2020 Market Update: Assessing the COVID Marketplace · 2020. 8. 18. · Sources: U.S. Census Bureau Household Pulse Survey (National Survey of 86,792 Adults, Conducted July 16‐21,

2020 Market Update:Assessing the COVID Marketplace

South Bay AORGeneral Membership MeetingAugust 18, 2020Leslie Appleton-YoungChief Economist + SVPCalifornia Association of REALTORS®

SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Mixed reactions on COVID within the real estate community

page2

35%

34%

31%

41%

27%

32%

35%

32%

33%

The U.S. will take too long inloosening restrictions

The U.S. will move too quickly inloosening restrictions

Unsure/Both

May 8-11May 1-4April 24-27

Q: Which of the following worries you more?

53%of Americans say stress related to COVID‐19 hashad a negative impact on their mental health

COVID‐19: A Snapshot

3Sources: U.S. Census Bureau Household Pulse Survey (National Survey of 86,792 Adults, Conducted July 16‐21, 2020);

Kaiser Family Foundation National Survey of 1,313 Adults, Conducted July 14‐19, 2020

51%of all Americans have

lost employment income since March 13

40%of all Americans have delayed medical care in the

past 4 weeks because of COVID‐19

27%of Americans either missed last month’s rent or

mortgage payment or have little confidence they can make the next one


The Economy

page05

CALIFORNIA ASSOCIATION OF REALTORS®

U.S. economy contracted at the sharpest rate on record

-32.9%-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Q1-

00Q

3-00

Q1-

01Q

3-01

Q1-

02Q

3-02

Q1-

03Q

3-03

Q1-

04Q

3-04

Q1-

05Q

3-05

Q1-

06Q

3-06

Q1-

07Q

3-07

Q1-

08Q

3-08

Q1-

09Q

3-09

Q1-

10Q

3-10

Q1-

11Q

3-11

Q1-

12Q

3-12

Q1-

13Q

3-13

Q1-

14Q

3-14

Q1-

15Q

3-15

Q1-

16Q

3-16

Q1-

17Q

3-17

Q1-

18Q

3-18

Q1-

19Q

3-19

Q1-

20

Real GDP Growth

Recession Real GDP Growth


Sharp decline in Q2 – Uncertain path of recovery

Q120 Q220 Q320 Q420 2020

Bank of America -5.0% -30.0% -1.00% 30.0% -10.4%

Congressional Budget Office -5.0% -37.7% 21.5% 10.4% -5.6%

Goldman Sachs -5.0% -39.0% 29.0% NA -6.5%

JP Morgan -5.0% -25.0% 8.0% 4.0% NA

Morgan Stanley -5.0% -37.9% 20.7% 15.9% -5.5%

UCLA -5.0% -41.8% 11.8% 7.6% -8.3%

Wells Fargo -5.0% -37.6% 23.9% 10.6% -5.8%

page7

* Latest updates as of 06/25/2020

2020 GDP Forecasts

CA losing $31.5% of its Daily GDP

page8SOURCE: Wall Street Journal, Moody’s Analytics

page9

Unemployment rate fell more than expected

SOURCE: St. Louis Fed

Employment: Reopening boosts jobs15 M below pre-COVID levels

page10

-20,787

2,6994,800

-25,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

Jan-

18Fe

b-18

Mar

-18

Apr

-18

May

-18

Jun-

18Ju

l-18

Aug

-18

Sep-

18O

ct-1

8N

ov-1

8D

ec-1

8Ja

n-19

Feb-

19M

ar-1

9A

pr-1

9M

ay-1

9Ju

n-19

Jul-1

9A

ug-1

9Se

p-19

Oct

-19

Nov

-19

Dec

-19

Jan-

20Fe

b-20

Mar

-20

Apr

-20

May

-20

Jun-

20

Chg. in Nonfarm Employment (thousand)

SERIES: Chg. in Nonfarm EmploymentSOURCE: U.S. Census Bureau

page11

Jobless claims dropped below 1 million for the first time since the Coronavirus pandemic

SOURCE: Department of Labor

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Thou

sand

s

U.S. Initial Unemployment Insurance Claims

page12

Over the past 5 months, over 56 million Americans have filed for unemployment insurance

SOURCE: FRED St. Louis Fed

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1/7/

1967

1/7/

1968

1/7/

1969

1/7/

1970

1/7/

1971

1/7/

1972

1/7/

1973

1/7/

1974

1/7/

1975

1/7/

1976

1/7/

1977

1/7/

1978

1/7/

1979

1/7/

1980

1/7/

1981

1/7/

1982

1/7/

1983

1/7/

1984

1/7/

1985

1/7/

1986

1/7/

1987

1/7/

1988

1/7/

1989

1/7/

1990

1/7/

1991

1/7/

1992

1/7/

1993

1/7/

1994

1/7/

1995

1/7/

1996

1/7/

1997

1/7/

1998

1/7/

1999

1/7/

2000

1/7/

2001

1/7/

2002

1/7/

2003

1/7/

2004

1/7/

2005

1/7/

2006

1/7/

2007

1/7/

2008

1/7/

2009

1/7/

2010

1/7/

2011

1/7/

2012

1/7/

2013

1/7/

2014

1/7/

2015

1/7/

2016

1/7/

2017

1/7/

2018

1/7/

2019

1/7/

2020

Thou

sand

s

U.S. Initial Unemployment Insurance Claims

37 millionin ~2 years

56.3 million in 21

weeks

page13

Small businesses revenue down

SOURCE: Wall Street Journal, Womply via Opportunity Insights

page14

Many small businesses are having financial difficulty

SOURCE: Oxxford Information Technology

Notes: Oxxford defines a small business as those with less than $10 million in revenue.

page15

The pandemic forces many to close

SOURCE: Yelp

Notes: Data are for businesses with fewer than five locations.

page16

Business closures led to sharp decline in employment

SOURCE: HomebaseNotes. 14-day moving average of number of hourly workers with at least one clock-in

Number of employees working at small businesses, change from January

June 2020: 98.1

July 2020: 92.6

0

20

40

60

80

100

120

140

160

IND

EX, 1

00=1

985

Consumer Confidence Ebbed in July

page17

Composite Index

SERIES: Consumer Confidence – Composite IndexSOURCE: The Conference Board

Retail sales rose again and topped pre-pandemic levels, but may slow in coming months

page18SOURCE: Census Bureau, St. Louis Fed

March 2020: -8.2%

April 2020: -14.7%

May 2020: 18.3%

June 2020: 8.4%

July 2020: 1.2%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Month-to-Month Change in Retail Sales and Food Services

Wall Street disconnected from Main Street

page19

SERIES: Dow 30, NasdaqSOURCE: Yahoo! Finance

29,551

26,585

18,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000Dow Jones (1/2/20 – 7/27/20)

9,817

10,536

6,000

7,000

8,000

9,000

10,000

11,000

12,000Nasdaq (1/2/20 – 7/27/20)

page20

Tech stocks mirror consumer behaviorS.I.P. & Streaming

SOURCE: BBC News

% Chg. in share price

And then there is the housing market --Showings in California continue to outpace last year’s

page21

SERIES: Weekly showings normalized to the first calendar week of January, 7-day moving averageSOURCE: Showingtime.com,

page022


Fiscal & Monetary Policy Response


page25

Fiscal Policy: Quick Action + Bottlenecks

SOURCE: California Association of REALTORS®

• Coronavirus Preparedness & Response Supplemental Appropriations Act (3/6)

• Families First Coronavirus Response Act (3/18)• Coronavirus Aid, Relief, and Economic Security Act

($2.2T CARES Act) (3/27)• Paycheck Protection Program & Health Care

Enhancement Act (4/24)

page26

What Comes Next? Congress in session until Aug 7


• House passed $3.5T Heros Act on May 15 • $600 weekly unemployment supplement til January• $1200 checks to individuals Direc$1T Aid to state and local

governments• $430B for schools• $10B food assistance• $25B post office

• Senate Proposal July 27 $1T Heals Act• $200 weekly unemployment supplement til Sept; 70% + state • $1200 checks to individuals• $105B for schools• No eviction relief for renters (expired 7/24)• No aid for state & local governments• Liability protection from COVID lawsuits

page27

Monetary Policy: Federal Reserve has taken unprecedented action


• Cut fed funds rate down to 0% - 0.25%• Forward guidance: “rates will remain low” • Lowered discount window rate to 0.25%• Expanded repo operations • Open-ended Securities purchases (QE)- Treasuries, Gov’t

guaranteed MBS, commercial MBS • Direct lending to banks, major corporate employers• Temporary relaxation of regulatory requirements• Relaxed growth restrictions on Wells Fargo

Motivated by historic low rates

page28

January 2012 – April 2019

3.02 2.962.84 3.02 2.90

0.25 0.250

1

2

3

4

5

6

FRMARMFed Funds Rate

MONTHLY WEEKLY

January 2012 – August 2020

SERIES: 30Yr FRM, 5Yr ARM, Fed Funds Rate (Target Rate)SOURCE: Freddie Mac, St. Louis Fed

CALIFORNIA ASSOCIATION OF REALTORS® CALIFORNIA ASSOCIATION OF REALTORS®

Purchase applications still up over 20% YTY

0.99

-20

-15

-10

-5

0

5

10

15

20Weekly Change in New Mortgage Purchase Applications

All Purchase Loans Conventional Government

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

3/6 3/20 4/3 4/17 5/1 5/15 5/29 6/12 6/26 7/10 7/24 8/7

Year-to-Year Change in New Mortgage Purchase Applications

*Updated as of 8/12/20

Many mortgages still in forbearance

4,068,753

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

4/13 4/20 4/27 5/4 5/11 5/18 5/25 6/2 6/9 6/16 6/23 6/30 7/7 7/14

Mortgages in Forbearance

SOURCE: MBA, estimates from C.A.R.

May 2020: Concern is Rising -- Highest since August 2014

page032

LA County: 365,000 residential evictionsonce the moratorium lifts

SOURCE: UCLA - UD Day: Impending Evictions and Homelessness in Los Angeles

• As of May 9, 2020, approximately 599,000 workers in Los Angeles County have lost their jobs and have no unemployment insurance or other income replacement.

• About 449,000 of those unemployed and with no income live in about 365,000 units of rental housing and have long been bearing the second heaviest rent burdens of all the urban areas in the United States.

• Most of those households lack savings or other resources to use for paying rent

• Nearly all of those tenants who are unable to pay rent will face eviction.


California Housing Market

August 2020: Is it a good time to buy or sell?

52%44%54%

Sep-

18

Nov

-18

Jan-

19

Ma

r-19

Ma

y-19

Jul-1

9

Sep-

19

Nov

-19

Jan-

20

Ma

r-20

Ma

y-20

Jul-2

0

23%31%

33%

Sep-

18

Nov

-18

Jan-

19

Ma

r-19

Ma

y-19

Jul-1

9

Sep-

19

Nov

-19

Jan-

20

Ma

r-20

Ma

y-20

Jul-2

0

Do you think it’s a good time to sell a home in California?

Do you think it’s a good time to buy a home in California?

page35

SERIES: Google Consumer PollSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

62%

Existing Home Sales% change

+6.4% YTY

JULY 2020 Market Snapshot Sales up, Prices way up, Supply really low

page036

Price

$666,320+9.6% Y2Y

Unsold Inventory Index

2.1 months-34.4% Y2Y

Median Days on Market

17 days-19.0% Y2Y

Sales Price to List Price Ratio

100.0%+1.0% Y2Y

July 2020


-10.0% YTD

California home sales continued improving and turned positive on a year-over-year

page37

6.4%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20

Year-over-Year % Chg 6 per. Mov. Avg. (Year-over-Year % Chg)

SERIES: Sales of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

page038

Sales surged passed 400k for the first time since February

page39

California, July 2020 Sales: 437,890 Units, -10.0% YTD, +6.4% YTY, +28.8% MTM

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Jan-

05

Sep-

05

Ma

y-06

Jan-

07

Sep-

07

Ma

y-08

Jan-

09

Sep-

09

Ma

y-10

Jan-

11

Sep-

11

Ma

y-12

Jan-

13

Sep-

13

Ma

y-14

Jan-

15

Sep-

15

Ma

y-16

Jan-

17

Sep-

17

Ma

y-18

Jan-

19

Sep-

19

Ma

y-20

SERIES: Sales of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Sales up big for high-end markets

page40

July 2020(YTY% Chg.)

-19.6%

3.9% 8.7% 13.4%24.2%25.5%

56.9%

-30%-20%-10%

0%10%20%30%40%50%60%70% 40%

40%

20%

46%

37%

17%

$0 - $499k

$500 - $999k

$1M+

Share by Price Segment

20202019

SERIES: Sales of Existing Detached HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Change in the mix of sales changed – more high-end home sales in July

page41

46%40%

0%10%

20%30%

40%50%

60%

% o

f Sal

es

$0 – $499k

SERIES: Sales of Existing Detached HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

37%

40%

30%32%34%36%38%40%42%

% o

f Sal

es

$500 – $999k

2019 2020

17%20%

0%

5%

10%

15%

20%

25%

% o

f Sal

es

$1M+

Sales rebounded but the growth was particularly strong in the high-end market

page42

-60%

-40%

-20%

0%

20%

40%

60%

80%

Dec

-18

Jan-

19

Feb-

19

Ma

r-19

Apr

-19

Ma

y-19

Jun-

19

Jul-1

9

Aug

-19

Sep-

19

Oct

-19

Nov

-19

Dec

-19

Jan-

20

Feb-

20

Ma

r-20

Apr

-20

Ma

y-20

Jun-

20

Jul-2

0

YTY

% C

hg. i

n Sa

les

$0 - $299k $300 - $399k $400 - $499k $500 - $749k$750 - $999k $1,000 - $1,999k $2,000k+

SERIES: Percent Change in SalesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Sales improvement more pronounced in ultra high-end market

page43

5.8%

28.4%

76.6%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Jan-

19

Feb-

19

Ma

r-19

Apr

-19

Ma

y-19

Jun-

19

Jul-1

9

Aug

-19

Sep-

19

Oct

-19

Nov

-19

Dec

-19

Jan-

20

Feb-

20

Ma

r-20

Apr

-20

Ma

y-20

Jun-

20

Jul-2

0

YTY

% C

hg. i

n Sa

les

$0 - $999k $1M - $2.99M $3M+

SERIES: Percent Change in SalesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Pending sales continued to improve but at a more modest pace

page44

1.9%

-40%

-20%

0%

20%

40%

60%

80%

MTM

% C

hg. i

n Pe

ndin

g Sa

les

SERIES: Percent Change in Pending SalesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Pending sales had yet the biggest year-over-year increase since April 2012

page45

24.3%

-50%-40%-30%-20%-10%

0%10%20%30%

Jan-

17

Ma

r-17

Ma

y-17

Jul-1

7

Sep-

17

Nov

-17

Jan-

18

Ma

r-18

Ma

y-18

Jul-1

8

Sep-

18

Nov

-18

Jan-

19

Ma

r-19

Ma

y-19

Jul-1

9

Sep-

19

Nov

-19

Jan-

20

Ma

r-20

Ma

y-20

Jul-2

0

YTY

% C

hg. i

n Pe

ndin

g Sa

les


Pending sales in the top end outpaced more affordable markets

page46

18.7%

60.7%

115.6%

-100%

-50%

0%

50%

100%

150%

YTY

% C

hg. i

n P

endi

ng S

ales

$0 - $999k $1M - $2.99M $3M+


Another record: More high-end sales propel statewide median price to a new high

page47

California, July 2020: $666,320, +6.4% MTM, +9.6% YTY

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Jan-

05

Sep-

05

Ma

y-06

Jan-

07

Sep-

07

Ma

y-08

Jan-

09

Sep-

09

Ma

y-10

Jan-

11

Sep-

11

Ma

y-12

Jan-

13

Sep-

13

Ma

y-14

Jan-

15

Sep-

15

Ma

y-16

Jan-

17

Sep-

17

Ma

y-18

Jan-

19

Sep-

19

Ma

y-20

SERIES: Median Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

List price popped but due primarily to more listings in high-priced market

page48

-20%

-10%

0%

10%

20%

30%

40%

Jan-

12M

ay-

12Se

p-12

Jan-

13M

ay-

13Se

p-13

Jan-

14M

ay-

14Se

p-14

Jan-

15M

ay-

15Se

p-15

Jan-

16M

ay-

16Se

p-16

Jan-

17M

ay-

17Se

p-17

Jan-

18M

ay-

18Se

p-18

Jan-

19M

ay-

19Se

p-19

Jan-

20M

ay-

20

YTY%

Chg

. in

Pric

e

Listing Price Sales Price

SERIES: Sales to List Ratio of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Price growth turned positive in all percentiles; strongest gain in the top end

page49

SERIES: Median Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

11.8% 11.1% 11.2% 12.2%

19.0% 19.0%16.9%

21.1%

28.8%

0%

5%

10%

15%

20%

25%

30%

35%

0-20 20-40 40-60 60-80 80-100 80-85 86-90 91-95 96-100Percentile

Year-over-Year Price Growth

Price growth turned positive in all percentiles; strongest gain in the top end

page50

-10%

-5%

0%

5%

10%

15%

20%

25%

YTY%

Chg

. in

Pric

e

0-20 20-40 40-60 60-80 80-100

SERIES: Percent Change in PriceSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Inventory down as sales improved and fewer new listings being added

page51

0.02.04.06.08.0

10.012.014.016.018.0

Jan-

05

Sep-

05

Ma

y-06

Jan-

07

Sep-

07

Ma

y-08

Jan-

09

Sep-

09

Ma

y-10

Jan-

11

Sep-

11

Ma

y-12

Jan-

13

Sep-

13

Ma

y-14

Jan-

15

Sep-

15

Ma

y-16

Jan-

17

Sep-

17

Ma

y-18

Jan-

19

Sep-

19

Ma

y-20

Mon

ths

of S

uppl

y

SERIES: Unsold Inventory Index of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Jul 2019: 3.2 Months; Jul 2020: 2.1 Months

Unsold Inventory dipped in all Regions

page52

2.3

1.80.01.02.03.04.05.06.07.08.09.0

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

Jul-2

0

Mon

ths

of S

uppl

y

Bay Area So CA Central Valley

SERIES: Unsold Inventory Index of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®


Active listings tightened up further in July

page53

010,00020,00030,00040,00050,00060,00070,000

California Active Listings by Month

2018 2019 2020

Active listings plunged by almost half as pent up demand remained robust

page54

-47.7%-60%-50%-40%-30%-20%-10%

0%10%20%30%40%

Jan-

15M

ar-1

5M

ay-

15Ju

l-15

Sep-

15N

ov-1

5Ja

n-16

Ma

r-16

Ma

y-16

Jul-1

6Se

p-16

Nov

-16

Jan-

17M

ar-1

7M

ay-

17Ju

l-17

Sep-

17N

ov-1

7Ja

n-18

Ma

r-18

Ma

y-18

Jul-1

8Se

p-18

Nov

-18

Jan-

19M

ar-1

9M

ay-

19Ju

l-19

Sep-

19N

ov-1

9Ja

n-20

Ma

r-20

Ma

y-20

Jul-2

0

Year-over-Year % Chg

SERIES: Active Listing of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Housing supply tightened up in all regions

page55

7,684

28,749

10,467

2,9065,157

14,161

5,2241,640

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

San Francisco BayArea

Southern California Central Valley Central Coast

Act

ive

Listin

gs

Jun-19 Jun-20

SERIES: Active Listings of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Supply continued to drop as sales improved

page56

14.8%5.4% 6.6%

21.9%

-32.9%

-50.7% -50.1%-43.6%

-60%-50%-40%-30%-20%-10%

0%10%20%30%

San Francisco BayArea

Southern California Central Valley Central Coast

Year

-to-

Year

% C

hg

Sales Active ListingsJuly 2020

SERIES: Sales and Listings of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Active listings dropped in all price segments

page57

-54.9%

-30.3%

-13.4%

-60%-50%-40%-30%-20%-10%

0%10%20%30%40%

YTY

% C

hg. i

n A

ctiv

e Lis

tings

$0 - $999k $1M - $2.99M $3M+

SERIES: Percent Change in Active ListingsSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Sales-to-list price ratio improved in the top end, but not the ultra high-end

page58

100.0% 100.0% 100.0% 100.0%

99.3%

100.0% 100.0%

99.2%

97.6%

100.0%

96.0%96.5%97.0%97.5%98.0%98.5%99.0%99.5%

100.0%100.5%

0-20 20-40 40-60 60-80 80-100 80-85 86-90 91-95 96-100

California Sales-to-List Price Ratio by Quintile

Jul-19 Jul-20


Median sales vs. list price growth $1M+ properties

page59

-10%

-5%

0%

5%

10%

15%

20%

Jan-

09Ju

n-09

Nov

-09

Apr

-10

Sep-

10Fe

b-11

Jul-1

1D

ec-1

1M

ay-

12O

ct-1

2M

ar-1

3A

ug-1

3Ja

n-14

Jun-

14N

ov-1

4A

pr-1

5Se

p-15

Feb-

16Ju

l-16

Dec

-16

Ma

y-17

Oct

-17

Ma

r-18

Aug

-18

Jan-

19Ju

n-19

Nov

-19

YTY%

Chg

. in

Pric

e

California Median Sales vs. List Price Growth

Listing Price Sales Price


Reduced-Price Listings

page60

Share of Listings with a Reduced Price: 27.6%; Median Reduction Amount: -4.3%

-10%-9%-8%-7%-6%-5%-4%-3%-2%-1%0%

0%5%

10%15%20%25%30%35%40%45%50%

1/1/

2010

6/1/

2010

11/1

/201

04/

1/20

119/

1/20

112/

1/20

127/

1/20

1212

/1/2

012

5/1/

2013

10/1

/201

33/

1/20

148/

1/20

141/

1/20

156/

1/20

1511

/1/2

015

4/1/

2016

9/1/

2016

2/1/

2017

7/1/

2017

12/1

/201

75/

1/20

1810

/1/2

018

3/1/

2019

8/1/

2019

1/1/

2020

6/1/

2020

Share Reduced Median ReductionSERIES: Listing Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Growth in Reduced-Price Listings

page61

Growth in Share of Listings with a Reduced Price: -11.9% Growth in Median Reduction Amount: 0.1%

-0.40%-0.30%-0.20%-0.10%0.00%0.10%0.20%0.30%0.40%

-15%

-10%

-5%

0%

5%

10%

1/1/

2015

4/1/

2015

7/1/

2015

10/1

/201

5

1/1/

2016

4/1/

2016

7/1/

2016

10/1

/201

6

1/1/

2017

4/1/

2017

7/1/

2017

10/1

/201

7

1/1/

2018

4/1/

2018

7/1/

2018

10/1

/201

8

1/1/

2019

4/1/

2019

7/1/

2019

10/1

/201

9

1/1/

2020

4/1/

2020

7/1/

2020

Share Reduced Median Reduction

SERIES: Listing Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®


Local Market Stats

CALIFORNIA ASSOCIATION OF REALTORS® page063









2020 Forecast


Sales expected to fall sharply in Q2 but bounce back in H2

page73

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 Q121 Q221

Milli

ons

U.S. Existing Single-Family Home Sales

NAR Fannie Mae MBA

Millions

SERIES: U.S. existing home salesSOURCE: NAR, Fannie Mae, Mortgage Bankers Association

0.7%

-30.7%

23.7%

8.5%

2.0%

1.9%0.7%

-24.7%

17.7%

-8.0%

9.9%

4.5%

0.7%

-13.6%

9.4%

4.7%

1.2%

1.6%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Q120 Q220 Q320 Q420 Q121 Q221

U.S. Existing SFR Sales Growth (qtq%)

NAR Fannie Mae MBA

Price effects to follow with a lag

page74

$230

$240

$250

$260

$270

$280

$290

$300

$310

Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 Q121 Q221

Med

ian

Pric

e (T

hous

and

)

U.S. Existing Single-Family Median Price

NAR Fannie Mae MBA

SERIES: Median Price of Existing Home SalesSOURCE: NAR, Fannie Mae, Mortgage Bankers Association

7.2%

-1.8%

-3.1%

0.0%

7.2%

4.0%

-0.7%

-2.8%

-0.4%

5.9%6.0%

0.8%

-2.3%

1.7%1.2%

-4%

-2%

0%

2%

4%

6%

8%

Q220 Q320 Q420 Q121 Q221

U.S. Existing SFR Median Price Growth (qtq%)NAR Fannie Mae MBA


U.S. sales down in 2020, but bounce back in 2021

yty% chg. in home sales Q120 Q220 Q320 Q420 Q121 Q221 2020 2021

NAR 5.2% ‐28.1% ‐13.4% ‐6.3% ‐5.1% 39.5% ‐10.7% 11.1%

Fannie Mae 5.2% ‐22.1% ‐10.3% ‐17.6% ‐10.5% 24.2% ‐11.4% 8.6%

MBA 5.2% ‐10.4% ‐4.2% 0.1% 0.2% 17.8% ‐2.3% 8.2%

page75

* Latest updates as of 06/17/2020

yty % chg. inhome price Q120 Q220 Q320 Q420 Q121 Q221 2020 2021

NAR 7.7% 5.5% 3.5% 2.0% 2.0% 2.0% 3.8% 2.1%

Fannie Mae 7.7% 2.2% 1.4% 0.4% ‐0.1% 1.8% 1.8% 1.1%

MBA 7.7% 4.3% 5.1% 4.4% 6.1% 1.3% 5.3% 3.1%


(OLD) C.A.R. 2020 Sales & Price Forecast2021: 381,980 Sales (+10%) $615,200 (+5%)

Sales expected to surge further in August, but began to slow in the fall

page77

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep-

17

Nov

-17

Jan-

18

Mar

-18

May

-18

Jul-1

8

Sep-

18

Nov

-18

Jan-

19

Mar

-19

May

-19

Jul-1

9

Sep-

19

Nov

-19

Jan-

20

Mar

-20

May

-20

Jul-2

0

Sep-

20

Nov

-20

YTY%

Chg

. in

Sale

s

SERIES: Sales of Existing Single-Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

forecast

High-end home sales and low rates push up California median price for the rest of 2020

page78

-10%

-5%

0%

5%

10%

15%

20%

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep-

17

Nov

-17

Jan-

18

Mar

-18

May

-18

Jul-1

8

Sep-

18

Nov

-18

Jan-

19

Mar

-19

May

-19

Jul-1

9

Sep-

19

Nov

-19

Jan-

20

Mar

-20

May

-20

Jul-2

0

Sep-

20

Nov

-20

YTY%

Chg

. in

Pric

e

SERIES: Median Price of Existing Single-Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

forecast


DRE Pipeline: Real Estate Salesperson Licenses Issued

19511951

Membership Forecast (Thousands)

page80

New Renewals Total % chg. in New

% chg. in Renewals

% chg. in Total

2017 28.5 171.5 200.5 11.3% 3.8% 4.8%

2018 25.1 179.9 205.5 -11.8% 4.9% 2.5%

2019 23.2 183.6 207.0 -7.7% 2.0% 0.7%

2020p 19.1 180.5 199.7 -17.6% -1.7% -3.5%

2021f 16.9 174.3 191.4 -11.4% -3.4% -4.2%


Post-COVIDReal Estate: What’s next?

The New Normal

page83

Remote working changes the “where” for homebuying

• Three quarters of those who work from homebecause of the coronavirus say they want tocontinue.

• Two-thirds say they would consider moving ifgiven that flexibility.

• Remote working promotes homebuying insecondary cities, more remote locationswith larger home.

• Half of those who are able to work fromhome say they would be open to acommute that was up to 45 minutes orlonger.

SOURCE: Zillow, The Harris Poll


page85

Home and homeownership become even more valuable

Home is more than just a roof and a shelter

• Remote working means spending moretime at home

• A home is not just a place to live but also a place to work

• Those who work from home may also need a bigger house if more space is dedicated as the office

page86

What “shelter” means in the new normal

• Urban area residence needs selfsufficient design elements likesunrooms or spaces for urban farmingto accommodate for a lack ofoutdoor space.

• Open floor plan can be a detrimentfor functional privacy, as home isnow an office

page87

Retail and office spaces could also be used as residential real estate

SOURCE: Loopnet, UBS, Global Workplace Analytics

COVID-19 impact

- According to a UBS report, the U.S. retail industry appears to stand to lose 11% to 17% of its total store count by 2025.

- In the next five years, 100,000 retail stores will close nationwide, and the number of closed stores could rise as high as 150,000.

- Global Workplace Analytics predicts that 30% of people will work from home multiple days per week within a couple of years. Office space demand may decline as remote working becomes a new normal.

Opportunity

- Vacant retail and office space could be converted into residential units, which would help to alleviate the shortage supply in the housing market.

page88

Turning malls into homes

SOURCE: Business Insiders, Forbes,

Recycling mall spaces?

• A survey found that malls are at the top ofthe list of places to avoid if the outbreakworsens.

• RetailNext reports that 97% of the 450 brick-and-mortar retail executives it surveyed have closed some or all of their doors.

• Restaurants and movie theaters were the first casualties of social-distancing public health protocols

• JC Penny, J. Crew, Neiman Marcus filed for bankruptcy


Who Will the Winners Be? 1. Residential real estate

2. The tech-enabled agent

3. The relationship – centered agent

4. Housing supply -- Transition commercial and retail

spaces into affordable residential villages.

page89

Thank YouThis presentation can be found on

www.car.org/marketdataSpeeches & Presentations

[email protected]

Documents

2020 Market Update: Assessing the COVID Marketplace · 2020. 8. 18. · Sources: U.S. Census Bureau Household Pulse Survey (National Survey of 86,792 Adults, Conducted July 16‐21,