- We have updated our FAQ on Reopening Brokerage Offices. On Monday, July 13, Governor Newsom issued a new shutdown order — this order does not affect the current practices of real estate brokers or their offices. Based on updates to the State’s Industry Guidance for Real Estate Transactions made on July 2, C.A.R.’s legal team revised our Reopening Brokerage Offices FAQ. Today’s order requires no further changes to the FAQ because real estate remains an essential service. Remember to check to see if your city or county has stricter rules.
- We have updated our FAQ on Industry Guidance on Showings to reflect changes made to the Industry Guidance on July 2.
- We have clarified new Open House Guidance based on the July 2 changes made to the Industry Guidance.
In This Issue:
- The Economy & Your Finances: Federal taxes due today, $600 extra weekly unemployment to end July 25
- The Market & Industry: Buyer demand on the rise, renters facing significant challenges
- Around the State: Newsom shuts down all bars, indoor restaurants and more
- Health Check-Up: Avoid poorly ventilated indoor spaces
The Economy & Your Finances: Federal taxes due today, $600 extra weekly unemployment to end July 25
Today, July 15, is the tax filing extension deadline for 2019 federal returns. If you are unable to meet this deadline, you must fill out Internal Revenue Service Form 4868 for an automatic extension of time to file your individual tax return.
As of right now, the extra $600 per week in federal joblessness benefits is set to expire on July 25, unless Congress extends the program. Back in May, the House of Representatives passed a $3 trillion stimulus bill called the HEROES Act, which would — among other thing — extend the weekly $600 benefit through January 2021. The White House is unlikely to support the HEROES Act as it currently stands, but Treasury Secretary Steven Mnuchin has indicated another stimulus bill could be signed by the end of July. Over 150 economists have written to Congress asking that the additional unemployment payments be preserved in the next stimulus package, along with ongoing stimulus checks, state and local government aid, enhanced SNAP benefits and funding for childcare.
Four months after the United States began shutting down in response to the pandemic, more than 32 million Americans — one-fifth of the workforce — are receiving some form of unemployment assistance. The economic fallout has been particularly hard on the younger generations, many members of whom are still recovering from first entering the job market during the Great Recession. Women of color have also experienced disproportionate hardship; in California, Black and Latinx women have lost work at three times the rate of white men.
The California EDD has begun contacting regular Unemployment Insurance (UI) and Pandemic Unemployment Assistance (PUA) benefits claimants to make “Retroactive Certification” of eligibility for benefits for the weeks before May 9, 2020. While claimants are normally required to certify every 2 weeks prior to receiving benefits, the certification requirement was temporarily suspended early in the pandemic to expedite the payment process. Now, the EDD is requiring retroactive certification to make sure those who received benefits during the waived certification period were eligible. Members have reported being contacted by mail, email or text. Retroactive Certification must be completed and submitted by October 5, 2020. Click here for additional information and access to the Retroactive Certification Application.
California’s weekly new jobless claims remain much higher than normal. Over a four-week period ending on July 4, California initial unemployment claims averaged 267,600 per week. Yet while the fallout has been substantial in California and across the nation, new research suggests that closing down the economy in March saved between 900,000 and 2.7 million American lives.
On July 11, the SBA announced that it has discontinued making Economic Injury Disaster Loan (“EIDL”) emergency grants to new applicants, having allocated the full $20 billion that was appropriated by Congress for the program. EIDL loan applications will still be processed by the SBA, even though the emergency grant is no longer available. Keep in mind that EIDL loans are not forgivable and will need to be repaid.
Sources: REALTOR® Magazine, Internal Revenue Service, CNBC, Fast Company, CBS News, Los Angeles Times, The Mercury News, ABC 7
The Market & Industry: Buyer demand on the rise, renters facing significant challenges
Yesterday, Governor Newsom signed Executive Order N-71-20, which — among other things — extended timeframes associated with examination application and licensee expiration dates through December 31, 2020.
Due to strong buyer demand, the percentage of homes closing below their listing prices has been decreasing. Data from Fannie Mae confirms that housing confidence is getting stronger: In a recent survey, 61 percent of respondents said now is a good time to buy. Mortgage applications are also 33 percent higher than they were at this time last year, and homebuilders saw their strongest June sales since the housing boom. This increased demand can be attributed to historically low mortgage rates, as well as buyers playing “catch-up” during the reopening after the first shutdown. But the momentum of the current rebound will likely be limited by California’s constrained housing supply, as well as this week’s second shutdown.
Housing prices have largely remained stable, even rising in the Bay Area markets. Redfin reported that over half of its offers in June faced bidding wars.
While mortgages in forbearance continue to drop, 32 percent of renters and homeowners did not make a full housing payment on July 1, according to an Apartment List survey. Renters, in particular, still face significant financial hurdles: In June, 31 percent of renters reported they had little confidence in their ability to pay next month’s rent. On Sunday, Los Angeles started taking applications for its $103-million Emergency Renters Relief Program, aimed at helping renters disadvantaged by COVID-19. All eligible applicants will have an equal chance of being randomly selected for the program, which ends at 11:59 p.m. this Friday.
Meanwhile, Apple committed the first $400 million of its $2.5-billion, multiyear pledge to affordable housing projects across California.
Sources: C.A.R. Research & Economics, Zillow, AP News, CNBC, The Mercury News, Redfin, Inman News, Los Angeles Times
Around the State: Newsom shuts down all bars, indoor restaurants and more
In response to recent surges in cases, on Monday Governor Gavin Newsom closed all indoor restaurants, wineries, family entertainment centers, movie theaters and zoos, as well as all indoor and outdoor bars, statewide. He also ordered all counties that have been on the state’s County Monitoring List for three or more consecutive days must shut down indoor fitness centers, worship services, protests, offices for non-essential sectors, personal care services, hair salons and malls.
Also on Monday, Los Angeles and San Diego public schools announced they will be starting 2020-2021 school year remote-only. Various school districts such as Santa Clara, Oakland and San Bernardino will be doing the same. Meanwhile, Secretary of Education Betsy DeVos has insisted all U.S. children should return to school in the fall, and President Trump has threatened to withhold federal funding from schools that do not physically reopen.
On Sunday, the rate at which COVID tests were coming back positive hit 8.3 percent, the highest percentage recorded since April. Hospitalizations have increased 28 percent over a two-week period. Yesterday, Los Angeles County set a daily record for new cases and hospitalizations. As of yesterday at 10:12 p.m., cases in California numbered 346,445 and deaths had hit 7,243. California has the second-highest number of coronavirus cases in the country, behind New York (403,175).
New research suggests that COVID-19 could worsen the economic risk of wildfires in California and across the nation. And researchers continue to predict another surge in cases this fall.
Sources: Los Angeles Times, COVID-19 California, CNN, NPR, CAL Matters, The Guardian, The New York Times, KCRA, The Mercury News, ABC News
Health Check-Up: Avoid poorly ventilated indoor spaces
The World Health Organization acknowledged last Thursday that COVID-19 may be able to linger in the air, giving it the ability to infect people indoors even while they are social distancing. Contact tracing studies have shown that confined indoor spaces can spread the disease, and health experts are warning that social distancing precautions might not be enough for those spaces especially if they are poorly ventilated.
Racial disparities continue to surface around the coronavirus pandemic, with Black and Latinx patients dying at younger ages than white patients. And in Los Angeles County, Latinx people are twice as likely to be infected than white people.
Despite early statements that severe cases of COVID-19 primarily target the elderly, new research has found that one-third of young adults may be at risk of getting very sick if they contract the virus, particularly if they smoke or vape. Studies have also shown you are more likely to be at higher risk if you have Type A blood, and that men are more likely to die from COVID-19 than women.
Researchers are working on a new generation of coronavirus tests that should be able to deliver results within one hour, but it will likely be months before such tests are widespread.
Sources: Los Angeles Times, Vox, The San Francisco Chronicle, The New York Times