Congratulations to all of us on making it through a month of Shelter in Place! I hope this email finds you and your loved ones in good health and good spirits. Our office has been conducting meetings and seminars via Zoom, homes are being shown by virtual tours, and we’re all rediscovering old recipes, old hobbies and even our own family members and pets in some cases. Obviously, though, we’re all looking forward to a time when we can meet in person (from six feet, of course).
This week, we’ll be going back to our monthly newsletter format and recapping the market activity for the month of March. In San Mateo County, the median sales price for both single family homes and townhomes/condos experienced increases on a month-over-month AND year-over-year basis. This was also the case for single family homes in Santa Clara County, while townhomes/condos had no change on a month-over-month basis and a moderate decrease compared to last year. In general, these prices reflect homes that were listed on the market prior to the Shelter in Place directive, so it’s not surprising to see them holding fairly steady or even doing better, as we knew the market was looking very strong in February.
As expected, the number of new listings decreased significantly in March in all categories except for townhomes/condos in Santa Clara County. As the Shelter in Place directive took effect on March 17th, many sellers chose to hold off going on the market in hopes the situation would improve by late spring or early summer. Those who have been reading our weekly updates will know that though the number of new listings has decreased significantly, they have not stopped entirely.
“What do you think will happen to the real estate market?” That is always a hard question to answer, but now even more than ever, as it will all depend on how things progress with the coronavirus situation and the short and long-term impacts on the economy. But two things are clear:
- The fundamentals of the housing market were strong before this started and are still strong. Those who are worried about a recession and still have PTSD from 2008 should be clear that we are in a very different environment now, as many homeowners have significant equity in their homes and as there have been stricter lending standards in place since the last recession.
- The concept of “supply and demand” will continue to dictate the market. Before the COVID-19 situation, demand was very strong and we were seeing multiple offers over asking on the majority of listings in our area in February. Taking a look at inventory levels in both counties, we can see that they were in the 1-1.5 month range for March, which is still quite low. So even if some buyers may need to hold off or cancel their plans to purchase a home, the number of listings has also gone down, creating continued low inventory levels, which means fairly strong home values.
March 2020 Market Data
How “Essential” is Real Estate?
Of course, we at Perisson think real estate is absolutely essential to life and society. After all, the three main necessities of life are food, SHELTER, and clothing. Although not originally included in governmental directives, the federal and state government later upgraded residential real estate to “essential” status. The Bay Area counties have been under stricter guidelines, and on March 31st, revised the order to include residential real estate “under very limited circumstances.”
The main question to consider is: Is the sale of a particular property ABSOLUTELY NECESSARY during this time? For example, is it a reverse-mortgage that must be sold in a matter of days? Is the sale of a home for a doctor, healthcare professional, or emergency personnel who was transferred into or out of San Mateo County? Is the sale for someone moving back home from overseas or some other equally essential situation? If so, then a sale can be considered “essential.”
There is nothing barring a home from being placed on the market during this time, and some activities for preparing a home for sale, such as photography, are allowed while residential construction is not unless crucial to maintain the safety and habitability of a home. We’re seeing different brokerages handle this differently, but making sure to keep social distancing protocols no matter what.
What about viewing homes? In all cases, virtual showings and open houses are strongly advised. If necessary, showings of vacant homes may take place by appointment only if no more than two people from the same household are in a home at one time. Showings of occupied homes may NOT take place under any circumstances, even if the owners leave the home for the day.
These are the current measures required of all REALTORS® in the Bay Area right now, but we are hoping to have more flexibility and adjustments in the coming weeks.
Call for Action – Protect Property Owner Rights
In general, we try to stay away from comments on political issues, but this is one that could have a major impact on the rights of property owners. While we definitely understand the plight of renters who are going through financial difficulties, there are already tenant protections in place, while there are many “mom and pop” landlords for whom their investment property represents their retirement and legacy to their children, and it’s important to protect them as well. Even if you don’t currently own investment property, if you own property at all or are thinking to do so in the future, we encourage you to be aware of legislation that may have an impact on your rights as a property owner.
On April 8, Assemblymember Phil Ting (D-San Francisco), along with Assemblymember Kevin Mullin (D-San Mateo County) and Senator Scott Wiener (D-San Francisco) introduced language in the State Legislature dealing with COVID-19 that would be extremely detrimental to small property owners. AB 828 says that property owners must reduce their rents by 25% for the next year, due to the COVID-19 pandemic. It also makes it virtually impossible to evict tenants, even for cause.
The stated intention of the law is to protect tenants who are financially affected by COVID-19, yet it has no requirement that tenants prove that they have actually experienced financial hardship.
AB 828 places a tremendous burden on property owners, some of whom recently purchase their property and have exceedingly high expenses and other who have already been under rent control for decades and don't even receive enough in rent to maintain their properties.
If this concerns you, we encourage you to contact your State Legislators and the Member of the Assembly Public Safety Committee today and ask them to oppose AB 828. Here is the contact information for your reference:
Assemblyman Phil Ting (D - San Francisco) - firstname.lastname@example.org
Assemblyman Kevin Mullin (D - San Mateo County) - email@example.com
Senator Scott Wiener (D - San Francisco) - firstname.lastname@example.org
Assembly Public Safety Committee
Reginald Byron Jones-Sawyer, Sr (D - Los Angeles) - assemblymember.jones- email@example.com
Tom Lackey (R - Palmdale) - firstname.lastname@example.org
Rebecca Bauer-Kahan (D - San Ramon) - email@example.com
Tyler Diep (R - Huntington Beach) - firstname.lastname@example.org
Sydney Kamlager (D - Culver City) - email@example.com
Bill Quirk (D - Hawyard) - firstname.lastname@example.org
Miguel Santiago (D - Los Angeles) - email@example.com
Buffy Wicks (D - Oakland) - firstname.lastname@example.org
In addition, last Monday, the California Judicial Council, the policy-making body of the California courts, made all evictions illegal - regardless of cause - for 90 days after the COVID-19 Shelter-In-Place Order is lifted.
Here is an article from last Tuesday, April 7, that explains the 90-day ban on all evictions, regardless of cause.
SAVE THE DATE: Remodeling Seminar (May 13th) and 1031 Exchanges (June 17th)
Be sure to SAVE THE DATE for our upcoming seminars:
Tips & Trends in Remodeling – Wednesday, May 13, 2020
1031 Exchanges – Wednesday, June 17, 2020
More information to follow, as we may be holding these virtually via Zoom depending on the coronavirus situation. These will most likely be held in the evening around 6 or 6:30pm.
Be sure to check out our Youtube page for recordings of our past seminars!