2020 Market Update: Assessing the COVID Marketplace · 2020. 8. 18. · Sources: U.S. Census Bureau...
Transcript of 2020 Market Update: Assessing the COVID Marketplace · 2020. 8. 18. · Sources: U.S. Census Bureau...
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2020 Market Update:Assessing the COVID Marketplace
South Bay AORGeneral Membership MeetingAugust 18, 2020Leslie Appleton-YoungChief Economist + SVPCalifornia Association of REALTORS®
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SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Mixed reactions on COVID within the real estate community
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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?
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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
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SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
The Economy
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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-
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3-10
Q1-
11Q
3-11
Q1-
12Q
3-12
Q1-
13Q
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Q1-
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3-14
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Q1-
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3-16
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3-17
Q1-
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3-18
Q1-
19Q
3-19
Q1-
20
Real GDP Growth
Recession Real GDP Growth
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CALIFORNIA ASSOCIATION OF REALTORS®
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%
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* Latest updates as of 06/25/2020
2020 GDP Forecasts
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CA losing $31.5% of its Daily GDP
page8SOURCE: Wall Street Journal, Moody’s Analytics
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Unemployment rate fell more than expected
SOURCE: St. Louis Fed
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Employment: Reopening boosts jobs15 M below pre-COVID levels
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-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
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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
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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
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1/7/
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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
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Small businesses revenue down
SOURCE: Wall Street Journal, Womply via Opportunity Insights
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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.
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The pandemic forces many to close
SOURCE: Yelp
Notes: Data are for businesses with fewer than five locations.
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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
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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
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Composite Index
SERIES: Consumer Confidence – Composite IndexSOURCE: The Conference Board
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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
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Wall Street disconnected from Main Street
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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)
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Tech stocks mirror consumer behaviorS.I.P. & Streaming
SOURCE: BBC News
% Chg. in share price
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And then there is the housing market --Showings in California continue to outpace last year’s
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SERIES: Weekly showings normalized to the first calendar week of January, 7-day moving averageSOURCE: Showingtime.com,
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page022
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SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Fiscal & Monetary Policy Response
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CALIFORNIA ASSOCIATION OF REALTORS®
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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)
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What Comes Next? Congress in session until Aug 7
SOURCE: California Association of REALTORS®
• 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
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Monetary Policy: Federal Reserve has taken unprecedented action
SOURCE: California Association of REALTORS®
• 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
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Motivated by historic low rates
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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
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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
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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.
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May 2020: Concern is Rising -- Highest since August 2014
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page032
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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.
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SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
California Housing Market
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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
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-18
Jan-
19
Ma
r-19
Ma
y-19
Jul-1
9
Sep-
19
Nov
-19
Jan-
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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?
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SERIES: Google Consumer PollSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
62%
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Existing Home Sales% change
+6.4% YTY
JULY 2020 Market Snapshot Sales up, Prices way up, Supply really low
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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
CALIFORNIA ASSOCIATION OF REALTORS®
-10.0% YTD
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California home sales continued improving and turned positive on a year-over-year
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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®
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page038
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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®
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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®
![Page 41: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/41.jpg)
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+
![Page 42: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/42.jpg)
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®
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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®
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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®
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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
SERIES: Percent Change in Pending SalesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
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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+
SERIES: Percent Change in Pending SalesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
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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®
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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®
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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
![Page 50: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/50.jpg)
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®
![Page 51: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/51.jpg)
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
![Page 52: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/52.jpg)
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®
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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
![Page 54: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/54.jpg)
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®
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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®
![Page 56: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/56.jpg)
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®
![Page 57: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/57.jpg)
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®
![Page 58: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/58.jpg)
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
SERIES: Sales to List Ratio of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
![Page 59: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/59.jpg)
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
SERIES: Sales to List Ratio of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
![Page 60: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/60.jpg)
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®
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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®
![Page 62: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/62.jpg)
SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Local Market Stats
![Page 63: 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,](https://reader035.fdocuments.us/reader035/viewer/2022062508/6048ee015b4ae120ef46b482/html5/thumbnails/63.jpg)
CALIFORNIA ASSOCIATION OF REALTORS® page063
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CALIFORNIA ASSOCIATION OF REALTORS®
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CALIFORNIA ASSOCIATION OF REALTORS® page065
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CALIFORNIA ASSOCIATION OF REALTORS® page068
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CALIFORNIA ASSOCIATION OF REALTORS® page069
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CALIFORNIA ASSOCIATION OF REALTORS®
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SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2020 Forecast
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CALIFORNIA ASSOCIATION OF REALTORS®
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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
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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
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CALIFORNIA ASSOCIATION OF REALTORS®
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%
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CALIFORNIA ASSOCIATION OF REALTORS®
(OLD) C.A.R. 2020 Sales & Price Forecast2021: 381,980 Sales (+10%) $615,200 (+5%)
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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
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High-end home sales and low rates push up California median price for the rest of 2020
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-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
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CALIFORNIA ASSOCIATION OF REALTORS®
DRE Pipeline: Real Estate Salesperson Licenses Issued
19511951
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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%
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SERIES: 2020 Membership SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Post-COVIDReal Estate: What’s next?
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The New Normal
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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
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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
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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
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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.
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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
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CALIFORNIA ASSOCIATION OF REALTORS®
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.
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Thank YouThis presentation can be found on
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