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You Will Get A Better Price Today Than The Next Year Or Two

A report from the Union Tribune in California. “San Diego home sales had their biggest annual drop since the Great Recession in April as the effect of COVID-19 hit the housing market. There were 2,499 home sales in April, down 30 percent from the same time last year, according to CoreLogic data released Tuesday by DQNews. The last time there was a year-over-year drop of that magnitude was March 2008.”

“Unlike the Great Recession, there was not a corresponding drop in home prices in April. The median home price reached $594,500, around 50,000 less than the record high reached in November. Sales in April reflect purchases that began in March as stay-at-home orders swept the nation.”

“At least some analysts and business owners say this might be a good time to buy or sell. Take Josh Stech, the CEO of the San Francisco-based company Sundae. His business buys distressed homes quickly from homeowners, similar to Zillow Offers and RedfinNow, except it only focuses on houses that need significant work. Stech said it may actually be a good time to sell. He predicted there would be a big increase in new listings as stay-at-home orders are lifted so buyers would have more options. Also, he said there would be at least some foreclosures coming out of the economic shock of the past few months, also increasing supply.”

“‘The recommendation I’ve been giving people is not what I’ve been reading,’ he said. ‘My perspective is if you are thinking of selling in the next year or two, this is the time to sell. I would say you will get a better price today than the next year or two.'”

The San Diego News. “Many buyers may find it laughable to even think about buying a home right now in the middle of this virus pandemic but I am going to put a few thoughts on the table as to why it might be an excellent time to purchase a San Diego property and if you are a seller, listing your property this summer might work out just fine.”

“Another reason to buy now is that there is less buyer demand. A few months ago when a quality, well-priced property came on the market, a large pile of offers would come in to the seller. But for the next few months, there will be less competition, giving a buyer a better shot at securing an excellent property. As far as prices, home prices are fairly steady with the thinking that this current state of the market is temporary but a buyer could maybe get a slight discount right now compared to the beginning of the year.”

“92115 MARKET REPORT: As expected market activity has dropped in the past month. New single family listings have dropped 50% from last April and pending sales are down 68% but the median home price has stayed fairly steady down only 6% year over year.”

The Los Angeles Times. “Illustrating the chilling effects the coronavirus crisis has had on the housing market, data released Tuesday show that Southern California home sales fell 26.6% in April compared with a month earlier, while year-over-year sales were down 31.5%. The data from DQNews reflect residential transactions that closed last month, meaning many opened escrow just before or in the wake of the stay-at-home restrictions placed on Californians in March.”

“Sales were down across the board in April, with the pandemic disrupting and negating many deals in escrow, but home prices continued to see marginal gains from a year earlier. Fear of the unknown has driven many would-be sellers to hit the pause button on prospective deals, while mortgage credit has tightened despite historically low interest rates. So-called jumbo mortgages — loans greater than $765,600 — have evaporated because of lenders’ concerns over the severity and duration of the COVID-19 outbreak.”

“The high-end market, particularly in Los Angeles County, has been a different story. The pandemic has done little to slow sales north of $5 million in L.A. County. Although inventory is down, buyers are taking advantage of the current market (and low interest rates), utilizing private banks that prioritize big spenders to do so.”

The Wall Street Journal. “Hours after Joe Taylor was laid off by Uber Technologies Inc., as part of the ride-sharing company’s far-reaching cost-cutting, the hardware engineer began looking for a new job. What he’s seeing is a Silicon Valley job market that has lost its spark. Major layoffs at big companies including Uber and Airbnb Inc., as well as a host of smaller startups, have shaken any sense that the tech industry is insulated from the broader employment destruction—and, for many, undermined hope that jobs lost would be easily replaced.”

“‘Everyone’s just a little more wary,’ said Mr. Taylor, 38 years old, who was let go earlier this month. Fewer recruiters have gotten in touch than in past job hunts, he said, as he’s scoured opportunities at large and small firms. The message from many recruiters, he said, has been: ‘I don’t have anything right now, but let’s stay in touch.'”

“Mr. Taylor, during his 15-year career spanning big companies like Microsoft and San Bruno, Calif.-based Spansive, a startup making wireless chargers, has seen ups and downs before in Silicon Valley’s job market, including during the 2008 financial crisis. In its boom times, companies have offered bountiful pay and benefit packages in the race to secure talent. Now, however, Mr. Taylor and other tech workers point to signs that the race has cooled significantly.”

“Uber on Monday announced it was laying off a further 3,000 people, two weeks after announcing around 3,700 job cuts, bringing the total to about a quarter of its workforce. In recent weeks, rival Lyft Inc. said it would slash 17% of its staff, and Airbnb said it is cutting about 25% of its jobs after bookings on its site plummeted with people largely unable to travel.”

“The three account for almost 10,000 positions lost just this month, with many more jobs gone across Silicon Valley, adding to the ranks of the nearly 36.4 million applications for unemployment benefits in the U.S. in the weeks since the Covid-19 outbreak hit. Tech startups have seen more than 56,000 layoffs since the coronavirus pandemic hit, according to Layoffs.fyi, a job-tracking site.”

“Several tech companies that have avoided job cuts have publicly or quietly instituted hiring slowdowns. Among those easing off is Microsoft, which has temporarily frozen recruitment for some roles while continuing to hire in strategically important areas, according to a spokesman. Google, the search giant owned by Alphabet Inc., publicly announced last month a slowdown in hiring.”

“What’s now unfolding could reshape the long-term prospects for job seekers in Silicon Valley. Recruiters and some executives have said they don’t expect tech hiring to rebound quickly once an economic recovery sets in. ‘I don’t think you’ll see us adding back at that same level,’ Uber Chief Financial Officer Nelson Chai said recently.”

“Two months of experience with the bulk of their employees working remotely also could change employment practices, potentially diminishing the focus on fabled Silicon Valley campuses that companies such as Apple and Facebook built and shifting some work overseas to cheaper workers.”

“Recruiters and tech employees say changes in the job market could mean people with sought-after experience likely will find new employment in the post-coronavirus tech economy. For those with thinner résumés, prospects may be darker, they say, in a market overflowing with talent at a time when companies are more conservative.”

“American corporations’ growing comfort with remote work has also led Mr. Taylor, the former Uber engineer, to look for jobs farther afield, including in Denver. He plans to remain in the Bay Area, working remotely if needed, but the trappings of a nearby tech-company office no longer feel essential. For interviews, he shows up on Zoom calls in a Brooks Brothers blazer, a button-up shirt with French cuffs and a San Francisco Giants baseball cap to hide his unruly quarantine hair, with pajama bottoms underneath.”

“He feels a sense of urgency given that the tech companies still hiring have a limited number of positions to fill, and the number of people on the market is growing. ‘I really wanted to try to hit the ground running with this because my fear was that there’d be more and more layoffs,’ he said.”

This Post Has 71 Comments
  1. ‘mortgage credit has tightened despite historically low interest rates. So-called jumbo mortgages — loans greater than $765,600 — have evaporated’

    Well that should be no problem, as Los Angeles has scads of shacks priced well under that.

  2. ‘if you are thinking of selling in the next year or two, this is the time to sell. I would say you will get a better price today than the next year or two’

    See the disconnect?

    ‘San Diego home sales had their biggest annual drop since the Great Recession in April’

    They can’t sell today.

    1. Au contraire: They could sell tomorrow, if only they were willing to drop their list prices to what the market will bear, aka “current market value.”

      But expectations that prices will always go up tends to lead HODLers of single family homes to wait patiently rather than drop the price and cut bait.

  3. It looks like DR Horton and some other builders have stopped building out some developments as I’m seeing “Ready To Build” on the MLS now. They want a contract before they break ground even though the lots are finished.

  4. Some MIGHT get a sale now if they are not greedy…in spring 2007 I listed my place about 10-15K (only about 3-5%) under comps and had a buyer under contract in a week. Thanks to the HBB (and OTM) was correctly convinced that the bubble pop was imminent. Had I listed it at a high price and then chased the market down would very likely have sold it for much less…

  5. Non-eviction order leads to squatting in style in the Hamptons
    The short-term renters moved into their beach-town pads on Long Island before the coronavirus struck and Gov. Andrew Cuomo enacted a moratorium on evictions till at least Aug. 20 to protect those financially struggling amid the pandemic.

    The tenants are now allegedly twisting the non-eviction order to their benefit, refusing to vacate their prime summer pads even though their leases are up — and exasperated local landlords say there is nothing they can do about it.

    “We’re not talking about poor people,” a frustrated homeowner said of his tenant, who began paying $3,600 a month in October to rent the Sag Harbor property — and then claimed he didn’t have the money to pay for April, and just never left.

    The homeowner said he could be getting $15,000 for the property for the month of May alone — and at least $55,000 to rent the home between Memorial and Labor days.

    https://nypost.com/2020/05/19/non-eviction-order-leads-to-squatting-in-style-in-the-hamptons/

    1. Ah, the old throw the Beat a bone trick.

      “The Sag Harbor homeowner said some local landlords are offering their hold-out tenants cash so they can get them out before the season and make the real money they’re due.”

      “The Water Mill homeowner said she tried the tactic with her tenant — to no avail.”

      1. This Landlord, he had three,
        Cuomo said they live for free;
        With a knick-knack paddywhack,
        Tried to throw a bone,
        These Deadbeats won’t leave my home.

    1. Boooo. The purchase price dropped but the price per sq ft went through the roof. Less for a lot less.

      No good.

  6. This was already quite apparent to anyone who paid attention to Chris Cuomo’s comments about his bad dreams and his doctor telling him they would continue for the next five days of hisCOVID-19 recovery.

    Chris Cuomo took ‘less safe version’ of hydroxychloroquine, McEnany says

    By Steven NelsonMay 20, 2020 | 5:23pm

    White House Press Secretary Kayleigh McEnany took on Chris Cuomo Wednesday, saying that while he “mocked” President Trump for taking hydroxychloroquine the CNN anchor took a less-safe version of the drug himself.

    “You had Chris Cuomo saying the president knows that hydroxychloroquine is not supported by science, he knows it has been flagged by his own people and he’s using it,” McEnany said at a White House press briefing.

    “Cuomo mocked the president for this” but “it turns out that Chris Cuomo took a less safe version of it called quinine, which the FDA removed from the market in 2006 because it had serious side effects, including death. So really interesting to have that criticism of the president.”

    https://nypost.com/tag/chris-cuomo/

    1. From what I read Cuomo took a homeopathic dose of quinine, so that might not have any effect good or bad…possibly no more quinine than you would get in a glass of tonic water. Many people have been having weird dreams since the pandemic started, lots of articles on that too…have had a few myself that were obviously related to the C19 situation but thankfully have been healthy so far.

      1. “possibly no more quinine than you would get in a glass of tonic water.”

        Is that why his doctor told him it could last for five more days?

      2. “From what I read Cuomo took a homeopathic dose of quinine,”

        by Madison Dibble
        May 20, 2020 04:49 PM

        “Well, Cuomo mocked the president for this. Interestingly, I found this out just before coming here, hydroxychloroquine, of course, is an FDA-approved medication with a long-proven track record for safety, and it turns out that Chris Cuomo took a less safe version of it called quinine, which the FDA removed from the market in 2006 because of its serious side effects, including death,” McEnany added.

        https://www.washingtonexaminer.com/news/chris-cuomo-took-a-less-safe-version-mcenany-pushes-back-on-criticisms-of-trumps-use-of-hydroxychloroquine

    2. including death

      Cuomo is a less than sincere person all around. Didn’t he do an interview after he was sick saying he was completely done broadcasting false narratives?

    3. Well for one thing, Cuomo actually had a confirmed COVID-19 case. Is it unusual to treat someone who is infected with an illness differently than someone who is not?

  7. DebtDonkey was rolling stone….
    rented a house from the bank with a loan…
    and when she died all that was left was the loan.

    Tukwila, WA Housing Prices Crater 22% YOY As One Seattle Broker Admits “I’ll Go Back To Selling Drugs If This Market Doesn’t Turn Around Soon”

    https://www.movoto.com/tukwila-wa/market-trends/

    1. “Professionally designed interior” == somebody went to Home Despot and said “Gimme the gray light special.” The back “yard” is entirely concrete, right? I can’t figure out where the strips of light are coming from.

    2. Realize that this house was likely built in the early 60s for a union line worker’s wage at Ford’s assembly plant off of Montague and Capitol. Today, that’s a $1.5M neighborhood!

  8. Surprisingly, a couple homes I’m watching in the area have gone pending. But many more are competing for attention by cutting prices.

    Also started to see homes in new developments continue with building. The new developments just started a little over a year ago. And when I started to see new construction I wondered if it was a sign of a new crash coming.

  9. I wonder if prices might drop to the point where (humor me here, I know this sounds absurd) an average person in an average American city might be able to afford an average house to live in.

    Yeah, that’s just crazy talk…

    1. Not if the FED and politicians have their way. They are working in concert to make housing as unaffordable as possible.

      1. Are you advocating that people sleep in their cars or live in tent cities instead? Because you end up writing a big check to someone every month regardless, and you have zero control over your destiny when someone else owns the property.

        You’re as much of a “donkey” renting as you are owning, only that you’ve just convinced yourself otherwise.

        1. He never said a peep about what you are saying.
          All he is saying is “live within your means”. Whether you rent or buy, just don’t borrow beyond your capacity to repay.
          What you are saying sounds like what Mr.Green did from yesterdays bits – speculating.

        2. I think it all depends on when you buy a house, esp in CA. I know a couple who bought in 2005, and they are still struggling to pay their mortgage. They would have been better if paying rent for a few more years. I know rents have gone up a lot, but rent prices are not more sticky than house values. Here’s a house I’ve got saved on Zillow, in an area I’d want to invest in if prices come back down …

          Sold 2006 for over $324,000
          Sold 2017 for $270,000
          For rent 2018 for $1,995
          For rent 8/2019 for $2,200
          For rent 1/2029 for $1,995
          Rent reduced 3/2010 $1695

        3. as much of a “donkey” renting

          Quite the contrary. The prudent renter does have a burden to bear while nimbly navigating the barrel chase of life; saddle bags full of cash.

      2. “It’s a dangerous time for Debt Donkeys. Don’t become one.”

        As evidenced by the wrecked donkey carts littering the shoulder of the road.

        Boulder, CO Housing Prices Crater 11% YOY As Colorado Housing Market Turns Toxic

        https://www.zillow.com/boulder-co-80301/home-values/

        *Select price from dropdown menu on first chart

        As a leading economist said, “Sell whatever it takes to get out of debt and hold onto every dollar you’ve got. You’ll thank me later.”

    2. If both spouses of a household work, then it’s entirely doable to afford an average house in an average city on current wages. For example, in Maryland, the median salary for a teacher is about $60K. With a little sacrifice, two $60K teachers can afford a $360K house. That will basically buy a Beaver Cleaver house, an average 1950s-1960s rancher in the shady suburbs.

      1. Buying a 60 year old house at that price is a dumb idea when you can build it for far less.

    3. Prices were cut in half locally by 2010 in the Calif. wine country where I live when the last bubble popped and a 3/2 was about $250K which I could afford…however I waited until 2011/2012 to try buying and was up against legions of 100% cash flippers and speculators and was effectively shut out as my pre approved mortgage was virtually worthless since sellers will nearly always go with the cash offer.

      1. Yet still multiples higher than long term trend price.

        There’s too much fraud in housing. Namely appraisal and mortgage fraud.

      1. It’s incredible, really. It’s risen an effective $75+ per barrel since the low. The price is delusional given demand. But it’s not surprising. When the FED funnels trillions to Wall St. speculators, expect asset bubbles. Bubbles have nothing to do with organic supply and demand.

  10. Do we believe this reporting? Does ‘real estate deployment’ mean new, refurbished, or just the equivalent of repainting?

    “Private equity firms across the globe hold an estimated $328 billion in dry powder for real estate deployment, according to the data firm Preqin Ltd. Prior to the crisis, asset prices had been pushed up as investors chased yield in riskier corners of the property market. Now, Blackstone Group Inc. and Brookfield Asset Management Inc., the largest real estate investing companies, are expected to hunt for bargains among the fallout from the pandemic.”

    https://www.msn.com/en-us/news/markets/loaded-with-cash-real-estate-buyers-wait-for-sellers-to-crack/ar-BB14iyIH?ocid=Money

  11. Ok, on the MSN Mastercard was in summary saying they won’t let employees return to the office until they get a C19 vaccine.

    I was afraid of these sort of requirements. Watch for more of this.

    1. Washington Compost had an article on this just this morning. (I’ll spare you the comment section.)

      IMO it’s one thing to be an antivaxxer opposed to traditional vaccines which are decades old. But it’s quite another to be forced into being a guinea pig for any vaccine that is profit-motivated and rushed through trials. Not only that, but this disease can be prevented with an N-95 mask and probably cured with a quick test and HCQ treatment, rendering a vaccine not entirely necessary. If nothing else, there should be a waiting period for safety. The court rulings will make for interesting reading.

    2. saying they won’t let employees return to the office until they get a C19 vaccine

      So if they can’t come up with a vaccine does that mean the office never reopens?

      1. You can’t come back to the office unless your vaccined against C19.

        Big Government, Big Pharma, Big Money, Big Corporations equals loss of choice and freedoms.

  12. So many MSM-quoted experts have pushed the V-shaped recovery hypothesis, you have to wonder kind of expectations shock might follow if the recovery ends up following some other shape.

    1. Caroline Baum
      Opinion: This time, it won’t take long for the recession to be called officially
      Published: May 21, 2020 at 9:02 a.m. ET
      By Caroline Baum
      Even for cautious business-cycle historians, there’s no doubt that March was the end of the longest-ever expansion
      Associated Press

      Assuming recently released economic data and projections for the U.S. economy going forward are reasonably accurate, it seems likely that March 2020 will mark the official onset of recession following the longest expansion on record.

      Not that the National Bureau of Economic Research’s Business Cycle Dating Committee, the arbiter of cycle peaks and troughs, is in a rush to pass judgment on such matters. It is not in the forecasting business. Its role is to provide historical context.

      In the time since its creation in 1978, the BCDC has formally announced the business-cycle peak anywhere from five to 11 months after the fact. Announcements of the trough month also come well after the fact: anywhere from nine to 21 months.

      No doubt this time

      This time, the lag is apt to be on the shorter side. Real gross domestic product declined by an annualized 4.8% in the first quarter, the result of the forced shutdown of the U.S. economy in mid-March. A huge decline on the order of 30%-40% is expected for the second quarter, after which the economy is expected to bounce back. (The rebound is apt to appear sharp even though the recovery is unlikely to be V-shaped.)

      1. A huge decline on the order of 30%-40% is expected for the second quarter

        If activity picks up slightly in July vs the second quarter then the official recession will be over, despite the economy still being in a crater.

    2. Clearly the stock market always goes up, no matter what. Party on, bulls!

      Market Snapshot
      Stocks turn slightly higher early Thursday after weekly jobless claims, final earnings reports, and rising China tensions
      Published: May 21, 2020 at 9:56 a.m. ET
      By Mark DeCambre and
      Andrea Riquier
      Fundamentals haven’t justified the recent stock rally, one technical analyst notes
      Another ugly week of job losses? AFP/Getty Images

      U.S. stocks traded slightly higher after opening in the red as investors digested a fresh round of corporate results and economic reports, including a report that showed another 2.44 million Americans filed for first-time jobless claims on an adjusted basis.

      Market participants were also digesting a fresh spurt of hawkishness from the White House on China.

      How are benchmarks faring?

      The Dow Jones Industrial Average traded about 67 points, or 0.2%, higher at 24,643, the S&P 500 index traded 3 points, or 0.1%, higher at 2,975, while the Nasdaq rose about 12 pointss to open near 9,387.

    3. Is 38.6 million alot?

      The Financial Times
      US employment
      US jobless claims keep climbing to hit 38.6m since lockdowns began
      First-time benefit applications of 2.4m in the latest week in line with expectations
      Concerns remain that job cuts which were expected to be temporary under furlough schemes will become permanent
      © Getty Images
      Mamta Badkar in New York and James Politi in Washington 30 minutes ago

      Another 2.4m Americans applied for unemployment benefits last week, bringing the total number of first-time applications to 38.6m since the coronavirus pandemic hit the world’s largest economy nine weeks ago.

      The data released on Thursday confirmed the enduring damage to the US labour market inflicted by lockdowns to curb the spreading disease, raising pressure on the Federal Reserve, Congress and the Trump administration to take further monetary and fiscal action as the crisis drags on.

      “Although it’s too soon to know now, the concern is that unemployment will continue to be an issue even after we begin the recovery,” said Jason Reed, a professor of finance at the University of Notre Dame’s college of business. “If the federal and state governments are not aggressive enough in combating unemployment, we might see permanently higher levels of unemployment and a second jobless recovery.”

      1. If the FED wasn’t pumping trillions of dollars of new money into the system, the stock market would be under 10,000 by now.

        1. Lots of knife catchers tend to jump in during a normal descent giving a chart that jagged saw-blade appearance. The free market’s credit cycles are difficult identify unless you’re an insider.

  13. Obamacare forced people to buy Health Insurance or get a tax penalty.
    Now the idea that you have to take one of the vaccines or you will be deprived of a right is alarming.

    I have never been a big vaccine taker and I’m not going to start now.

    1. Vaccines for Corona-virus will be 50% effective at best. Not to mention the side effects of a hurriedly developed vaccine. Oh I forgot…the only medicine to have side effects is hydroxychloroquine. {SMH}

      1. By the time a vaccine is developed (assuming one ever is) it is likely that the pandemic will have run its course and we will have other things to worry about.

      2. the side effects of a hurriedly developed vaccine.
        Does anyone else recall the Swine Flu vaccine debacle of 1976?

  14. The Globalist rule and they are willing to get in bed with the Commies. The Globalist are to greedy to know how dangerous the Commies really are. They don’t get what the long term plan of the Communist is.

    1. Lenin knew it. Marx knew it.

      “The ‘capitalists’ will the sell you the rope we can use to hang them with.”

    2. This commie and capitalism motif seems very 20th century. Kinda like college degrees and american cheese singles.

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