- Delinquencies continue to rise [3:10]
- 5 shifts among 2020 buyers and sellers [5:53]
- Social media background checks for Realtors [9:38]
- The COVID-19 vaccine [14:45]
- Digital notarization paired with dotloop [16:42]
- How a vaccine could negatively impact home affordability [18:49]
- Will people return to big cities when there’s a vaccine? [21:20]
- Home renovation company raises $25 million in funding round [24:21]
- Plus, so much more.
- Grow Your Real Estate Profits with Our Agent Success Toolbox
- Take Over $13,000 in Real Estate Courses for Just $97
- Enroll in Pat Hiban’s 6 Weeks to 7 Figures Course
Real Estate Rockstars, this is Aaron Amuchastegui and I am back for today’s State of the Market. Before I get into the State of the Market, I want to honor a few of the recent reviews that we got on Apple podcasts. Now it was really great. We had 1029, Kim said Real Estate Rockstars, five out of five love the show, helpful relevant information. We had John in here say very helpful five stars. I’ve been studying for my license, learning so much from the podcast while driving or doing something I can listen to. Those reviews are great. I also have two or three that stuck out that really are going to change the way that you hear our podcast over the next few months. I want you guys to know, I do read these, and I do listen and we are going to adjust.
Next we had a four out of five from Dude Navan. Dude Navan said, great content, brutal ads for new agent podcast has been incredible but he’s listened to so many of the podcasts and there’s only so many times he can listen to the same podcast advertisement. We had a complaint about that. We had another one that said it’s amazing how many commercials they can try to pack into that. They said good content. This sounds like something also is crazy. How much advertising the gym in a 30-minute episode. A lot of times the same advertisements back-to-back loves the content why they keep coming back. He gave me a two out of five stars because of too many advertisements.
We hear you. What we’re going to do over the next couple of months is I’m going to get rid of all of those extra plugs where I tell you guys what you’ll go do. We have our main sponsor. We’ve got our main sponsor rent ready. Other than that, you won’t hear any of those other interruptions, any of those other ads as we go through. We’ve discontinued inserting any of the ads from those other providers out there. We can just be sure to provide for you guys the best possible content. As you listen in, hopefully, love today’s content as I jump in and go over the news with you.
If you do like what we’re doing, go on and give us review. Just like I told you today and if you don’t like what I’m doing, go on and give us a review and see if we can’t change your mind. Let’s get going. All right, first article today and I’m going to go ahead and share my screen. If you’re watching this on YouTube, you’ll see the ads but you don’t need to see the ads or see the articles I go through them. When I read them out to you, you’ll get jammed packs news of what you need to know today. First article was in was a week ago.
Says delinquencies continue to rise across the country. CoreLogic reported at 2.9% rise in mortgage delinquencies in August compared to last year. It says an August CoreLogic record, 6.6% of mortgages when Sunstate of delinquency a 2.9% rise from the same time last year. It says the hit comes primarily from late-stage delinquencies mortgage payments they’re late. More than 90 days are 4.3% up from 1.3% last August. In one sense, I’ll tell you, “Okay, that’s bad news but so it’s three times as many delinquencies of 4.3% delinquencies but those numbers are much smaller than some of the news that we’ve seen over the last few months of how people went into forbearance and were missing payments.
When I saw that number, the CoreLogic App, that actually made me feel better about the market than I had been saying. They’ve got some pretty cool graphs on here when it says to those that are 30 plus days overdue. It’s pretty common for people to go 30 days in default. Last year was 3.7%, this year at 6.6%. Twice as many people are 30 days behind. When you think about all of those delinquencies out there and forbearances, this is actually a really good number. It says, if I mentioned that the pandemic, the 150-day delinquency rate for August spiked to 1.2%. It’s the highest rate in more than 21 years and double the January 2010 peak during the home price bust.
I see what they’re saying there. I agree that it is definitely up and being twice as bad as it was during the January 2010 peak during the housing bust. That makes a lot of sense. At the same time, when right now they have told so many people they can forego making their payments and worry about it later. The fact that the numbers are only twice what they were when right now, it’s okay to be in default and it wasn’t as bad as I was expecting this. Forbearance programs continue to reduce the flow of homes into foreclosure and distress sale. That’s been the key to helping many families.
I’ve told you guys before the foreclosure stats that we manage out in Texas, usually, there’s 6 or 7,000 houses a month that are scheduled for foreclosure. Right now we’re getting less than 1000 scheduled and maybe less than 100 selling statewide. Usually, 6,000 are scheduled in 1500 actually sell into foreclosure. Right now those numbers are less than a 100 scheduled and less than 100 actually selling. Keep in mind out there. They do see the delinquencies there but as we’re hitting the end of the year, that is better news than I was expecting. I was expecting to see many more foreclosures by now.
We’ll start to see at the beginning of the year, if those foreclosure moratoriums will extend or what other government intervention will come into place but the numbers weren’t as bad as I thought they were. All right, next article. This comes from a Boston article and this is a lot of the stuff that we’ve been saying. This says real estate by boston.com and COVID-19 era home buyers here have changed their mind now they want this. This is five shifts among 2020 buyers and sellers. I’m going to go through these quickly but they’re very cool.
It said this came from new research for the National Association of Realtors. It is the number one buyers are choosing to move to the suburbs, according to NAR 57% of buyers purchasing the suburbs after April compared with 50% before that. That means it’s gone up. There’s a spike of buyers, but it’s not the only place they’re buying but we’ve been talking about prices increasing in the suburbs prices decreasing in the city. It seems to be that’s the same thing happening out in Boston. This next one is interesting. It says, number two common trend, multi-generational homes are increasingly popular. NAR’s data indicate that 15% of buyers in April or later chose a multi-generational home.
This is as we’re seeing grandparents helping to homeschool and provide childcare. That’s a change with this whole shelter in place and everything that’s going on in the world. Now it’s more common for grandparents to move back into the home or multiple multi-generational homes. I hadn’t been thinking about that. I hadn’t been seeing statistics on that but that totally makes sense to me. When I think about the world that we’re living in. Number three says buyers are moving faster. NAR’s research found that on average buyers spend eight weeks looking for a home down from 10 weeks in 2019 and the shortest amount of time searching since 2007.
They said that now they’re taking eight weeks to look for a home before they buy instead of 10. They’re buying two weeks sooner but that’s not that big of a statistic difference for me. They’re buying houses 10% sooner than they were before. We’ve talked about how extreme this COVID market is right now and how people are in such a rush to buy. There’s such a shortage of demand out there. Or such a shortage of supply out there with such a strong demand. The going from 10 weeks at normal searching to eight weeks, isn’t super news but it is true buyers are moving faster. A repeat buyers are upsizing rather than downsizing.
I’d ask you guys, is this a surprise right now? We shelter in place. People stay in their houses way, way more. Now there’s very few people that are downsizing. There aren’t very many people saying, “Hey, I don’t need a house this big I’ll move into something smaller.” Like we probably saw a lot of in years past, we saw a lot of almost people moving into smaller homes so they could get into places with amenities, closer to the cities, things like that. Well, now we are not seeing that right now.
Something we’ve been talking about for the last several months, people are moving out into bigger houses. This NAR report found that sellers moving to a home in their same area, cited a desire for a larger home as the primary reason for buying. With many families, living, working, and schooling at home, larger homes that function for their needs or what buyers are looking for. Exactly what we’ve been talking about on here. Lined up with that. Next says the number five is that we have not been timers is family ties are motivating sellers.
For the second consecutive year, NAR’s profile found the seller’s desire to be close to friends and family was their top reason to sell. For sellers making long-distance moves, a higher percentage said this was the primary reason. McCarran said some of her sellers are relocating living within driving distance of family members. Many empty nesters are moving closer to their grand, their grown children and grandchildren to reconnect and also in part to help out with these overwhelmed parents working from home and those policies. That’s a lot like that.
Multi-generational home is also seeing people moving into cities so they can be closer together. A lot of those trends are going to stay with us for a while. There’s a few more articles that I’m going to go into today about how a vaccine could change the real estate market. There’s many differing opinions on what new habits are going to stay and which ones are going to change. Next article. This was from Inman and it was published on November 13th that says new NAR policy requires MLS is to process complaints anonymously. There’s a lot of new NAR policies out there. This highlight article from Inman I thought it was pretty interesting.
It says the trade group passes new standard for analysts and local realtor associations. Future NAR leaders will have to pass a social media background check. During election time, there’s been so much talk about the power of social media about the social media giants being able to turn people on and off, to be able to change stories, to be able to fact check stories, and all sorts of things. I found it interesting to say now the NAR leaders will also have to pass a social media background check.
The National Association of Realtors approved new standards for its local associations including a policy requiring MLSs to process complaints anonymously upon request. Group also voted to come up with a process that is social media background checks on members who aspire to get elected to office. 959 member board of directors which represents 1.4 million members also pass controversial change to its professional standards to crack down on racist and discriminatory speech and behavior. The changes were motivated in part by a desire to protect the realtor brand. They go in there and talked about a few different things here.
A social media background check, the board approved a policy that directs credentials and campaign rules established the process for conducting a social media background check, already subject to review such as a financial audit, illegal audit, criminal background check. It says this review process seeks to identify any issues in a candidate’s history that may cause an embarrassed or shed negative light to the National Association of Realtors if they’re going to serve as an officer. Now they’re going to go through and check social media to see if there’s anything in the past on social media that could potentially shed a negative light on the National Association of Realtors if that person becomes an officer.
Hi, Real Estate Rockstars, this is Aaron Amuchastegui. I am so excited to share with you our newest head podcast sponsor and this is a company called RentRedi. RentRedi is a landlord-tenant software that has everything you need to manage your rentals from your phone or your computer. No need to be tech-savvy, download multiple programs or hire a specialist. RentRedi is easy to use for everyone. If you do have a question, their customer support team is available to make sure managing your properties doesn’t have to be harder than it already is.
Now we’re already doing that. When someone applies for a job, people are looking on social media, someone’s running for office of anything. People are looking on social media. It makes more and more sense and I think that it was a safe bet for them to actually make it public and saying, everyone is doing that. Anyway, everyone is using social media as a background check before they hire or fire. Now they’re actually making it clear out there. This is a policy that we’re doing. We’re going to do it now they won’t get in trouble for it if they do do it.
MLS standards says the board of directors also approved MLS policies. The proposals were created which was charged with considering the criteria and enforcement process for minimum MLS standards. The policies of the first phase of a two-phase approach. Second phase will involve gathering industry feedback and developing these new standards. This rationalizes an anonymous complaints of MLS rules. This was the one thing. If you’re bringing a complaint on MLS, it eliminates the stigma of bringing questionable actions and business practices of other people to attention.
Now you can actually say, “Hey, they’re violating something in MLS but now you can do it anonymously.” That was the big change with that. Association core standards, if the board of director to approve changes to core standards for local associations, core standards are minimum requirements that state and local associations must comply with annually in order to remain realtor affiliated. The core standard change would require the associations’ strategic plans include diversity, equity, and inclusion of fair housing components and that they associations annually certify that they’ve conducted or promoted a diversity equity inclusion.
A lot of different rules just came in three of them, seemingly unrelated to hit the article but a social media background check new MLS standards where you can actually report someone as a violation anonymously. Then also making sure they’re going to follow fair housing activity and also they are going to audit that. All right, next few articles are all about a vaccine. CNN business on November 18th there says how a vaccine could upend real estate markets. There’s an immune article says what a vaccine could mean for the US housing market and real estate.
There was also Zillow CEO getting interviewed on Inman on how the COVID-19 vaccine may impact real estate tech. I’m going to go into these three different articles and talk about the differences between them. Here’s an interesting thing that Zillow CEO says about it. Now he says the vaccine’s a miracle and so many things are going to change but he kind of said, “Hey, the change has been made. People have decided that they want to do real estate digitally now that even though before they weren’t going into houses, they learned how to see things remotely. Having the agents go back and forth. Well, now they’ve saved time. They’ve saved processes.”
You’re saying even with the vaccine people, aren’t going to be going back to looking at houses and showing houses the way they were before they’re going to be staying much more digitally related. It’s like the things that we’ve learned, that’s made it a lot more convenient. They’re like, “Sure, we could go view 10 houses in the same day but isn’t it better to view your 10 of them virtually than only go look at one or two in-person?” That wasn’t acceptable before, now it’s making it so much easier.
What he said is, my feeling is the concrete hasn’t completely set but it is setting. The further we get into this thing, the more we’ve been knocked out of our old habits and we’re discovering new and better ways to do things. That means we’re less likely we are going to go back. The long-term trend for him is digital. People want to shop virtually. They want to tour virtually. They want to let themselves into a house with just an app. They don’t want to have to meet agents or meet people. Really interesting stuff. If the Zillow CEO is saying as the COVID-19 vaccine, his big thing he’s going to see is, it may not change real estate all that much because people have made their changes and made their decisions.
In a related note, another article came out, it says Notarize announces partnership with Dotloops. The new partnerships should let agents using Dotloop, get their documents notarized with the click of a button. Digital notary startup Notarize announced Wednesday, they struck up a partnership with Dotloop, a Zillow owned company that provides a popular transaction management.
If I need to tell you guys, I sold a house like a week and a half ago. With that one, I got to do a remote notary for the first time. I was in California. The closing was in Texas. I was in my house and I’ve always had mobile notaries come to my house, print out paperwork, be able to notarize there. This was different. They said, “Hey, you’ve got your appointment. Now go into your office.” I was able to walk into my home office, click the button. All of a sudden this thing pops up. That company was called NotaryCam. I was on a Zoom chat essentially with a notary. When I got on there, she looked at my ID, she did some background checks. They brought up a series of questionnaires that made me prove who I was.
Then the sales documents came up on the screen and it was just like DocuSigning a document. It was click and sign and click and sign and click and sign. She stamps it as notary that sent off. We recorded the sale an hour later and my funds were wired to me like two hours later. It was beautiful. It was my first experience seeing that digital notary thing. It’s now saying Notarize announced they have a partnership with Dotloop, I think that is really, really cool technology. That will help everyone out there in real estate. They’re going to be using real notaries to do it. But to go in line with what the Zillow CEO said, “Hey, we’re doing all this technology now. We’re not going to go back.”
It’s like we needed a pandemic for people to be able to say, “Okay, doing notaries online is totally okay and acceptable.” We needed this but now that it’s happened now that they’ve unlocked that when we go back to normal and now if there’s a vaccine and people and there’s no masks and everything’s open 100% plenty of people are going to say, “That’s great but I still don’t want to go to a notary or have a notary come over. Just let me do the video chat. Let me just click that whenever I’m ready and do that.” That lines up a lot with the Zillow CEO said.
All right. Here’s another one though. It says what a vaccine could mean for real estate US housing market. This is from Inman Markets and Economy, November 16th. It says an effective vaccine could mean a spike in interest rates and a return to some pricey Metro market. What do you guys think about that? It said the last week that the pharmaceutical giant Pfizer said they’re one step closer to having the COVID vaccine. They’ve studied more than 45,000 individuals. The vaccine candidate was found to be more than 90% effective in COVID-19.
Impact on home affordability. The news of an effective vaccine which in turn means a potential light at the end of the tunnel but obviously the good news for the economy overall, the early week spike, and equity markets as a result of the news provided clear evidence of that hypothesis. An effective vaccine according to Redfin chief economist, Daryl Fairweather would mean more employees would return to work sooner and consumers could spend money in ways that would have been too risky during the pandemic. A strong economy is generally good news for the housing market as people are more likely to buy home, there’s one caveat however, a strong economy also means interest rates may start to rise.
Mortgage rates has spent the pandemic settling almost weekly record lows news of approved vaccine is likely to the higher mortgage rates, which could dampen buyer demand somewhat as affordability also becomes more of a challenge. We do not expect a huge pullback in buyer demand which has been quite strong. That’s really interesting. Now we will have, if the economy gets better mortgage rates go up a little bit. We’ve already seen prices go up a lot. Now mortgage rates, as they’ve gone down, have offset the pricing but will prices stay high if the rates start to go back up a little bit? How will it impact migration trends? Rich Barton CEO and co-founder of Zillow believes this great reshuffling is here to stay. Simply put people want to move. People are still going through that suburban boom.
Much of it was discussed about the suburban boom that fueled the hot housing market but many of the underlying trends could be here to stay. It says, “Agents returned to open houses and in-person showing the pandemic has not only changed where people want to live but how they buy and rent homes. Lenders in the field have been clear that many of the trends like 3D tours and digital closings are here to stay.” We were just talking about that digital closings but we’ll see some of the old ways once the vaccine is approved and made readily available.
Franco believes that it will take a while for open houses and showings to resume as normal, just because the rollout of the vaccine will not happen overnight. Some buildings are going to continue restricting showings and public access. They’re not going to go back to the way they were at least immediately. Then the next article and when I go back to the CNN one, it says, “How a vaccine could upend real estate markets. Again, a little different purposes in just a matter of months, it could just really change the landscape of the housing market, especially in big cities.”
We’ve got a couple of people saying, “Hey, the trends are going to stay.” Another one says, “Now news are promising vaccine could turn the market on its head and nationally home prices have never been higher driving up surging demand or record-low mortgage rates. The most expensive urban areas have been experiencing the opposite problem. New York and San Francisco have seen higher vacancy rates and lower rents and sales prices. As many people untethered from office jobs were created to the suburbs but with potential vaccines on the horizon real estate in these big cities could now see a turnaround.”
“It’s not going to be a light switch.” Said Miller Samuel a real estate appraiser consultant New York city. The news is starting to get people to be hopeful that someday they will get to return to the city. While widespread vaccination is still a ways off the news alone is a good sign. The real estate in cities will continue to recover as the prospect becomes more realistic and people can go back in.
It says, “Will people return to the cities? The more vaccine brings life closer to normal, the more city real estate markets will change. Once the vaccine is out and population begins seeing schools reliably open and big companies bringing people back in that’s where it starts to snowball. Then you will see people return.” They’re specifically in Manhattan, the rental market will come back first because that activity that has fallen the most of super vacant on their rentals. Both rental inventory currently triple what it was a year ago. They don’t expect rent prices to go back up.
It’s saying right now there’s a high vacancy. Maybe you get some deals in those cities, especially for the rentals that have been vacant for a while but maybe now’s the time. Maybe now’s the time for people to buy in there so they can buy new rentals and as that vaccine comes out, people will move back into cities. The vacancy rate in Manhattan is still at an all-time high of 6.14%. The buyers won’t leave the suburbs behind is the next part of that. The virus has made the home more important than ever. A lot of different opinions here on what we could see the implications of what that vaccine could mean. Because that was big news.
You’ve got the idea that will people go back to cities. I don’t know but in part of that opinion, one of those opinion pieces they believe that they will. Another opinion piece says, the market’s going to get better. As a result, interest rates are going to have to start coming up again. I do believe interest rates will have to start coming up again. Now the fed had talked a couple of months ago saying that they were going to leave them low for the next like three years. That doesn’t mean that everyone is going to adjust that way. As the economy gets better, when the economy is doing really, really good people can reverse course of action without getting many people telling them it’s the wrong thing to do.
There’s also that idea of saying, “Hey, the vaccine won’t change anything that people now like doing digital recordings. They like doing digital showings and that is here to stay.” I’d be really curious to hear from you guys to hear your predictions, to see what you think. Will the vaccine not change anything at all? Will people go back into the markets? Will the rates go up? There’s a lot of opportunities out there. Oh, there was one last article I was going to bring up before I close this thing out. This was interesting because the guests that we interviewed a few weeks ago talked about this as one of his business plan pieces.
This says, “Home-improvement startup Curbio raises $25 million.” This was in mid-November 17. It says, “The company handles repairs for homeowners and takes payments for the work when the home later sells.” We had a guy we were interviewing on here and he would reach out to his customers and he would let them know, “Hey, we’ll do the repairs and you just pay us back when the house sells.” I also mentioned there’s probably a business plan in there and maybe there was a company to do it. I hadn’t heard of Curbio but Curbio has started the renovates homes and then gets paid when those homes sell has raised $25 million in new funding round.
Comcast Ventures, which is part of the telecommunication giant Comcast led the funding round. Other participants included the national association of realtors, Second Century Ventures, and several capital funds such as Camber Creek Ventures. In a statement, Curbio has said it will use the new funding to support rapidly growing demand for it services. I feel very fortunate to have the backing of such a talented group of visionaries in the rapidly growing space to Rick Rudman Curbio’s CEO. It’s very cool technology. We’ve talked about one of those things that happens in times like this where the market is strong and fast.
Being able to just do a little bit of that fixed up to make it even better but homeowner’s not really having that availability. Also if you’re an agent out there, whether you’re trying to set yourself apart, having relationships and partnerships with companies like that, being able to bring that to your client as an option and let them know, right now I could sell your house for 200,000, but if we did these repairs, I bet I could sell it for 240,000.
There’s another company that will actually fund that rehab for you. That’s a win-win for everybody. It’s a win-win for Curbio It’s a win-win for you as the agent because you’re going to help your client make more money and be able to sell the house faster. It’s a win-win for your client because they’re going get more bang for their buck. They’re going to sell their house for more money. Real Estate Rockstars, I hope you enjoy today’s State of the Market. Thank you for coming back and listening again.
If I said something today that you liked out there, please share it with a friend and let somebody else know to listen, and be sure to go give me a review. Let me know if we’re doing a great job out here or not. Because like I said, at the beginning of the State of the Market, we are listening to our reviews and we are going to make sure that we make this the best podcast ever. Thank you.