Last May, the Brookings Institution wrote about the post-Covid19 recovery as having several possible shapes of recovery (Z-shaped, V-shaped, U-shaped, W-shaped, L-shaped, and even the Nike Swoosh) but here are four major financial institutions predictions for recovery (below image).
In a Realtor.com study- we have seen a similar V-Shape recovery, but recently there’s been a deceleration as potential sellers found it harder to list and show their home as wildfires spread through the West coast.
Housing Market Recovery Index Highlights – Week Ending September 12
California has shown that social distancing and economic resilience continue to be key factors driving local differences in the housing recovery. Per Realtor.com’s research, the spread of COVID-19 is closely linked to the housing slowdown, with markets with higher cases per capita more likely to see a bigger impact on supply and the pace of sales. The speed and sustainability of the reopening, and each market’s ability to contain COVID-19, are dictating the speed of recovery across the regions. Finally, resilient economies may have an edge in the housing recovery, and areas with strong job markets before COVID-19, especially those with thriving tech sectors (such as in the SF Bay Area), are seeing buyers and sellers reconnect faster than the rest of the country.
Below are the V-shaped curved found in the northern California communities. Notice the downward trend in Aug – Sept due to the numerous wildfires.
The higher the index value, the higher the level of recovery. The lower the index value, the lower the level of recovery.
Thank you to the brave California Fire Department for coordinating a fantastic job containing many of the fires in California, we applaud their heroic service as many sacrificed their time, energy away from their families to protect people and properties throughout California.
How is your family and how are you handling the aftermath of the fires? I hope you and your family are doing well, but just know that it has effected everyone. It’s been a very rough few weeks here in northern California and the housing market certainly has been effected by the enormity and tragedies around us. Be safe & let me know if there’s anything we can do to assist.
|Lynne Watanabe MacFarlane, MCDM, SRES | Realtor
PFAC Silicon Valley affiliate
Intero | A Berkshire Hathaway Affiliate
In recent years co-living has gained popularity not only in younger 20’s demographics, but attracting popularity for 50+ Boomer generation. Typically, seniors who opt for the co-living lifestyle as homeowners enjoy additional income from roommates and companionship!
What’s the difference between Co-Living versus Co-Housing?
In co-living people without family ties choose to cohabitate in a single dwelling. Typically, each resident has a private bedroom but other rooms (such as kitchen, laundry room, family room) are considered shared common spaces. In a co-housing community, each individual or family has an independent living unit (single family home, condo or apt) and they might share common facilities such as pools, a library, conference or fitness space.
In the SF Bay Area we know that the lack of affordable housing is difficult as it can hit the senior population hard. As the ‘Silver Tsunami’ and senior households continues to expand over the next two decades, households in their 80’s will be the fastest-growing age group according to the Joint Center for Housing Studies of Harvard University. Many of those households already face cost burdens.
As the cost of senior communities continue to rise, along with visitation restrictions which COVID19 has placed on family members not being allowed into these senior communities, the desire for multi-generational housing continues to escalate. These are hard questions all families must decided what is important to them. Families are looking for more options as our lifestyle has shifted during these stressful health crisis times our community and family interdependence has become of greater necessity.
What are Co-Living Advantages?
- Sharing household responsibilities can lessen the load and housemates can have complimentary benefits such as one roommate’s ability to drive to the store and another can prep food and cook. This might allow individuals to live independent and active lives.
- Fewer seniors own their own homes these days, more are likely to have a mortgage or even a second mortgage. Co-living can help homeowners afford to stay in their home but creating passive income with rent. Sharing space means dividing up utility costs and home maintenance expenses too.
- Loneliness is one aspect of aging-in-place that co-living can help remedy. A sense of belonging and community can be nurtured with scheduled co-living events such as “Italian Night!” and plan cooking a dinner while playing Italian opera and watch a favorite Italian movie!
Preventing Co-Living Conflicts
Create a written agreement outlining who pays for what and when. Housemates with declining cognitive abilities and/or mobility issues can make living together difficult so a mutually agreed upon rental contract will help avoid co-living conflicts.
Make sure to interview to find the right fit housemate. Look for someone who is financially stable, and shares your interest, values and lifestyle. Always discuss privacy expectations and do consider looking outside an age range. When meeting with a prospective roommate for the first time, always meet in a neutral public location for safety reasons. Get references from previous roommates and consider a background check and credit check; protect oneself.
Consider a trial period and see if all personalities get along! Will pets or habits become irritating after two weeks? Will you need to consider ‘overnight guests’ and does each roommate need to seek permission and could this be considered an invasion of privacy for some? Some people need more privacy than others and having a written agreement can help communication and expectation.
It can be a wonderful experience co-living with others. Co-living can be multi-generational or the same age, but whatever one decides to do I hope you’ll enjoy the company and appreciate your differences!
If you’re interested in other cities, let me know, I can set-up your customized search to assist your needs.
Lynne Watanabe MacFarlane, MCDM, SRES | Realtor
PFAC Silicon Valley affiliate
Intero | A Berkshire Hathaway Affiliate
As our lives, our businesses, and the world we live in change day by day, we’re all left wondering how long this will last. How long will we feel the effects of the coronavirus? How deep will the impact go? The human toll may forever change families, but the economic impact will rebound with a cycle of downturn followed by economic expansion like we’ve seen play out in the U.S. economy many times over.
Here’s a look at what leading experts and current research indicate about the economic impact we’ll likely see as a result of the coronavirus. It starts with a forecast of U.S. Gross Domestic Product (GDP).
According to Investopedia:
“Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.”
When looking at GDP (the measure of our country’s economic health), a survey of three leading financial institutions shows a projected sharp decline followed by a steep rebound in the second half of this year:
A recent study from John Burns Consulting also notes that past pandemics have also created V-Shaped Economic Recoveries like the ones noted above, and they had minimal impact on housing prices. This certainly gives hope and optimism for what is to come as the crisis passes.
With this historical analysis in mind, many business owners are also optimistic for a bright economic return. A recent PricewaterhouseCoopers survey shows this confidence, noting 66% of surveyed business owners feel their companies will return to normal business rhythms within a month of the pandemic passing, and 90% feel they should be back to normal operation 1 to 3 months after:
From expert financial institutions to business leaders across the country, we can clearly see that the anticipation of a quick return to normal once the current crisis subsides is not too far away. In essence, this won’t last forever, and we will get back to growth-mode. We’ve got this.
Lives and businesses are being impacted by the coronavirus, but experts do see a light at the end of the tunnel. As the economy slows down due to the health crisis, we can take guidance and advice from experts that this too will pass.
Concerns about the impact COVID-19 will have on the global and local economy are real. They’re scary too as the health and wellness of our friends, families, and loved ones are high on everyone’s emotional radar.
While we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver as it was in 2008.
A Recession Does Not Equal A Housing Crisis:
- The COVID-19 pandemic is causing an economic slowdown.
- The good news is, home values actually increased in 3 of the last 5 U.S. recessions and decreased by less than 2% in the 4th.
- All things considered, an economic slowdown does not equal a housing crisis, and this will not be a repeat of 2008.
As our country begins to collectively roll out shelter in place, I hope we can come together, take the time to share gratitude; let’s remember that this will pass. As a country we’ve experienced multiple divisive events such as Civil War, WWII, and more recent traumatic events as 9/11. The concerns about an impending recession are real, but housing isn’t the driver. During the Dot.com bubble starting in late 90’s, a period of massive growth of Internet & telcos, in 2002 (the dot.bomb) I personally would have lost my entire wealth because I was young (& mostly naive) never imagined stocks could crash! The only thing that helped preserve it was a little Los Altos house we divested. I sure am grateful for owning real estate – I am not a financial planner by any means, but I am conservative and because I’ve seen these recessions I advise my buyers to diversify their portfolios; try to have 6 months to a year’s worth of savings, have savings that are a mix of stocks, bonds, mutual funds but work towards owning property. the SF Bay Area our homes are not only places to live, but a wonderful wealth generating asset over time. With our current ongoing global uncertainty, including a U.S. stock market correction, no one could have seen coming. We first should do what’s best for our country, and for our families and that is to take care of one another.
Let’s fight this COVID-19 epidemic together by staying indoors & practicing social distancing, and checking up on loved ones and neighbors.
Take care of your needs now & let me know if I can help in anyway!
We’ve got this!
Lynne MacFarlane, MCDM, Realtor, PFAC affiliate
(831) 346-2743 text/voice anytime
Recently, we reported that many believe a recession could happen within the next two years. We explained that 70% of economists and market analysts surveyed last year believe that a recession will occur in 2019 or 2020 and that 42% of consumers currently looking to purchase a home also agree that a recession will occur this year or next.
However, the U.S. economy has performed well in the first quarter of 2019 and that has caused some experts to change their thinking on an impending economic slowdown.
Here are a few notable examples:
“I feel really comfortable that the economy is slowing down this year, but not going into a recession… It doesn’t look, to me, like the odds of a recession in 2020 are there.”
“To sum up the general picture, the U.S. economy is definitely weakening… However, with wages growing at a respectable pace, and job growth remaining healthy, we should see enough consumption demand to keep the economy moving forward. That means slower growth, but no recession.”
“I’m not convinced a recession is coming soon… I see an improving housing market (low rates help), a rebound in bank lending, a tight labor market, higher oil prices and well-behaved credit markets. All these point to a stable U.S. economic outlook.”
We are seeing a stronger economy than many had predicted. That has caused some experts to push off the possibility of a recession further into the horizon.