Coronavirus: Housing Providers FAQs

Housing providers have special considerations when it comes to their residents. How they can protect them? What precautions should they take? How they can insure the building is protected and sustainable. This FAQ answers those questions.

What properties are covered by the federal eviction moratorium?

All rental properties are covered by the CDC notice(link is external). NAR has published a one-page summary(link is external) of the order issued by the CDC. It does not apply to residential properties in locations with an eviction moratorium that provides the “same or greater level of public-health protection that the requirements” of the order. It also does not apply to American Samoa.

When did the federal eviction moratorium begin?

The moratorium began on September 4, 2020. After that date,  a housing provider may not evict for failure to pay, any tenant who submits a signed attestation, per the Notice through December 31, 2020.

Is rent that accrues during the eviction moratorium forgiven?

No: The moratorium prohibits housing providers from evicting, but does not forgive the rent that is due. In fact, for tenants who have attested and received the eviction moratorium, a property owner or agent may charge penalties, late fees and interest, per the lease.

How can the government do this? Isn’t it a 5th Amendment takings?

The order by the CDC is based under Section 361 of the Public Health Service Act, and is designed to “prevent the further spread of COVID-19.” Legal challenges are anticipated.

Is there an appropriate way to request past due rent without having to do 30-day notice to quit?

An owner can certainly make a request for rent payments that are due during the eviction moratorium; owners may also enter into repayment agreements with tenants during the moratorium, making clear the amount due and the terms for repayment. 

If a tenant doesn’t pay the full rent on time, can I send a late payment notice to the tenant?

Yes, but with some caveats: the moratorium prohibits initiation of eviction proceedings but it does not prohibit an owner from sending the tenant a notice that the rental payment is late or incomplete. Among other things, if an owner wants to initiate collection or eviction proceedings after the moratorium ends, it is wise to have a copy of these notices on hand, making clear that the housing provider documented the nonpayment and provided information to the tenant. If you send such a notice, you should consult with your legal counsel about the wording. Among other things, the notice needs to indicate that it is not itself a notice of eviction.

What other steps should I take if a tenant doesn’t pay the full rent on time?

In addition to providing a notice of nonpayment, many owners are asking tenants to execute a formal rent forbearance agreement. These documents constitute a contractual agreement between the housing provider and the tenant, identifying the amount of rent that is unpaid and providing terms for repayment in the future. If a tenant has a good rental history in the past, it may be desirable to work out terms for repayment after the moratorium, rather than go through the effort to evict a tenant now and try to re-rent the unit. From the tenant’s point of view, many are eager to enter into a forbearance agreement that establishes a mechanism to pay accrued rents to avoid having to pay all accrued but unpaid rent in a lump sum at the end of the moratorium period. A forbearance agreement clarifies what the tenant owes and when it will be paid, and provides remedies that the housing provider can exercise if the repayment terms are not met. Again, housing providers need to consult with legal counsel to make sure that the forbearance agreement complies with state and local landlord/tenant laws in general.

Can tenants pay partial rent?

Some housing providers may want to enter into a rent discount agreement with tenants, under which the tenant agrees to pay a discounted amount of rent on the regular due date each month. Many tenants, even if they recently lost their job, will continue to receive some income from unemployment compensation and other sources and would be willing to pay some portion of their current rent to avoid facing a lump sum at the end of the moratorium period and possible eviction thereafter. Likewise, many housing providers would prefer to receive at least some portion of their rental income on a current basis, rather than no income at all and face the cost and uncertainty of eviction in the future. Again, any such discount agreement should be prepared by legal counsel familiar with state and local landlord/tenant law requirements.

If tenant does not pay rent during the eviction moratorium, when can I start to charge fees or penalties for nonpayment?

Immediately. Unlike the previous moratorium in the CARES Act (which has expired), the CDC notice allows a property owner to charge late fees, penalties and interest on any rent that accrues during the eviction moratorium period (September 4 – December 31), per the terms of the lease.

Am I allowed to initiate eviction for cause (criminal activity, etc.) during the eviction moratorium?

Yes: the moratorium only applies to actions “for nonpayment of rent or other fees or charges.” A housing provider can initiate a “for cause” eviction if a tenant has breached some other lease provision – such as committing a crime or assault on another tenant – that does not involve nonpayment of rent or other charges or fees.

The housing market changes daily, stay updated with us. For all your real estate needs, Talk To Tammy 636.931.9100!

NEW Flood Risk Data Available

New Flood Data Adds an Extra Dimension for Shoppers and for Research

September 1st, 2020 – Now, flood data, available on realtor.com® will enable buyers to consider the flood risk of a location when thinking about their home purchase.  The flood data includes an estimate of a home’s FEMA flood zone as well as Flood FactorTM, comprehensive flood risk data displayed at the property level in the form of a score, ranging from 1 (minimal risk) to 10 (extreme risk) powered by the First Street Foundation. When available for a property, it will display the current risk of flooding for the home; whether that risk is increasing, decreasing, or constant; and the likelihood of that property experiencing a flood event over the next 30 years. 

Previous research conducted by realtor.com® and featured in the Wall Street Journal found evidence that homes outside of FEMA high-risk flood zones appreciated faster than homes inside those zones between 2012 and 2017, suggesting that buyers already attempt to adjust for this risk. But most buyers are not deterred just because a home has flood risk.  In a consumer survey conducted this spring by Toluna research for realtor.com®, a majority of buyers (55 percent) would still buy a home even if they knew it was in a flood zone, but roughly four in 10 buyers would expect some kind of discount on the home, presumably for the extra costs associated with flood risk. Younger shoppers were more open to buying a home with flood risk than those aged 55 and older.

The shopping experience on realtor.com® will now make information about flood risk available to home buyers, homeowners, and real estate agents upfront. It will enable buyers to factor this risk into their evaluation of the tradeoffs of buying a particular home. The data will also help buyers and owners ensure they have adequate insurance coverage, since flood risks are not covered by homeowner’s insurance policies. By helping real estate agents make this risk an early part of the home search discussion, this data may incentivize owners to make improvements to their homes that help mitigate flood risk. This information may also reduce the likelihood that a home sale is derailed by unexpected information about flood risks late into the transaction.

In the future, this flood risk data will enable research to answer questions such as how a rating affects the price of a home or how long it takes to sell. We may also be able to evaluate whether the FEMA mapping or Flood FactorTM data have different impacts on market outcomes or consumer home shopping behavior.

For assistance in finding the right home or guidance in the real estate market, Talk To Tammy636.931.9100!

Waves of Homebuyers Hit the Housing Market Before Labor Day

25th August 2020 – The realtor.com Housing Market Recovery Index reached 104.8 nationwide for the week ending August 15, posting a 0.9 point decrease over last week and 4.8 points above the pre-COVID baseline. The ‘housing demand’ component remained above recovery, with this week’s index reaching 121.8, the second highest index value since March,
Locally, a total of 34 markets have crossed the recovery benchmark as of this week. The overall recovery index is showing greatest recovery in Las Vegas, Seattle, New York, Boston, and Philadelphia.

National Recovery Trends

Waves of home shoppers continue to drive the housing market recovery this summer, powering sales and putting a dent on inventory as back-to-school plans hang in the balance. The realtor.com Housing Market Recovery Index reached 104.8 nationwide for the week ending August 15, posting a 0.9 point decrease over last week and 4.8 points above the pre-COVID baseline. The slight drop in the overall index this week comes after visible and opposite changes to demand and supply components of growth.

The ‘housing demand’ component remained above recovery, with this week’s index reaching 121.8, the second highest index value since March, after posting a second consecutive weekly increase. In contrast, the ‘housing supply’ component declined back down to 97.5, after having surpassed the recovery threshold last week. New listings remain on the right trajectory but growth is still variable on a week to week basis, and consistent improvement will be key in the weeks to come.

With supply and demand moving in opposite directions, sellers are clearly gaining an upper hand as buyer competition builds up. While sellers are returning to the market, buyers are increasingly outnumbering them, causing overall levels of inventory to decline.

The pandemic has transformed the homebuying season to one that’s not dictated by the school calendar. In a typical year, online traffic peaks in July and begins to dwindle down in august as schools restart in the fall. This year, online traffic has continued to accelerate through August, as most of the country debates back-to-school plans. This bodes well for sellers in the next few weeks, as the usually quieter early fall season may see summer levels of activity.

Overall Housing Recovery Index 104.8 -0.9
Housing Demand Growth Index 121.8 +3.3
Listing Price Growth Index 106.5 +0.2
New Supply Growth Index 97.5 -4.2
Pace of Sales Index 104.7 +0.0

The ‘housing demand’ component – which tracks growth in online search activity – remained visibly above recovery, with this week’s index reaching 121.8, up 3.3 points over the prior week and 21.8 points above the January baseline. Homebuyer interest continues to outpace last year levels as detected on realtor.com over the last few months. While record-high prices, short supply and economic headwinds pose significant challenges, the pool of ready-to-transact buyers continues to grow.

Powered by a backlog of demand, the ‘home price’ component – which tracks growth in asking prices – increased by 0.2 points last week, and is now at 106.5, 6.5 points above the January baseline. With supply at record lows and buyer competition on the rise, sellers have regained leverage, enabling the fastest price growth recorded since January 2018. As inventory and foot traffic grow through the end of the summer, we’ll get a good indication of whether higher asking prices will translate into higher selling prices.

The ‘pace of sales’ component – which tracks differences in time-on-market – continues to remain above the pre-COVID baseline. The time-on-market index remained the same as last week, at104.7, 4.7 points above the January baseline, suggesting buyers and sellers are continuing to connect at a faster rate and setting up the peak homebuying season in August.

Notably, the ‘housing supply’ component – which tracks growth of new listings – declined to 97.5, down 3.3 points over the prior week, and 2.5 points below the January baseline. The temporary boost in new listings seen earlier came as the summer season replaced the typical spring homebuying season. More homes entered the market than typical for this time of the year, but further improvement could be limited going into the fall as the peak cycle subsides.

Local Recovery Trends

The Midwest Approaches the Recovery Threshold
Regionally, the West (112.7) continues to lead the pack in the recovery, with the overall index now visibly above the pre-COVID benchmark. The Northeast (107.4) and South (101.8) remain above recovery pace but conditions in the south declined slightly this week. The Midwest (99.7) continued to see slight improvements in market conditions.

Notably, it was primarily the ‘housing supply’ component which decreased the South’s overall score this week. The ‘housing supply’ component, measuring new listings, declined -3.4 points in the South, while all other components grew. While the Midwest and Northeast continued to see improved supply conditions, the West’s ‘housing supply’ component also declined, by 2.7 points, potentially indicating a small slip in seller confidence in the South and West this week.

Social distancing and economic resilience continue to be key factors driving local differences in the housing recovery. Per our earlier 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, are seeing buyers and sellers reconnect faster than the rest of the country. Are you ready to list your house? Talk To Tammy, 636.931.9100 

6 Home Trends Buyers Love

Open floor plans, smart homes, and outdoor areas are among the features in top demand for home shoppers this year. Home improvement website Fixr’s recent study, Single-Family Home Construction and Remodeling Trends 2020, highlights the renovation and construction choices of buyers and homeowners in 2020. The results reveal some key areas of interest in home design that real estate professionals may want to spotlight.

1. Open floor plan and two-story homes represent the most popular layouts.

Floor Plans

While there has been a trend toward open floor plans for the past few years, 2020 is seeing an overwhelming consensus: 90% of experts selected an open floor plan as the most popular single-family layout. And it’s likely to remain so in the future.

As quarantine periods and social distancing guidelines force families to spend more time together at home, large common areas command a premium value. Family rooms, dens, and open kitchen areas are acquiring new importance.

Another large percentage—77%—are favoring two-story houses in 2020. Compare this to the 29% who preferred single-story homes, or the 2% who favor split-level residences.

2. Smart homes rank first among design choices.

Popular Design Choices

A growing trend in home design is the smart home, in which AI-based automation systems are seamlessly incorporated into electric circuits, heating/cooling systems, and entrances. Buyers this year are likely to appreciate homes in which smart thermostats, security cameras, and smart outlets are already installed.

Since installation of many smart systems is relatively affordable, this represents an important opportunity for real estate professionals to make their listings trendy, modern, and full-featured.

3. Most homeowners make accessibility modifications to their home for future personal use.

Modification Reasons

Homeowners looking to age in place are exploring renovations that allow them to do so more easily. Homes with accessibility features likely will be more attractive to senior buyers as they look toward a future of independence, even as their physical abilities may decrease. This future need is a motivating factor behind such renovations (54%) than current personal use (11%) or current use for an aging relative (22%).

Buyers also are evaluating potential homes with accessibility modifications in mind. For instance, a front yard with space for a ramp will be more appealing than one with front steps leading directly to the street.

4. Energy efficient homes with tight building envelopes are among the top designs for green construction.

Green Construction

As Americans deal with furloughs, layoffs, and economic uncertainty, many are paying more attention to their energy bills. Energy efficient homes are suddenly much more attractive than conventional properties, and buyers who may not have ever considered green construction are making energy efficiency a priority.

Sixty-two percent of design experts say energy efficient homes are a top priority in 2020, according to Fixr’s study, far outweighing other options like cool roofs or solar panels.

Prevent Energy Transfer

Experts say a tight building envelope—more than exterior or interior insulation—is the most common way to prevent energy seepage. A tight building envelope minimizes air transfer and can be an important feature of an energy efficient and environmentally friendly home. A home with both effective insulation and a tight building envelope will provide the best value to a buyer who desires lower energy bills and minimal heating requirements.

5. Family space and outdoor kitchens are trending in 2020.

Outdoor Living

Outdoor playsets, firepits, and recreation-oriented yards are seeing an uptick in popularity, especially among married couples with kids. For real estate and staging pros, this means that a little attention to backyards, porches, and other outdoor living areas can ignite extra buyer interest.

This is a 2020 trend that has only been cemented by quarantine rules and social distancing regulations. As playgrounds, parks, and outdoor amusements became unavailable, families were forced to think in terms of what outdoor activities they could offer their children on their own property.

Outdoor Living Spaces

But outdoor living spaces aren’t limited to playgrounds, decks, and patios. Fixr’s research shows that outdoor kitchens were nearly twice as popular as a traditional patio. The outdoor kitchen is another trend that has been steadily increasing over the past few years, and it will be interesting to see how it continues to evolve in 2020 and 2021. New recommendations for socially distant entertaining, which may be better suited for meals and meetings with friends outside, may increase the number of homeowners wanting both outdoor kitchens and seating spaces.

6. Contemporary and modern will be the most common styles used in modular construction.

Prefab Construction

Modular and prefab construction continues to be widely used, and Millennials are most likely to build modular homes. As part of the Fixr survey, consumers were asked which style of prefab building would be most popular in 2020. A large majority (62%) indicated that a contemporary, modern style would be most commonly selected by home buyers. The runner-up choice was ranch-style—but it was only selected by 22% of respondents.

This year has been in many ways an uncharted year, full of unexpected surprises. But even as priorities have changed, many home buying and renovation trends have remained consistent. Keeping track of these trends can help us stay relevant as we navigate the real estate industry in a socially distant world. Looking for a new home? Talk To Tammy, 636-931-9100

COVID-19: The Effect On Rental Markets

August, 2020 – Pricey Cities Become Cheaper, Cheaper Cities Become Costly

While the rental market remains far from robust, two important factors — rent decreases in the country’s most expensive cities and rent increases in more affordable cities — suggest the coronavirus pandemic is causing a squeezing effect on rental prices across the country.

According to online rental platform Zumper, this seesaw effect has continued to accelerate this summer as the outbreak persists and more Americans are opting for cheaper places to live while working remotely.

“In our August national rent report, seven of the 10 priciest markets had larger year-over-year percentage decreases than the month prior,” said Anthemos Georgiades, co-founder and CEO of Zumper. “Additionally, five of these cities had larger month-over-month percent decreases this month than last. Meanwhile, of the top 10 least expensive cities in this report, only one city experienced a decrease in rent.”

The two priciest markets continued their downward trajectories with San Francisco and New York City one-bedroom rents down 11% and 7%, respectively, since this time last year.Of the top 10 least expensive cities in the 100 tracked in the report, only one city, Tulsa, Oklahoma, had a decrease in median rent for one-bedrooms.

“As historically expensive cities become cheaper and historically cheaper cities become more expensive, the gap between the price distribution of rentals across the country seems to be closing,” said Georgiades. Overall, the national one-bedroom rent increased 0.3% to a median of $1,233, while two-bedrooms grew 0.6% to $1,493. On a year-to-date basis, one and two-bedroom prices are up 0.7% and 1%, respectively.

Here are the top five rental markets:

1. In San Francisco, one-bedroom rent dropped another 2.4% last month to $3,200, while two-bedrooms decreased 3% to $4,210. Notably, both one and two-bedroom rents are now down over 11% since this time last year.

2. New York City, similar to San Francisco, continued to see rents drop with one-bedrooms declining 1.7% to $2,840 and two-bedrooms decreasing 0.3% to $3,200. Both one and two-bedroom prices in this city have fallen around 7% year-over-year.

3. Boston saw one-bedroom rent drop 2.5% to $2,350, while two-bedrooms dipped 3.1% to $2,810.

4. San Jose, California held on as the fourth priciest market with one-bedroom rent remaining flat at $2,300, while two-bedrooms decreased 1.4% to $2,820.

5. Oakland, California moved down one spot to become the fifth most expensive market with one-bedroom rent falling 3.5% to $2,220, while two-bedrooms grew 1.8% to $2,900.

In stark contrast to the nation’s most expensive cities, median rents in less expensive cities have been steadily increasing. Tulsa, Oklahoma, inched up one position to become the 99th priciest market with one-bedroom rent growing 5.1% to $620 and two-bedrooms increasing 1.2% to $820.

Memphis catapulted up eight spots to rank as 76th. One-bedroom rent jumped 5.1% to $820, while two-bedroom units climbed 4.8% to $880.

Durham, North Carolina moved up nine positions to 43rd with one-bedroom rent growing 4.8% to $1,090. Two-bedroom rent had a more modest growth rate, increasing 1.6% to $1,250.

Providence, Rhode Island moved down four spots to rank as the 22nd priciest city and tied with Washington, D.C. for the largest rental decline last month, falling 4.8% to $1,400.

Washington, D.C. remained the sixth priciest market and similar to Providence, Rhode Island, saw rent drop 4.8%, settling at $2,160, while two-bedrooms decreased 1.4% to $2,880.

Nationally, median rents continue to tick up during the summer moving season. Overall, the national one-bedroom rent increased 0.3% to a median of $1,233, while two-bedrooms grew 0.6% to $1,493. On a year-to-date basis, one and two-bedroom prices are up 0.7% and 1%, respectively.

If you are ready to invest in a rental property, looking for the right home or need guidance in selling your house, Talk To Tammy636.931.9100

Existing-Home Sales Climb RECORD 20.7%

June 2020, Existing-home sales rebounded at a record pace in June, showing strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic, according to the National Association of Realtors®. Each of the four major regions achieved month-over-month growth, with the West experiencing the greatest sales recovery.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June. Sales overall, however, dipped year-over-year, down 11.3% from a year ago (5.32 million in June 2019).

“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”

The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.

Total housing inventory3 at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.

Yun explains that significantly low inventory was a problem even before the pandemic and says such circumstances can lead to inflated costs.

“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”

Yun’s concerns are underscored in NAR’s recently released 2020 Member Profile, in which Realtors® point to low inventory as being one of the top hindrances for potential buyers.

Properties typically remained on the market for 24 days in June, seasonally down from 26 days in May, and down from 27 days in June 2019. Sixty-two percent of homes sold in June 2020 were on the market for less than a month.

First-time buyers were responsible for 35% of sales in June, up from 34% in May 2020 and about equal to 35% in June 2019. NAR’s 2019 Profile of Home Buyers and Sellers – released in late 20194 – revealed that the annual share of first-time buyers was 33%.

Individual investors or second-home buyers, who account for many cash sales, purchased 9% of homes in June, down from 14% in May 2020 and 10% in June 2019. All-cash sales accounted for 16% of transactions in June, down from 17% in May 2020 and about equal to 16% in June 2019.

Distressed sales5 – foreclosures and short sales – represented 3% of sales in June, about even with May but up from 2% in June 2019.

“It’s inspiring to see Realtors® absorb the shock and unprecedented challenges of the virus-induced shutdowns and bounce back in this manner,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “NAR and our 1.4 million members will continue to tirelessly work to facilitate our nation’s economic recovery as we all adjust to this new normal.”

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 3.16% in June, down from 3.23% in May. The average commitment rate across all of 2019 was 3.94%.

Single-family and Condo/Co-op Sales

Single-family home sales sat at a seasonally-adjusted annual rate of 4.28 million in June, up 19.9% from 3.57 million in May, and down 9.9% from one year ago. The median existing single-family home price was $298,600 in June, up 3.5% from June 2019.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in June, up 29.4% from May and down 22.8% from a year ago. The median existing condo price was $262,700 in June, an increase of 1.4% from a year ago.

“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival,” Yun said. “Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”

Regional Breakdown

In a complete reversal of the month prior, sales for June increased in every region. Median home prices grew in each of the four major regions from one year ago.

June 2020 existing-home sales in the Northeast rose 4.3%, recording an annual rate of 490,000, a 27.9% decrease from a year ago. The median price in the Northeast was $332,900, up 3.6% from June 2019.

Existing-home sales increased 11.1% in the Midwest to an annual rate of 1,100,000 in June, down 13.4% from a year ago. The median price in the Midwest was $236,900, a 3.2% increase from June 2019.

Existing-home sales in the South jumped 26.0% to an annual rate of 2.18 million in June, down 4.0% from the same time one year ago. The median price in the South was $258,500, a 4.4% increase from a year ago.

Existing-home sales in the West ascended 31.9% to an annual rate of 950,000 in June, a 13.6% decline from a year ago. The median price in the West was $432,600, up 5.4% from June 2019.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries. Talk To Tammy, and see what the best options are for you with selling your house or finding the right home. 636-931-9100, Tammy Fadler