In This Issue:
- The Economy & Your Finances: President signs executive actions on coronavirus relief
- The Market & Industry: Mortgage applications up, many homes seeing multiple offers
- Around the State: Technical glitches lead to case undercount
- Health Check-Up: More children testing positive
The Economy & Your Finances: President signs executive actions on coronavirus relief
On Saturday, President Trump took executive action on coronavirus relief after negotiations stalled in Congress. The president signed four executive orders that defer payroll taxes through the end of the year for Americans earning less than $100,000, defer student loan payments and provide some eviction protections.
They will also extend enhanced unemployment benefits at a reduced rate of $400 per week, one-fourth of which will come from states’ budgets. The nation’s governors have already raised concern about implementation; Newsom said Monday that California will face massive budget cuts if it has to provide an additional $100 weekly to every person receiving unemployment. The President is likely to need congressional agreement and legislation to deliver on some of these actions, but talks in Congress have stayed stalled. Last week, C.A.R. sent a letter to the California Congressional Delegation to urge Congress to take action by passing another COVID-19 relief package.
Employers did add another 1.8 million jobs in July, exceeding expectations but still coming in far lower than June’s 4.8 million. Still, the national unemployment rate is 10.2 percent, slightly higher than during the peak of the Great Recession, and it could get worse if enhanced federal unemployment isn’t replaced. But the situation for out-of-work Californians is looking more grim: About 61 percent of those who filed new unemployment claims during the week ending on July 25 expect to be rehired, compared with 80 percent during the week ending on March 15.
California has lost a greater share of revenue than most states have during this crisis; it began the year with a $5.6 billion surplus that quickly plunged to a $54 billion deficit due to COVID-19. State lawmakers are divided on how to reverse the situation, with proposals including a millionaire tax and a rate hike on commercial property owners.
Sources: CNN, CNBC, NBC News, The Washington Post, The New York Times, U.S. News & World Report, The Mercury News, The San Francisco Chronicle, CAL Matters
The Market & Industry: Mortgage applications up, many homes seeing multiple offers
Buyer demand remains robust, with mortgage applications 22 percent higher than they were a year ago. Redfin surveyed homebuyers planning to purchase in the next 12 months and found that three out of four have had their plans impacted by the pandemic — and one out of four want to move or speed up their move as a direct result of the pandemic. With mortgage rates hitting a new low of 2.88 percent the week ending on August 6, August is shaping up to be the homebuying peak of 2020 (typically, May sees the most homebuying activity).
Multiple offers and bidding wars are holding strong in California’s luxury markets, and as more employees are able to work from home, rents are being driven down in expensive metro areas.
There does seem to be a mismatch between buyer demand and available inventory, with listings down 6.8 percent last week. That sellers remain cautious — even with homes selling so fast and often facing multiple offers — suggests recovery may be slower than hoped for, and buyers who are eager to purchase may not be able to afford to.
On the industry side of things, RE/MAX saw a 25 percent year-over-year decline in revenue in Q2, while Keller Williams saw a 15 percent decline in transactions. But EXp Cloud Holdings, parent company of virtual brokerage eXp Realty, saw its most profitable quarter in company history.
Sources: C.A.R. Research & Economics, REALTOR® Magazine, Redfin, Forbes, Inman News, Zumper
Around the State: Technical glitch leads to case undercount
A malfunction in California’s system for collecting and storing infectious disease data has led to widespread underreporting of cases and mass confusion. The undercount does not reflect hospitalization data, which is collected through a different system. On Monday, the director of the California Department of Public Health abruptly resigned; shortly thereafter, Governor Newsom announced the technical glitch had been fixed and the data moving forward should be accurate. As of yesterday at 10:13 p.m., cases in California numbered 586,430 and deaths had hit 10,656. California has the highest number of coronavirus cases in the country, ahead of Florida, Texas and New York.
Some California elementary schools may be allowed to reopen this fall under a strict waiver system. The waivers are intended to prioritize young children who have the most trouble with distance learning. Teachers unions have insisted that reopening any schools at this point would be “reckless.”
Rural California, at first spared the worst of the pandemic, is now being battered by new cases. Kern County reported over 12,000 new cases last week; a month ago, it was reporting only about 1,350 cases a week. Agriculture workers have been hit particularly hard.
Amidst the pandemic, California is also gearing up for wildfire season, the height of which typically falls between August and December. Power cutoffs are expected to resume in Northern California, and officials are worried that coronavirus concerns might discourage people from heeding evacuation orders.
Sources: The San Francisco Chronicle, The San Diego Union-Tribune, The Los Angeles Times, California Department of Public Health, ABC 7 News, The Guardian
Health Check-Up: More children testing positive
In the last two weeks of July, over 97,000 children tested positive for COVID-19 across the United States. At least 338,000 children have tested positive since the pandemic began, which means at least one-fourth tested positive in just those two weeks. While symptoms are generally milder in children than adults, children can also become “long haulers,” experiencing symptoms for months after contracting the virus. And an increasing number of children who contract COVID-19 are suffering from severe inflammatory reactions that can be life-threatening.
Experts say data from Moderna’s vaccine clinical trial, which is in Stage 3, strongly indicates a vaccine will not be available before the election on November 3. Results are more likely to arrive in the first quarter of 2021.
Meanwhile, with U.S. deaths projected to hit 300,000 by December, experts announced that if everyone in the United States were to reliably wear a face mask, that number could be reduced by 66,000.
Sources: The New York Times, CNN, The San Francisco Chronicle, The Modesto Bee