June 2020
Update on Covid-19 Market Impacts
Consumer confidence finds bottom: After suffering from its worst decline in April in nearly 50 years, the Conference Board's Consumer Confidence Index ticked up slightly in May. The index remains below 100 indicating that consumers are still pessimistic, but it is a slightly lower level of pessimism than in April. This supports the conclusion from a variety of other indicators that the economy and market found a bottom in mid-April and has begun to stabilize after roughly 2.5 months of sheltering in place.
Mortgage applications regain lost ground: Homebuyer demand is beginning to show signs of life as well as the U.S. recorded its 6th consecutive increase in new purchase-money applications. That brings the number of mortgage applications back above the pre-crisis levels of late February. Importantly, this also erases the year-to-year deficit that peaked in mid-April as well with total applications 8% higher last week than they were during the same period of 2019. California saw its 7th consecutive weekly gain in mortgage applications as well, though it also saw a bigger contraction in the immediate aftermath of the downturn, so it remains roughly 2% below 2019 levels.
Buyer demand coming back with more showings: Buyer demand is also expressing itself in the form of increased showings. The 7-day moving average of showings posted a 38% increase, which brought the index back to pre-outbreak levels. Home showings have improved dramatically from mid-April when showings were falling by nearly 75% on a weekly basis and were well below 2019 levels.
Fewer buyers and sellers backing out of transactions: The percentage of California REALTORS(R) experiencing hold back from buyers and sellers continues to decline. Last week, just 32% of REALTORS(R) reported having a buyer withdraw an offer on a property they had been ready to purchase. This is down from nearly 50% in mid-April. Similarly, the percentage with sellers that have removed their homes from the MLS completely was down from nearly 60% several weeks ago to 46% over the weekend.
Ready to Sell? Here's how to refresh your home after the lockdown.
There are a number of improvements you can make-both large and small-while waiting to put your home on the market.
It's easy to get carried away thinking about elaborate renovations to kitchens and bathrooms, but there are many small improvements and maintenance items that are equally important. They don't cost much, but they can help make buyers feel comfortable with a home and reduce the chance of red flags during a home inspection.
That includes burned-out light bulbs, which should be replaced. Otherwise, it's a question mark, because a fixture that won't turn on may make a buyer wonder if there's a problem with the wiring. Eliminate unnecessary extension cords for similar reasons. While you may have added them for convenience, they can raise concerns about the electrical system.
You should also repair any windows and doors that don't open and close easily, and fix loose or leaky faucets.
If there's a stain on the ceiling from a toilet overflow, repair the drywall and paint in that area so buyers won't worry that there's a leaky pipe. That stain on the ceiling raises a lot of questions. We can test and verify that it's dry, but it will still loom in the buyer's mind.
Consider the dishwasher. Before the lockdown, it may have been used, at most, once a day. But with so many people eating all their meals at home, some dishwashers are now being used twice a day. Heating and cooling systems are also facing increased demand.
And if you have a washing machine that's being used more than usual and it connects to supply lines with rubber hoses, now might be a good time to upgrade the hoses to stronger to protect against leaks.
When you're selling a house, curb appeal is important. But at a time when buyers may be looking to limit the number of house tours they take, it is especially crucial. Tackle the simple things that many people forget: Clean the gutters, touch up cracked and peeling paint, and trim unruly trees and shrubs.
If you want to get the best price and attract the most buyers, you want it to look fresh, modern and move-in ready.
California Legislature Back in Session
CAR is working a full load of bills this legislative session despite the Coronavirus pandemic. The State Legislature is now wrestling with those bills:
And many more at www.legislature.ca.gov.
National Association of Realtors CEO on racial injustice
As the nation reels from the killing of George Floyd, a Black man, by a white Minneapolis police officer, and its aftermath, the National Association of Realtors CEO Bob Goldberg recently stated that the current situation is a long-standing one. "It's a terrible situation, that we're all living a part of. But this is not a new issue. It's been ongoing in our country for years," Goldberg said.
On Monday, NAR President Vince Malta put out a statement saying that NAR is committed to leading the way on policies that address racial justice, while highlighting that fair housing, equality and inclusion, are among the association's most cherished values. "The shocking, senseless death of George Floyd is tragic," Malta said. "Our neighbors in the communities where we work and live across America should feel safe and free from discrimination."
He noted that NAR hired a director of fair housing at the end of last year, Bryan Greene, and announced a fair housing action plan in January called "ACT", which stands for Accountability, Culture Change and Training. The goal of the plan is to "ensure America's 1.4 million Realtors are doing everything possible to protect housing rights in America," according to a NAR statement at the time.
Specifically, the nation's largest trade association will take new actions to ensure members uphold the fair housing standards incorporated in NAR's Code of Ethics; begin integrating fair housing into all conferences and engagements; and form partnerships with fair housing advocates to pursue shared goals around accountability and training, among countless other initiatives" the statement added.
"This gives us another opportunity to also have a voice with consumers and with our members to say, 'Despite the terrible situation and the unjust situation that has occurred and has been occurring', let's put our stamp on the important parts of the industry that we serve", he added.
#BlackLivesMatter
March to May Comparisons the Bay Area, Central Coast & Santa Cruz
Comments: As you can see the number of sales dropped 14.4% over April and 25.9% over March. The biggest overall change was in the days on the market most likely due to Virtual Showings. The median price increased in Santa Cruz County due to five sales in Capitola, the price dropped in Monterey County and ever so slightly increased in Santa Clara County. Days on the market dropped in all three counties. Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS.
