We’re doing fine here at headquarters – how about you?
We’ve primarily worked out of the house for the last 17 years, so we aren’t experiencing any disruption just because we’re stuck at home. We’re still having two listings being prepped for market, and haven’t had any escrows fall out yet. So far, so good.
Our boss suggested that we don’t do open houses for the foreseeable future, and to use gloves and sanitizer for individual showings. Tours via FaceTime or Skype are encouraged as well.
Here’s a snapshot of my hotsheet this morning – an equal compliment of new listings, price changes, solds, and new pendings (six each):
The volume will be light, but as long as we keep seeing new pendings, the market is working!
From this twitter thread written on March 12th. We are about 7-10 days behind them:
The following thread is taken from an Italian citizen.
As they put it: “To the rest of the world, you have no idea what’s coming.”
As I think everybody knows, Italy is on quarantine because of the coronavirus outbreak. This situation is bad, but what’s worse is seeing the rest of the world behaving as if it isn’t going to happen to them. We know what you’re thinking because we were in your place too.
Let’s see how things developed…
STAGE 1: You know that coronavirus exists, and the first cases begin to appear in your country. Well, nothing to worry about, it’s just a bad flu! I’m not 75+yo so what could possibly happen to me? I’m safe, everybody is overreacting, what’s the need to go out with masks and stock toilet paper? I’m going to live my life as usual, there’s no need to freak out.
STAGE 2: The number of cases begins to be significant. They declare “red zone” and quarantine one or two small cities where they found the first cases and a lot of people were infected (Feb 22nd). Well that’s sad and somewhat worrisome but they’re taking care of it so nothing to panic about. There are some deaths but they’re all old people so the media is just creating panic for views, how shameful. People lead their life as usual.. I’m not going to stop going out and meeting my friends am I? It’s not going to get me. Everybody’s fine here.
STAGE 3: The number of cases is rapidly going up. They almost doubled in one day. There’s more deaths. They declare red zones and quarantine the 4 regions where the majority of cases are registered (March 7). In Italy 25% of the county is under quarantine. Schools and universities are closed in these areas but bars, work places, restaurants and so on are still open. The decree gets released by some newspaper before it should……so around 10k people from the red zone escape from the area that same night to return to their homes in the rest of Italy (this will be important later).
Most of the population of the remaining 75% of Italy still does what it always does. They still don’t realize the seriousness of the situation. Everywhere you turn people advise to wash your hands and limit going out, large groups are forbidden, every 5 minutes on TV they remind you of these rules. But it still hasn’t settled in people’s mind.
STAGE 4: The number of cases is heavily increasing. Schools and universities are closed everywhere for at least a month. It’s a national health emergency. Hospitals are at capacity, entire units are cleared to make space for coronavirus patients. There aren’t enough doctors and nurses. They’re calling retired ones and those in their last 2 years of university. There’s no shifts any more, just work as much as you can. Of course doctors and nurses are getting infected, spreading it to their families. There’s too many cases of pneumonia, too many people who need ICU and not enough places for everyone.
At this point is like being at war: doctors have to choose who to treat based on their survival chance. That means that the elderly and trauma/stroke patients can’t get treated because corona cases have priority. There’s not enough resources for everybody so they have to be distributed for best outcome. I wish I was joking but it’s literally what has happened.
People have died because there wasn’t any more space. I have a doctor friend who called me devastated because he had to let 3 people die that day. Nurses crying because they see people dying and can’t do anything aside from offering some oxygen. A friend’s relative died yesterday of corona because they couldn’t treat him. It’s chaos, the system is collapsing. Coronavirus and the crisis it’s provoking is all you hear about everywhere.
STAGE 5: Remember the 10k idiots who ran from the red zone to the rest of Italy? Well, the entire country has to be declared under quarantine (March 9). The goal is to delay the spreading of the virus as much as possible. People can go to work, do grocery shopping, go to the pharmacy, and all businesses are still open because otherwise the economy would collapse (it already is), but you can’t move from your commune unless you have a valid reason. Now there’s fear, you see a lot of people with masks and gloves around but there are still are people who think that they’re invincible, who go to restaurants in large groups, hang out with friends to drink and so on. Next step.
STAGE 6: Two days later, it’s announced that all (most) businesses are closed: Bars, restaurants, shopping centers, all kinds of shops etc. Everything except supermarkets and pharmacies. You can move around only if you have certification with you. The certification is an official document where you declare your name, where you’re coming from, where you’re going and what for. There are a lot of police check points. If you’re found outside without a valid reason you risk a fine up to €206. If you’re a known positive patient you risk from 1 to 12 years of jail for homicide.
FINAL THOUGHTS: That’s what the situation is like now today as of the March 12th. Keep in mind that it all happened in around 2 weeks… 5 DAYS FROM STAGE 3 TO TODAY. The rest of the world apart from Italy, China and Korea is just now beginning to reach other stages, so let me tell you this: You have no idea what’s coming to get you. I know because 2 weeks ago I was the one who had no idea and though it wasn’t bad. But it is.
And not because the virus alone is particularly dangerous or deadly, but for all the consequences it brings. It’s hard to see all these countries act like it’s not coming and not taking the precautions that are necessary for the well-being of its citizens while they still can. Please if you’re reading this try to act in your best interest. This problem isn’t going to solve itself by ignoring it. Just wondering how many undiscovered cases there might be in America alone is scary, and they’re in for a big, big trouble because of how their country is run.
Our government for once did a good job I must say. The actions taken were drastic but necessary, and this may be the only way to limit the spreading. It’s working in China so we hope it will work here too (it’s already working in some of the first red zones which were quarantined before everybody else). They’re taking measures to protect us citizens such as probably suspending mortgage payments for next months, help for shop owners who were obligated to close and so on.
I realize that these takes are really difficult, if not impossible, to take in some countries, and it’s really worrying to think about what it could mean in global scale. I wonder if this pandemic will be a turning point in our society. If there are cases where you live, then the virus is spreading, and you’re maybe 1-2 weeks behind us. But you’ll get to our point eventually. PLEASE take any precaution you can take. Don’t act like it’s not going to get you. If you can, STAY HOME.
The coronavirus is having a mixed impact on the housing market. It’s decreasing buyer traffic somewhat—although in still relatively low numbers—but it’s also not deterring some home buyers and sellers from taking advantage of the lowest mortgage rates in history, shows NAR’s survey, which is based on responses from more than 2,500 real estate professionals.
Sixteen percent of real estate pros say they’ve seen a reduction in buyer interest in their market since the onset of the coronavirus in the U.S. In California, 21% of members reported a decrease in buyer interest, and 19% of members said the same in Washington.
“Given that a home transaction is a major commitment, the uncertainties on how the economy will play out and the spread of the virus itself are barriers to home buying and selling,” says Lawrence Yun, NAR’s chief economist. “The stock market crash is no doubt raising economic anxieties, while the coronavirus brings fear of contact with strangers. At the same time, the dramatic fall in interest rates may induce some potential buyers to take advantage of the better affordability conditions. It is too early to assess the likely impact as to whether lower interest rates can overcome the economic and health anxieties.”
At least in the short term, Yun predicts home sales to be down about 10% compared to what they could have been due to the spread of the coronavirus.
One movement that could lessen its impact, however, is the dip in mortgage rates and its effect on buyers to move ahead with a purchase. More than one-third of members said that their clients are excited by the lower mortgage rates.
Real estate pros credit the lower rates for prompting the majority of home sellers to not make a change in the listing of their home, the survey shows. They want to take advantage of the lower rates on the buying side.
In some areas, the number of home sellers is rising. In California, 12% of members said the number of sellers is increasing because of the desire to take advantage of lower interest rates upon moving, according to NAR’s survey. Nine percent of real estate pros nationwide also reported a higher number of homeowners wanting to sell for this reason. Only 3% of sellers nationwide have decided to remove their home from the market and refinance into a lower mortgage rate so they can remain in their home.
This is a real estate blog but we need facts to make decisions with – thanks Aunt Nancy:
University of California, San Francisco BioHub Panel on COVID-19
March 10, 2020
Panelists
Joe DeRisi: UCSF’s top infectious disease researcher. Co-president of ChanZuckerberg BioHub (a JV involving UCSF / Berkeley / Stanford). Co-inventor of the chip used in SARS epidemic.
Emily Crawford: COVID task force director. Focused on diagnostics
Patrick Ayescue: Leading outbreak response and surveillance. Epidemiologist.
Chaz Langelier: UCSF Infectious Disease doc
Below are essentially direct quotes from the panelists. Bracketed are the few things that are not quotes.
Top takeaways
At this point, we are past containment. Containment is basically futile. Our containment efforts won’t reduce the number who get infected in the US.
Now we’re just trying to slow the spread, to help healthcare providers deal with the demand peak. In other words, the goal of containment is to “flatten the curve”, to lower the peak of the surge of demand that will hit healthcare providers. And to buy time, in hopes a drug can be developed.
How many in the community already have the virus? No one knows.
We are moving from containment to care.
We in the US are currently where at where Italy was a week ago. We see nothing to say we will be substantially different.
40-70% of the US population will be infected over the next 12-18 months. After that level you can start to get herd immunity. Unlike flu this is entirely novel to humans, so there is no latent immunity in the global population.
[We used their numbers to work out a guesstimate of deaths— indicating about 1.5 million Americans may die. The panelists did not disagree with our estimate. This compares to seasonal flu’s average of 50K Americans per year. Assume 50% of US population, that’s 160M people infected. With 1% mortality rate that’s 1.6M Americans die over the next 12-18 months.]
The fatality rate is in the range of 10X flu.
This assumes no drug is found effective and made available.
The death rate varies hugely by age. Over age 80 the mortality rate could be 10-15%. [See chart by age Signe found online]
Don’t know whether COVID-19 is seasonal but if it is and subsides over the summer, it is likely to roar back in fall as the 1918 flu did
I can only tell you two things definitively. Definitively it’s going to get worse before it gets better. And we’ll be dealing with this for the next year at least. Our lives are going to look different for the next year.
What should we do now? What are you doing for your family?
Appears one can be infectious before being symptomatic. We don’t know how infectious before symptomatic, but know that highest level of virus prevalence coincides with symptoms. We currently think folks are infectious 2 days before through 14 days after onset of symptoms (T-2 to T+14 onset).
How long does the virus last? On surfaces, best guess is 4-20 hours depending on surface type (maybe a few days) but still no consensus on this
The virus is very susceptible to common anti-bacterial cleaning agents: bleach, hydrogen peroxide, alcohol-based.
Avoid concerts, movies, crowded places.
We have cancelled business travel.
Do the basic hygiene, eg hand washing and avoiding touching face.
Stockpile your critical prescription medications. Many pharma supply chains run through China. Pharma companies usually hold 2-3 months of raw materials, so may run out given the disruption in China’s manufacturing.
Pneumonia shot might be helpful. Not preventative of COVID-19, but reduces your chance of being weakened, which makes COVID-19 more dangerous.
Get a flu shot next fall. Not preventative of COVID-19, but reduces your chance of being weakened, which makes COVID-19 more dangerous.
We would say “Anyone over 60 stay at home unless it’s critical”. CDC toyed with idea of saying anyone over 60 not travel on commercial airlines.
We at UCSF are moving our “at-risk” parents back from nursing homes, etc. to their own homes. Then are not letting them out of the house. The other members of the family are washing hands the moment they come in.
Three routes of infection
Hand to mouth / face
Aerosol transmission
Fecal oral route
What if someone is sick?
If someone gets sick, have them stay home and socially isolate. There is very little you can do at a hospital that you couldn’t do at home. Most cases are mild. But if they are old or have lung or cardio-vascular problems, read on.
If someone gets quite sick who is old (70+) or with lung or cardio-vascular problems, take them to the ER.
There is no accepted treatment for COVID-19. The hospital will give supportive care (eg IV fluids, oxygen) to help you stay alive while your body fights the disease. ie to prevent sepsis.
If someone gets sick who is high risk (eg is both old and has lung/cardio-vascular problems), you can try to get them enrolled for “compassionate use” of Remdesivir, a drug that is in clinical trial at San Francisco General and UCSF, and in China. Need to find a doc there in order to ask to enroll. Remdesivir is an anti-viral from Gilead that showed effectiveness against MERS in primates and is being tried against COVID-19. If the trials succeed it might be available for next winter as production scales up far faster for drugs than for vaccines. [More I found online.]
Why is the fatality rate much higher for older adults?
Your immune system declines past age 50
Fatality rate tracks closely with “co-morbidity”, ie the presence of other conditions that compromise the patient’s hearth, especially respiratory or cardio-vascular illness. These conditions are higher in older adults.
Risk of pneumonia is higher in older adults.
What about testing to know if someone has COVID-19?
Bottom line, there is not enough testing capacity to be broadly useful. Here’s why.
Currently, there is no way to determine what a person has other than a PCR test. No other test can yet distinguish “COVID-19 from flu or from the other dozen respiratory bugs that are circulating”.
A Polymerase Chain Reaction (PCR) test can detect COVID-19’s RNA. However they still don’t have confidence in the test’s specificity, ie they don’t know the rate of false negatives.
The PCR test requires kits with reagents and requires clinical labs to process the kits.
While the kits are becoming available, the lab capacity is not growing.
The leading clinical lab firms, Quest and Labcore have capacity to process 1000 kits per day. For the nation.
Expanding processing capacity takes “time, space, and equipment.” And certification. ie it won’t happen soon.
UCSF and UCBerkeley have donated their research labs to process kits. But each has capacity to process only 20-40 kits per day. And are not clinically certified.
Novel test methods are on the horizon, but not here now and won’t be at any scale to be useful for the present danger.
How well is society preparing for the impact?
Local hospitals are adding capacity as we speak. UCSF’s Parnassus campus has erected “triage tents” in a parking lot. They have converted a ward to “negative pressure” which is needed to contain the virus. They are considering re-opening the shuttered Mt Zion facility.
If COVID-19 affected children then we would be seeing mass departures of families from cities. But thankfully now we know that kids are not affected.
School closures are one the biggest societal impacts. We need to be thoughtful before we close schools, especially elementary schools because of the knock-on effects. If elementary kids are not in school then some hospital staff can’t come to work, which decreases hospital capacity at a time of surging demand for hospital services.
Public Health systems are prepared to deal with short-term outbreaks that last for weeks, like an outbreak of meningitis. They do not have the capacity to sustain for outbreaks that last for months. Other solutions will have to be found.
What will we do to handle behavior changes that can last for months?
Many employees will need to make accommodations for elderly parents and those with underlying conditions and immune-suppressed.
Kids home due to school closures
[Dr. DeRisi had to leave the meeting for a call with the governor’s office. When he returned we asked what the call covered.] The epidemiological models the state is using to track and trigger action. The state is planning at what point they will take certain actions. ie what will trigger an order to cease any gatherings of over 1000 people.
Where do you find reliable news?
The John Hopkins Center for Health Security site which posts daily updates. The site says you can sign up to receive a daily newsletter on COVID-19 by email. [I tried and the page times out due to high demand. After three more tries I was successful in registering for the newsletter.]
The New York Times is good on scientific accuracy.
Observations on China
Unlike during SARS, China’s scientists are publishing openly and accurately on COVID-19.
While China’s early reports on incidence were clearly low, that seems to trace to their data management systems being overwhelmed, not to any bad intent.
Wuhan has 4.3 beds per thousand while US has 2.8 beds per thousand. Wuhan built 2 additional hospitals in 2 weeks. Even so, most patients were sent to gymnasiums to sleep on cots.
Early on no one had info on COVID-19. So China reacted in a way unique modern history, except in wartime.
Every few years there seems another: SARS, Ebola, MERS, H1N1, COVID-19. Growing strains of antibiotic resistant bacteria. Are we in the twilight of a century of medicine’s great triumph over infectious disease?
“We’ve been in a back and forth battle against viruses for a million years.”
But it would sure help if every country would shut down their wet markets.
As with many things, the worst impact of COVID-19 will likely be in the countries with the least resources, eg Africa. See article on Wired magazine on sequencing of virus from Cambodia.
The linkedin article was taken down for an unknown reason, but it was posted at the Daily Koz and other websites so it seems legit. It wasn’t flagged on snopes.
The panic ensues over the coronavirus, but people want and need to move too – especially as mortgage rates climb higher. What can we do to keep the real estate market hopping?
Here’s what can we do for home sellers.
Those who are concerned about strangers coming into their house should go ahead and move to their next home first. We can give you a Compass Bridge Loan to access up to 90% of your equity in your current home to purchase your next one, and we’ll front up to $50,000 for home improvements and staging to make selling your old home more effective. Let’s go this route on every home sold – it’s easier on you!
What can we do for home buyers?
The COVID-19 might be what finally gets agents to do video tours of homes. Selling homes by video is a real possibility, and if listing agents just walked around the house with a camera like they were showing it in person, then every potential buyer could see it from the comfort of their own home. If making a film makes you queasy, have your kids do it – they have no problem with producing videos.
This could also be the chance for home auctions to take hold. After a few days go by and/or the video reaches 100+ views, then conduct an online auction to determine the winner. Then have that buyer view the home in person, keeping traffic to a minimum.
Or have buyers submit written offers after seeing the video tour, and if the seller permits, have only those contenders view the home in person. Investment properties are regularly sold this way to minimize the impact on the existing tenants – you’ve heard the phrase, “Show with offer”.
Either way would reduce human interaction and possibly make home-selling MORE effective.
Buyers don’t necessarily need to see the home in person, either.
My buyers purchased this home and closed escrow without ever stepping foot inside. We also did a video of the home inspection, and between the two, the buyers got a full experience of what they were buying – and never saw the house in person until they owned it:
Either we can adopt new and improved ways to serve our clients and keep everyone moving, or we can sit at home watching the paranoia grow on TV. It’s your choice!
From the doctor in charge of infectious diseases at Rady Children’s hospital:
Statement from FHFA Director Mark Calabria on Coronavirus
FOR IMMEDIATE RELEASE
3/10/2020
?Washington, D.C. – “To meet the needs of borrowers who may be impacted by the coronavirus, last week Fannie Mae and Freddie Mac (“the Enterprises”) reminded mortgage servicers that hardship forbearance is an option for borrowers who are unable to make their monthly mortgage payment. For borrowers that may be experiencing a hardship, I encourage you to reach out to your servicer. The Enterprises and the Federal Home Loan Banks continue to provide support to the secondary mortgage market, and the UMBS market continues to operate at its normal level.”
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S. mortgage markets and financial institutions.
Everyone is wondering how the coronavirus will affect housing, so Bloomberg News decided to whip up the hysteria with this article built on speculation and guesses. Mark Zandi has had one of the most negative opinions about housing, hoping that some day he might be right, and Yunnie has never left his ivory tower.
These are the only facts mentioned in the article:
The potential economic fallout still hadn’t completely registered this past weekend for homebuyers in Seattle, an epicenter of the U.S. outbreak. On Saturday, around four dozen groups filed through a four-bedroom Tudor in the Whittier neighborhood listed for just over $1 million. Many said they had hoped the virus would keep other would-be buyers away in a market where there’s little inventory and bidding wars are frequent.
At another open house nearby, handshakes were out, but plenty of home shoppers came for a look. Craig Rothlin, 34, and Kanako Nakarai, 31, were among them. Both work for tech companies, and have been hurt by the recent stock market rout.
“A good chunk of our down payment is caught up in that,” Rothlin said.
The couple had been waiting to see prices come down. But, so far, that hasn’t happened. The last home they bid on got multiple offers and sold for $180,000 over the asking price.
Seattle is an epicenter of the U.S. outbreak, and FOUR DOZEN GROUPS are looking at an open house? Many said they hoped that the virus would keep other would-be buyers away? There’s your takeaway!
Let’s focus on the facts.
In the area between La Jolla and Carlsbad, there are 121 houses for sale priced under $1,500,000, and 158 pending listings. When there are more pendings than actives, it means the demand is outstripping the supply! Even if some nervous nellies decided to wait it out, there will still be plenty who want to buy a home when rates are at all-time lows.
What about the high-end, Jim, aren’t the affluent more susceptible to stock market swings? Maybe, but they’re not going to give it away! This scare will be over in less than a year, and rich people have a long history of waiting on price, rather than dumping.
What if we have a recession? Then don’t make your payments – banks don’t mind!
It would take a flood of inventory to disrupt the market in a bad way. But the COVID-19 is causing a hunker-down-and-do-nothing environment. Homeowners aren’t going to panic and uproot their life just because of some stinking virus that will pass in 6-12 months.
The rapid growth of COVID-19 (“Coronavirus”) cases continues to create turbulence in the global economy and in domestic financial markets. However, C.A.R. is not revising its current 2020 housing market forecast, but will continue to monitor the market for negative macroeconomic impacts on the demand for housing as well as the supply chain impacts that could adversely affect the cost of new home construction in the coming months and quarters.
C.A.R. has created a list of the Top 10 potential impacts that could elicit questions from buyers and sellers over the near term:
Forecasts Have Been Downgraded, But Few Economists are Calling for Recession Yet: Last week, the International Monetary Fund (IMF) cut its forecast for global economic growth by 0.1%, but is still calling for an expansion in 2020, albeit at a slower pace. Similar orders of magnitude have been forecast for the domestic economy, with groups like Wells Fargo and others expecting GDP to grow by 10-20 basis points slower than their pre-Coronavirus forecast. Growth is expected to be slower, but the economy is still expected to grow.
Mortgage Rates Will Likely Remain Low, Or Even Fall Further As A Result of Coronavirus: The Federal Reserve issued an emergency 50 basis point cut to their target interest rates, and guidance suggests that the Fed may be open to future reductions in order to counteract the negative impacts to financial markets. This should help to reduce the cost of borrowing and make housing more affordable over the near term, which should help to offset some of the negative impacts to housing demand associated with rising uncertainty.
Domestic Buyers May Be Discouraged By Rising Uncertainty and Recession Risk, But Is It Still a Good Time to Buy?: This week, mortgage rates fell to an all-time low level of just 3.13%. That is down from 3.80% at the start of the year and represents significant cost savings over the life of a 30-year loan. For buyers who can afford their monthly payments, the economic uncertainty that is driving rates lower provides an opportunity to capitalize on significantly reduced borrowing costs that they will enjoy for years to come. Short-run risks to the economy exist but are arguably offset by long-run benefits of lower rates at the individual level.
Financial Market Volatility Could Reduce Demand For Luxury Homes, But Also Create Potential Opportunities for Luxury Home Buyers: The recent turbulence in financial markets has already impacted household wealth. This could reduce demand for luxury homes in California in particular. However, with less luxury buyers, there could be opportunities for price discounts for buyers who choose to remain in the market for high-end properties. Real estate may also act as a buffer against potentially larger declines in the financial markets.
An update on two of the homes featured here that garnered multiple offers. As expected, they sold for well over their list price. This one got $51,000 over the top of their price range:
This one had 20+ offers, and sold for a whopping $190,100 OVER LIST PRICE!
The fully-renovated, one-story homes are HOT!
Plus let’s also include this old classic in Olde Carlsbad that sold for $30,000 over list price, or $773/sf in an area that has averaged $539/sf over the last six months:
