Market Watch - 13 Aug. 2021

Since last week, residential housing had setbacks. New Listings and Properties Under Contract were flat while Pending and Sold Properties decreased. There are slightly more new listings than sold, so it’s a minor improvement.

 
The Lease Market saw declines in new listings and properties leased since many districts started new school years and the CDC stepped in to regulate the lease market mechanisms last week.

The CDC Eviction Moratorium expired on July 31, 2021. Congress didn't impose a new moratorium.

The expectation was that more houses would enter the market after the moratorium expired. Landlords could liquidate those houses relatively quickly and extract appreciation from the properties. After months of tenants living in those properties without paying rent and most likely unwilling to perform regular maintenance, it is feasible those properties would need repairs to become market ready. Most were expected to hit the market starting on Aug. 15 after evictions and repairs.

However, the CDC issued a "new" moratorium on Aug 3. They stated it is not an extension of the previous moratorium that the Supreme Court ruled against. Instead, this is a "new moratorium" that only affects "Areas of Substantial and High Transmission" of COVID-19 - which is about 90 percent of the USA. Unless overturned or extended, the “new moratorium” is set to expire Oct. 3, 2021.

Alabama and Georgia associations of REALTORS were joined by the national association in lawsuits to stop this action.

The Lease Market had a sharp increase after the previous eviction moratorium ended. However, it was followed by a significant drop after the “new moratorium” was ordered. With a shortage of lease homes available, those potential tenants must work harder to find housing in both the lease and preowned markets.

Since the “new moratorium” was implemented, listing volume has been on a slow but steady decline. Sold properties had a spike as school began across much of the DFW Metroplex. It has since decreased below the volume of July 30.

The volume of Price Decreases had a sharp turn after the new moratorium was announced. It’s the first drop since the moratorium delay from June to July but a much higher volume as sellers understood an influx of former lease houses to the market is unlikely soon.

Months Of Supply measures demand. The Months Of Supply was at historic lows in March. The historic high point for lumber futures was in May. Unemployment stopped paying additional supplements at the end of June and unemployment numbers dropped in July. Simultaneously, many states began to roll back pandemic protocols during these months as vaccination rates climbed.

The result is that employees went back to work as the costs of building materials declined. Subsequently, new housing starts increased as builders purchased materials at bulk prices and worked on demand backlogs.

The new construction homes have affected the Months Supply of Inventory numbers while preowned listings remain relatively flat near historic lows.

The “Fourth Wave” of COVID-19 Delta and Lambda variations has put a strain on area hospitals and created a rollback to some pandemic restrictions in urban centers. These actions are new this week and are likely to affect sellers who are concerned about the disease transmission.

At this point, it’s still a strong seller’s market for preowned houses with limited supply of both lease and preowned properties. Buyers with the help of REALTORS can find more new construction homes in outlying areas of the Metroplex.

I have a variety of options for sellers who want to buy before they sell and might need a small repair budget to maximize their selling price and/or speed of sale. I also know where new construction homes are available in North Texas.

Call, text or email when you’re ready for me to help you sell or buy a residential property in this complex market.

I’ve Got Your Six!

Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212
DFWmark.com

#DFWmark #REALTOR #MarketWatch #SellersMarket #NewMoratorium #PriceStability #FlatMarket #LeaseShortage #moratoriums #NewConstruction

Unwinding the Pandemic Market

COVID Pandemic Market trend.
8/Please click on image to enlarge.

8/27/21 UPDATE:
U.S. Supreme Court ends CDC eviction moratorium.

 

8/3/21 UPDATE:

  The CDC Eviction Moratorium expired on July 31, 2021. Congress didn't impose a new moratorium.
  However, the CDC issued a "new" moratorium today. They stated this is not an extension of the previous moratorium that the Supreme Court ruled against. Instead, this is a "new moratorium" that only affects "Areas of Substantial and High Transmission" of COVID-19 - which is about 90 percent of the USA.

  Alabama and Georgia associations of REALTORS were joined by the national association in lawsuits to stop this action.

6/30/21 UPDATE:

Supreme Court rules CDC lacks authority to implement eviction ban 

However, the court declined to lift the current moratorium. Therefore, the eviction moratorium remains until July 31.

6/28/21 UPDATE:

CDC Extends Eviction Moratorium to End of July

Action has kicked the can another month. Expect historic housing shortages to continue until around the time school starts. 

5/5/21 UPDATE:

NAR: Court Strikes Down Eviction Ban 

NBC reports, “The judge noted that while Congress had ratified earlier extensions of the moratorium order, it had not done so for the latest extension. 

It's unclear what the immediate impact of the ruling will be.”

_________________

4/20/21

Since the state of Texas lifted the mask mandate and allowed 100 percent capacity at all businesses and facilities, it’s time to unwind the pandemic.

The federal government initiated eviction and foreclosure moratoriums through the CARES Act on 27 March 2020. It has been extended a few times but is currently set to expire at the end of July. This situation means homes should get the highest sale and lease income until about mid-July unless the mandates are extended again.

If a homeowner plans to sell or lease a house, it's ideal to do it before the middle of July to take advantage of the historic housing shortage. I have many resources on this blog to help get your house "show ready." The seller section explains everything in detail.

I'm certified to help homeowners navigate a buy-before-you-sell program that can also include a small loan to fix up the current house to get it “market ready” for top dollar.

Now is also a great time because rates are again near historic lows, which allows buyers to get more for their money.

However, building materials are in short supply. This has caused monthly increases in new construction since last May. Therefore, prices are unlikely to stop increasing until housing inventory and building material supplies increase.

Educating my clients on the home buying process is a hallmark of my business. If you want to know the entire process, follow this link to a free Home Buyer Guide (link) that I wrote.

The guide explains both preowned and new build purchases. It should answer every question you have, and some you haven't considered yet. You can read it a little at a time or understand everything from the beginning. You're welcome to share it with your friends and associates.

Housing shortages began with the Covid-19
pandemic and associated CARES Act eviction
and foreclosure moratoriums on 27 March 2020.

Current “Housing Crisis”
All markets are temporary. So is this one. It exists due to artificial controls of the government stopping the regular free trade of an open market.

For health reasons, the government placed eviction and foreclosure moratoriums on the market. Some folks fell into desperate situations while others merely took advantage of the situation. Either way, there is ZERO motivation for a person living for no cost (rent or mortgage) in a 5-bed, 4-bath house with a swimming pool, etc... to move a family into a small apartment at inflated rent.

This situation is the current housing crisis. The normal cleansing mechanisms (eviction and foreclosure) are clogged.

Unless the government extends the moratoriums again, they are set to expire on the last day of July. This means the evictions start on July 1 while the foreclosures start a 6-month countdown to their expected final date of 31 Dec. 2021.

Rental Market
If the rental properties aren't destroyed by current tenants (many are), those owners will likely sell many to residential buyers to get huge profits from "challenged" properties before the eventual market correction.

This should relieve some of the housing pressure and stabilize the market through the end of the summer. Most families with school-age kids settle in August or early September - both rental and purchase.

Other landlords will fix the properties to take advantage of the lease shortage. They'll also scrutinize future applicants harder than ever because demand will remain high while a wave of recently evicted tenants flood the market.

Nonetheless, rent should continue to rise because the rental market has not only mirrored the regular market it has been supercharged. For many weeks listed-to-leased has been at a 3:4 ratio when there should always be more properties coming onto the market than leased.

In a normal market, failure to lease causes many homes to go onto the residential market for liquidation. That threat doesn't exist now. The only control is price, which can be easily adjusted.

Residential Market
With the release of rental houses for liquidation (sale), there should also be some relief in the residential market through the end of the summer. Buyers should be wary of houses that were formerly rental properties during this time. Expect many investor-grade "flip" homes to come on the market with a fresh coat of paint and not much else.

Meanwhile, homeowners with equity in their properties that can't arrange financial extensions, will need to liquidate their homes. The smart ones will strike fast to get the most money. Others will drag it out a few months because they don't want to move to a lease property or can't move because their credit is destroyed. Nonetheless, they should all eventually sell to claim the equity rather than hand it over to the bank.

Those sellers in the second group are most likely to experience the back-to-school slow down. They may also require a short sale (sell the house for less than is owed to the bank). The bank would need to agree to the short sale. These issues will seriously slow down the transaction and put a drag on the market. While the remainder of the market is speeding along, these homes will artificially increase the average days on market and lower the average price. Expect two lanes of traffic during this phase of the market.

Unless the government steps in, the final group should arrive on New Year’s Day 2022. These are the foreclosure homes.

Most of these homes will probably be in horrible condition. They have been occupied for many months – possibly more than a year - by someone who knew they would lose the house. There was no motivation to maintain the property. Even worse, they may have become angry about the circumstances and taken it out on the property with a sledgehammer or something worse.

Contractors love these “projects” because they can get them for a relatively low price and make up the difference with “sweat equity” and skills. Most folks don’t have those skills, or the spare cash needed to get the property up to lease or resale shape quickly.

Pre-foreclosures and short sales can have additional baggage that doesn’t appear until the final steps. There may be tax liens or other problems with the property itself that might kill the deal after months of negotiations and related costs.

Because the market should still lean toward the seller side, don't expect too much of a foreclosure discount - if any.

While there are a few amazing opportunities in this sphere, many turn out to be money pits. I strongly advise my clients to avoid foreclosures unless they know the property’s history and hopefully its former owner. These houses are often purchased without access to the inside of the property before it is bought.

New houses are in various phases of
construction at Cambridge Crossing in Celina.

New Build
Most new build properties in southern Collin and Denton counties currently have two-year waiting lists. Some have completely stopped taking new orders because the material costs are outpacing expectations.

The pace of construction is slow due to material shortages, but also a lack of city employees - specifically related to code enforcement and building permits. The shortage is compounded by the pandemic.

The new build waiting lists should dwindle as more buyers find preowned homes that will meet their needs after the moratoriums are lifted. As building materials and capacity increase (mostly due to businesses reopening after the pandemic), new-build price increases should slow or stabilize. As buyers evaporate, inventory homes should return and may come with discounts if material prices have dipped along with demand.

There's no way to tell when this will happen because there are 24-month waiting lists across town. It could start to appear as soon as mid-September or may take until sometime in 2022. However, expect some bargain inventory homes after 15 Dec. 2021 because the builders don't want to pay those taxes. 

The Bottom Line
If the government doesn't extend the moratoriums again, sellers and landlords should make the most money between now and July 1. I expect sweet spots for buyers and leases around the end of July and in mid-September through early October. However, there won’t be any “bargains” because most houses have equity and there is plenty of pent-up demand.

I've Got Your Six!

Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212
markhancockrealty@gmail.com

DFWmark.com

Pandemic Help

Mark M. Hancock / © DFWmark.com

I hope this information helps you, your loved ones and associates during the COVID-19 pandemic. Even if you're surviving the pandemic with only inconveniences and Zoom meetings, you are very likely to know someone who can use the information listed below.
Since you may not know who needs help, please share this page on your social media to help your friends.

Stay safe! Stay healthy!
I’ve Got Your Six!

DFWmark.com

Jump to:
Suicide Prevention
Family Crisis Center / Domestic Abuse
Federal Stimulus Packages
• Federal Stimulus Checks
• Unemployment Benefits
• Paycheck Protection Program (PPP)
• Food programs
• Utility, Prescription and Medical Help
• Veterans Administration

Small Business Administration Loans
• Economic Injury Disaster Loans (EIDL) Loan Advance
• EIDL Emergency Grant

Pandemic Mortgage Relief Options
• Health and Welfare Assistance
• Mortgage and Rent Programs
• Protections for renters
• Where to get additional help

Pets (food and veterinary assistance)
401K Disbursements
IRS (tax relief)
Student loans
Report price gouging

DFW city and county websites 

Suicide Prevention
National Suicide Prevention Lifeline
1-800-273-8255
suicidepreventionlifeline.org
Lifeline provides continuous, free and confidential support for people in distress. They also provide prevention and crisis resources for friends and family.

Family Crisis Center / Domestic Abuse
1-800-799-SAFE (7233)
Email: nationaldeafhotline@adwas.org
thehotline.org/help
Call, chat or email.
National Domestic Violence Hotline provides continuous, free and confidential support in more than 200 languages. Advocates talk confidentially with anyone experiencing domestic violence, seeking resources or information, or questioning unhealthy relationships.

DoD Safe Helpline
877-995-5247
Chat online with a trained Department of Defense staff member who can provide you confidential crisis support. Your privacy and safety are crucial. You may use Safe Helpline anonymously.

International Domestic Violence Resource Guide: Coronavirus Update

Contact information sorted by nation and useful tips to help witnesses take action.

Federal Stimulus Packages (pandemic related)

Federal Stimulus Checks
• This is an advance on your 2020 tax return – not a grant. Learn what this means for your 2020 taxes.
• Direct payments to Taxpayers
• Based on 2019 return or 2018 if 2019 is not filed
• To qualify: Adjusted Gross Income must be under $75K single / $150K filed jointly
• $1,200 per taxpayer
• $500 for each qualifying child (17 and under)
• Payments start the week of April 13th or 20th
• It will take longer to get a payment if the IRS doesn’t have your direct deposit information

Unemployment Benefits
• CARES Act provides unemployment benefits for independent contractors too
• These are federal funds and are administered by the states (such as TWC.texas.gov)
• Benefit amounts depend on your past income

Paycheck Protection Program (PPP)
• Provides loans to small business to help with payroll costs, rents and mortgages
• Available for independent contractors as well
• Loan amounts are based on a monthly average payroll costs X 2.5 up to $10 million
• Parts of the loan may be forgiven (most likely those paid to employees)
• Low interest rate and two-year maturity
• Visit www.sba.gov for more information
• Apply through your banker

Food programs
USDA (www.usda.gov)
Food and Nutrition Service (FNS)
• Assistance for People of All Ages
• Supplemental Nutrition Assistance Program (SNAP): SNAP provides nutrition benefits to supplement the food budget of needy families so they can purchase healthy food and move toward self-sufficiency.
• Food Help for Disaster Relief
• The Food and Nutrition Service (FNS) coordinates with state, local and voluntary organizations to provide food for shelters and other mass feeding sites, distribute food packages directly to households in need in limited situations, and issue Disaster Supplemental Nutrition Assistance Program (D-SNAP) benefits.
• The Emergency Food Assistance Program (TEFAP): TEFAP helps supplement the diets of low-income Americans by providing them with emergency food assistance at no cost.

Utility, Prescription and Medical Help
usa.gov/help-with-bills
Utility company help
• If you can't afford to pay your home heating or cooling bill, you may be able to get help from the government or your local social services agency or nonprofit. Prescription drug and medical help
• Government programs can help pay for prescription drugs and medical bills.

Veterans Administration
benefits.va.gov
• If you haven’t applied for veterans’ benefits and need to take advantage of them now, here’s where you can start the process.
• If you are a service member and need pandemic-related assistance with your rent or mortgage payments, contact your local Legal Assistance Office.

Small Business Administration Loans

Economic Injury Disaster Loans (EIDL) Loan Advance
• Up to $2 million loan
• Low interest rate (3.75%) with 30-year maturity
• Must provide economic hardship due to COVID-19
• Personal guarantee required or collateral
• Visit www.sba.gov for more information and to apply

EIDL Emergency Grant
• Economic Injury Disaster Loans
• $10,000 forgivable grant
• Same process as the loan
• Independent contractors included
• Must provide economic hardship due to-19
• Visit www.sba.gov for more information and to apply

Pandemic Mortgage Relief Options

Health and Welfare Assistance
Federal and state governments have announced plans to help struggling homeowners during the pandemic.
A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, puts in place two protections for homeowners with federally backed mortgages:
1. A foreclosure moratorium
2. A right to forbearance for homeowners who are experiencing a financial hardship due to the COVID-19 emergency

Mortgage and Rent Programs
USA Today article
If you can pay your mortgage, pay your mortgage. There is no mortgage forgiveness program.
• Mortgage Forbearance – borrowers of government-backed mortgages can request up to 360-day payment forbearance without proof of hardship.
• It is vital to understand if your loan servicer will demand all funds at the end of the forbearance period or will tack them onto the end of the loan.
• It is unclear how taxes and insurance will be handled, but they will most likely be due and payable as typical for your arrangement. Only loan principal and interest are affected.

Protections for renters
According to the Consumer Financial Protection Bureau, if you are renting from an owner who has a federally-backed mortgage, the CARES Act provides for a suspension or moratorium on evictions. If your landlord has a federally backed mortgage or multi-family mortgage, you cannot be evicted for nonpayment of rent for 120 days beginning on March 27, 2020, the effective date of the CARES Act. After the 120-day period is up, the landlord cannot require you, the tenant, to vacate until providing you with a 30-day notice to vacate.
If the property you rent isn’t covered by the CARES Act, many states have suspended all evictions and foreclosures due to the pandemic. Check the websites of your state government or legal aid program for details and updates. See National Center for State Courts www.ncsc.org for more information.

Where to get additional help
If you need help working with your mortgage servicer or understanding your options, you can contact a professional to help with your specific situation.
• HUD-Approved Housing Counselors. The U.S. Department of Housing and Urban Development (HUD)-approved housing counselors can discuss options if you can’t pay your full mortgage loan or need a reverse mortgage loan. This may also include forbearance, deferment, or a modified payment program.
• Credit Counselors. Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors. There are specific questions to ask to help you find a credit counseling organization to work with.
• Lawyers. If you need a lawyer, there may be resources to assist you through your local bar association, legal aid.

401K Disbursements
• CARES act allows distribution from your 401K or IRA up to $100,000 of your vested balance with no penalty.
• Distribution is taxable but tax is spread out over three years.
• Distribution can be repaid and receive a tax credit.
• Loans are also permitted based on your plan’s rules.
• Must certify that the distribution/loan is COVID-19 related.

Pets (food and veterinary assistance)
• ASPCA pandemic response page
• Humane Society aid and financial assistance:

IRS (tax relief)
Coronavirus tax relief (IRS)
• July 15th is the new tax deadline for filing your 2019 returns
• This includes quarterly tax payments

Student loans
• Suspends all payments due on federal student loans for 6 months
• Interest shall not accrue on these during this forbearance
• For the purpose of loan forgiveness, loans will be deemed paid during the forbearance.
• Prohibits negative credit reporting or involuntary debt collection during the forbearance period

Report price gouging
USPIRG.org (U.S. Public Interest Research Group)
How do I spot price gouging?
1) Extraordinarily high prices: Businesses can increase prices for critical supplies during an emergency. While laws vary by state, increases over 20% may be considered price gouging.
2) Price Comparison Between Similar Products: Some state laws prohibit significant increases in prices as compared to similar store-brand products.
3) Err on the side of caution: If you aren’t certain if a product is priced too high, report the problematic items to the company and your Attorney General.

What do I need to report price gouging?
1) The name of the store/vendor where you saw the item and their address.
2) Product details, including, but not limited to, the product type, brand, size, and price.
3) The date, time, and location you saw the product.
4) You can improve the investigation by providing a picture of the item.

Please also visit individual city and county websites in the DFW Metroplex for local help.

I’ve Got Your Six!

Mark M. Hancock
REALTOR
214-862-7212
DFWmark.com


#DFWmark #pandemic #help #COVID19 #StagingTips #FoodToGo #SucceedInPlace #UsefulNews #Frisco #DFW

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