Update on the State of Real Estate in California and the Bay

Noted among the regular updates on the California real estate markets, from the California Association of Realtors, as of 5/27/20:

This was the first week in several months where it was more difficult to find negative impacts on the economy and housing market than it was to find signs optimism. And yet, even as the economy begins to heal, it is important to temper that hope with the difficult truth: even if the economy continues to gradually reopen and the leading indicators continue to improve, the toll of the COVID-19 pandemic have been unprecedented and it will take time for us t

o recover. This is particularly true in a world where the new normal will likely look significantly different that our previous definition. On top of that, we will face both ongoing restrictions and a big learning curve on how to operate in a pre-vaccine world.

Consumer confidence finds bottom: After suffering from its worst decline in April in nearly 50 years, the Conference Board’s Consumer Confidence Index ticked up slightly in May. The index remains below 100 indicating that consumers are still pessimistic, but it is a slightly lower level of pessimism than in April. This supports the conclusion from a variety of other indicators that the economy and market found a bottom in mid-April and has begun to stabilize after roughly 2.5 months of sheltering in place.

Mortgage applications regain lost ground: Homebuyer demand is beginning to show signs of life as well as the U.S. recorded its 6th consecutive increase in new purchase-money applications. That brings the number of mortgage applications back above the pre-crisis levels of late February. .... California saw its 7th consecutive weekly gain in mortgage applications as well, though it also saw a bigger contraction in the immediate aftermath of the downturn, so it remains roughly 2% below 2019 levels.

Buyer demand coming back with more showings: Buyer demand is also expressing itself in the form of increased showings. Last week, the 7-day moving average of showings posted a 38% increase, which brought the index back to pre-outbreak levels. And although last week’s levels were still roughly 4% below 2019 levels, home showings have improved dramatically from mid-April when showings were falling by nearly 75% on a weekly basis and were well below 2019 levels.

Francis

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Potential borrowers eager to find lenders with superior service

Potential borrowers eager to find lenders with superior service

A poll by Carlisle & Gallagher Consulting Group found that more than a third of potential borrowers would be willing to pay a higher rate if the mortgage came with superior service. The survey didn’t say how much more the 34 percent were willing to pay, but it did find that this group is a frustrated bunch.

More than half think the process is too slow. A third find it impossible to track the status of their loan application, an equal percentage say it is too difficult to talk with their lenders, and a quarter don’t believe the advice they’re given.

A starting point for borrowers is to ask their real estate agent which lenders offer the best service. Agents know which lenders keep their promises and close quickly without incident. Another option is to ask friends, co-workers, and relatives about their experiences.

Beyond that, prospective borrowers should look for several attributes that will help them find a responsible company or accessible loan officer.

Borrowers should look for a consistent point of contact. Federal regulators have already settled on this as a requirement for loan servicers – the companies that collect payments, disburse funds to cover property taxes, and homowners insurance and otherwise administer loans.

Dealing with a company that provides up-to-date status information also is beneficial. There’s nothing worse than chasing down an unresponsive loan officer to make sure this document or that report has been received, or to find out whether underwriting has looked at the application.

More on this in this article by Lew Sichelman of the Los Angeles Times

Francis

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