MyMove.com Reports Surge in Moves During Covid-19, 28% Citing Virus as the Reason

MyMove.com is the online replacement of the change-of-address form you probably filled out at the post office the last time you moved. While the post office benefits from having the move process computerized, the website makes money by accepting advertising and earning a royalty on moving services which are purchased on the site.

Through their exclusive partnership with the USPS, My-Move also aggregates data from those online change of address forms. Pew Research Center then surveys a sample of those movers to find out why they moved.

In prior columns I speculated about the out-migration from downtown Denver to Jefferson County and other suburbs by “urban cliff dwellers” (as my mother called them) fleeing their congested high rises to reduce their exposure to the virus. An October 14th article on MyMove. com confirmed that trend nationally, as reflected in the chart below. Note: The numbers are for net migration between Feb. 1, and July 31, 2020, subtracting the number of moves into each city from the number moving out of that city. Therefore, the number of moves out of each city is actually higher than the number shown in the chart.

The following is excerpted from that Oct. 14 MyMove article.

Pew Research Center study conducted in June looked at almost 10,000 U.S. adults to understand COVID moving trends better….

About a quarter (28%) told us they chose to move because they feared getting Covid-19 if they stayed where they were living… About a fifth (20%) said they wanted to be with their family, or their college campus closed (23%). A total of 18% gave financial reasons, including job loss.

In reading the chart, it should be noted that “New York, NY” is the postal address for Manhattan, not all five boroughs of New York City, which is why Brooklyn has its own number. Also, not shown is that the biggest destination of New York out-migration is Brooklyn, and vice versa. Since only 28% of movers cited the virus as their reason for moving, that fact does not diminish the impact Covid-19 played in this year’s moves.

The change-of-address form asks whether the move is permanent or temporary, and although the number of permanent moves increased by about 2% year-over-year, the number of temporary moves increased by nearly 27%. Some of those moves were to second homes. Others were students who left campuses which had switched from in-person classes to online learning.

Since an estimated 70% of workers were able to continue working from home, those people who had a place to which they could relocate made the move quickly — likely to a place that was not subject to the lockdowns of their home city. The highest spike was in March, falling slightly in April. As reflected in the above chart, small cities were the primary recipients of this in-migration, which supports what I have already observed, that downtown Denver has a buyer’s market while the suburbs have a seller’s market. 

Reflective of that, my most recent closing was of a tri-level home in Lakewood, which I listed at $520,000 and which sold immediately for $579,000. In Jeffco, 46% of the closings in the past 30 days sold for more than their listing price with median days on market of 5. Meanwhile 87% of the homes (mostly condos) that sold in downtown Denver, Lodo and River North during the same 30-day period sold for less than their listing price, with median days on market of 24.

Just Listed: 4-Bedroom, 2-Bath Brick Ranch in Arvada

12082 W. 60th Place — Just listed for $400,000

This 1963 brick ranch has been lovingly maintained, although not particularly updated, since it was purchased by the seller in 1973. Most of the hardwood flooring throughout the main floor has been covered over the years by wall-to-wall carpeting, but the carpet has been removed from the main-floor bedrooms so buyers can see it. The full basement has a non-conforming 4th bedroom, 3/4 bathroom and laundry, plus a full-width family room. The name of the subdivision is Allendale, which is located east of Ward Road and south of 64th Avenue, making it super convenient to shopping as well as Interstate 70, while being an extra quiet neighborhood. You’ll hear no highway noise from your front or back yard! You can take a narrated video tour of this home, inside and out, and see all the interior photos at www.ArvadaRanch.info, then come to our open house this Saturday, October 24th, 11am to 2pm.

You’ve Heard of NIMBY (‘Not in My Backyard’). You’ll Be Hearing About YIMBY in 2021.

One of the many bills passed by the Democratic House which Senate Majority Leader Mitch McConnell has not allowed to be acted on in the Senate is the YIMBY Act. If, as may well happen, the Democrats take control of the U.S. Senate in this year’s election, that act could become law next year.

The YIMBY Act (HR 4351) was bi-partisan, co-sponsored by Democrat Denny Heck of Washington and Republican Trey Hollingsworth of Indiana. It was passed on a voice vote by the House of Representatives on Mar. 2, 2020. Here’s a link to the full text of HR 4351.

Here’s how the act is described and promoted at www.UpForGrowth.org:

The Yes in My Backyard (YIMBY) Act encourages localities to eliminate discriminatory land use policies and remove barriers that prevent needed housing from being built around the country.

The YIMBY Act achieves these goals by requiring Community Development Block Grant (CDBG) recipients to report periodically on the extent to which they are removing discriminatory land use policies and implementing inclusive and affordable housing policies detailed by the bill.

The YIMBY Act increases transparency in land use, zoning, and housing decisions; sheds light on exclusionary polices; and ultimately encourages localities to eliminate barriers to much-needed housing.

Background:

According to Up for Growth’s “Housing Underproduction in the U.S.” report, the United States has underproduced housing by 7.3 million homes from 2000 to 2015.

Exclusionary land use policies — including zoning and density restrictions, onerous parking requirements, and other burdensome development regulations — drive a severe housing shortage and affordability crisis.

The “Missing Millions of Homes” report from the New Democratic Coalition shows that the cost of shelter has been the single largest increase in household budgets in the last 15 years and that the median U.S. family now spends 42% of its income on housing.

Housing underproduction also increases cost of living for families, inhibits geographic mobility, burdens both renters and buyers, and stifles economic productivity. By one estimate, from 1964 to 2009, our national housing shortage lowered aggregate economic growth by 36 percent.

Many of these land use policies are rooted in racism and classism. Their continued existence perpetuates housing discrimination and contributes to the housing affordability crisis affecting large parts of the United States.

Legislative Solution:

The YIMBY Act increases transparency and encourages more thoughtful & inclusive development practices by requiring localities to fully examine and disclose their housing policy decisions.

The bill provides localities a framework for smart policymaking and regulatory practices, thus promoting more inclusive development principles.

The YIMBY Act is an important first step in decreasing the barriers to smart, inclusive growth and reducing the negative and cumulative impact of exclusionary housing policies. It is also a way to clearly demonstrate that the federal government takes seriously the challenges created by exclusionary zoning.

This proposal has not escaped the attention of conservatives, who consider it an attack on suburbia, primarily by eliminating single-family zoning. Allowing greater density and making housing more affordable means to them the introduction of lower-income and therefore racially diverse populations into communities which are historically white and upper-middle or upper income neighborhoods. It’s worth noting that it’s an argument that does indeed divide conservatives from liberals and, because of how it is being promoted, will be a factor in this year’s election.

However, we should remember that zoning laws are matters of local debate and enactment and cannot be forced upon localities by the federal government. That’s why the YIMBY Act only asks localities to consider the implications of their zoning decisions. Single-family zoning will only be modified or eliminated gradually if at all over time and only by a vote of locally elected representatives on city councils and county boards of commissioners. Voters would be wise to recognize fear mongering on the subject for what it is and to consider the underlying motives.

Moreover, it is inconceivable that an established and fully built out subdivision, especially one with a healthy housing stock under 30 or 40 years old, would see any effects from zoning changes. Instead you might see the legalizing of ADUs (Accessory Dwelling Units), which are already popular in many jurisdictions. These units can be in walk-out basements or above detached garages, and provide a great solution for modestly increasing a neighborhood’s and city’s density.

What we are already seeing in the older communities with pre-1970 bungalows is the scraping of isolated homes, making way for attached townhomes. Again, this is only done by the enactment of zoning changes by your elected officials who are not going to act in opposition to their constituents’ loudly expressed viewpoints.

No matter who is elected on the national level or what legislation is passed, housing will always be an expression and result of very localized democratic control — that’s democratic with a small “D.”

Moreover, the YIMBY Act would only apply to localities which accept Community Development Block Grants, for which no community needs to apply.

Realtor Association Takes Fair Housing Seriously

While it might be popular to think of Realtors as privileged conservatives (mostly Republicans) who put up with but are not fans of federal civil rights laws, quite the opposite appears to be true now. Liberal thinking Realtors are in ascendance.

An August 22 article from Realtor Magazine, the official magazine of the National Association of Realtors, makes this abundantly clear.

In 2018, NAR leadership laid bare at its legislative meetings in Washington, D.C., the organization’s “immutable past support of discriminatory and racist practices [link],” vowing to deepen its commitment to industry inclusivity and equal opportunity in housing.

The Chicago Association of Realtors, headed by an African-American woman, apologized last year for its “historically racist policies that persisted for decades.”

Click on that link above. Unless you miss the “good old days,” you’ll be heartened by what you read. It makes me proud to be a Realtor. The commitment to equality and justice is rock solid.

Report Names 7 Cities Most at Risk of a Housing Crash. Denver Isn’t One of Them

With the crazy seller’s market we’re experiencing now, it’s common for people to ask whether we’re in a “bubble” which could burst at any time.

Well, last Wednesday UBS Group released its annual Real Estate Bubble Index, and while it listed three U.S. cities (San Francisco, Los Angeles and New York) as “overvalued,” none of the seven cities listed as “bubble risks” were in the U.S.

Those seven cities with the highest “bubble risk” included Toronto (#3) and Hong Kong (#4), but the rest were all in Europe — Munich (#1), Frankfurt (#2), Paris (#5), Amsterdam (#6), and Zurich (#7).

Boston squeaked into the “Fair Valued” category, and Chicago narrowly made it into the “Undervalued” category.

I was surprised at this analysis until I read the UBS report myself instead of just the coverage of it on a real estate news service to which I subscribe.

The answer as to why more American cities weren’t on the list turns out to be very simple — UBS Group only studies “25 major cities around the world,” and the U.S. cities I mentioned above are the only U.S. cities analyzed each year in the report!  Twelve of the 25 cities studied for this report are in Europe, with the rest divided between North America, the Middle East and Asia/Australia.  It should be noted that the UBS Group office which creates the report is based in Switzerland, so it’s rather Euro-centric.

Click here to view the full UBS Group Global Real Estate Bubble Index.

Despite the limited number of U.S. cities included in the UBS report, there are some useful observations about our market, such as this one:

“Overall, the drop of mortgage rates to historically low levels supports house prices in the U.S. But price changes in the analyzed cities trail the nationwide average. Inner-city demand growth has slowed down as citizens move out to the suburbs as a result of affordability issues and the impacts of COVID-19. Continued migration to lower-cost and more tax-, business-, and regulatory-friendly states has accelerated this trend.”

Claudio Saputelli, Head of Real Estate at UBS Global Wealth Management’s Chief Investment Office, added the following: “The rise of the home office calls into question the need to live close to city centers. Pressure on household incomes cause many people to move to more affordable suburban areas. Moreover, already debt-ridden or economically weaker cities will have to respond to this economic crisis with tax increases or public spending cuts, neither of which bode well for property prices. Taken together, these factors amplify some longer-term uncertainties surrounding urban housing demand.”

Doing my own statistical analysis on REcolorado, Denver’s MLS, I see the trend described above.  While the number of active (i.e., not yet sold) listings and days on market are at nearly   all-time lows in Jefferson County, they are near all-time highs in the Lodo/Downtown Denver market. This is not a good time to sell a condo in any city center (except small cities like Golden), but it is certainly a good time to sell a single-family home (or a condo) in Jefferson County, as I have reported in previous columns.

The last time Realtor Magazine even dealt with the question of a real estate bubble was in November 2018.  The consensus of real estate economists is that our country is not in a real estate bubble, but it’s hard not to worry about it as one looks at the recently increased rate of appreciation in home prices.

With no end in sight to the low mortgage interest rates and with the rich getting richer under the Trump tax cuts, it’s understandable that the real estate market is performing as it is, but such appreciation cannot be sustained long-term.

Only time will tell, and our crystal balls will at least clear up a little after the current election season ends. A Biden victory is sure to bring rollbacks of the Trump tax cuts which benefited the rich (defined as those having taxable incomes over $400,000 per year) and the super rich, which will reduce some of the upward pressure on home prices, but those rollbacks are critical to address the widening wealth gap in America and the exploding national deficit — something that used to be an important issue among Republicans!

Find Out This Saturday Whether an Electric Vehicle Is Right for You

For the 7th consecutive year, Golden Real Estate is pleased to host an Electric Vehicle Round-up in our parking lot at 17695 S. Golden Road this Saturday, Oct. 3rd, from 2 to 5 pm. It’s part of the National Drive Electric Week in addition to being the only in-person component of the Metro Denver Green Homes Tour.

Over 20 owners of EVs have registered at www.DriveElectricWeek.info to bring over 10 different models of EVs and answer the questions of people who may be considering the purchase of an electric vehicle.

EVs already registered include 3  Tesla models, 3 Chevy models, an Audi e-Tron, both Nissan Leaf models, a Fiat 500e, and the Hyundai Kona. I expect others to register, too.

In addition, we expect to have some electric bicycles and a unique electric tricycle, which you’ll be able to test drive. I’ll bring my 2012 Chevy Volt (242 lifetime MPG), which Rita and I have decided to sell for $7,500.  (It cost $40,000 in 2012, and runs as well as new.)

We’ll observe state rules regarding COVID-19, taking the temperature of all visitors on arrival and requiring masks, which we’ll provide if necessary. Everyone will get a shot of hand sanitizer, and we will get contact info of all attendees solely for the purpose of contact tracing (another requirement for such events).

If you drive a car for business, you really need to look into buying an electric vehicle. Why? Because the only cost of driving an EV is 3 cents per mile for electricity (unless you get it free from the sun, as we do) and the wear on your tires, yet the IRS is happy to give you the same 57.5 cents per mile deduction when you use your car for business.

A previous Electric Vehicle roundup event at Golden Real Estate.

Price Reduced on 3-Bedroom Golden Townhome

416 Gladiola Street – Now priced at $344,000

Originally priced at $350,000, this 3-bedroom, 3-bath townhome is now priced at $344,000. It has many virtues, including the best mountain view in the subdivision. With its low turnover, you can tell people are happy living here, and it’s super convenient. Colorado Mills, a medical center, a community swimming pool and tennis court, Kyffin Elementary School, Red Rocks Community College and light rail are all close by. These townhomes are well built too and suprisingly quiet, given the proximity to I-70 and U.S. 6.  See more pictures and a narrated video tour at www.GladiolaTownhome.info.

Just Listed: Solar-Powered Golden Home Behind Hogback

515 Crawford Street, Golden – Listed at $850,000

Tripp Ranch is a 1990s subdivision located in South Golden between Heritage Dells and Stonebridge at Eagle Ridge. This home is located across from the Kinney Run trail and a short walk from the Apex Open Space trailhead. Shelton Elementary School is just a few blocks south. US Highway 6 and Interstate 70 are less than two miles away, providing convenient access to Denver, Boulder and the mountains. Inside, this home has some great improvements, including hardwood floors, a gourmet kitchen with slab granite countertops, and two offices. The backyard features a large deck with included hot tub. Best of all it’s super quiet here because of its setting behind a hogback. Homes here sell quickly, so check out the narrated video tour online at www.TrippRanchHome.info, then come to the open house this Sunday, October 4th, 11 a.m. to 2 p.m.  Or call your agent or Jim Smith at 303-525-1851 for a private showing.

Experts Are Predicting a Surge in Foreclosures, But I See the Situation Differently

With the continued high unemployment rate and the expiration of Pandemic Unemployment Assistance (PUA), many homeowners are hurting, so it makes sense that we may have a foreclosure crisis in our future.

CoreLogic reported recently that back in June (when the Feds were still sending $600/week in PUA to Americans) the share of mortgages with payments 90 to 119 days late had already risen to 2.3%, “the highest level in 21 years.” A rate that high could result in a foreclosure crisis, the report said. Not only could millions of families potentially lose their home, but that would also create downward pressure on home prices.

But I see the situation differently, and after consulting with Jaxzann Riggs of The Mortgage Network, here’s why I don’t expect that flood of foreclosures.

First of all, foreclosure should only happen when a seller owes more on their home than it is worth. That’s because sellers lose all their accumulated equity in a foreclosure, and most people have accumulated a lot of equity thanks for the sellers’ market we have been experiencing.

Secondly, federally mandated forbearance is in effect, which is unlike the forbearance which delinquent borrowers may have enjoyed in the past. Under the current plan, lenders add extra payments at the end of the loan instead of requiring any kind of catch-up payments. This mandate could be extended, too.

The only people likely to face foreclosure will be those who recently took out 100% VA loans or 96.5% FHA loans or conventional loans with only 3% down payment, and for whom there is hardly any equity to lose in a foreclosure action.

Being on forbearance doesn’t affect one’s credit rating even though you are not making payments (again, part of the federal mandate), but once you resume payments, you need to make a minimum of three on-time payments to qualify for a Fannie Mae or Freddie Mac loan, which will restrict your ability to sell your home and purchase a replacement home. Some lenders require six months post-forbearance loan payments.

That, too, will slow down any surge in what are known as “distressed listings.”

A Reader Asks How to Handle Inspection Objections

Inspection is the first and biggest hurdle in any contract to buy and sell a home. It’s an area in which experience by your agent really counts!

Usually the buyer will only ask for serious issues to be addressed by the seller. The seller rarely agrees to all the demands, nor is that expected. A common practice is to fix the easy items but give the buyer a price reduction or credit toward closing costs in lieu of making the big dollar repairs. When the buyer wants older appliances that are still working replaced, one solution is for the seller to purchase a home warranty covering those and other appliances.

Good luck with your inspections!