CV effect on SD RE

[Coronita]

At least in CA….

1.Can’t afford the rent? There’s a moratorium on that.

2. Can’t afford the mortgage? There’s a moratorium on that.

4. Can’t afford your income taxes? Hmm. There’s a deferral of that until July

5. Can’t afford the property tax? Hmm. There’s probably going to be a moratorium on that too.

6. Still want to sell during this period? Ok… Who’s going to sell it and who’s going to take clients to see it? LOL

https://www.car.org/aboutus/mediacenter/news/covidstayathome

https://www.carcovidupdates.org/stay-at-home-guidelines

[quote]

The real estate industry is not exempt from this prohibition except as needed to maintain “continuity of operation … of … construction, including housing construction.” Therefore, REALTORS® should cease doing all face-to-face marketing or sales activities, including showings, listing appointments, open houses and property inspections. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person.

Property management and repair work, which generally involves maintaining sanitary and safety conditions is permissible. Additionally, many other aspects of the real estate industry can continue to occur without in-person contact, including documentation and signing, and in many circumstances, closings. Other activities may also be managed remotely, though there may be some difficulties.”

Impact on MLS Statuses, Showing Instructions and DOM

In light of the Governor’s order on March 19, 2020, it would be appropriate for the MLS listing status to be changed by the listing agent to hold or withdraw— but if the listing agreement is still in effect, one would not select cancelled.

Also, it would be reasonable under the circumstances, if so desired, for an MLS in its discretion to alter its usual showing instructions and/or DOM approach, either by taking a unilateral approach systematically in the MLS or simply to offer participants the option to alter their status designation into a field that suspends the clock, ex: hold or the like in one’s system. An MLS could also decide to make no changes to its offerings because it’s a given that all California listings are subject to this same order of March 19, 2020, such that those active during this time would be assessed in the same light.

​

If an MLS does alter or suspend the DOM, keep in mind, however, portals like Zillow, Realtor.com and others that also calculate their own DOM might not be changing their DOM calculations. That raises the concern of having two differing, publicly available DOM sources, possibly causing the buying public to lose confidence in the MLS reporting and/or creating potential liability situations for agents for inaccurate reporting. Thus, if an MLS does decide to pause the DOM calculations, best practice would be to keep measuring things both ways so that future evaluation of this current marketplace will be possible. When this is all over, it will still be important to keep an accurate tracking of what happened, so even if the DOM clock stops, the CDOM clock should keep going so the total picture is still there.

Also, the following Inman article may be of interest regarding what some other MLSs are doing: https://www.inman.com/2020/03/19/we-talked-to-21-multiple-listing-services-about-their-coronavirus-preparations-heres-what-they-said/

​

Based on that which is set forth above, the MLS has various options to consider depending on what works best locally and within the fields and functionality of its system.

Disclosure of Potential COVID 19 Exposure

What to do if an agent learns that a visitor to the property, including potentially another agent, tested positive to COVID 19 — is disclosure required or recommended?

This information would be material to anyone at risk for potential exposure but raises the question of whether it’s a property concern or a people concern. Is the concern that the property site itself might have been or is contaminated? Or is the risk of having been around a particular person? And was this person on or offsite from the property?

Legally, known material conditions related to the property should be disclosed. Per the CDC, it’s possible the virus can spread from contact with infected surfaces or objects on a property, meaning a person could get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this is not thought to be the main way the virus spreads. However, the more relevant aspect to potential exposure pertains to the timing of contact with the property and the infected person and any others who came for a period thereafter. This is not purely or a per-se property condition. But to be on the safe side, a disclosure could be made. Disclosing through the MLS would not be the most effective way to communicate this information because (a) no further showings should be ongoing under the order of March 19, 2020, and (b) the concern at issue is backward-oriented and person-focused (and not a permanent property condition) for those potential visitors and/or agents identifiable from lockbox or other records as having been at the property during that time period with the exposed person. Notice could then be given in a targeted way.

[/quote]

The world is being put on hold for the next few months, possibly until the end of the year. Next year will be interesting when things slowly return to normal. The low mortgage rate lever is already being pulled. I wouldn’t be surprised to see another lever pulled: relaxing lending standards to otherwise credit-unworthy people.

When 9/11 occurred and the dot.bomb imploded, did home prices crater right after, or did they crater after irresponsible lending ran its course for a few years?

[Coronita]

3.3m unemployed people. Most in service sector, many in tourism and entertainment.

https://finance.yahoo.com/news/coronavirus-weekly-initial-unemployment-claims-march-21-153036254.html

Besides real estate. There may be several small businesses that will be for sale at a discount that otherwise would have been ok.

[spdrun]

My prediction – detached home prices up, condo/apartment prices down. Lower rates won’t change some people’s fear of living close to others who may have the cooties. We’ll see a wave of exurbanization like in the 1950s (was that driven in part by polio?).

[FlyerInHi]

[quote=spdrun]My prediction – detached home prices up, condo/apartment prices down. Lower rates won’t change some people’s fear of living close to others who may have the cooties. We’ll see a wave of exurbanization like in the 1950s (was that driven in part by polio?).[/quote]

I don’t think so. White flight from the city is only a US phenomenon because prior to WWII, people lived in bad tenement housing. Condos only began to develop in the 1970s.

The economy is now concentrated in urban areas. Take the LA metro for example, it’s sprawled out as much as possible already. Only infill can solve the housing crunch.

Another thing…. does it means that Starbucks is a dying business model?

[The-Shoveler]

I have to vote for spdrun on this one, no one is going to want to live in overcrowded areas of cities after this for awhile.

There are lots of StarBucks out in the burbs but I could never really see the appeal myself.

[ltsddd]

[quote=Coronita]3.3m unemployed people. Most in service sector, many in tourism and entertainment.
[/quote]

6.6m – https://finance.yahoo.com/news/coronavirus-covid-weekly-initial-jobless-claims-march-28-165758189.html

it’s a ripple effect (a beautiful, yuge, bigly one).
Real estate market is next.

[spdrun]

Although it’s interesting that this started in less crowded areas of cities — the index case in NYC was actually in the suburbs, and the worst-affected areas are suburban(ish) Queens near JFK airport.

[ltsddd]

[quote=spdrun]Although it’s interesting that this started in less crowded areas of cities — the index case in NYC was actually in the suburbs
[/quote]

demographics

[quote=spdrun]
, and the worst-affected areas are suburban(ish) Queens near JFK airport.[/quote]

follow the travel hubs.

[evolusd]

Sold in May 2019, have been making offers the last few months but nobody willing to accept our low balls.

I can’t imagine this doesn’t have a material impact on pricing over the next 12-18 mos with the government intervention being the real x-factor.

Feel fortunate I didn’t just get into a big mortgage and am still liquid, these are going to be tough times for almost everyone.

Hang in there, Piggs.

[FlyerInHi]

[quote=The-Shoveler]I have to vote for spdrun on this one, no one is going to want to live in overcrowded areas of cities after this for awhile.

There are lots of StarBucks out in the burbs but I could never really see the appeal myself.[/quote]

Eventually everyone will get Covid unless a vaccine is developed. Small towns are getting affected as we speak. Time will tell….

[SDNative2]

Hello. Decade-long reader here with just one SFH rental house with a mortgage. What are Pigg Landlords doing about offering or otherwise notifying their tenant(s) regarding possible rent deferment? If so, for how long? Is anyone taking advantage of forbearing a mortgage on their rental (if applicable)?

I ask, because my property mgmt is taking the stance of basically offering this to all of their tenants, and it’s falling back on owners to make it work on their end.

Thoughts?

[Coronita]

[quote=SDNative2]Hello. Decade-long reader here within just one SFH rental house with a mortgage. What are Pigg Landlords doing about offering or otherwise notifying their tenant(s) regarding possible rent deferment? If so, for how long? Is anyone taking advantage of forbearing a mortgage on their rental (if applicable)?

I ask, because my property mgmt is taking the stance of basically offering this to all of their tenants, and it’s falling back on owners to make it work on their end.

Thoughts?[/quote]

Nothing. Not mentioning anything. If one of my tenants have an issue, they can follow up with the law and notify me with 7 days of the due date that they were directly impacted by the CV , and then they can talk to my property manager(if needed) so we can work together to work out a payment plan that meets their immediate need while still ensuring at the end I get paid.

But, so far so good (knock on wood). I got all my rent from all my tenants. Most are H1-B’s that work for tech or pharma, one nurse, and a few other that had sold a house and according to bank statement cash reserves. That was one of the main reasons I wanted this kind of tenant pool (hedge #1). All my tenants have credit scores above 790, and as someone once said one don’t get high credit scores by luck and being a shithead shyster, so we’ll test that theory (hedge#2). Lastly, no outstanding loans from paying off all mortgages from equity gains over previous years despite low interest rated, so monthly debt to income ratio is slightly less than 1% (hedge#3).

Any sort of good deals that do come, cool! We wont see any for some time, definitely not until state laws allows agents to start showing properties again. Most agents, through the advice of CAR, have been removing/withdrawing listings since there will be no allowed activity in the foreseeable future.

I think you guys are worrying about the wrong thing. Imho I’d be more concerned about dying from CV versus getting ruined financially. I’d make sure your living trust and advanced health directive is up to date more so than anything else.
Nothing would suck more than your last moments be under remain-at-home and you’re rushing to finish your living trust or advanced directive so your heirs doesn’t have to go through probate or argue amongst each other when to pull the plug. That would be the ultimate slap in the face to those you care about. Although it’s a low chance that it would happen to you, it’s definitely not lower than before, and you wouldn’t say don’t by insurance because the chances of something happening are low too.

Also make sure all your life insurance and retirement accounts are up to date with the correct beneficiaries.

Also make sure you have some way to give your heirs all the passwords/access codes to all your accounts should something happen so they don’t need to wait for access. Make sure you keep an inventory of all your assets on a list including but not limited to bank accounts, financial accounts and any physical precious metals , jewelry , etc that you might have stashed all over different safe deposit boxes or escrow services. (Don’t put those list online or electronically) Keep a spare set of keys , access codes, etc to any sort of lock box.

Make sure the executer of your trust is still alive and competent. It wouldn’t be a bad idea to have more than one alternatives, just in case the first one is also dead when you are dead, things probably weren’t thinking would a be possiblity due to a pandemic that could affect more than one parent or relative or friend at the same time as you. Also probably a good idea to have a talk about “if something were to happen” with spouse and adultish kids.

Plan for the worst , hope for the best.

Lastly, enjoy your life while you can. You don’t know what tomorrow brings. Good luck to everyone.

[scaredyclassic]

[quote=Coronita][quote=SDNative2]Hello. Decade-long reader here within just one SFH rental house with a mortgage. What are Pigg Landlords doing about offering or otherwise notifying their tenant(s) regarding possible rent deferment? If so, for how long? Is anyone taking advantage of forbearing a mortgage on their rental (if applicable)?

I ask, because my property mgmt is taking the stance of basically offering this to all of their tenants, and it’s falling back on owners to make it work on their end.

Thoughts?[/quote]

Nothing. Not mentioning anything. If one of my tenants have an issue, they can follow up with the law and notify me with 7 days of the due date that they were directly impacted by the CV , and then they can talk to my property manager(if needed) so we can work together to work out a payment plan that meets their immediate need while still ensuring at the end I get paid.

But, so far so good (knock on wood). I got all my rent from all my tenants. Most are H1-B’s that work for tech or pharma, one nurse, and a few other that had sold a house and according to bank statement cash reserves. That was one of the main reasons I wanted this kind of tenant pool (hedge #1). All my tenants have credit scores above 790, and as someone once said one don’t get high credit scores by luck and being a shithead shyster, so we’ll test that theory (hedge#2). Lastly, no outstanding loans from paying off all mortgages from equity gains over previous years despite low interest rated, so monthly debt to income ratio is slightly less than 1% (hedge#3).

Any sort of good deals that do come, cool! We wont see any for some time, definitely not until state laws allows agents to start showing properties again. Most agents, through the advice of CAR, have been removing/withdrawing listings since there will be no allowed activity in the foreseeable future.

I think you guys are worrying about the wrong thing. Imho I’d be more concerned about dying from CV versus getting ruined financially. I’d make sure your living trust and advanced health directive is up to date more so than anything else.
Nothing would suck more than your last moments be under remain-at-home and you’re rushing to finish your living trust or advanced directive so your heirs doesn’t have to go through probate or argue amongst each other when to pull the plug. That would be the ultimate slap in the face to those you care about. Although it’s a low chance that it would happen to you, it’s definitely not lower than before, and you wouldn’t say don’t by insurance because the chances of something happening are low too.

Also make sure all your life insurance and retirement accounts are up to date with the correct beneficiaries.

Also make sure you have some way to give your heirs all the passwords/access codes to all your accounts should something happen so they don’t need to wait for access. Make sure you keep an inventory of all your assets on a list including but not limited to bank accounts, financial accounts and any physical precious metals , jewelry , etc that you might have stashed all over different safe deposit boxes or escrow services. (Don’t put those list online or electronically) Keep a spare set of keys , access codes, etc to any sort of lock box.

Make sure the executer of your trust is still alive and competent. It wouldn’t be a bad idea to have more than one alternatives, just in case the first one is also dead when you are dead, things probably weren’t thinking would a be possiblity due to a pandemic that could affect more than one parent or relative or friend at the same time as you. Also probably a good idea to have a talk about “if something were to happen” with spouse and adultish kids.

Plan for the worst , hope for the best.

Lastly, enjoy your life while you can. You don’t know what tomorrow brings. Good luck to everyone.[/quote]

Yes

[FlyerInHi]

[quote=Coronita]
But, so far so good (knock on wood). I got all my rent from all my tenants. Most are H1-B’s that work for tech or pharma, one nurse, and a few other that had sold a house and according to bank statement cash reserves. That was one of the main reasons I wanted this kind of tenant pool (hedge #1). All my tenants have credit scores above 790, and as someone once said one don’t get high credit scores by luck and being a shithead shyster, so we’ll test that theory (hedge#2). Lastly, no outstanding loans from paying off all mortgages from equity gains over previous years despite low interest rated, so monthly debt to income ratio is slightly less than 1% (hedge#3).

[/quote]

Good for you, flu. You may collect your rents….. But our property values will be affected by other tenants who don’t pay rent, or other landlords who get foreclosed upon. That’s how it works during recessions.

[Coronita]

[quote=FlyerInHi][quote=Coronita]
But, so far so good (knock on wood). I got all my rent from all my tenants. Most are H1-B’s that work for tech or pharma, one nurse, and a few other that had sold a house and according to bank statement cash reserves. That was one of the main reasons I wanted this kind of tenant pool (hedge #1). All my tenants have credit scores above 790, and as someone once said one don’t get high credit scores by luck and being a shithead shyster, so we’ll test that theory (hedge#2). Lastly, no outstanding loans from paying off all mortgages from equity gains over previous years despite low interest rated, so monthly debt to income ratio is slightly less than 1% (hedge#3).

[/quote]

Good for you, flu. You may collect your rents….. But our property values will be affected by other tenants who don’t pay rent, or other landlords who get foreclosed upon. That’s how it works during recessions.[/quote]

Who gives a shit about property value in the short term.

1. Were you planning to sell before or in a hurry to sell? No? Go to step 2.

2. Are leveraged up the ying-yang in one specific geographical location that is dependent on one specific industry that is now affected? No? Go to step 3.

3. Are you well capitalized with sufficient cash reserves as you should have been with any sort of leveraged investment just in case? Yes go to step 4.

4. Is the geographical location of where your property is materially going to change due to a permanent job loses of a major industry that employs a majority of the population such that it could pose as a longer term issue of employment and rentability of properties in the future? San Diego, probably no…go to step 5.

5. Can you think of anything else that your cash/cashflow could be invested in that would do better right now versus staying the course…Like investing in a small retail shop, lol
.. God no …not right now. In fact, relative to those folks that invested in small service biz, you probably dodged a huge bullet. Go to step 6.

6. Do you have alternative sources of income so that you aren’t desperate to sell ? Yes?

Land on free parking , collect the money in the pot…stay safe, don’t get sick and die( or try not to) , occupy your time with a hobby, be thankful you are a lot more lucky than many other people, be sympathetic to those that aren’t , help where you can (or don’t if you don’t care) and wait for the storm to clear.

Also, tourism and retail isn’t going to collapse completely into obvilion. After the stay at home is lifted , people are going to be itching to do something. San Diego venues are outdoors, the stigma of possibly being infected won’t be nearly as an issue as other tourism businesses like a cruise ship (which imho won’t recover for awhile) or a close indoor venue like a concert, movie theater, or casino, which people could be risk adverse for some time . Theme Parks will need to be changed to practice some social distancing, but that can be done with technology and a little marketing and sales because generally those are outdoor too so you could start charging for admission based on linited groups and priority viewing similar to the old model that once Disneyland used with different ticket levels instead of a one entry ticket for all rides. People won’t mind pay a lot more for a lot less because they don’t want to get sick, so a theme park could totally exploit that. Cruise ships, concerts, movie theaters, and casinos have a lot more work to do to solve to “stranger too close” phobia problem, and there’s limited options to change that without changing the venue as we know it

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