Week 4 Of Shelter in Place: The Real Estate Markets Tighten Up
The new thing appears to be emails from all those we know and have known with their various jokes on being too long in Solitary. "Going out this week? What should you wear to take out the garbage?"
In Santa Clara County list prices of Single Family Homes have had a -2.88% fall in a 30-day trend, Luxury Home list prices have had a -10.78% fall in a 30-day trend. Importantly, the average sales prices for single family is +8.10% and Luxury Single Family +0.28%.
In San Mateo County Single Family list prices have a -5.66% 30-day trend and Luxury Single Family have had a -2.10% 30-day trend. Average sales prices for Single Family homes are +11.27% with no statistics available for Luxury Homes in the 30-day trend.
Watching the daily summary of listings of Atherton, Menlo Park, Palo Alto, La Honda, Redwood City, Woodside and Portola Valley the only trend I can see is that there have been a number of cancellations, expired and withdrawn properties in the Luxury Markets of Woodside, Portola Valley and Atherton. Palo Alto, Menlo Park, and Redwood City have remained unchanged. La Honda appears to have some active markets in the land sales and large parcels with buildings.
The recent laws by the California Association of Realtors has had a substantial impact on home viewing and showings. The big issue is Virtual Tours, do the listings have them and will buyers move from the physical visual impact of looking before they buy. That will be the big determinant of home sales in the future. Will real estate go the way of Carmax and Amazon, shopping on line and waiting for delivery? A big question that remains to be seen.
Many of the sellers have gone off market awaiting the end of our isolation. Buyers now fight over what is on the market, owing to the increase in sales over list. Lists are going down as sellers realise that they need to discount to sell.
The ability to go back to work will change. Will more wish to remain "work at home" employees? Will more businesses adjust to the "Cloud Based" economy? Will clients accept a "Cloud Based" economy? Whether you like it or not, we are already in a Cloud Based Economy! The exception is that it is now broader than it ever was before. Then what will happen to all the commercial spaces?
The stock market this week, 4 days, had a 13% rise in value. To get a better idea of performance it took from October 2019 to February 2020 for the market, call it S&P 500, to gain 12%. Looking at "Bear Market" which is the term for the present condition of the stock market; which means lower prices, there has been a normal 10% rise and fall before the markets resumed an upward trend and it took years before the old highs were ever reached. The greatest loss in the stock market was the Bear Market of 1974. The previous high was not reached until 1983!
We are not in normal circumstances. The Federal Reserve and Congress and the President have taken unprecedented steps in keeping the country from falling into chaos and depression. $1200 coming in the mail for each American is the first of many benefits. Expanded unemployment for those out of work or unable to perform their profession. Businesses get money from 2 different SBA loans. One $10,000 out right forgiven loan and another loan to keep employees on with a Paycheck Protection Program. Getting Federal Funds will take time.
As we await money to help subsidise or Staying At Home and keeping the virus in check from spreading and making the Spanish Epidemic look pale and the Black Death a more reasonable comparison. We wait for a solution to Covid19. Who will have a stop gap, who will create a vaccine? What will be the effect be
on our economy and more importantly employment?
When the all clear is given will it be so? Will we all go back to elbow to elbow or waiting in line within 12 inches of each other? I rather doubt it. Will children be safe on playgrounds, in soccer games or any field sport? Will foursomes in golf return? If so, each walk or have their own cart and of course remain 6 feet apart. Will we all be labeled as positive, negative, immune or a carrier without symptoms?
It appears we will be in place until mid May? Each week the real estate market will have some reflection on our future. At one point I think we will see a large increase in listings and movement EAST. I look at the Mercury News daily and look at the areas in the state that have reported cases. It is very clear that as one moves beyond the Bay Area east cases decline and so do deaths decline or disappear. I am now gretfull my youngest daughter and family moved to the El Dorado Hills. She was the first one I know who realised that working from home did not mean living in the Bay area and took her profits and bought a larger home on a larger lot with better schools and from her comments a far better environment.
On the Baby Boom Generation and the Silver Tsunami of sales and movement, I don't think that senior centers will be a good choice. They appear to be areas of infection and dying alone. Seniors are prone to die in place. Will they move east to be in a safer environment will be the big question; as it will be, the big question on the work from home Bay Area residents.
The major issue I think about is the empty holes along El Camino in Redwood City, Menlo Park to Palo Alto. Will they end up being empty or will apartments fill their space as originally planned? How are rental properties going to fare? Rents are being forgiven in April by some of the large REITS, private owners are waiting to see if they will have past rent made up and or will the renter be there in May, or moving east? Will rental properties carry the premium of the past in low Capital Rates looking for Capital Gains in property value increases. Will rental single family homes be the real Tsunami?
Once the Government subsidies end will the economy and the individual normal return or will there be a new normal. I think the later will be the case. We will need to wait to see what the New Normal will be.
Stay Healthy and safe, Happy Easter and Passover
Gary
In Santa Clara County list prices of Single Family Homes have had a -2.88% fall in a 30-day trend, Luxury Home list prices have had a -10.78% fall in a 30-day trend. Importantly, the average sales prices for single family is +8.10% and Luxury Single Family +0.28%.
In San Mateo County Single Family list prices have a -5.66% 30-day trend and Luxury Single Family have had a -2.10% 30-day trend. Average sales prices for Single Family homes are +11.27% with no statistics available for Luxury Homes in the 30-day trend.
Watching the daily summary of listings of Atherton, Menlo Park, Palo Alto, La Honda, Redwood City, Woodside and Portola Valley the only trend I can see is that there have been a number of cancellations, expired and withdrawn properties in the Luxury Markets of Woodside, Portola Valley and Atherton. Palo Alto, Menlo Park, and Redwood City have remained unchanged. La Honda appears to have some active markets in the land sales and large parcels with buildings.
The recent laws by the California Association of Realtors has had a substantial impact on home viewing and showings. The big issue is Virtual Tours, do the listings have them and will buyers move from the physical visual impact of looking before they buy. That will be the big determinant of home sales in the future. Will real estate go the way of Carmax and Amazon, shopping on line and waiting for delivery? A big question that remains to be seen.
Many of the sellers have gone off market awaiting the end of our isolation. Buyers now fight over what is on the market, owing to the increase in sales over list. Lists are going down as sellers realise that they need to discount to sell.
The ability to go back to work will change. Will more wish to remain "work at home" employees? Will more businesses adjust to the "Cloud Based" economy? Will clients accept a "Cloud Based" economy? Whether you like it or not, we are already in a Cloud Based Economy! The exception is that it is now broader than it ever was before. Then what will happen to all the commercial spaces?
The stock market this week, 4 days, had a 13% rise in value. To get a better idea of performance it took from October 2019 to February 2020 for the market, call it S&P 500, to gain 12%. Looking at "Bear Market" which is the term for the present condition of the stock market; which means lower prices, there has been a normal 10% rise and fall before the markets resumed an upward trend and it took years before the old highs were ever reached. The greatest loss in the stock market was the Bear Market of 1974. The previous high was not reached until 1983!
We are not in normal circumstances. The Federal Reserve and Congress and the President have taken unprecedented steps in keeping the country from falling into chaos and depression. $1200 coming in the mail for each American is the first of many benefits. Expanded unemployment for those out of work or unable to perform their profession. Businesses get money from 2 different SBA loans. One $10,000 out right forgiven loan and another loan to keep employees on with a Paycheck Protection Program. Getting Federal Funds will take time.
As we await money to help subsidise or Staying At Home and keeping the virus in check from spreading and making the Spanish Epidemic look pale and the Black Death a more reasonable comparison. We wait for a solution to Covid19. Who will have a stop gap, who will create a vaccine? What will be the effect be
on our economy and more importantly employment?
When the all clear is given will it be so? Will we all go back to elbow to elbow or waiting in line within 12 inches of each other? I rather doubt it. Will children be safe on playgrounds, in soccer games or any field sport? Will foursomes in golf return? If so, each walk or have their own cart and of course remain 6 feet apart. Will we all be labeled as positive, negative, immune or a carrier without symptoms?
It appears we will be in place until mid May? Each week the real estate market will have some reflection on our future. At one point I think we will see a large increase in listings and movement EAST. I look at the Mercury News daily and look at the areas in the state that have reported cases. It is very clear that as one moves beyond the Bay Area east cases decline and so do deaths decline or disappear. I am now gretfull my youngest daughter and family moved to the El Dorado Hills. She was the first one I know who realised that working from home did not mean living in the Bay area and took her profits and bought a larger home on a larger lot with better schools and from her comments a far better environment.
On the Baby Boom Generation and the Silver Tsunami of sales and movement, I don't think that senior centers will be a good choice. They appear to be areas of infection and dying alone. Seniors are prone to die in place. Will they move east to be in a safer environment will be the big question; as it will be, the big question on the work from home Bay Area residents.
The major issue I think about is the empty holes along El Camino in Redwood City, Menlo Park to Palo Alto. Will they end up being empty or will apartments fill their space as originally planned? How are rental properties going to fare? Rents are being forgiven in April by some of the large REITS, private owners are waiting to see if they will have past rent made up and or will the renter be there in May, or moving east? Will rental properties carry the premium of the past in low Capital Rates looking for Capital Gains in property value increases. Will rental single family homes be the real Tsunami?
Once the Government subsidies end will the economy and the individual normal return or will there be a new normal. I think the later will be the case. We will need to wait to see what the New Normal will be.
Stay Healthy and safe, Happy Easter and Passover
Gary
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