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In this Real Estate News Brief for the week ending June 5th, 2021… a lawsuit over the CDC eviction moratorium is heating up, what remote workers are saying about going back to the office, and the important role that pets are playing in the homebuying process. Economic News We begin with economic news from this past week, and a job market that continues to improve. The weekly jobless report shows another pandemic low for initial jobless claims. They were down to 385,000, according to the Labor Department. That’s down from 405,000 for the previous week. More than 15.4 million Americans are still receiving unemployment benefits. (1) The latest home price report from CoreLogic shows that prices were up 13% year-over-year in April. That’s the highest annual gain since February of 2006. It’s been driven mostly by competition among buyers for a tight inventory of homes as well as the low mortgage rates. Economists say we might see slower price growth as more homes come on the market from builders and existing home o

Airbnb just unveiled a big upgrade to its platform as the company gears up for a post-pandemic travel surge. (1) The upgrade includes more than a hundred changes with a focus on flexibility. Airbnb says that people need more flexible options because they are traveling more often, searching for new destinations, and are staying for longer periods of time. Airbnb says the changes it made to its platform were inspired by a comprehensive analysis of its booking data and travel has changed because of the pandemic. According to the Airbnb Report on “Travel & Living”: “We are shifting from traveling at all the same times to all the same old places, to many of us living anywhere, at any time, for however long.” Airbnb describes this as “a world in which living and traveling are one and the same.” (2) Airbnb’s Report on Travel & Living The report says the number of people who see traveling as more of a lifestyle today is almost the same as the number of people who see traveling as a series of individual trips.

In this Real Estate News Brief for the week ending May 29th, 2021... what the GDP is expected to do in the second quarter, how much single-family rents have shot up, and what developers are saying about off-the-grid homes. Economic News We begin with economic news from this past week. The latest update on the GDP shows the first quarter holding at 6.4%. Economists had expected a revision to 6.6% but stronger imports apparently offset an increase in consumer spending. (1) Looking ahead to the second quarter, economists are expecting an annualized growth rate of 8.2%. And JP Morgan Chase CEO, Jamie Dimon, thinks we’ll continue to see this kind of growth for the next few years. Inflation hit a 13-year high in April. According to the PCE index, it jumped to 3.6%. (2) That’s the strongest reading of the personal consumption expenditure index since 2008. It’s also well above the Federal Reserve’s 2% goal. Great news on the job market. The government reports just 408,000 new unemployment claims for last week. (3) Th

The U.S. Senate is taking a close look at the YIMBY Act. The Yes in My Backyard legislation was first introduced in 2019, but was put on hold because of the pandemic. It addresses the national housing shortage by encouraging local policies that will increase affordable housing, including changes to zoning restrictions in single-family neighborhoods. Republican Senator Todd Young of Indiana and Democratic Senator Brian Schatz of Hawaii reintroduced the YIMBY Act a few weeks ago. (1) YIMBY is a reaction to the well-known NIMBY concept for Not in My Backyard. Inside the YIMBY bill is a list of 20 policies that local governments or states could adopt to increase housing affordability and availability. HUD Block Grant Funding Although the bill doesn’t mandate the adoption of these policies, it requires the elimination of discriminatory land use policies and affordable housing barriers before jurisdictions receive HUD block grant funding. To qualify for the annual grants, jurisdictions would have to submit reports

Warren Buffett is launching a new business venture that could shake things up in the building industry. A Berkshire Hathaway-owned construction company has teamed up with a New York City architect on a new way to make modular mainstream. The plan is based on a way to make the modules more transportable and keep local contractors and workers involved. First reported by the Wall Street Journal, the initiative launched last week between tech-construction company MiTek and Architect Danny Forster. (1) They started working on this initiative about a year ago with backing from Berkshire Hathaway. The investment is reportedly worth millions of dollars. Modular Units Would be Collapsible The modular units would be made of steel boxes that can be attached to and stacked onto other units. But unlike the bulky building blocks of other modular construction projects, these will be made to “fold” so they can be transported more easily. As reported by Fast Company: “Instead of large steel boxes that have to be carefully rou

Investor interest in single-family rentals is making a post-COVID comeback. A new report by Redfin shows an increase in the purchase of single-family homes by investors after three straight quarters of declines during the pandemic. Redfin says there was a 2.7% increase in the number of homes bought by investors during the first quarter of this year. That’s about 1 in every 7 homes compared to about 1 in every 10 homes during the previous three quarters. Cautious Approach During Pandemic Redfin says that investors held back at the beginning of the pandemic and were slow to jump back in. Even though the housing market recovered quickly, many investors took a more cautious approach because of job losses, unpaid rents, and the eviction moratorium. Redfin’s senior economist, Sheharyar Bokhari says: “Investors are likely starting to feel more comfortable because the economy is in recovery mode.” And, they may also see the declining inventory of homes as an opportunity because a lot of families who’d like to buy a h

In this Real Estate News Brief for the week ending May 22nd, 2021... the government’s rental assistance program is helping landlords, rent growth speeds up, and the housing boom is adding value to opportunity zones. Economic News We begin with economic news from this past week, and a Treasury Department announcement that it has distributed $6 billion in rental assistance in the last two weeks. And more money is on the way. (1) A total of $21.6 billion was allocated to the program as part of a stimulus package approved in March. Another $25 billion had been approved in December. The funding is important to help pay off tenant debt to landlords as eviction moratoriums expire. More Americans are heading back to work. The latest unemployment report shows that initial jobless claims were down 34,000 last week, to 444,000. (2) That’s the lowest number we’ve seen in more than a year. More than 16 million people are still getting unemployment checks, but that number is also decreasing. Several states say they plan to

We’ve been hearing a lot about the risk of inflation lately. With government money flooding into the market and the economic recovery in high gear, we’ve already seen some price jumps. The Federal Reserve has tried to calm fears by telling us that prices will settle back down, but rent prices are probably not among them, and higher rents, or what’s known as shelter inflation, is a big part of the Consumer Price Index. A recent Business Insider blog makes a case for rent growth as a catalyst for inflation -- that rents are starting to go up after a decline during the pandemic, and are not likely to “settle back down.” (1) The blog cites Morgan Stanley economists who say that rent prices are “flashing signs of more persistent inflationary pressures” and Goldman Sachs economists who say “special factors that suppressed inflation during the pandemic” have eased up. They feel that as other prices rise and pull back because of the reopening, that rents will continue to accelerate and will likely bring permanent inf

In this Real Estate News Brief for the week ending May 15th, 2021... a surprise jump in consumer prices, a looser lending environment, and how government regulations impact home prices. Economic News We begin with economic news from this past week that includes a few good reports on the job market. Unemployment claims fell again, to a new pandemic low. Initial state claims are now down to 473,000. That’s the fifth week in a row they have dropped, and reflects a huge hiring effort by U.S. companies as the economy continues to recover. The March report on job openings shows 8.1 million unfilled positions. That’s up from 7.5 million in February. They had dipped to as low as 4.6 million soon after the start of the pandemic. But the problem now is finding enough qualified employees to fill all those jobs. Some people blame generous unemployment benefits, while others argue that many parents have kids at home and no childcare, or that COVID-19 may still be a threat for some people, especially those who are not vacc

The housing market is firing on all cylinders, and it’s revving up for a home sale record. Redfin is forecasting $2.5 trillion in U.S. home sales this year. That’s more than the GDP of France, and about equal to the combined value for Amazon.com and Facebook. Redfin says home sales will probably rise about 17% year-over-year in 2021. That would be a bigger jump than we saw during the pandemic last year, when demand skyrocketed for single-family homes. It will also be the biggest jump in sales since 2013. As we’ve been reporting, the housing market has gone through a huge transformation because of the pandemic. It brought mortgage rates to a record low and triggered a migration of people to new markets because of the remote work trend. In April, Redfin conducted a survey among remote workers and about 60% of those people expect to continue working from home at least part time. That kind of shift is work habits and demand for work-at-home space has helped to push home sales higher. And that’s despite a critical

Call it a perfect storm of conditions to keep home prices on a steady upswing as buyers clamor after too few homes. I had the opportunity to talk to HousingWire’s lead analyst Logan Mohtashami about the unusual situation we’re seeing, and whether all those scary headlines about a housing bubble are true. The housing market has been breaking all sorts of records. It’s never been so hot. Asking prices have hit an all-time high. Selling prices have hit an all-time high. The share of homes selling over list price is also breaking records. I noticed a crazy headline the other day. It said: The East Bay real estate market is so hot, houses are selling for more than $1M over asking price.” That’s a jaw dropper for sure! That headline appeared in the SFGate in reference to the San Francisco East Bay. One realtor said in the article that it’s not that surprising when they get an offer like that. Josh Dickinson says: “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 mill

In this Real Estate News Brief for the week ending May 8th, 2021… what’s happening with the CDC eviction moratorium, why you should sell your home in May, and which rental markets are the most competitive. Economic News We begin with economic news from this past week, and a new court ruling “against” the CDC’s eviction moratorium. A U.S. District Court Judge in Washington, D.C. ruled that the Centers for Disease Control and Prevention did not have the authority to issue the moratorium. It struck down the ban but the Department of Justice immediately filed an appeal which will be heard within another two weeks. In the meantime, the court issued a temporary stay on the District Court’s decision. Realtor associations in Georgia and Alabama filed the lawsuit along with two housing providers and their property management companies. The National Association of Realtors also supported the lawsuit. NAR believes the best solution is to provide rental assistance to the tenants who are impacted by COVID. That will help

It’s easy to see that the housing market has remained strong throughout the pandemic, but quantifying that impact is no easy task. That kind of data crunching can help explain what happened, and what’s likely to happen in the near future. It’s also the kind of analysis that HouseCanary has done, with results that show the full-impact of the pandemic on housing. HouseCanary is a data analytics company with a focus on residential property valuations. Founded in 2008, the San Francisco-based company has put together a database of information on homes, mortgages, and neighborhoods across the U.S. and it uses that data to provide value-based solutions for people in the real estate industry. In this report, HouseCanary analyzed single-family listing volume, new listings, and median listing price information in 41 states and 50 metropolitan areas for a two-year period -- from March of 2019 to March of this year. The report is called: “One Year Later: Understanding COVID-19’s Impact on the U.S. Housing Market.” The r

An appeals court decision has ruled in favor of a development project in Berkeley that will give the state more control over local housing decisions. Some people are calling it a win for developers and the state’s effort to create more housing in California, but not everyone is celebrating. The decision was based on Senate Bill 35, which addresses the housing crisis with construction mandates for cities and counties. In this case, it ends a six-year battle to keep the Berkeley project from going forward. SB 35 went into effect in January of 2018 as one of a number of bills meant to address a critical need for more housing. If a municipality doesn’t provide its fair share of housing to meet regional needs, developers can apply for approval under SB 35 and get their projects fast-tracked, by the state. Projects must meet several requirements to quality, including. 1 - The construction of multi-unit housing with two or more residential units. 2 - A location that is within city limits on an infill area. 3 - The p

In this Real Estate News Brief for the week ending May 1st, 2021… the economic recovery boom, home price growth, and what builders are doing about lumber prices. Economic News We begin with economic news from this past week, and the results of a two-day policy meeting by the Federal Reserve. Fed Chief Jerome Powell acknowledged a big improvement to economic conditions, and the Fed no longer feels that COVID-19 presents a “considerable risk” to the economy. But Powell says the central bank is committed to its current stimulus strategy. As you know, short-term interest rates are near zero, and the Fed is buying $120 billion in Treasury and mortgage-backed bonds every month. Economists say the economy is poised for a boom in 2021. In fact, first quarter GDP was 6.4%. Incomes were also up more than 21% last month, and spending was up more than 4%, thanks in part to government stimulus and those $1,400 checks. Many Americans also have more money saved than normal, and are now spending it on things like new cars an

The marketing of co-owned vacation homes in a scenic part of Northern California is causing an uproar among full-time residents. Real estate company Pacaso is buying single-family homes within driving distance of busy metro areas, and reselling them to as many as eight buyers. It’s an idea that has evolved during the pandemic. But it’s also creating a debate over the impact of co-owned homes in single-family neighborhoods. Pacaso was planning to launch its co-ownership plan in a few vacation spots before the pandemic began, but like everything else, those plans were delayed by COVID-19. Over those next several months, the Pacaso strategy changed. The pandemic highlighted the importance of “home” and created new vacation preferences. Pacaso’s original idea for co-owned vacation homes that might involve air travel morphed into one focused on a one to two-hour drive from home. At the helm of Pacaso are two Zillow executives -- former Zillow co-founder and CEO, Spencer Rascoff, and former Zillow executive, Austin

Home prices have been rising so fast that comps have become wildly unreliable. That’s making it difficult for sellers to set accurate listing prices, and for buyers to get homes appraised for what lenders are willing to loan. Home valuation tools like Zillow’s Zestimate and others are also struggling with a volatile pricing environment, and are often off by an insanely high amount. In a report by Inman, realtor Tim Collom in Sacramento, California, said that estimated home values by companies like Zillow and Redfin are “always” off, and it’s getting worse. He says: “They’re not off by $10,000. They’re off by like $100,000 to $200,000.” If you go by percentages, he says they can off by as much as 10%, and that even experienced real estate agents are having a difficult time keeping up with the trends in home prices right now. Tools like the Zestimate are automatic valuation models or AVMs so they rely on software to automatically update figures. There’s been a lot of criticism about these tools, but Zillow defe

In this Real Estate News Brief for the week ending April 24th, 2021... new home sales blast off, existing home sales stall, and mortgage rates are doing what we like them to do! Economic News We begin with a slow week for economic news. There were no reports on the MarketWatch calendar from Monday through Wednesday. On Thursday, the weekly unemployment report showed there were fewer first-time filers. Those initial state claims were down about 12,000, to 574,000, while continuing claims fell by 34,000 to a seasonally adjusted 3.68 million. The total number of claims for eight state and federal programs is still quite high, at 17.4 million. New home sales blasted off this last week to their fastest pace since 2006. The Census Bureau reports that sales rose 20.7% month-over-month, to a seasonally-adjusted rate of 1.021 million homes. Inventory remained about the same, although it’s down 7% from where it was a year ago. Existing home sales didn’t do as well because of extremely low inventory. The National Associ

The prediction that millions of homeowners would face foreclosure due to job losses from COVID 19 shutdowns does not seem to be materializing. There are some who say that delinquent borrowers have a way to avoid that fate this time around. Unlike the Great Recession, they have a lot more equity in their homes which they won’t want to lose. When the housing market crashed in 2008, it was the result of easy lending. Home loans were easy to get, often with no down payment or verification of income. In some cases, buyers would get money back for buying a home, or qualify with a teaser rate, not the real rate. That, of course, drove prices up and created a housing bubble. The bubble burst when those loans eventually came due and people couldn't afford the payment. Seems like an obvious problem, doesn't it? As more and more loans reset, more people went into foreclosure, flooding the market with distressed inventory far below market value. Anyone who wanted to sell their home at market value had to compete against

It may seem like the housing market is as hot as it can ever be, but a new survey shows that millions of Americans could be on the verge of relocating, sparking even more buyer activity. The survey is part of Zillow’s first-ever “Mover Report.” It shows that people are waiting for pandemic worries to go away as they ponder new homes and new locations. Zillow researchers were motivated to find out more about the spring home shopping season, and the people and emotions that are making it happen. What they found was that as many as eight million homeowners say they are more likely to sell their homes and relocate because of the pandemic. And that’s on top of a market that’s already experiencing high demand and low inventory. But these homeowners will also be putting their own homes on the market which is why Zillow is calling it The Great Reshuffling. Many of the potential sellers have been thinking about doing this for quite some time, but have held back due to pandemic worries and uncertainty about their circu