fbpx

Who’s Fleeing?

The pandemic is being blamed for people leaving town.

I think it’s more that Covid-19 is the last straw that is causing people to take the action they would have taken at some point anyway.  The ‘rona will be gone in 1-18 months – moving is a major life-changing event.

But these two conflicting articles probably demonstrate who is being impacted.

On one hand, we have people – probably those who want/need to be economical – who are moving themselves and are being ripped off by the rental-truck agencies (hat tip SM):

https://jalopnik.com/moving-truck-prices-in-la-and-san-francisco-are-skyrock-1845068350

But a survey of full-service moving companies describe a different scenario:

Are people in the U.S. migrating during the coronavirus crisis in different ways than pre-pandemic? Are they leaving cities? Moving to the suburbs? These are popular questions without definitive answers — yet. But there is some data emerging that can paint a better picture of Americans’ geographic response to the pandemic.

One thing’s for certain: So far, there is little support for the dramatic claims that people are fleeing cities writ large. In fact, available data indicates that overall, fewer people moved at all since the beginning of stay-at-home orders and through June — even with interest in moving on the rise again.

Among those who have moved, it’s unclear how many of those moves will be only temporary. But that doesn’t mean there aren’t interesting migration takeaways worth following. A select few cities including New York City and San Francisco do seem to be seeing more out-migration than most. But guess where many of those people are going? Other very large metropolitan areas, like Seattle and Los Angeles.

If there is a perception that the pandemic has ushered in a mass migration, it is not supported by the data. According to figures from two national moving companies, Americans moved less during the pandemic than they normally would have, not more. 

Several surveys have found that the great majority of people who did move during the first months of the pandemic did so for reasons unrelated to the coronavirus. In one such survey of 1,300 individuals conducted by Hire A Helper, just 15% said they had relocated because of Covid-19. Out of these pandemic-induced migrations, 37% of respondents said they moved because they could not afford current housing due to a Covid-related income loss. Thirty-three percent of the respondents said that they moved to shelter in place with friends or family, and 24% that they didn’t feel safe where they were.

Pew Research Center survey in June looked more closely at Americans who said they did make pandemic-induced moves. It found that overall, young people between the ages of 18 and 29 were moving because of Covid-19 in higher numbers, whether permanently or temporarily (college closing for in-person education might be to blame, at least partially.) Only 3% of the respondents said they had moved because of Covid-19, and 6% said someone else had moved in with them because of it.

Link to Article

What the pandemic is exposing is the gap between the haves and have-nots.

Those who are moving are seeking financial relief – either homeowners cashing in their home-equity lottery ticket and moving down, or those who flee so they can afford to start their American dream in a cheaper area.

The affluent don’t have to worry about that stuff. But they’ll move closer to the grandkids!

Fleeing to The Suburbs?

The chart above shows the June page views, which was probably the peak hysteria for those who were considering a drastic change.  I think the heightened activity and sales could have just been from all the people who had been thinking about a move over the last 2-3 years, and they finally got on their horse.  If we end up with about the same number of sales as last year, which looks probable, then sales were merely redistributed from April/May to late summer.  Maybe a few more people left for the suburbs, but this report makes it look like it’s not a mass exodus.

From Zillow:

Are people fleeing the cities for greener suburban pastures?

Some faint signals may have emerged in certain places, but by and large, the data show that suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets. Both region types appear to be hot sellers’ markets right now – while many suburban areas have seen strong improvement in housing activity in recent months, so, too, have many urban areas.

Zillow’s Economic Research team analyzed a variety of Zillow data points in order to illustrate this trend. Data related to for-sale listings are generally the best indicator of real-time housing market activity, and in all but a few cases, suburban markets and urban markets have seen similar changes in activity in recent months: about the same share of homes selling above their list price, similar  changes in the typical time homes spend on the market before an offer is accepted, and recent improvements in newly pending sales have been about the same across each region type.

Other indicators also help drive home this conclusion. Changes in annual home value growth rates from just before the pandemic to now have been about the same for urban and suburban markets. In some regions where there is a divergence, the discrepancy can be explained by trends that were unfolding before the pandemic. Page view data also show that suburban home listings have not grown in relative popularity in the past few months. For-sale suburban homes attract more than three times as much of Zillow’s traffic as urban listings do, but that was the case last year as well. Interest in detached single-family homes (or similar) has not seen a marked increase in the past year, either.

Link to Zillow’s Full Report

NSDCC Sales, Jan-Aug

Sales has been robust over the last couple of months, and the national pending-home-sales index above shows how we’re just making up for lost time. We don’t have a local PHSI, so let’s look at how the NSDCC closed sales for 2020 have compared to last couple of years:

NSDCC Detached-Home Sales, Jan-Aug:

2018: 1,969

2019: 1,928

2020: 1,841

After six months of Covid-19, we’re only 87 sales behind last year!

I bring it up because the doomer-of-the-century chimed in, and I just wanted to present more-current evidence before reading his take on the 2020 market:

https://www.mhanson.com/9-3-housing-rebounds-recoveries-are-two-very-different-things/

He did mention that we got off to a hot start this year, and it can be attributed to the lower mortgage rates. With the Fed saying they are going to ignore inflation, let’s include ultra-low mortgage rates high on our list of why the 2021 Spring Selling Season will likely be craziest market of all-time!

 

What’s Hot!

We know that covid, and it’s impact on schooling in particular, is causing some people to want more space around them.  Bigger houses, with bigger yards, are becoming more desirable…..and buyers are scrambling to get situated and comfortable before school starts – or at least not get too far into the school year.

The Poway area offers such relief at a fairly affordable price.

My buyers and I finalized this list of homes on Monday, and picked yesterday as our tour date. By Wednesday night, this is how the list looked:

17307 St Andrews Dr., Poway.  $1,399,000  Active listing

14260 Hacienda Ln., Poway.   $1,150,000  Active listing

16105 Lakeview Rd. Poway.  $1,350,000  Active listing

12612 Stoutwood St., Poway.  $1,070,000  Pending

13615 Sunset View Rd., Poway.  $1,100,000  Pending

11828 Clearwood Ct., San Diego.  $1,290,000  Pending

12429 Damasco St., San Diego.  $920,000  Pending

14473 Trailwind, Poway $1,465,000 Pending

14220 Primrose Ct., Poway $1,249,000  Pending

3428 Tony Dr., San Diego $1,329,000 Pending

12020 Blue Diamond Ct., San Diego $1,300,000 Pending

9972 Falcon Bluff, San Diego $1,389,000  Pending

14048 Old Station, Poway $999,000 Pending

12488 Caleta Way, San Diego $1,098,000 Pending

13427 Calle Colina, Poway $1,250,000 Active listing

Out of the 15 listings, eleven of them already went pending this week!

The agent sent this message on his Blue Diamond listing, priced at $1,300,000:

The sellers don’t want any more showings, they have 10 offers and half of them are over $1,400,000.

Yowsa! Get Good Help!

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/

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/

Mass Exodus?

The idea of people fleeing to the suburbs isn’t what we thought – an excerpt:

For the week ending on May 10 — which was around the height of the pandemic in New York City — the percentage of search traffic from the New York metro area to out of market areas rose 5.4 percentage points year-over-year, which appears to reflect a minor uptick in people wanting to get out of the city.

But if you take a closer look at the breakdown of searches by population density, the share of search traffic from the New York metro area to suburban and rural areas dropped, while the share of search traffic looking at other urban areas rose. Taken together, this shows that while there was a minor uptick in New Yorkers looking for homes outside of the New York area, it’s slightly tilted toward other urban areas than it has been in the past. The search data, which is already a weak indicator, does not actually reflect an increase in New Yorkers’ interest in moving to suburban or rural areas.

The same is generally true for a number of other cities as well, including Detroit, St. Louis, San Jose, Pittsburgh, Cleveland, Miami, Las Vegas, Boston, Baltimore, Los Angeles, and Philadelphia.

There were other cities that saw a drop in traffic to out-of-market homes, but the share of traffic to other urban areas still rose — Seattle, Minneapolis, Chicago, Phoenix, Washington, D.C., Dallas, Charlotte, Atlanta, Tampa, Sacramento, San Diego, San Antonio, Columbus.

Of the cities that did see a drop in traffic to homes in urban areas, the drop was negligible. The city that saw the biggest drop was Indianapolis, where traffic fell by a mighty 1 percent.

“We just don’t have any basis to claim a boom in the suburbs,” says Jeff Tucker, an economist with Zillow. “There are people who really believe the urban exodus hypothesis. If there’s an evidence for it in the data, it’s very weak.”

This doesn’t mean there won’t be a flight from cities at some point in the future. As the virus continues to rage on across the country, people who have lost their jobs may decide to leave their cities for more affordable areas. Widespread adoption of work-from-home polices may also give people who didn’t want to live in cities to begin with, the option to leave. People in cities like New York and Detroit, which were hit hard by the virus, may decide they’ve had enough.

(more…)

The Frenzy of 2020

Mortgage rates hit an all-time low yesterday!

Combine the improved purchasing power with the covid-delayed selling season and the lowest inventory in recent history, and we have full-blown frenzy conditions. Look at how July wound up:

NSDCC July Sales & Pricing – Preliminary

Year
# July Sales
Avg. $$/sf
Median SP
July Mortgage Rate
# Listings, 1st Half
2012
258
$365/sf
$850,000
3.55%
2,545
2013
297
$418/sf
$930,000
4.37%
2,790
2014
271
$451/sf
$1,018,000
4.13%
2,714
2015
321
$458/sf
$1,025,000
4.05%
2,871
2016
271
$504/sf
$1,110,000
3.44%
2,999
2017
261
$528/sf
$1,240,000
3.97%
2,725
2018
273
$544/sf
$1,280,000
4.53%
2,701
2019
281
$612/sf
$1,300,000
3.77%
2,725
2020
343
$620/sf
$1,420,000
2.99%
2,293

We had 342 sales, and there will be some late-reporters. Wow!

Has pricing caught up with the market conditions yet?

Pin It on Pinterest