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.
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
We had 342 sales, and there will be some late-reporters. Wow!
Has pricing caught up with the market conditions yet?
Did sheltering in place have any effect on home improvement rates? Our data says yes.
Over half of American homeowners (55%) said the pandemic and associated disruptions gave them time to improve their homes, while 59% admitted that spending more time inside due to lockdown inspired them to renovate their place of residence.
What’s the stated reason? “Finally having the time” was the top motivator, with 25% of homeowners saying that’s what drove them to go ahead with their improvement and remodeling projects.
Impressively enough, it ranked above the more typical drivers of home improvement, such as adding value to a home (21%) or making a home feel more comfortable and cozy. (21%).Link to Full Article
Will our local market survive the coronavirus?
Let’s look at the bigger picture and compare the first half of 2020 to previous years:
NSDCC 1H Listings & Sales
There have been a fairly-consistent 2,700 NSDCC houses listed for sale in the first half of each of the last three years. In 2020, the count dropped to 2,290, which is 435 fewer listings than last year, or about a month’s worth. We didn’t miss them much either, with sales only being down 17%. Pricing of homes on the lower end has known no throttle.
If we have a typical second half, the 2020 annual sales could end up only being down 5% to 8% for the year – and median pricing up 5% to 10% YoY. I’m not sure anyone predicted that when the ‘rona broke out!
North coastal is doing better than most! Seniors are most susceptible:
This presentation covers both sides of the concerns about home values plunging because of the effects of the pandemic on the economy.
Suze says don’t buy a house until later this year because there could be foreclosures, and David points out that the CARES Act already gives those in forbearance at least 6-12 months. I’ll point out that the rules changed after the last crisis, and now lenders don’t have to foreclose if they don’t feel like it – which makes foreclosure an option, not a requirement. It’s a huge change that Suze doesn’t see.
Our society is now geared to take advantage of other people’s misfortune, so insiders will pounce.
The premiere of the new X video hit the Rolling Stone website today – watch in the beginning when they cruise by John and Exene’s old house at 1118 North Genesse in North Hollywood where they lived back in the day and John carved their names into the curb:
Here are the coronavirus comparisons by zip code (new counts above).
Percentage increases in cases over the last 24 days:
Carmel Valley: +293%
Solana Beach: +264%
La Jolla: +217%
Rancho Santa Fe: +207%
Del Mar: +177%
San Diego County: +189%
The ‘rona loves to party, and it’s coming for you and me – be safe!Link to SD County website