Real Estate Update: Tuesday April 21st – Week 6 – The Bare Necessities

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Dear Friends, Clients, and Colleagues:

We have been watching a few more movies with the kids these days – typically after a week of homeschool to break up the monotony a bit.  We watch the classic Disney’s Jungle Book this week, and that’s when it dawned on me.  If it wasn’t already obvious, this is the perfect time to just focus on the simple things in life.  And to get you into the right mindset, here are some words from the welknown song from that movie sung by Phil Harris and Bruce Reitherman (aka Baloo and Mowgli).

Look for the bare necessities

The simple bare necessities

Forget about your worries and your strife

I mean the bare necessities

Old Mother Nature’s recipes

That brings the bare necessities of life

It is very hard to predict where we will be one month from now, let alone one year from now given the circumstances we all face.  What we do know is that the world is focused on the bare necessities – health, family, food, and shelter.  I heard one friend describe it as the Great Renewal.  Another friend, who just turned 100 years old (Shout out to Maude Infantino!) – talk about perspective! – said she thinks this is a good thing in that it is forcing people to slow down, and to have dinner with their families again.  I couldn’t agree more!

Health – We can use this time to focus on our health.  For me that means getting more sleep, taking a daily walk, stretching, and eating a balanced diet of minimally processed foods.  Feeding our minds with positive inputs is just as important for our mental health (see the TedTalk shared below). 

Family – Probably more than any other time in the last 70 years, we have the opportunity to connect with our families.  For those with school aged children, we have a daily hands-on role to play in their education, but in these times of disruption from routines, we also need to be there 24 hours a day for an emotional connect and support.  For those without a house full of kids, this is a chance to to pick up the phone and connect with extended family and old friends.  Personally, this has been one of the hidden joys of this time – I have truly enjoying catching up with many old friends that I hadn’t talked to in too long.

Food – This is where things get a little more challenging.  I read somewhere that during World War II, over 40% of our food was grown in our backyards; today it is less than 1%.  We have a great opportunity to reacquaint ourselves with where our food comes from, and maybe even start a garden of our own.  Maybe 40% is an ambitious goal, but just a pot of tomatoes or some basic herbs will help you find the joy of being part of your food from seed to plate.  For those that are interested, I have started some seedlings and would be happy to give you one or two to get you started on your garden for this summer (please email or call me if you are interested).

Shelter – Home has never been more central to our lives than it has for the past 5 weeks.  Hopefully it has been a place of refuge and comfort.  Maybe you have been forced to think about if your home meets your long term needs, or if there are some changes in order when things start to return to normal.  Maybe you want to seize the opportunity to make that move you’ve always dreamed about to the mountains, a lake house, or a home at the beach.  Or perhaps you just want to paint a room or redo the backyard.

Regardless of our current situation, shelter and housing will remain a need.  Just as it has been a place of refuge during the imediate health threat, I am confident that real estate will be one place in our economy that will lead us to recovery.  If you have a free minute, I would love it if you could share some feedback about what you think about real estate going forward.  I created a simple survey that should take less than 2 minutes to complete.  

Click here to take the survey.

Market Update

And for those that are following along with the real estate market, here’s a summary of activity in the South Bay from the last week:

  • New Listings: 61 (up from 45 last week)
  • New Escrows: 44 (up from 32 last week)
  • Closed Sales: 44 (down from 54 last week)
  • Back-on the Market (fell out of escrow): 18 (down from 19 last week)
  • Price Reductions: 31 (down from 41 last week)
  • Price Increases: 4 (same as last week)
  • Listing on hold: 16
  • Cancelled listing: 14
  •  

For another week volatility remains the norm.  This past week we saw a bump in new listings which was matched almost equally by new escrows, providing further evidence that even in times of crisis, people still need to buy and sell real estate.  We are seeing some tightening on the lending front, but what this means is that it is all that more important to have your ducks in a row when it comes to getting qualified for a loan.  I expect continued uncertainty in the short term around real estate so long as people are concerned about jobs, especially salary reductions and layoffs.  My message remains the same, unless you are in a position to have to sell, it is better to sit tight for a while, and if you are looking to buy, have a long term strategy in place to guide your decision making process.

I came across this Ted Talk and want to urge you to find 10 minutes to watch this.  It features some amazing photography, but more than that, it more of a meditation than a true talk.  If you don’t have time to watch it now, bookmark it and return to it later tonight or first thing tomorrow morning, you will be glad you did.

https://www.ted.com/talks/louie_schwartzberg_nature_beauty_gratitude?utm_campaign=tedspread&utm_medium=referral&utm_source=tedcomshare

Legal Resource

A friend of mine reached out to offer her legal resources to anyone with estate planning questions.  Here’s her offer exactly: “I am offering free consultations on the phone with any of your clients who may have any questions or concerns regarding any of their estate plan matters. We are trying to provide some information and peace of mind for people during this uncertain time.”  Thank you, Anna M. Schneider, Attorney at Law, Stearns, Kim, Stearns

To Schedule a Meeting – Click Here<https://freebusy.io/5schneiders@verizon.net/30min>

Or if you would just like a FAQ about Living Trusts during the Covid-19 Crisis, send me an email and I’ll forward it to you.

What I am reading this week:

Fannie Mae just released their updated April economic guidance.  There are many reports to keep an eye on, but I like to stay close to the real estate space and that’s why I typically pay close attention to what they are saying. 

https://www.fanniemae.com/portal/research-insights/forecast/monthly/economic-developments/april-2020.html

If you don’t want to read the entire report, here’s their national forecast for the residential resale market:  “Our 2020 house price forecast was revised downward from 4.6 percent to 0.4 percent year over year. While the slowdown in housing activity will likely correspond with weaker home price appreciation, we do not believe house price declines will be sustained on a national basis in our baseline forecast. Besides the expected short-run nature of this economic downturn, we believe there are additional factors limiting price softness. First, entering the current downturn, a lack of housing supply was putting upward pressure on prices. The months’ supply of existing homes for sale was just 3.1, a record low for the month of February. Second, the nature of the current sales slowdown is two-sided. Demand is declining as economic confidence falls and people avoid home tours due to social distancing. However, there is also a negative supply response as well, due to potential sellers not wanting to list their homes out of worry of infection or due to their belief that there are few buyers in the market. Therefore, an excess supply of available listings is not likely even as sales slow sharply. Realtor.com reported that for the week ending April 5 new listings fell by 31 percent from the year prior. In the March HPSI, the net number of respondents indicating that it was a good time to sell fell by 15 percentage points, much larger than the 3-percentage-point decline in respondents who believe it is a good time to buy. This supports our view that the drop off in activity is partially supply driven and that sales should begin to move upward once infection worries ease.”

So while we are going to feel the pain for the short term, because the overall supply is still low and will likely remain low as people wait for the health crisis to pass, the recovery will likely be strong once demand returns and “normal” financial activity resumes.

This Week’s Book Suggestion

“…many a trip continues long after movement in time and space has ceased. I remember a man in Salinas who in his middle years traveled to Honolulu and back, and that journey continued for the rest of his life. We could watch him in his rocking chair on his front porch, his eyes squinted, half-closed, traveling to Honolulu.”

This week I am digging into the archives a bit.  I believe the first time I read this was in college.  Going to school in Steinbeck country had a certain influence on my literary choices and definitely helped inspire my wanderlust a bit.  One of his lesser known books is still one of my favorites.  The author’s ability to describe his personal thoughts and interactions allow the reader to feel what he is feeling, and almost be transported into the passenger seat of his truck. But is also a commentary on the American spirit, the American people, and the author himself. So to satiate your wanderlust in a time when we are asked to put our travels aside, enjoy Travels with Charley, in Search of America, by John Steinbeck.

Stay healthy, be safe, and take care,

Kyle

 

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