Real Estate Trend during COVID-19

In just a short 2 months since the shelter-in-place order due to COVID-19 across the globe, most people are predicting that the “real estate market will be worse than the 2008”. What’s your prediction?

As some of you may know, I have been tracking the local market trend since I became a realtor some 20 odd years ago. As an original hi-tech nerd, I have always believe that data help us make better decision in most cases. The mortgage industry meltdown was the major cause of all the shortsales, foreclosures we saw in 2008. Will this pandemic spread by these tiny viruses bring down our economy? With the growth rate we have observed across the Bay Area since ~ 2012, most people have been predicting that real estate market will eventually crash.

The media has been talking about the big spike in unemployment rate. I thought it would be interesting to compare housing inventory and the unemployment rate during these period. All the major employers’ presence in Silicon Valley are the main reason for our housing market demand and growth.

Even with the spike we have been hearing, the currently unemployment rate is not quite where it was in the 2008 time period. The lowest interest rate that we see, continue to fuel and maintain the housing market steady. The inventory is still very low. Home in good neighborhood, price right are still selling within days with multiple offers.

So how will COVID-19 impact the local Real estate market? I am paying attention to the slope in the unemployment rate. It has a similar slope we saw in 2008. If companies continue to have to shutdown, major layoff(s) will most likely be the inevitable. And if those layoffs prolong, we may see that major correction in our real estate market, that everyone has been predicting for years, now.

What do I recommend to our sellers and buyers? Sellers – we are seeing the peak in equity growth. This is the best time to sell! Buyers – with the interest rate hitting the all time low, you are going to be the bigger winner when buy and keep your properties for 5 plus year. If you have seen my other posts, the market data has shown that Real Estate is still the safest investment overtime. For those investors looking for the quick profit, I would say: “your guess is as good as mine”. There are just too many variables to consider for any short term investments.

Good luck to us all. I am hopeful that test kits and a vaccine will be available soon. I see masks, 6 ft handshake staying around until at least 2021.

Nick Pham | 408.425.5304 | DRE: 01365281

2020 Real Estate Market and COVID-19

2020 started just like any previous year.  Seller are slow after the Holidays, so it is a typical 1st quarter with lower inventory, then the summer wave of sellers and buyers browsing, shopping for their home during the summer.

With the uncertainty of the COVID-19 epidemic globally, there has been nothing but fear of an economy crash.  I and other realtors are facing the same questions from all the buyers and the sellers – Are we going to have a crash like the 2008 housing market crash?!?

No ones has a crystal ball, and I surely have been wrong in the past.   But the impact of our real estate future will be much different than the market crash in 2008.   The housing supply has remain consistently low since the bounced back in 2010.   compare to the same time in 2008, where there were +10,000 of homes available to sell.  We are at 10% of housing inventory compare to the crash in 2008.

Residential Real Estate has been declared to be part of the Essential Services workforce.  Realtors including myself are suffering economically.   Just remember, we all need a place to Shelter-In-Place.   We can’t not open-houses, but we definitely can show homes virtually, review Disclosures, Inspection Reports, and Review Offers online.   Keep in my all related Real Estate Services, Lenders, Escrows, County Recording System are open to serve you.  Don’t forget all the video conferencing tools, that are wonderful to utilize.

The major problem in 2008 was not due to any world events or epidemic, but it was due to the mortgage loans problem including: Option-ARM, 0% Down Payment programs.  buyers were allow to buy homes with zero money, paying Negative-Amortization loan.  It was cheaper then renting!

A shout out to all the people, especially our front line medical workers, for keeping our country moving.   I am hopeful and praying for everyone’s well-being.  Let’s fight this COVID-19 by practicing the safety guideline recommended.  With the Fed cutting interest rate to 0% again, it may actually be the best time for those that have not been able to purchase in recent year.  Let’s keep America going.  We are all in this together, and together we will survive and come out fine.   #BeStrong #BeSafe #nocovid

I am personally practicing all the safety measures as we all are trying to get through this together.

• Frequently wash your hands with soap and water for at least 20 seconds. When soap and running water are unavailable, use an alcohol-based hand rub with at least 60% alcohol. Always wash hands that are visibly soiled.
• Avoid touching your eyes, nose, or mouth with unwashed hands.
• Avoid close contact with people who are sick.

Thank you for reading.

Nick Pham | 408.425.5304 | DRE 01365281 | Broker | Residential | Commercial | Mortgage | Private Lending

Buy, Hold or Sell – San Jose Real Estate Market 2020 Prediction

Finally finished my 2019 year end graphs for Santa Clara County Real Estate Market. Some buyers were making bets that market is going to crash! Would you consider 6% drop in the Median Price for Single Family Residence a crash?

For a county of about 2M people, it is actually a scary comparison. In 2019, a total of 13,360 homes (single Family+townhouse+condo) were sold. in 2004, we saw the highest number of home sold in 24,458 in Santa Clara County. The market crashed in 2007-08… So how did the market changed and continued to climb since then?

Just in case, you forget – WE ARE THE SILICON VALLEY. Unless all the big high tech we all love leave the Bay Area, I don’t expect any major decline in our market any time soon.

If Google, Apple, Facebook, Adobe are BUYING up all the land in Silicon Valley and building more facilities, YOU SHOULD TOO!!!

Hint: There are 551 Single Family Home Active (for sale) in Jan 2020, Same month the years before, there were 1,072 Actives in 2019 and 628 Actives in 2018… With Interest Rates continuing to be below 4.000%, Anyone would like to predict the Market for 2020?!?

Some quick historical timeline for your enjoyments:

2004 – #Facebook was founded

2004 – #Google went IPO

2006 – #Twitter was founded

2007 – #Apple launched iPhone

2007 – #Google launched Android OS

2008 – #Uber was founded

2012 – #Facebook went IPO

…

As a full-time real estate professional for ~20 yrs, I have seen the Bay Area Real Estate market gone through a few corrections, but continues to grow tremendously! Real Estate is not just a dream, it is also one of the safest investment strategy.

http://www.nickpham.com | http://www.pnrealestate group

San Jose Rent Control Impacts on Property Owners

If you are an owner of rental properties, this blog is a must read!!!

Background info:

Did you know that apartments with three or more units that were built and occupied prior to Sept 7, 1979 are covered by San Jose’s Apartment Rent Ordinance (ARO)?

The Apartment Rent Ordinance (ARO) effects over 44,000 apartments, that is roughly 1/3 of the City’s rental housing, or 11% of San Jose Residents.  The ARO is put in place to control rent increase and stabilize the rental market, while creating rights and obligations for landlords and tenants.

Apartment Rent Ordinance Amendments:

At the direction of the City Council, an interim ARO amending the ARO was adopted on April 19, 2016 to reduce the allowable rent increase from 8% to 5%, along with other changes.   The City Council also directed the Housing Department to further review and amend and make permanent modification to the ARO.

Draft recommendations are released for public review and comments.   IF YOU ARE A RENTAL PROPERTY OWNER, and you have comments, concerns with the recommendations to Council Members, you can send an email or hard copy by Friday, Sept 22, 2017.  Email to: ARO@sanjoseca.gov or send hard copy comments to:  City of San Jose, Dept of Housing, Attn: Rachel VanderVeen, 200 East Santa Clara St., 12th Floor, San Jose, CA 95113

A Realtor Perspective:

As an active practitioner representing owners and investors of various property types, and an active public servant, I have mixed feeling about the impact and benefit of the ARO.   As strong supporter of affordable housing, I applause the City for doing its job in addressing the need for more affordable housing and protecting tenant’s rights.  On the other hand, as a Realtor, I also strongly believe in protecting property owner’s rights.

I tried to be impartial in reviewing the ARO, the interim ARO and the draft recommendations to be amended to the ARO.   Here is my quick summary for your reference:

1. Property owners need to really clearly understand the 12 “JUST CAUSES” and its consequences and the potential relocation fees that landlords may be obligated to pay.
2. Understand both the landlord’s rights and the tenant’s rights may be the best way to benefit from the ARO.
3. There is a petition process to increase more than 5%, if the property is currently rented substantially below market to achieve a Fair Return.
4. Know the Ellis Act, and how it works in conjunction with the ARO.

If you are an owner/investor of an multi-unit property that may be rented below market rate, and considering selling, there are investor who are looking for under performed properties just like yours.  Understand your rights will definitely answer all the Rent Control related questions.

Feel free to contact me with your specific questions!

Thank you for reading my post.

Nick Pham | Broker | BRE#01365281 | 408.425.5304 | nick@nickpham.com

#SanJose #RealEstate #Investment #1031 #RentControl #AparmentRentOrdinance