants – you’ve heard the phrase, “Show with offer”.

Either way would reduce human interaction and possibly make home-selling MORE effective.

Buyers don’t necessarily need to see the home in person, either.

My buyers purchased this home and closed escrow without ever stepping foot inside. We also did a video of the home inspection, and between the two, the buyers got a full experience of what they were buying – and never saw the house in person until they owned it:

Either we can adopt new and improved ways to serve our clients and keep everyone moving, or we can sit at home watching the paranoia grow on TV.  It’s your choice!

From the doctor in charge of infectious diseases at Rady Children’s hospital:

 

Don’t Worry About Payments

Statement from FHFA Director Mark Calabria on Coronavirus
FOR IMMEDIATE RELEASE
3/10/2020

?Washington, D.C. – “To meet the needs of borrowers who may be impacted by the coronavirus, last week Fannie Mae and Freddie Mac (“the Enterprises”) reminded mortgage servicers that hardship forbearance is an option for borrowers who are unable to make their monthly mortgage payment.  For borrowers that may be experiencing a hardship, I encourage you to reach out to your servicer.  The Enterprises and the Federal Home Loan Banks continue to provide support to the secondary mortgage market, and the UMBS market continues to operate at its normal level.”

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S. mortgage markets and financial institutions.

Coronavirus and the Real Estate Market

Everyone is wondering how the coronavirus will affect housing, so Bloomberg News decided to whip up the hysteria with this article built on speculation and guesses. Mark Zandi has had one of the most negative opinions about housing, hoping that some day he might be right, and Yunnie has never left his ivory tower.

These are the only facts mentioned in the article:

The potential economic fallout still hadn’t completely registered this past weekend for homebuyers in Seattle, an epicenter of the U.S. outbreak. On Saturday, around four dozen groups filed through a four-bedroom Tudor in the Whittier neighborhood listed for just over $1 million. Many said they had hoped the virus would keep other would-be buyers away in a market where there’s little inventory and bidding wars are frequent.

At another open house nearby, handshakes were out, but plenty of home shoppers came for a look. Craig Rothlin, 34, and Kanako Nakarai, 31, were among them. Both work for tech companies, and have been hurt by the recent stock market rout.

“A good chunk of our down payment is caught up in that,” Rothlin said.

The couple had been waiting to see prices come down. But, so far, that hasn’t happened. The last home they bid on got multiple offers and sold for $180,000 over the asking price.

Seattle is an epicenter of the U.S. outbreak, and FOUR DOZEN GROUPS are looking at an open house?  Many said they hoped that the virus would keep other would-be buyers away?  There’s your takeaway!

Let’s focus on the facts.

In the area between La Jolla and Carlsbad, there are 121 houses for sale priced under $1,500,000, and 158 pending listings.  When there are more pendings than actives, it means the demand is outstripping the supply!  Even if some nervous nellies decided to wait it out, there will still be plenty who want to buy a home when rates are at all-time lows.

What about the high-end, Jim, aren’t the affluent more susceptible to stock market swings? Maybe, but they’re not going to give it away!  This scare will be over in less than a year, and rich people have a long history of waiting on price, rather than dumping.

What if we have a recession?  Then don’t make your payments – banks don’t mind!

It would take a flood of inventory to disrupt the market in a bad way.  But the COVID-19 is causing a hunker-down-and-do-nothing environment.  Homeowners aren’t going to panic and uproot their life just because of some stinking virus that will pass in 6-12 months.

Coronavirus and the C.A.R.

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…)

Over List!

An update on two of the homes featured here that garnered multiple offers. As expected, they sold for well over their list price.  This one got $51,000 over the top of their price range:

This one had 20+ offers, and sold for a whopping $190,100 OVER LIST PRICE!

The fully-renovated, one-story homes are HOT!

Plus let’s also include this old classic in Olde Carlsbad that sold for $30,000 over list price, or $773/sf in an area that has averaged $539/sf over the last six months:

What’s Hot

We noted how there aren’t many of the newer one-story houses for sale.

When they do hit the open market, they tend to blow out – three of the last four sales of this 2,100sf plan in Santa Fe Trails in Carlsbad have sold over list price.  The previous high sale of this model was $1,100,000 in 2018, so they listed this one on the range $1,125,000 – $1,150,000, figuring they could get a little more:

https://www.compass.com/listing/3412-camino-largo-carlsbad-ca-92009/441432253076395113/

Four days later they opened escrow for $1,225,000 cash, and closed three weeks later!

Homebuyers Guide

With our tight inventory and ultra-low mortgage rates, it kinda feels like Tesla stock.  One minute you’re in the $800s, and the next thing you know, the same house is in the $900s!

What can buyers do?

  1. Buy location.
  2. Don’t buy crap.

Simple enough, right?

But it’s hard to accomplish both, because the best locations have the oldest homes.

Let’s narrow it down further.

If you can afford a decent location, what else can a buyer do to ensure a smart purchase?

Buy a newer home, and/or buy a one-story home.

Newer: Homes built in the last 15 years typically have modern floor plans with a large open great room and lots of windows that allow for ample natural light.  When you go to sell it someday, it will still be a desirable home without a load of upgrading or maintenance costs to you.

One-Story: Boomers aging in place guarantee that the scant supply of one-story homes will stay tight, and those that do leak onto the open market will be hotly contested.

Here’s a good example.

This sold for $850,000 two years ago, and after a complete remodel it goes on the market for $1,149,000…..and they get multiple offers.  Those who thought they could still buy a nice house in Old La Costa in the $800,000s are really scratching their heads now!  But it had the good location, and the sellers added the new look to clinch a nice boost in value.

If you want to stick with a newer house and/or a single-story house, what are your chances?

Price Range
# Listings
# Built Since 2005
# One-Story
# One-Story Built Since 2005
0 – $1M
28
5
6
0
$1M – $2M
184
45
42
6
$2M – $3M
163
42
54
8
$3M+
266
100
79
24

Buying a newer home or a single-story really looks daunting now, but if you can pull it off, you got it made!

Insisting on a newer home and/or a one-story home will give you maximum assurance that you’ve made a smart buy that will appreciate better than the rest. We can add a few older homes that have been thoroughly remodeled, but they probably still have a floor plan cut up into smaller rooms with low ceilings.

Get Good Help!

Rates Make A Difference

Mortgage Amount
30-Yr Rate
Monthly Payment
$540,000
9.0%
$4,345
$688,000
6.5%
$4,349
$810,000
5.0%
$4,348
$885,000
4.25%
$4,354
$1,000,000
3.25%
$4,352

The same buyer who qualified for a $810,000 loan amount just 15 months ago can now borrow $1,000,000 and get the same monthly payment – a whopping 23% increase!

No wonder sellers expect +11% year-over-year!

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