A report from Forbes. “Sagaponack, New York’s 11962 marked its third consecutive year as the second most expensive Zip code in the United States. Its $3.875 million median price was the result of a 10% year-over-year drop — the fourth year in the past five that this exclusive Hamptons community’s median sale price decreased. In 2015, it dethroned Atherton from the top spot with a jaw-dropping $8.5 million median, a position it managed to hold onto in 2016, despite a 35% price drop.”
“New York City’s real estate market felt the effects of Covid-19 at a sharper degree than others. The report found that no New York City Zip codes ranked among the 10 most expensive in the country.”
The Review Journal in Nevada. “Las Vegas started the year on strong footing. But the pandemic shut off much of the economy virtually overnight, turning the Strip into a ghost town and sparking catastrophic job losses. The valley’s unemployment rate, just 3.9 percent in February, shot up to 34 percent in April after Gov. Steve Sisolak ordered casinos and other Nevada businesses closed to help contain the virus’ spread. Resorts and other businesses have since reopened, but unemployment remains high in the valley, at 13.8 percent as of October, state officials recently reported.”
“John Beckmann has been a Las Vegas casino host for 20 years, luring gamblers with free airfare, show tickets and the like. Beckmann was laid off from Treasure Island days after the Sept. 11, 2001, terrorist attacks. Nearly a decade later, he and his wife lost a fortune on their house after the real estate bubble burst. And now he’s out of a job at Texas Station after the coronavirus pandemic shut off tourism.”
“His wife is still working, but amid enormous job losses in Las Vegas, he isn’t hunting for work. ‘There’s really nothing out there,’ Beckmann said.”
From Pasadena Now in California. “Pasadena rents have declined steadily since the start of the pandemic, currently representing the 10th highest in the Los Angeles Metro area, down from 7th highest in April, according to a new report. The average rent for a one-bedroom apartment in Pasadena dropped by $240 over the course of the pandemic, according to Zumper. Prior to that, it had been even higher, Zumper analyst Crystal Chen said.”
“‘Pasadena one-bedroom rent was consistently priced above the $2,100 threshold until April 2020 when it started a steady monthly freefall, reaching its lowest point on our latest November metro report at $1,850,’ she said. The decrease amounted to a 6.1% drop in October, compared with last year, according Zumper. The average cost of renting a two-bedroom apartment in the city had decreased to $2,640, representing a 10.8% drop compared with the previous year, the report found.”
“For small landlords, Bryant Companies property management, owner Matthew Bryan said issues of nonpayment due to the pandemic can have a much more significant impact. ‘A lot of mom and pop type of owners, in some cases, are caught between the buzz saw of: Rent is not coming in, but they’re still obligated to make repairs and their expenses haven’t gone away. So I think it’s really tough for those kinds of owners when they are experiencing vacancies,’ he said.”
From Mortgage Professional America on California. “Few cities have experienced the ups and downs of this year’s residential market the way Los Angeles has. The country’s second-largest city is defined as much by its suburbs as its downtown core, and has seen a variety of growth, stagnation, and decline across its various real estate markets. Downtown condo dwellers have struck out into the ‘burbs, in line with national trends, and the downtown multifamily market has stayed depressed.”
“‘This pandemic, in my opinion, is the time in history where millionaires and even billionaires are made,’ said Jeff Holzmann, CEO of IRR Management Services, a crowdfunded real estate investment firm. ‘There are some real estate investments that in 2019 had an efficient market rate, and are currently selling for a fraction of that price.’”
“Matt Douglas, who has been working on the frontlines of the multifamily and retail mortgage industry as principal of Venture West Funding in El Segundo California, within LA county, said the landscape for investment has grown more challenging this year. ‘The appetite for lending from banks has normalized somewhat, but it’s still very cautious,’ Douglas said when asked how his day-to-day is changing. ‘The underwriting has been much more conservative, just about everybody is reducing loan-to-values or increasing the debt coverage requirements on any loan.’”
The Mendocino Voice in California. “Ed Keller was sure there had been a mistake when he opened a letter from his home insurance company and read that his policy had been cancelled, and that purchasing a new policy would cost four times what he had paid in the past. Bewildered, he picked up the phone and called his provider, Mark Davis Insurance, to clear things up, only to hear from a company representative that it was not an error at all. Keller’s insurance premium had been hiked up by around 400%, from around $1,000 to just over $4,000 per year.”
“His story is by no means unique. Across California, almost one million homeowners have received notices of non renewal since 2015. Short of serious intervention, insurance experts, consumer advocates, and state agencies only expect this to continue.”
“It was just two years ago that Keller moved to the Golden Rule Mobile Village, a mobile home park for seniors that lies in a valley off US Route 101, about half-way between Willits and Ukiah. He put an offer on the home the first day he saw it and, using a mortgage, purchased it for $100,000. That was about a year after the Redwood Fire burned within a quarter mile of the Village.”
“Keller felt a bit of sticker shock when he saw the amount he would be paying for home insurance then, around $1,000, but brushed it aside. Of course, that pales in comparison to what his insurance company raised it to this spring, around $4,000, which Keller said is more than what some of his friends with houses worth close to half a million dollars pay for their home insurance.”
“As hotter, faster, larger, and more frequent wildfires make California a more dangerous place to live and own property in, homeowners, government agencies, and the insurance industry are all trying to figure out who should be responsible for the vastly increased risk of extremely destructive wildfires. No one wants to end up holding the bag.”
“‘At some level, insurers are overreacting,’ said Amy Bach, the executive director of a nonprofit that advises consumers on how to navigate the insurance market ‘Their reaction is out of proportion. But, to a certain degree, people can’t just point the finger at somebody else and say, ‘well I’m a victim of climate change and somebody has to do something about it.’ People who have made that choice to live in a heavily forested area, in some way have to bear the consequence of that decision…You’re gonna get more and more people asking the question,’ ‘Should I stay here?’”