DECEMBER HOUSING MARKET ENDS 2020 ON HIGH NOTE

Posted by Rick Griffin on Jan 15, 2021 4:08:22 PM

Voice of Real Estate - November

Although 2020 will be remembered as a surreal year of setbacks and hardships when a brutal pandemic changed the world amid government-imposed lockdowns, it was a terrific final month on the calendar for California’s housing market.

According to the most recent monthly home sales and price report from the California Association of REALTORS® (C.A.R.), released Friday, the state’s housing market closed out 2020 on a high note with solid home sales in December, plus a record-high median home price for the fifth time in the year.

December 2020’s statewide sales total exceeded the 500,000-units benchmark for the second month in a row. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 509,750 units in December 2020. It was an increase of 0.2 percent from 508,820 in November 2020, and 28 percent higher from December 2019, when 393,370 homes were sold on an annualized basis.

The year-over-year, double-digit sales gain marked the fifth consecutive month and the largest yearly gain since May 2009.

For the 2020 year, annual home sales rose to a preliminary 411,870 closed escrow sales in California, up 3.5 percent from 2019’s pace of 397,960.

Meanwhile, California’s median home price set another record in December 2020, after dipping below the $700,000 benchmark the previous month. The statewide median home price rose 2.7 percent on a month-to-month basis to $717,930 in December 2020, up from $698,890 in November 2020. Home prices continued to gain on a year-over-year basis with the statewide median price surging 16.8 percent from $614,880 recorded in December 2019.

The double-digit increase in a year-over-year comparison was the fifth in a row, and the month-to-month gain was higher than the long-run average of 0.8 percent observed between 1979 and 2019.

For the 2020 year, the statewide median home price was $659,380, an increase of 11.3 percent from a revised $592,230 in 2019.

In San Diego County, December 2020 home sales were 4.4 percent higher compared to November 2020 and 30.3 percent higher than in December 2019.

The median home price for a single-family detached home in San Diego County dropped slightly in December 2020 to $730,000, compared to $740,000 in November 2020, a 1.4 percent decrease, but a 11.5 percent increase from December 2019’s figure of $655,000.

December 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)
December 2020 County Sales and Price Activity

“It’s a testament to the strength of the market that even after the pandemic effectively shut down the spring home-buying season in 2020, the market still was able to recover the substantial sales lost in the first half of the year and even top 2019’s levels,” said C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. “With mortgage rates expected to stay near the lowest in history, demand for homeownership will continue to be strong, so home sales should remain elevated into the first half of 2021, as motivated buyers take advantage of the increased purchasing power.”

“Home prices, which usually peak during the summer, were unseasonably strong in December,” said C.A.R. Vice President and Chief Economist Jordan Levine. “The imbalance between supply and demand continues to fuel home price gains as would-be home sellers remain reluctant to list their homes during the pandemic, contributing to a more-than-40-percent year-over-year decline in active listings for the seventh straight month.”

Perhaps due to increasing home prices, more consumers said it is a good time to sell, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in early January, the poll found that 59 percent of consumers said it is a good time to sell, up from 55 percent a month ago, and up from 56 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; one-fourth of the consumers who responded to the poll believed that now is a good time to buy a home, unchanged from last year.

Other key points from C.A.R.’s December 2020 resale housing report included:

-- Home sales from a regional perspective increased by double-digits in all major regions in December 2020, with a year-over-year gain of at least 20 percent in nearly every region. The San Francisco Bay Area remained on top with the highest gain of 40.2 percent over last year, followed by Southern California (31.4 percent), the Far North (30.8 percent) and the Central Valley (22.2 percent).

-- Median home prices from a regional perspective also posted increases in December 2020 by more than 10 percent in year-over-year comparisons. The Central Coast region had the largest year-over-year price increase, gaining 17.9 percent from a year ago. The San Francisco Bay Area had the second largest increase of 16.4 percent, followed by the Central Valley (15.5 percent), the Far North (15.2 percent) and Southern California (13.0 percent).

-- Active listings declined in December 2020 as expected during the holiday season. Active listings fell 47.1 percent in December 2020, compared to December 2019 from last year and continued to drop more than 40 percent on a year-over-year basis for the seventh straight month. On a month-to-month basis, for-sale properties dropped 18.6 percent in December 2020, higher than the five-year average of -14.0 percent, observed between 2015 and 2019.

-- The unsold inventory of available homes for sale dropped to 1.3 months in December 2020, matching the record-low set in 2004. Statewide inventory in November 2020 was 1.9 months. Inventory levels measured in months refers to the number it would take for the current supply of available homes on the market to sell-out given the current rate of sales. C.A.R. said the surge in the coronavirus cases played a role in the decrease in active listings as homeowners remain concerned about the worsening coronavirus pandemic situation.

December 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)
December 2020 County Unsold Inventory and Days on Market

-- In San Diego County, the inventory of available homes for sale in December 2020 was 1.2 months, compared to 1.6 months in November 2020, 1.8 months in October 2020 and 2.2 months in December 2019.

-- The median number of days it took to sell a California single-family home was 11 days in December 2020, compared to nine days in November 2020, 10 days in October 2020, 11 days in September 2020 and 28 days in December 2019. The nine-day November 2020 figure was the lowest ever recorded.

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was eight days in December 2020, compared to seven days in November, October and September 2020. The timeframe a year ago in December 2019 was 20 days. The December 2020 eight-day figure also compares to eight days in August 2020, 10 days in July 2020, 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020 and 23 days in January 2020.

-- With homebuying interest remaining high, the housing market in Californian’s mountain resort areas in December 2020 continued to exhibit strong gains compared to December 2019. Mammoth Lakes saw the biggest year-over-year sales increase in December 2020, surging 116.7 percent from the same month a year ago, followed by Lake Arrowhead (78.6 percent), Big Bear (54.1 percent) and South Lake Tahoe (31.7 percent).

-- Overall for the year 2020, home sales in mountain resort communities increased 92.7 percent in Big Bear, 51 percent in Lake Arrowhead, 49.5 percent in South Lake Tahoe and 37.5 percent in Mammoth Lake.

-- The 30-year, fixed-mortgage interest rate averaged 2.68 percent in December, down from 3.72 percent in December 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 2.79 percent, compared to 3.39 percent in December 2019.

In other recent real estate and economic news, according to news reports:

-- If a COVID-19 vaccine distribution proves successful, Fannie Mae economists are expecting the U.S. economy is poised for a strong year in 2021. Consumer spending is expected to accelerate during the spring, ultimately driving a considerably faster pace of growth in the second half of 2021.

-- The number of active listings in San Diego declined 20.6 percent in December 2020 in a year-over-year comparison, according to Realtor.com. Nationwide, the percentage decline for housing inventory in December was 39.6 percent year-over-year. The number of new listings can vary greatly from market to market. In December, San Jose, Calif. saw its new listing count climb by 123.8 percent and San Francisco-Oakland’s market increased by 98.9 percent.

-- The median monthly rent in San Diego was $2,355 in November 2020, which was a 3.8 percent year-over-year increase, according to Zillow. San Diego is the 8th most expensive city to rent an apartment, according to Zumper. Zumper’s report said the rental rate for a one-bedroom unit in San Diego grew 0.6 percent to $1,800 a month in December, while a two-bedroom's monthly rate increased 2.6 percent to $2,400.

-- Home prices continue to rise faster than wages across the nation, according to Attom Data Solutions. In the 2020 fourth quarter, home-ownership expenses consumed 29.6 percent of the average wages, compared to 26.4 percent in 4Q 2019. For the 4Q 2020 timeframe, homeownership costs exceeded an industry standard of 28 percent in 55 percent of U.S. counties, up from 43 percent in 2019 and 33 percent three years ago.

-- San Diego home prices are expected to rise by 8.3 percent in 2021, according to CoreLogic. The increase is the most of any other U.S. major city. The main reason is the lack of homes for sale will continue to push up prices. A secondary reason is income inequality. The pandemic has benefited high-wage workers who have been able to work from home, while low-wage workers lost income because their jobs were among the first shuttered during government-imposed shutdowns. Other cities with expected home price increases in 2021 include Miami (3.2 percent), Los Angeles (3.2 percent) and Washington, D.C. (2.9 percent), while the national average is expected to be around 2.5 percent. In contrast, Houston, hit hard by declines in the oil industry and the recent hurricane season, will see prices decrease 1.4 percent.

Topics: Brokers/Managers, Market Information

San Diego Tax Accessor Educates on Benefits of PROP. 19

Posted by Rick Griffin on Jan 8, 2021 5:05:56 PM

More than 100 PSAR members learned more about property tax benefits available to clients of REALTORS® from Proposition 19 during a Zoom meeting earlier this week with Taxpayer Advocate Jordan Marks of the San Diego County Accessor-Recorder-County Clerk (ARCC) Office.

Recorded Video of the Presentation

How-to-win 19 with Jordan Marks

 

Attachments from the presentation:

Prop. 19, approved by California voters in the recent November general election, offers significant benefits to homeowners and sellers. The ballot measure was endorsed by the California Association of REALTORS® (C.A.R.) and other business and community organizations because it will spur housing economic recovery.

Simply put, Prop. 19 expands the affordable housing tools by allowing senior homeowners over 55 years old, people with severe disabilities and victims of natural disasters or wildfires to keep their low tax base and move or rebuild anywhere statewide.

In addition, Prop. 19 addressed a tax loophole allowing families to pass their homes and affordable tax bases to their children, but no longer allowing them to be used for a commercial purpose.

However, Marks told PSAR members that it’s important to remember that some rules relating to Prop. 19 will change on Feb. 15 and April 1.

Before Feb. 15, in the case of transferring home ownership from parent to child or grandparent to grandchild, the law allows for unlimited transfer of assessed value on a primary resident with no requirement to live in the property and up to $1 million of assessed value on all non-primary residential properties.

After Feb. 15, the law changes with a limit of $1 million transfer of assessed value on a primary resident, plus a requirement to live in the property and no transfer of assessed value on any property not a primary resident.

Before April 1, for relocating homeowners over 55 years old, the current rules limit the senior exclusion from property tax reassessment to one time plus a requirement to live in the property.

After April 1, the senior exclusion from property tax assessment can be claimed for three times for any property in the state (but unlimited times for those whose homes were destroyed or substantially damaged by a wildfire or natural disaster). Filing for the exclusion must occur within two years from the date of the sale or purchase.Jordan Marks speaking on PROP 19

Marks, a longtime PSAR member, welcomes “Our office is here to be of service to PSAR members,” said Marks. “We’re here to serve your needs as a partner. We don’t close until you do, and you have our commitment to help you in your business.” calls and emails from PSAR members.

He can be reached at  Jordan.Marks@sdcounty.ca.gov. For emergency assistance you can reach Jordan on his cell phone is (619) 372-0226.The website for the ARCC office is www.SDARCC.com.

 

Topics: Brokers/Managers, Market Information, Industry

HOMEBUYER BEHAVIOR SURVEY REVEALS WHAT CLIENTS ARE THINKING

Posted by Rick Griffin on Dec 31, 2020 10:45:00 AM

blogbanner_210102_411-1It’s no surprise that Merriam-Webster, the dictionary publisher, selected “pandemic” as its 2020 Word of the Year. The COVID-19 coronavirus pandemic changed life in ways that none of us could have imagined in 2019. It was on every TV channel, every news website and part of every conversation. Everyone was impacted, including homebuyers and sellers.

Indeed, the pandemic even changed homebuyers’ housing preferences, according to the California Association of REALTORS’® (C.A.R.) Annual Housing Market Survey, which reveals homebuyers’ behavior throughout the 2020 year.

The recently-released survey found that more than two in five California REALTORS® (43 percent) saw a pandemic-related change in their buyers’ preferences in the property type they wanted to purchase in 2020.

In response to pandemic-related, government-imposed prolonged lockdowns and quarantines that forced homebound distance learning for school and working remotely for the job, the most frequent homebuyer requests included a bigger home (39 percent), a home with more rooms (35 percent), a home in a suburb rather than in an urban area (37 percent) and a home in a rural area rather than a city or suburb (26 percent). Not surprisingly, the survey also found 37 percent of homebuyers in 2020 were less concerned about the commute time to work.

The survey also showed a variety of interesting aspects of homebuyers’ behavior statewide in 2020.
For example:

-- The top three reasons homebuyers purchased a home in 2020 included tired of renting (25 percent), desire for a larger home (20 percent) and desire for a better location (19 percent). For first-time homebuyers, tired of renting was the most popular reason at 54 percent. For repeat homebuyers, 25 percent said their primary reason for buying in 2020 was a desire for a larger home, an increase from 21 percent in 2019. Respondents agreed that low mortgage rates made buying a home makes more sense than renting for many first-timers.

-- The average number of multiple offers made on available homes for sale in 2020 reached its highest level since 2013. Nearly two-thirds (59.2 percent) of homes sold in 2020 received multiple offers at an average of 4.8 offers per home. In 2019, less than half (47.7 percent) of homes sold received multiple offers with an average of 3.9 offers on each home. Homes priced between $500,000 and $1 million received the most multiple offers in 2020 with 67.3 percent receiving an average of six offers.

-- The real estate housing market in 2020 was one of the most competitive markets in decades. A large share of properties sold above their asking price in 2020. Approximately 35 percent of homebuyers paid more than what home sellers asked for in 2020, compared to a quarter (26.7 percent) in 2019. The 2020 figure was the highest in seven years and is 16 percent higher than the long-run average. Homes in the $500,000-to-$1 million price range sold the fastest with an average of 10 days.

-- More people purchased vacation and second homes in 2020, the highest percentage since 2016. Vacation homes represented 6 percent share of total sales, compared to 4 percent in 2019. The flexibility to work from home, plus a desire to move away from metropolitan areas, resulted in higher housing demand in resort areas. Overall, home sales in California resort areas outperformed other housing sectors in the state in 2020. In addition, the share of investor buyers of rental properties was 8.1 percent, the lowest since 2001, due to uncertainty over eviction moratoriums.

-- Home sellers in 2020 pocketed a gain of roughly $210,000 from their home sale, which was about 63 percent higher than the price they paid for their home. Not surprisingly, the longer a homeowner lives in their home will increase the profit they can expect when they sell. Sellers who lived in their homes for less than five years earned a 16 percent profit from their sale in 2020, while those who lived in their home five or more years earned a 100 percent profit.

C.A.R. has conducted its Housing Market Survey annually since 1981.

Topics: Brokers/Managers, Market Information, Industry

LANDLORDS, TENANTS CAN BENEFIT FROM RENTAL RELIEF RESOURCES

Posted by Rick Griffin on Dec 29, 2020 12:58:45 PM

RENTAL RELIEF RESOURCES

Landlords and tenants alike have been hit hard with economic challenges resulting from the Covid-19 pandemic. Fortunately, several local cities and nonprofits who administer federal government programs on behalf of cities, have made rental assistance resources available to both landlords and tenants who have suffered Coved-related economic losses. PSAR members active in their communities should be aware of these following landlord/tenant resources:San Diego-- In San Diego, With funding from the federal government, the San Diego Housing Commission (SDHC) helps more than 16,000 households with low income pay their rent in the City of San Diego. Through this rental assistance program, SDHC made payments totaling more than $166 million to more than 5,800 participating landlords on behalf of low-income families during Fiscal Year 2020 (July 1, 2019 – June 30, 2020).

In 2019, SDHC expanded its focus on landlord outreach and engagement with the creation of the Landlord Services Unit. This unit is composed of seven specialized staff who provide quality customer service to landlords and tenants participating in the Section 8 Housing Choice Voucher rental assistance program. For more details about SDHC rental assistance resources for properties located within the City of San Diego, contact SDHC, www.sdhc.org or call 619-578-7131.

The San Diego Housing Commission (SDHC)

The SDHC Landlord Services Unit manages the agencies Landlord Partnership Program (LPP), which provides financial and support incentives to landlords who rent to families who receive federal rental assistance through the Section 8 Housing Choice Voucher program within the San Diego city limits (92037 and ZIP codes that begin with “921”, except for 92118). Landlords who participate in the LPP may be eligible to receive up to $500 for each rental unit rented to a Section 8 household and up to $3,000 to help cover repair expenses in excess of normal wear and tear and rent due that exceeds the security deposit following tenant move-out. For more information about LPP, please visit https://www.sdhc.org/doing-business-with-us/landlords/landlord-partnership-program/

SDHC’s services to landlords include consistent and on-time rent payment, access to an online landlord portal, and enhanced customer service.

national City

-- In National City, South Bay Community Services (SBCS) launched a tenant-based rental assistance program in National City. The City of National City has reached out to PSAR seeking assistance in contacting property managers and management companies who have tenants with past due rent.

SBCS is now accepting applications for a COVID-19 Tenant Based Rental Assistance Program funded by the City of National City. This program will assist low-income families in who have suffered a loss in income or are unable to pay their past due rent because of Covid-related financial issues. You can help by notifying tenants that this rental assistance is available. Applications can be found at https://southbaycommunityservices.org/national-city-rental-assistance/. Application assistance is available in person at the National City Family Resource Center (304 W. 18th Street, National City), at  rentalassistance@csbcs.org, or by phone: (619) 336-8360
Chula Vista-- In Chula Vista, the city is developing its long-term strategic plan for housing and determining housing dollars usage, according to the city website. Earlier this year, the  Chula Vista City Council enacted a temporary eviction moratorium in response to Covid-19. The city’s moratorium, which provided eviction protection for residents and commercial tenants, was superseded and replaced with AB 3088, known as “The Tenant, Homeowner and Small Landlord Relief and Stabilization Act of 2020.” The law signed by Gov. Newsom on Aug. 31, protects renters, homeowners and small landlords through January 2021.

Chula Vista used a portion of the $3.3 million it received from the CARES Act to lend financial support to South Bay Community Services (SBCS), who assists residents with rent payments. An additional CARES Act allotment arrived Nov. 1, allowing SBCS to accept additional applications for rental assistance from those suffering economically from Covid-19 effects.El Cajon-- In El Cajon, several nonprofits who have contracts with the city are assisting El Cajon residents with rent payments. The nonprofits include Home Start (619-430-0032), Interfaith Shelter Network (619-702-5399) CSA San Diego County (619-444-5700). Earlier this year, the El Cajon City Council allocated $800,000 in special block grant funding to those impacted financially by the Covid pandemic.la Mesa-- In La Mesa, Home Start is overseeing a Rental Assistance Program. Applicants may qualify for up to three months of past-due rent assistance for those who have experienced job loss and/or other Covid-related financial challenges. Earlier this year, the La Mesa City Council approved $1.8 million in Coronavirus Aid Relief and Economic Security Act funding to businesses and residents. A portion of that money, roughly $600,000, was allocated to rental assistance to help people avoid eviction and homelessness. 
lemon Gove-- In Lemon Grove, Home Start is supporting the city’s rental assistance efforts. The Lemon Grove City Council allocated $100,000 of $162,371 in Federal Coronavirus Aid, Relief, and Economic Security Act funds to Home Start to help individuals needing hotel vouchers, transportation, reunification efforts and emergency items such as food, blankets and diapers. Funds are also available to those who need rental and utility assistance.

_______________________

SouthBay community Services                        Home-Start

Topics: Brokers/Managers, Market Information

PSAR’S EDITION OF `TWAS THE NIGHT BEFORE CHRISTMAS

Posted by Rick Griffin on Dec 24, 2020 10:00:00 AM

Wishing you Happy Holidays from PSAR.

‘Twas the night before Christmas, and all through the house,
not this REALTOR® was working, not even my spouse.
The escrows had closed, the documents signed with extreme care,
and commission checks had been deposited without a second to spare.

The “For Sales” signs and brochures were nestled in the back of my shed,
while visions of day spa visits danced in my head.
I was chill-laxin’ in my PJs after finishing my favorite Starbucks frap,
preparing my brain for a long winter’s nap.

The wintertime moon was bright in its glow,
illuminating only a couple of lockboxes below.
When all of a sudden, my wondering eyes saw a new text,
another local REALTOR®’s name appeared and you won’t believe what happened next.

The text message was lively and brief,
it told of an all cash-offer that was way beyond belief.
More rapid than eagles my thoughts raced through my mind,
this amazing offer was one of a kind.

No contingencies, no home inspection, not even an appraiser,
How grateful I was, how the buyers did me a favor.
Before I knew it, my cell phone began to ring,
I sprung from my couch and my heart began to sing.

I leaped in my car and drove to the meeting,
but I first brushed my teeth since holiday treats I had been eating.
From the top of the porch to the retaining wall,
this property met all Covid-protocol, thanks to lots of Lysol.

The documents were many, measuring from my head to my foot,
there were certainly enough of them to cause a cardiac caput.
But I knew exactly what to do, how to anticipate any impasses,
because I had attended many PSAR educational classes.

Now Paragon, now LionDesk, giddy-up HomeSnap, Matrix and CRMLS,
just one more transaction to close, now won’t it be bliss.
The transaction closed so easy and quick,
I knew in a moment it must be because of St. Nick.

The buyers sprung to the front door, now they were living the dream,
For REALTORS®, it’s always a joy to see homebuyers’ faces beam.
And I heard them exclaim, as they smiled with delight,
“Merry Christmas to all, and to all a good night.”

Topics: Market Information, Marketing

November Home Sales Statewide Highest in 15 years

Posted by Rick Griffin on Dec 18, 2020 4:15:00 PM

Voice of Real Estate - November

California’s housing market remained red hot in November 2020 with statewide home sales reaching the highest level in 15 years. Record-low mortgage rates and flexibility to work from home has driven home-buying interest to levels not seen since the last decade, according to the California Association of REALTORS® (C.A.R.).

November 2020’s statewide sales total broke the 500,000-units benchmark for the first time since January 2009.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 508,820 for November 2020. It was an increase of 5 percent from 484,510 homes in October, and 26.3 percent higher from November 2019, when 402,880 homes were sold.

The year-over-year, double-digit home sales gain recorded in November was the fourth consecutive month and the largest increase over a year’s time since May 2009.

Meanwhile, California’s median home price for November 2020 dipped slightly after breaking the $700,000 benchmark over the past three months. The statewide median price dropped to $699,000 in November 2020, down 1.7 percent from $711,300 in October 2020.

However, home prices continued to gain on a year-over-year basis with the statewide median price surging 18.5 percent from $589,770 recorded in November 2019. The double-digit increase from 2019 was the fourth month in a row and the highest 12-month gain since February 2014. The gain was also higher than the six-month average of 9.7 percent observed between May 2020 and October 2020. 

November 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)
November 2020 County Sales and Price Activity

In San Diego County, November 2020 home sales decreased 7.8 percent, compared to October 2020, but increased 23.2 percent higher than in November 2019.

Similarly, the median home price for a single-family home in San Diego County dropped slightly in November 2020 to $740,000, a 1.2 percent decrease from October 2020’s figure of $749,000, but a 12.3 percent increase from November 2019’s figure of $659,000.

“Home-buying interest is at levels that we have not seen for years, setting the stage for a stronger-than-expected comeback that fully recovered all the sales that the market lost in the first half of the year due to the pandemic,” said 2021 C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. “Housing supply remains an issue, however, as we will likely to see a shortage of homes for sale in the near term, which will put upward pressure on prices and dampen affordability for those who haven’t been able to take advantage of low rates.”

“California’s housing market continues to be the bright spot in the economy, but the direction and pace of the recovery will hinge on the coronavirus pandemic and the distribution of the vaccine in the coming months,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The rise in COVID-19 cases and tighter constraints on economic activity recently imposed will likely have implications for the housing market as renters and homeowners face adverse impacts to their incomes, which is why Congress should pass additional relief for renters, homeowners, and workers as soon as possible.”

Perhaps due to rising cases of the Coronavirus, fewer consumers said it is a good time to sell in December, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in earlier this month, the poll found that 55 percent of consumers said it is a good time to sell, down from 59 percent a month ago, but up from 51 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; just over one-fourth (27 percent) of the consumers who responded to the poll believed that now is a good time to buy a home, up from last year, when 24 percent said it was a good time to buy a home.

Even with low inventory levels, the coronavirus pandemic has increased the demand for spacious, multi-functional homes as more homeowner families are dealing with homebound distance learning for school and working remotely for the job.

Other key points from C.A.R.’s November 2020 resale housing report included:

-- Home sales from a regional perspective continued to increase in November 2020 by double-digits in year-over-year comparisons for most California regions. The San Francisco Bay Area had the highest gain of 34.4 percent over last year, followed by the Central Coast (33.4 percent), Southern California (19.1 percent) and the Central Valley (18.3 percent).

-- Median home prices from a regional perspective also posted double-digit increases in November 2020 in year-over-year comparisons. The San Francisco Bay Area median price remained at its record high in November, rising 18.9 percent from last year. The Central Coast region had the second largest median price increase at 18.7 percent, followed by the Central Valley (17.6 percent), Southern California (14.4 percent), and the Far North (13.6 percent).

-- With a resurgence in Covid-19 cases in recent weeks and the market entering the traditional holiday season, active listings declined from the prior month as expected, contributing to a substantial decline in inventory. Active listings fell 46.6 percent from last year and continued to drop more than 40 percent on a year-over-year basis for the sixth straight month.

-- The unsold inventory of available homes for sale fell sharply from 3.1 months in November 2019 to 1.9 months in November 2020. Statewide inventory in October 2020 was 2.0 months. Inventory levels measured in months refers to the number it would take for the current supply of available homes on the market to sell-out given the current rate of sales.

November 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)
November 2020 County Unsold Inventory and Days on Market

-- In San Diego County, the inventory of available homes for sale in November 2020 was 1.6 months, compared to 1.8 months in October 2020 and 2.7 months in November 2019.

-- Active listings in all major California regions continued to decline in November 2020 in year-over-year comparisons. The Central Valley had the biggest year-over-year drop of 53.3 percent in November, followed by Southern California (49.0 percent), Central Coast (-46.3 percent), Far North (-40.1 percent), and the San Francisco Bay Area (-18.7 percent).

-- The median number of days it took to sell a California single-family home was nine days in November 2020, compared to 10 days in October 2020, 11 days in September 2020 and 25 days in November 2019. The nine-day November 2020 figure was the lowest ever recorded.

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was seven days in November 2020, which was the same number in October 2020 and September 2020. The timeframe a year ago in November 2019 was 17 days. The November 2020 seven-day figure compares to eight days in August 2020, 10 days in July 2020, 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020 and 23 days in January 2020.

-- The housing market in California’s mountain resort areas has generally outperformed the state during 2020’s first 11 months due to increased demand in second homes and vacation homes, as available supply continues to decline. In a comparison of home sales between November 2020 and November 2019, Mammoth Lakes saw a 400 percent increase, followed by South Lake Tahoe (81.4 percent), Big Bear (73.9 percent) and Lake Arrowhead (58.1 percent). Similarly, median home prices jumped in Big Bear by 40.8 percent from last year, followed by South Lake Tahoe (39.6 percent) and Lake Arrowhead (32.0 percent). In contrast, home prices declined by 2.5 percent Mammoth Lakes in November 2020, compared to 2019.

-- The 30-year, fixed-mortgage interest rate averaged 2.77 percent in November, down from 3.70 percent in November 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.0 percent, compared to 3.41 percent in November 2019.

In other recent real estate and economic news, according to news reports:

-- The average rate for a 30-year, fixed-rate mortgage continued to plummet, dropping to 2.67 percent in the second week of December. It was the lowest rate since Freddie Mac began tracking the data in 1971. A year ago at this time, it averaged 3.73 percent.

-- Mortgage applications increased 1.1 percent for the week ending Dec. 11, according to the Mortgage Bankers Association’s week-over-week comparison report. Refinance applications also increased 1 percent during the same week and 105 percent in a year-over-year comparison.

-- CoreLogic said San Diego County median home price in November remained unchanged from October and September at $650,000, which is 9.3 percent higher than a year ago. It was the second consecutive time for no monthly price increase since May. The price represents all homes, including single-family, condos and townhomes.

-- A group of top real estate economists speaking at a forecast forum hosted by the National Association of Real Estate Editors recently predicted that home prices will continue to rise in 2021 fueled by low mortgage interest rates and lack of homes for sale.

-- Californians are pessimistic about their economic future with 73 percent of survey respondents in San Diego and Orange counties anticipating bad financial times during the next 12 months, according to a report released in early December by the Public Policy Institute of California. The survey of 2,325 Californians conducted after the November election showed the statewide average of pessimism at 68 percent.

-- Realtor.com is predicting prices for existing single-family homes will continue to climb in 2021, making affordability a continued problem. San Diego is projected for an 11.3 percent year-over-year increase in existing home sales and a 5.5 percent rise in home prices. Realtor.com also expects mortgage rates to climb from 3 percent at the beginning of 2021 to 3.4 percent by year’s end. Realtor.com admits there are numerous wildcards that could shake up the housing market, including what happens with Covid-19 vaccines or more government-imposed shutdowns.

-- Rental applications in San Diego County were lower by about 7 percent for the third quarter in a year-over-year comparison as many grown children moved back in with their parents, or doubled up in apartments to make their dollars go further, according to the data firm Rent Café. The report said in 18 of the 30 largest U.S. cities, including San Diego, more renters left than moved into rental properties. The firm also said apartment rents decreased in 2020 in the nation’s top 10 most expensive cities.

Topics: Brokers/Managers, Market Information

MORE HOUSING OPTIONS, TAX RELIEF, ARE BENEFITS OF PROP. 19

Posted by Rick Griffin on Dec 11, 2020 4:36:18 PM

Benefits of Prop. 19

All PSAR members should be aware of the significant benefits available to homeowners as a result of the recent passage of Proposition 19 in the November general election.

Approved by California voters by a 51.1 percent to 48.9 percent margin, Prop. 19 is considered by many as a landmark property tax exemption law that is now part of the California constitution. Thanks to more than 8.5 million voters who marked their ballots “yes” for Prop. 19, homeowners will be able to take advantage of tax relief while providing much-needed revenue for schools, fire districts, cities and counties as they face budget shortfalls due to the harmful economic impact of Covid-19.

Prop. 19 was endorsed by C.A.R. and many others because it will spur housing economic recovery.

Prop. 19 limits property tax increases on primary residences for family transfers, homeowners over 55 years old, people with severe disabilities and victims of natural disasters or wildfires by removing unfair location and price restrictions.

Prop. 19 also limits property tax increases on family homes used as a primary residence by protecting the right of parents and grandparents to pass on their family home to their children and grandchildren for continued use as a primary residence.

Overall, Prop. 19 will open up tens of thousands of housing opportunities, making homes more readily available for first-time homeowners, families and Californians throughout the state.

There are two major benefits of Prop. 19, both dealing with what’s called “tax basis portability,” which means homeowners can enjoy an exemption from a reassessment of property taxes when they move to a new residence.

New Rules for Homeowners Over 55 Years of Age

With the passage of Prop. 19, a homeowner who is over 55 years of age, severely disabled or whose home has been substantially damaged by wildfire or natural disaster may transfer the taxable value of their primary residence to a replacement primary residence anywhere in the state within two years of the sale and up to three times, regardless of the value of the replacement primary residence.

According to the California Association of REALTORS® (C.A.R.), Prop.19 makes three significant changes to the portability of one’s tax basis from the sale of a principal residence to a replacement principal residence.

First, Prop. 19 allows a seller of a principal residence to transfer the tax basis of that principal residence to the purchase of a replacement principal residence anywhere in the State of California. Under prior law, the seller was limited to transfers either within the same county (under Proposition 60) or between a limited number of counties that specifically permitted such taxable value transfers (under Proposition 90).

Second, Prop. 19 allows the transfer of the tax basis of the sold principal residence to the replacement principal residence regardless of value with certain adjustments to the tax basis if the replacement principal property is of “greater value” than the sold principal residence. Under prior law, only transfers of “equal or lesser value” were eligible for the exemption.

Third, Prop.19 permits such transfers up to three times (but unlimited for those whose homes were destroyed or substantially damaged by fire). Prior law allowed such transfers only one time

There still remains some questions about the timing of tax benefits under Prop. 19 applying to transactions and sales before April 1, 2021.

According a statement from C.A.R., “Although we believe that the tax benefits under Proposition 19 apply to transactions where either the sale or purchase of a primary residence takes place before April 1, 2021, as long as the subsequent sale or purchase takes place within two years and on or after April 1, 2021, others have taken the position that both the sale and purchase must occur on or after April 1, 2021. C.A.R. will seek official clarification of this issue.”

New Rules on Intergenerational Family Transfers After Feb. 1, 2020

Prop. 19 also changes the rules on exemptions from reassessment for intergenerational transfers by limiting the exemption to the transfer of a primary residence to a child (or grandchild) only when the property continues to be used as a family home by the child (or grandchild). However, if the divergence between the taxable value and the actual value is too great, a partial increase in the new taxable value will be imposed.

Prop. 19 also includes provisions that would allow the transfer of a family farm to retain its taxable value.

These new rules apply to any purchase or transfer beginning Feb. 16, 2021.

Here are a few questions-and-answers relating to intergenerational family transfers and family farms:

Q: If I pass my principal residence on to my children or grandchildren, will the property be reassessed?

A: So long as the property continues to be used as a family home (primary residence), and the transferee claims the homeowner exemption, the property tax basis will remain the same, subject to some upward adjustments if the property value, at the time of transfer, is more than $1M over the original tax basis.

____________________________

Q: If the property is transferred to a child or grandchild and used as a family home, what will the new tax basis be if at the time of transfer the property value is less than $1M over the original tax basis?

A: The new tax basis will remain the same as the original tax basis. For example, if the original tax basis was, let's say, $500,000, and at the time of transfer the property is valued at $1.2 M, then the tax basis will remain at $500,000. This is because $1.2M is not more than $1M over the original taxable basis.

____________________________

Q: How are family farms included in Proposition 19?

A: Family farms have the same exemptions as family homes (principal residences). “Family Farm” means any real property under cultivation or which is being used for pasture, or grazing, or that is used to produce any agricultural commodity. It does not require the transferee to live in the property as a principal residence.

PSAR members who have additional questions about the benefits of Prop. 19 are encouraged to contact either C.A.R. or the office of San Diego County Assessor-Recorder-County Clerk (ARCC) Ernest J. Dronenburg, Jr. The ARCC office oversees assessing the value of real estate and personal property (property taxes constitute the largest share of revenue for the county). The office also involves registering business names and issuing marriage licenses, birth and death certificates. 

For assistance from the Assessor’s office please contact Taxpayer Advocate Jordan Marks. Jordan is a PSAR member and welcomes calls and emails from PSAR members. He can be reached at Jordan.Marks@sdcounty.ca.gov. For emergency assistance you can reach Jordan on his cell phone is (619) 372-0226.The website for the ARCC office is www.SDARCC.com.

 

Topics: Brokers/Managers, Market Information

PSAR COMMENTS ON DOJ, NAR SETTLEMENT ON ALLEGED ANTITRUST VIOLATIONS

Posted by Rick Griffin on Dec 4, 2020 4:01:46 PM

Department of Justice News

You may have seen the recent headlines about the U.S. Department of Justice (DOJ) having filed an antitrust lawsuit alleging the National Association of REALTORS® (NAR) maintained illegal, anticompetitive restraints on REALTOR® competition, including business practices and policies that prohibited multiple-listing services from disclosing commissions for buyers’ agents to prospective buyers.

The Justice Department accused NAR, the real estate industry’s largest trade group with more than 1.4 million members and 1,400 local associations, with restraining free trade under the Sherman Act, thus creating an environment in which there was little visibility for homebuyers to learn about the commission a buyer’s agent would earn.

This announced action sounds alarming.

However, with a look past the headlines, you will see that the current settlement between the DOJ and NAR, which was announced at the same time as the antitrust complaint filing, means that future outcomes are expected to trend positive for our real estate profession.

According to NAR, who maintained that there was no wrongdoing committed, the settlement requires the following changes in the way in which REALTORS® compete:

 #1. Public display of buyer broker compensation.
“The amount of compensation offered to a buyer’s agent for each MLS listing will be made publicly available. Publicly accessible MLS data feeds will include offers of compensation, and buyers' agents will have an affirmative obligation to provide such information to their clients for homes of interest.”

#2. Consumer access to all properties that fit their criteria.
“MLSs and brokerages, as always, must provide consumers all properties that fit their criteria regardless of compensation offered or the name of the listing brokerage.”

#3. Forbidding buyers’ agents from representing services as “free.”
“While NAR has long encouraged buyers' agents to explain how they expect to be paid, typically through offers of cooperative compensation from sellers' agents, there will be a rule that more definitively states that buyers' agents cannot represent that their services are free to clients.”

#4. Lockboxes and licensed agents.
“With the seller's prior approval, a licensed real estate agent will have access to the lockboxes of properties listed on an MLS even if the agent does not subscribe to the MLS.”

“For the most part, these changes more explicitly state what already is in the spirit and intent of the NAR Code of Ethics and MLS policies regarding providing information about commissions and MLS participation,” said Robert Cromer, 2020 PSAR President. “PSAR has long sought to ensure fairness, transparency and a competitive real estate market for home buyers and sellers. We have always been committed to an MLS system that puts consumers first and benefits homebuyers, sellers and brokerages.”

According to a statement from Makan Delrahim, Assistant Attorney General of the Justice Department’s Antitrust Division, “Buying a home is one of life’s biggest and most important financial decisions. Home buyers and sellers should be aware of all the broker fees they are paying. Today’s settlement prevents traditional brokers from impeding competition, including by internet-based methods of home buying and selling, by providing greater transparency to consumers about broker fees. This will increase price competition among brokers and lead to better quality of services for American home buyers and sellers.”

The California Regional Multiple Listing Service (CRMLS) said in a statement, “CRMLS plans to fully comply with the terms of this government-mandated agreement, once finalized. Visit www.go.CRMLS.org/NewRules to keep up to date on how CRMLS will implement these rules.”

Inman News Service posted recent news articles covering possible disruptive consequences from the DOJ lawsuit and proposed settlement. These consequences include:

-- Commissions may be squeezed since consumers will have more visibility into options when choosing which real estate brokerage or agent with whom to work.

-- MLSs can no longer hide commission rates.

-- REALTORS® will not be allowed to set a filter in the MLS for homes for potential buyers based on commission levels.

-- Buyers’ agents cannot make misrepresented statements, for example, “My services are free” (because they aren’t free if the seller pays the commission).

-- A licensed agent cannot be denied lockbox access on the basis of not being an MLS member.

The DOJ-NAR settlement is not yet final as the DOJ is still receiving public input. A DOJ statement said comments regarding the proposed final judgment may be submitted to Chief, Office of Decree Enforcement and Compliance, Antitrust Division, U.S. Department of Justice, 950 Pennsylvania Ave., N.W., Washington, D.C., 20530. The DOJ also stated, “At the conclusion of the 60-day comment period, the court may enter the proposed final judgment upon a finding that it serves the public interest.”

Topics: Brokers/Managers, Market Information

zillow the brokerage?

Posted by Richard D'Ascoli on Nov 30, 2020 5:13:22 PM

Zillow appears to be in the process of becoming a REALTOR brokerage. The story has been evolving during 2020.  As Zillow transitions from being a listing distribution or advertising platform to a REALTOR (member of NAR, CAR and also some local local Associations,) they will receive the same rights and benefits as other brokerages.

Among these rights is the right to access IDX (Internet Data Exchange) feeds.  

Today, Zillow receives listing data from brokers instructing CRMLS to provide their listing information through a specifically tailored listing distribution feed called a syndication feed. Once Zillow becomes a brokerage in the CRMLS area, they will access listings through the same feeds that brokers receive on their web pages today.

What could this change mean for agents and brokers?

Listing distribution control changes: 
The CRMLS system currently permits brokers to control which listing distribution partners receive their listings, including Realtor.com, Homes.com, Apartments.com, and Zillow. Those options will soon change. As Zillow will be a participating brokerage instead of a listing distribution partner, brokers will not be able to specifically exclude Zillow from receiving their listings. 

Changes to how listings display on Zillow
Because of the switch to IDX feeds, listing data will display on Zillow differently than it does today. Full details are still forthcoming. CRMLS shared, however, that their IDX licensing agreement does not permit advertising in the way you may be used to on Zillow.  Zillow will update its current listing displays to comply with CRMLS IDX standards, the same as any brokerage that uses that same IDX listing data feed. IDX rules can be found in section 12.16 of the CRMLS Rules and Regulations.

Changes to rental listing search on Zillow
You may have heard rumors that Zillow plans to start charging fees for rental listings. (In fact, per Zillow, Zillow has charged fees for rental listings for “about a year,” except for MLS-sourced listings.) As outlined above, Zillow is also moving to IDX feeds. It’s reasonable to wonder how these two things can coexist.

CRMLS reached out to Zillow and confirmed that Zillow will no longer combine rental and for-sale properties in the same search. In other words, their IDX feed for MLS-sourced for sale listings will not comingle with their feeds for rental listings.

Per Zillow, “None of the fees… will be implemented until Jan 2021 and will not be on any listings under [Zillow’s] current syndication license.”

Zillow continued: “Under IDX, [Zillow] will not be pulling or displaying any [rental] listings under the IDX license. The rentals search will be a completely separate search experience on the site.”

CRMLS and Zillow

Topics: Brokers/Managers, CRMLS, Market Information, Technology, Industry

PREDICTIONS FOR 2021 HOUSING MARKET

Posted by Rick Griffin on Nov 27, 2020 3:00:00 PM

2021 Housing Market

2020 has certainly been an unusual and turbulent year complete with some major challenges. Life was dramatically upended early on with the pandemic, economic lockdowns, homeschooling, politics and natural disasters. These and more unsettling events in 2020 hit many people hard, leaving them with a sense of chaos, stress and uncertainty.

With that as a backdrop, heading in to 2021 what can real estate professionals expect? Economist Steven Thomas, publisher of “Reports on Housing,” a newsletter covering the regional real estate market, recently delivered his 2021 Southern California Housing Market Forecast to PSAR members.

Thomas, with a degree in Quantitative Economics and Decision Sciences from the University of California San Diego, is a California real estate broker with decades of real estate experience. He has been quoted in news stories published by the Orange County Register, Los Angeles Times, San Diego Union-Tribune, The Wall Street Journal, Fortune, USA Today, Bloomberg, ABC, CBS and NBC television, Cox Cable Television, KNX AM-1070 News Radio, KFI AM-640 Radio, blogs and Internet news sites. 
Steven Thomas Reports On
Thomas noted how quickly the economy rebounded following the Covid-caused economic shutdowns that began in March 2020. Thomas observed that the 2020 housing market is ending the year in much better shape than anyone expected.

Thomas commented that in 2020, it only took four months before the unemployment rate reached 9 percent month By comparison, the amount of time needed to reach 9 percent unemployment was 19 months during the 1980s oil recession, 30 months during the Great Recession (December 2007 to June 2009) and 108 months during the Great Depression (August 1929 to March 1933).

The U.S. Commerce Department reported the nation’s third-quarter domestic product (GNP), a measure of the total goods and services produced in the July-to-September 2020 period, grew at a 33.1 percent annualized rate. That’s the fastest growth ever for the U.S. economy and is all the more remarkable as it follows the worst quarter in history when the economy plunged 31.4 percent. The previous GNP quarterly growth record of 16.7 percent was set following World War II in the first quarter of 1950.

Thomas believes that in 2021, the California housing market will continue to rebound from this year’s economic shock, thanks to rock-bottom mortgage rates, a rebounding GNP and strong homeownership demand. As a result of these factors, financially eligible buyers will be motivated to enter the market.

Based on November 2020 statistics, Thomas said buyer demand in San Diego County was at its strongest level since 2012.

Steven Thomas

Thomas illustrated buyer demand with this imaginary conversation:

-- Potential buyer: “Hi, I’m looking to buy a house. How’s the market?”
-- REALTOR®: “Remember back in May when you were looking for toilet paper? Yeah, just like that.”

However, Thomas said that the most likely scenario is that the lingering uncertainty about the economy, a volatile stock market and a shortage of homes for sale will keep the 2021 housing market in check and prevent the overall economy from returning to full strength. That model also assumes no major resurgence of Covid cases next year.

While the beginning of the year might be slow for some REALTORS®, housing market conditions will show a steady improvement throughout 2021. Thomas expects a steady, if not spectacular, rise in home prices and sales.

Thomas believes housing inventory levels and prices will appreciate 4 to 6 percent in 2021. Closed sales in 2021 will be higher by 4 percent to 8 percent, compared with 2020.

He also predicts a slight increase in the number of distressed properties, but not a wave of foreclosures. The 2021 market will herald the return of sellers who have unrealistic expectations and overprice their homes.

According to Thomas, traditional home buying and selling seasons, prevalent in past decades, may be changed forever because of the market effects of Covid-19. The normal Fall cool down occurs as students return to school. However, start-of-school market timelines are no longer applicable with delayed reopening of in-person school attendance. As a result, sellers will continue to receive top dollar for their homes outside the prime selling season in 2021. Homes will continue to sell quickly and buyer demand will not taper-off in the foreseeable future.

Thomas said current expected market time levels in San Diego County are at their lowest since 2013.

He said recent statistics show the median number of days an existing, single-family home remains unsold on the market varies throughout San Diego County: Chula Vista, 12; La Mesa, 17; Lemon Grove, 19; El Cajon, 27; National City, 27; Bonita, 30; Downtown, 132; Coronado, 143. He also said lower-priced homes are selling faster (28 days under $500K), compared to higher priced homes (100 days for $2M-$4M). Existing houses make up about two-thirds of all home sales.

He said available inventory of higher-priced, move-up homes will improve slightly, aided by a growing number of move-up sellers in 2021. Luxury home sales will thrive next year in spring and summer, then slow during the latter third of the year.

Thomas also predicted that monthly interest rates on typical 30-year home loans will average between 2.75 percent and 3.5 percent

Thomas offers a “Reports on Housing” monthly subscription for $15 per month or $150 per year. The regional report tracks regional demand, inventory, distressed homes and other market data. It also shares what buyers, sellers and real estate professionals are experiencing in the trenches. One month free is available upon sign-up.

Steven Thomas can be followed on YouTube, visit www.Youtube.com/ReportsOnHousing
Facebook at @reportsOnHousing.
For more information, visit 
www.reportsonhousing.com.

Topics: Brokers/Managers, Market Information