Home prices remain stable in the face of a global pandemic, record high unemployment, and millions of Americans actively not paying on their mortgages through forbearance. Not exactly a rosy picture. On the surface, the stable prices would seem to indicate all is well. But the reality is more problematic in that millions of homes are off the market right now as people are not paying their mortgage via forbearance. For those wanting to buy a home, they are competing with very little inventory. Selling a home right now just does not seem like the best time given the pandemic we are in. In California, housing prices remain stable while millions are out of work and half the state is made up of renter households. The math doesn’t seem to add up but this isn’t a “market” in what many would think as a free market. Read the rest of this entry »





Posted in: banking,federal reserve,real estate investors What do you think?

Pre-Covid our cohort of Millennials in California were already living at home in dramatically large numbers. The total was 2.3 million Millennial adults were living at home with mom and dad because they were unable to afford high rents, let alone purchase an overpriced crap shack built during World War II with popcorn ceilings and horrid looking carpet. Flippers think that a little bit of lipstick on the pig is enough to charge $1 million for a piece of junk. It should come as no surprise that Millennials are struggling even more during the pandemic. The bulk of job losses have come from industries where young people dominate. So it is no surprise that the median age of a home buyer went from 31 in 1981 to a whopping 47 today. All of a sudden many of the new buyers are looking like the Taco Tuesday baby boomers that rail against Millennials for not affording a home when they went to college during a time when college was affordable enough to pay with a paper route. Of course many of these older Americans couldn’t program their way out of a paper bag yet rant on social media platforms built by Millennials. Read the rest of this entry »





Posted in: market analysis,Millennials,young homebuyers What do you think?

A startling number of American households are currently not paying their mortgages. This number is at 4.1 million and this data was before we entered what now appears to be a second shutdown as cases of the Coronavirus spread across the country. Yet somehow, people think the housing market is going to be perfectly fine. The reality is, there are massive systemic shocks that are hitting the system and housing is always a lagging indicator. In California, the unemployment rate is at 16.3 percent which is the highest since the Great Depression. The forbearance issues run deep since missed payments are now compounding on top of each other meaning many households now owe multiple payments to keep up. Many missed a payment because they are unable to make one payment so now that people need to make 3, 4, or more payments all at once, there will be challenges. Yet more importantly, think of places in Los Angeles with good schools. Many are moving to online delivery of coursework this year so that premium on good schools is not worth it if you are essentially paying for a virtual learning model where your student is taking classes from their laptop. The housing market is facing challenges but you wouldn’t know that by simply looking at price. Read the rest of this entry »





Posted in: banking,covid19,housing valuation What do you think?