Pending sales volume rose strongly for the second straight month. For-purchase mortgage applications took a subtle step back last week. And the reported national homeownership rate skyrocketed in Q2, though the jump was likely due to underlying changes to the survey rather than marked shifts in household behavior.
Pending sales has another strong month in June
NAR's measure of pending home sales activity in June rose 16.6% from May.
The index now sits at 6.3% above last June's levels and is at its highest point since April 2016.
For-purchase mortgage applications took a small step backwards
The MBA's seasonally adjusted measure of for-purchase mortgage application activity fell 2% last week from the week prior.
The measure remains up 21% year-over-year, but has fallen on a weekly basis in four of the last six weeks.
A strong spike in the homeownership rate comes with some questions
The U.S. homeownership rate rose 2.6 percentage points – easily the largest one-quarter jump – to officially sit at 67.9%.
Fundamental changes to the survey's data collection efforts likely skewed the results.
So what?
Pending home sales activity registered another strong month, rising 16.6% in June from May to its highest level since Spring 2016. The index is now up 6.3% from last year. Annual comparisons in housing activity metrics are challenging to make at the moment, due to the fact that the spring selling season was basically delayed by 6 weeks or so and buyers have spent the last couple months making up for lost time. Nevertheless, today's pending sales reading – a leading indicator for closed sales in July and August – was the latest signal that demand for homes has held firm through the early summer and that the housing market remains one of the bright spots in today's economy. Citing the better-than-expected report, NAR increased their outlook for home sales for the remainder of the year. But despite this promising news, the risks that have increased in prominence over the last few weeks both remain and are becoming more acute. Still-rising coronavirus case counts, asymmetric plans for containment and reopening, and uncertainty around the next round of fiscal relief all pose a threat to the recent rally of home sales. So too does a historic shortage of for-sale inventory, which will likely hinder the recovery even if the previously mentioned risks ease.
Another leading signal in the housing market – the Mortgage Bankers Association's weekly reading of for-purchase mortgage application activity – suggests that these risks may already be starting to impact market activity, albeit very slightly. The index has seen a remarkable, V-shaped recovery since reaching lows in late April, thanks in large part to mortgage rates that have essentially flatlined near all-time lows for the better part of a month. But recent weeks have seen the index level off, or even decline just slightly. The seasonally adjusted measure of for-purchase loan activity has fallen in two of the last three weeks and four of the last six. On the other hand, activity remains above its pre-pandemic levels and near the highest point in at least a decade. Low interest rates should continue to fuel demand from buyers, but inventory shortages, seasonal headwinds and risks posed by the pandemic are likely to play a larger role on buyer behavior now that the delayed "spring shopping season" is nearing its end.
Lastly, the one-quarter spike in the national homeownership rate appears to be a remarkable development, until you look more closely. The housing market has seen a series of notable shifts in recent months, including a steady stream of homebuyer demand and a wave of (particularly young) renters moving back in with family in order to save on monthly costs. Both of these trends, in theory, would drive the homeownership rate upward, and that could be taking place. But the unprecedented spike cannot be explained by these factors alone. More likely, the shift in the series is explained by fundamental changes to the survey's data collection methodology in response to the COVID-19 pandemic, a difference which makes it difficult to confidently compare these results to those of previous iterations of the survey.
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Over the past few years, Portland, OR, has emerged as an epicenter of hipster cool and one of the nation’s hottest housing markets. Lower home prices and a thriving startup scene lured cost-conscious residents from pricier Seattle as well as San Francisco and other California cities.
More recently, Portland has been in the news for something else entirely: persistent and highly volatile protests in support of Black Lives Matter. Federal agents dispatched there by President Donald Trump in July to keep the peace have themselves been accused of civil rights violations and inflaming tensions.
Oregon Gov. Kate Brown announced on Wednesday that the agents would be withdrawing.
“They have acted as an occupying force & brought violence,” she said in a tweet. However, Trump appeared to contradict that in a tweet of his own the next day.
At a time when Portland’s downtown, like other urban business districts, is suffering from a coronavirus-fueled recession, it would seem that the ongoing, violent disruptions might drag down the area’s real estate values. After all, many people have soured on the idea of cheek-by-jowl urban living during a pandemic, and now there are added clashes between protesters and law enforcement.
Can Portland’s housing market, particularly downtown, survive the combination of the coronavirus and civil unrest? The answer, of course, is complicated.
“For a lot of the condo and apartment [dwellers], this is extremely disruptive,” says Gerard Mildner, a real estate finance professor at Portland State University. “To be a resident of downtown is quite challenging, given the noise and the violence.”
The boarded-up storefronts, empty office buildings, and growing homeless camps present other issues for would-be residents.
However, “the entire city is not in flames,” says real estate agent Deb Counts-Tabor of Portlandia Properties. She’s been participating in the protests, which are mostly peaceful during the day and held in a predominantly commercial and office district with few residences. “The majority of the protests are happening in a four-block section of downtown Portland around the federal building.”
That may be why home prices, for now, remain on the rise. Median prices in the Portland metropolitan area, which includes nearby towns and suburbs, increased 5.3% annually, to $499,950, according to realtor.com® data.
Within the city limits, median prices also remained strong despite the turmoil, rising nearly 7% year over year, to $524,000 in the week ending July 25. However, prices continued their yearslong fall in the downtown ZIP codes closest to where the protests are held.
“Our inventory is so low, and has been so low for long, and money is so cheap, neither the virus nor the uprising has had much of an impact on the market,” says Counts-Tabor. She was referring to record-low mortgage interest rates below 3%.
“South downtown, near the protests, the pandemic dropped our sales numbers from last year by about 20%, and the protests don’t seem to be adding to that,” she adds.
Prices for properties sold in south downtown fell nearly 3% for homes sales that were completed May through July of this year, compared with the same period last year, according to data Counts-Tabor pulled from the local multiple listing service. (List prices were up about 15% annually despite sold prices being lower.)
The number of sales in south downtown also fell from 34 from May through July 2019 to 26 over the same time frame this year. However, there were 11 pending sales, which are transactions that have yet to close.
“If there are people fleeing the center of the city, they’re being replaced,” says Counts-Tabor.
The protests contrast with Oregon’s history of racial discrimination
The outrage fueling the protests may be at least partly inflamed by Portland and Oregon’s long history of discrimination against minorities.
Portland is overwhelmingly white, with white residents making up more than 77% of its residents. Less than 6% of the population is Black, although that’s a higher concentration than the state overall, which has 2.2% Black residents, according to the U.S. Census.
The reason for that imbalance dates to 1844, when the territory of Oregon banned Black people from the region. Those who were there as slaves had to be freed within three years—and then leave the state. It was more because white workers didn’t want the labor competition than any abolitionist sentiment. This attitude was later enshrined in the state’s constitution, which stated, “No free negro or mulatto, not residing in this State at the time of the adoption of this constitution, shall ever come, reside, or be within this State, or hold any real estate, or make any contract, or maintain any suit therein.”
“A lot of people in the Portland area are aware of the history of racial exclusion,” says Katrine Barber, a history professor at Portland State University. “It’s very definitely fueling why people are out in the streets. There’s a kind of reckoning happening fueled by that history.”
After the Civil War, Black residents migrated to the Portland area.
“But they were never able to overcome that initial hostility that the pioneer period created,” says Darrell Millner, a professor emeritus of Black studies at Portland State University.
The Ku Klux Klan was very active in the state in the 1920s. Gov. Walter Pierce, who was elected in 1922 and went on to represent the state in Congress, was a member.
It wasn’t until World War II that Blacks moved to the city in earnest to take jobs in the burgeoning ship building industry. But once the war ended, many of the Black workers were let go to free up jobs for the returning white soldiers. White authorities and residents made it clear through redlining and deed restrictions that prohibited Blacks from buying homes in white neighborhoods, harassment, and general hostility that Blacks weren’t welcome. By 1950, more than three-quarters of the Black population had left the area, estimates Millner.
The state refused to ratify the 15th Amendment, which allowed Black men to vote, until 1959.
The Blacks who remained settled in the northeastern swath of the city where redlining permitted. But due to rising prices and gentrification, many have since left.
“Very few communities of color still exist that aren’t gentrified in Portland,” says Kymberly Horner, executive director of the Portland Community Reinvestment Initiatives. The city-funded organization owns and operates about 700 affordable housing units and single-family houses. “In order for you to be here, the economics really don’t pan out for folks without really well-paying jobs.”
Will fewer folks want to live in downtown Portland?
Downtown living may not be as desirable at least for now.
horica/Getty Images
If the federal agents do not return, Portland’s downtown protests could become less heated and the overhead helicopters could move on. That could help spur sales as buyers feel more comfortable moving in.
But even if the disruptions of the protests are ratcheted down, the urban core will still have to contend with the ongoing impact of the coronavirus, as the number of cases has been on the rise over the past few weeks.
As long as residents feel cooped up in their condos and apartments and surrounding businesses remain closed and boarded up, living downtown just isn’t as desirable. That’s a problem faced by cities across the country, as suburban areas offering single-family houses with additional square footage and private backyards have become more popular.
“COVID-19 would be the impetus for more changes than protests,” says real estate broker Blake Ellis, who works for Windermere Realty Trust in Portland. “None of the [downtown] listings I’ve taken have been fear-based.”
The market paused in March and April, but has since been coming back, he says. Demand never wavered for single-family homes, as folks sought more space and distance as the pandemic dragged on. The higher-end condo market suffered more, but has begun rebounding in the past few weeks, says Ellis, who lives in downtown Portland.
“It’s like a perfect storm,” says Horner. “We’re just not sure where the real estate industry is going to go.”
In the olden days, one-room schoolhouses were common across the country, many of them simple wood-frame buildings painted white.
Katy Young’s one-room school is going be a dome.
Ms. Young, who lives in the suburbs outside Berkeley, Calif., recently set up a 24-foot-round geodesic polyhedron in her backyard to host a small group of kindergarteners. An Airstream trailer parked nearby will serve as an administrative office.
The dome was built by Ms. Young’s husband, Randy, for use at Burning Man, the annual outdoor art festival in the Nevada desert. But with Burning Man canceled this summer, the structure is being repurposed for her kindergarten son and five classmates, whose Mandarin-language school has switched to distance learning in the fall.
“We’re calling it ‘dome school,’ ” said Ms. Young, a lawyer.
With thousands of schools across the country moving to partial or full remote learning in the fall, parents are racing to form small at-home schooling groups or “pandemic pods,” groups of children who will be taught together. Some parents are hiring teachers to help guide the students through remote learning, while others plan to devise lesson plans on their own.
But finding a place to host the mini schools is proving to be a challenge. Even for parents that have the space, hosting students inside seems iffy because of social-distancing guidelines. Plus, many parents are working from home and don’t want the distraction.
Liam Honigsberg set up a school for his 6-year-old son and his classmates on a side street in Davis, Calif.
Nadia Honigsberg
For parents without the space or financial means for elaborate setups, the challenge can be even greater. Shauna Causey, founder and chief executive of Weekdays Micro-Schools, a website that helps organize schooling pods, says some families are retrofitting their dining rooms or basements, or taking over local parks.
Holding school outside comes with its own set of issues: What about Wi-Fi and bathroom access? Is there enough space for students to sit 6 feet apart? What happens when it rains?
Parents are devising workarounds. In Davis, Calif., Liam Honigsberg rolled out several Ikea benches and chairs, and erected a shade canopy at the end of a small side street for his 6-year-old son and his friends for the coming school year. Mr. Honigsberg said he suspects that setting up in the street is probably illegal.
If it gets too cold in the winter, the class might end up in down jackets in his open garage.
“The spirit of American innovation is sort of the centerpiece of where I was going with this,” said Mr. Honigsberg, who works in education technology.
California Gov. Gavin Newsom recently mandated that most school districts across the state begin the academic year with full-time distance learning.
Sage Cohen, the mother of a sixth-grader in Portland, Ore., thought her recently renovated garage would make the perfect location for a home school. Portland Public Schools is planning a fall schedule that is largely remote, and she didn’t want her son to toil alone.
Ms. Cohen’s space has several windows that can be opened during the summer months and closed during the wet ones.
Then she stumbled onto a problem: she didn’t have anywhere for children to go to the bathroom. She is considering bringing in a port-a-potty or installing a compost toilet. “I’ve never done anything like this before,” she said.
In Renton, Wash., Lynzora Lowmax cleared her basement of her families’ belongings and converted it into a home-school pod for her young children and a couple of neighbors. “They’re not used to being down there, so when we go down, they know it’s time to get on schedule,” she said. Ms. Lomax plans to teach the class herself.
Lynzora Lowmax of Renton, Wash., converted her basement into a home-school pod.
Weekdays Micro-School
In cities, where extra space and backyards are scarce, parents are looking at renting empty storefronts and churches.
Josh Skyer, who owns commercial real estate in Brooklyn, is hoping to interest one or more home-school pods in renting a vacant store and condominium space he owns in the Cobble Hill neighborhood.
“I would get Wi-Fi, throw a flat-screen on the wall and build it out to be a luxury school house for the kids,” said Mr. Skyer.
Michelle Luxmore plans to turn the cottage she built in her Seattle yard into a school for her son and his classmates.
Michelle Luxmore
Michelle Luxmore, a real-estate agent in Seattle, is finishing an 800-square-foot cottage in her backyard that she had planned to rent through the home-sharing platform Airbnb Inc.
Instead, she plans to turn it into a school for her 6-year-old and his classmates, and wants to help other parents build similar structures in their yards. Seattle’s regulations recently changed to allow for such structures up to 1,000 square feet, but a permit is required.
“Some people that I talk to are like, ‘Really? Why would I do that?’ and I’m like, ‘Hear me out,’ ” Ms. Luxmore said.
Seattle Public Schools is planning to hold school remotely in the fall.
Ms. Young, who erected the dome, said she already is anticipating some of her neighbors complaining, as they did when she parked her Airstream in the yard. “We’re going to ask for forgiveness rather than permission,” she said.
Like many other parents, Ms. Young was stressed about what to do with her son after his school announced recently it would go fully remote.
Then Mr. Young remembered the collapsible dome he had spent about three months building for Burning Man, which typically takes place each August.
Randy Young built the dome to use at the Burning Man festival in Nevada.
Katy Young
Made of old parachute material and aluminum piping, the dome will withstand light drizzle, but if it rains hard, the couple plans to throw some tarps on top or move the whole structure indoors. Inside of it, they plan to set up tables, workstations and portable heaters for the winter months.
It took the Youngs about three hours to set it up in the yard. Mr. Young carved a “Dome School” sign to hang out front.
One of the country’s most infamous homes went up for sale this week, and the clicks soon followed.
The Palm Beach, FL, mansion of the convicted sex offender Jeffrey Epstein listed for $22 million, and the sheer curiosity it inspired made it the week’s most popular home on realtor.com®.
The disgraced financier died in jail a year ago, while facing an array of criminal charges. Two of his properties—one in Florida, the other in New York—just went on the market.
The Palm Beach home is the less expensive of the two, and the images available are limited to a handful of shots of the mansion’s exterior. This lack of listing photos, however, didn’t stop gawkers from taking a peek at the property.
Just a couple miles north of Mar-a-Lago, the waterfront mansion was designed by John Volk, an architect of the mid-20th century who helped to define Palm Beach’s signature style.
While Palm Beach remains popular with luxury buyers, it will be interesting to see whether anyone will be able to look past the home’s most recent owner.
Aside from Epstein’s mansion, you also clicked on the country’s most expensive home, the second-oldest home in Indiana, and a marvelous modern farmhouse in Oklahoma.
We also saw the return of the wild underground bunker lurking below Las Vegas—an ideal property for 2020.
For a full look at all of this week’s most popular properties, simply scroll on down…
Why it’s here: Built in 1808 and known as Cedar Glade, this is the second-oldest residence in Indiana.
Only three families have owned this property over its two-century history. Listed on the National Register of Historic Places, the grounds include a walkway, patio, gazebo, circular drive, and freshly painted original barn.
The five-bedroom main house is in Federal style and offers more than 7,000 square feet of living space.
Why it’s here: This waterfront three-bedroom Colonial was built in 1900 and underwent a complete remodel in 1985.
It’s been regularly updated ever since, and is located on a waterfront half-acre with lovely views. Its highlights include a custom kitchen, walkout lower level, Tiki bar, patio, and dock.
Why it’s here: This is the most expensive piece of property in the country. The 20-bedroom estate comes with nearly 10 acres in the nation’s most prestigious ZIP code.
Why it’s here: Affordable and stylish! According to the listing details, this chic midcentury modern house has been featured in the pages of House Beautiful magazine.
Built in 1956, the three-bedroom home features a stone fireplace, huge windows, and a wraparound porch.
Why it’s here: This was on our list of 10 private islands you can buy right now. Set in the middle of a lake, the tiny island comes with a three-bedroom home built in 1951.
There’s also a steel bridge to the island, as well as a cable trolley to move freight between the island and the mainland.
Why it’s here: Known as the “Vegas Bunker House,” this one-of-a-kind residence peaked in popularity a couple of years ago, when it initially came on the market. Thanks to the pandemic, interest in the subterranean dwelling is percolating again.
The space includes a 5,000-square-foot house, a 450-square foot guesthouse, and murals that mimic the sky and nature views. It’s a funky fortress for those who want to be truly prepared.
Why it’s here: With more than 7,000 square feet of living space, this huge home includes upgrades like a sunroom, a two-sided fireplace, a custom kitchen, and walkout basement.
The roomy, traditional house is set on 5 rolling acres.
Why it’s here: Only two years old, it’s exactly what today’s buyers desire.
Built in 2018, this four-bedroom modern farmhouse is on a nearly 6-acre lot. Fine finishes and custom details throughout the home combine to make it a Pinterest-perfect home.
Why it’s here: Near the Possum Woods sits this lovely blue Colonial built in 1904.
The five-bedroom home includes a finished attic, original wood flooring, and a walkout basement. We’re particularly enamored with the enclosed porch on the second floor. A fenced yard features an above-ground pool next to a four-car garage with woodshop.
For a buyer looking to spread out, there’s an additional 2.5 acres available for purchase.
A luxurious Bel-Air megamansion with jaw-dropping views and equally impressive amenities is back on the market for $67.5 million.Even with a 33% price cut, the Los Angeles property is still the most expensive new listing on realtor.com® this week.
The location is exquisite: The 30,000-square-foot estate overlooks the Bel-Air Country Club golf course. And the megamansion could be the last of its kind in the area, thanks to recently enacted zoning restrictions on oversize homes on relatively small lots.
After five years of construction, the home was listed at $100 million in 2017. It’s come down in price over the years. At its current price, will a buyer bite?
Indoor-outdoor flow
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Formal dining room
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Kitchen with bar seating
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Lounge with skylights
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Bar and seating area
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Two-lane bowling alley
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Master bedroom
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Spa
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Covered outdoor space
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Pool and lawn
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Built by developer Donald Bolin, the property was constructed “like a night club,” he told realtor.com® when it first came on the market.
Which is to say, it’s a party pad meant for a buyer who lives to entertain. Flooring is porcelain tile, lighting is LED, and there are 25 bathrooms.
But these days, what was once a devil-may-care party palace is now a perfect pandemic bubble. And with the range of luxury amenities on offer—especially at a time when many are still sheltering in place—deep-pocketed buyers may give this place another look.
Set on 1.03 acres, the 12-bedroom mansion was designed with “every amenity imaginable,” the listing notes.
The large space offers plenty of room to spread out, including 40,000 square feet of decks. A mini Olympics could be held on the spacious yard. The outdoor space features a tennis court, infinity pool with waterfalls and spa, cabana, two fire features, and a putting green.
Inside, there’s a home theater with seating for over 40, a game room and bar, wine cellar, two-lane bowling alley, a professional salon, sport court, and “world-class gym.”
The living space boasts high ceilings, walls of windows that open to the outside, a formal dining room, and a large, eat-in kitchen.
At 5,600 square feet, the master bedroom is the size of some homes, and comes with its own spa and theater.
There’s a commercial elevator, and parking is plentiful with a motor court that holds 60 cars. That’s in addition to a 14-car garage.
On the practical side, the layout includes a library and an office, for when you can tear yourself away from all the in-home diversions and perhaps get some work done.
Many of us have been sprucing up our digs while stuck at home during the coronavirus pandemic. Well, so has First Lady Melania Trump, in the White House. She’s swapped out furniture in the Blue Room, wall coverings in the Red Room, and even redecorated the bowling alley. Now, she’s turned her eye to improving the great outdoors, by renovating the famed Rose Garden.
According to a White House news release, the first lady is spearheading a project to “restore and enhance” this version of the garden, which President John F. Kennedy revamped nearly 60 years ago, and which has been the site of many bill signings, state dinners, and other presidential ceremonies.
More recently, President Donald Trump has been using the garden to host his coronavirus press briefings.
Melania Trump came in for some criticism on social media for lavishing attention on a garden in the midst of a pandemic. (The project is said to be privately funded.)
We’re not going to take sides on that, but since it’s happening anyway, we can’t deny that we’re fascinated by what she’ll do with this iconic space.
“The very act of planting a garden involves hard work and hope in the possibility of a bright future,” the first lady said in a statement.
“Preserving the history and beauty of the White House and its grounds is a testament to our nation’s commitment to the care of this landscape and our dedication to American ideals, safeguarding them for our children and their children for generations to come.”
Inside Melania Trump’s plans for the White House Rose Garden
The Rose Garden dates back to 1913, when Ellen Axson Wilson—wife of President Woodrow Wilson—first unveiled this half-acre plot to the public.
The best-known garden redesign, though, occurred under President John F. Kennedy in 1962, when the president tasked his family friend Rachel “Bunny” Lambert Mellon with overhauling this outdoor space.
Mellon created the iconic layout in place today: a lush rectangle flanked by geometric planting beds, flowering crabapple trees, boxwood shrubs, magnolia trees, and pale roses.
Melania Trump’s updates to the Rose Garden will stick closely to the 1962 design. She’ll be collaborating with members of the Committee for the Preservation of the White House, as well as the landscape architecture firms Perry Guillot and Oehme, van Sweden.
So what changes will they make? A lot of their work seems more focused on repairs than an aesthetic overhaul. One goal is to improve drainage, which we’re guessing means that the lawn tends to get soggy. There are also plans to reduce leaf blight—a fungal infection due to poor soil and other environmental factors.
In other words, just as the White House has become a bit run-down over the years (prompting the president to complain that it was a “dump” when he moved in), its outdoor areas, too, appear to be crying out for some much-needed maintenance.
“Helping any garden look its best requires regular maintenance and a certain level of vigilance, in order to prevent new troubles as well as to manage existing problems,” says Susan Brandt, co-founder of Blooming Secrets, a gardening website and shop.
“No garden is ever static. A garden is made up of primarily living organisms that change from day to day as well as year to year. The White House Rose Garden and grounds are no exception.”
Since the Trumps are holding more meetings and conferences in the garden than ever, some of the changes will improve support for audiovisual and broadcasting equipment, so people can see and hear what’s going on clearly. The garden will also be made more accessible to people with disabilities.
As for more aesthetic changes, Melania Trump plans to add a limestone walkway and replace a few crabapple trees with white rose shrubs. These classic plants are surprisingly hardy. They don’t just look good, they smell good, too (scent gardens are a hot trend right now).
“Roses look good in a garden, and they also add fragrance, and the scent of roses helps reduce stress and calms nerves,” Brandt says.
“Having roses in a garden has benefits for your health and the environment, as bees, butterflies, and other pollinators enjoy any garden in which they can find nectar.”
She predicts that the first lady could inspire a renewed interest across the country in planting roses in home gardens.
Crabapple trees in bloom in the Rose Garden of the White House in March.
Official White House Photo by Andrea Hanks
What could go wrong with this Rose Garden reno?
Although Melania Trump’s proposed changes appear to be relatively understated, there’s always a chance that the garden could lose some of its natural charm as a result of the renovation.
“The danger in redoing any garden is overdesigning it,” says Richard Mullen, an architect and managing partner of Demesne in Aspen, CO.
“You can overdo things. There’s a happy medium or a sweet spot with having enough hardscape.”
Here’s hoping the first lady can strike the right balance, since as far as gardens go, this is one we’ll be seeing for a while.
As Brandt points out, “The White House Rose Garden has been the backdrop for many important and memorable events in American history. These upgrades are intended to preserve its symbolic importance, while helping it remain the beautiful and peaceful sanctuary that it was always intended to be.”
Another survey emerged revealing how comfort in certain social activities during the pandemic differs across political lines. Rapid growth in the Federal Reserve's balance sheet has slowed of late, due to limited demand for specific programs. And spending on capital goods rose strongly in June, but the recent surge in case volumes threatens that rally.
Survey offers specific examples of how coronavirus outlook differs across party lines
Those who identify as Republican are far more confident in boarding an airplane, dining indoors at a restaurant and other activities than Democrats are, according to a New York Times/SurveyMonkey survey.
The discrepancy will complicate efforts to create a coordinated response to the virus.
Growth of the Federal Reserve's balance sheet has slowed
The Fed's balance sheet ballooned in the spring, rising by 67% from February to June.
Demand for programs aimed at local governments and the private sector has fallen short of expectations.
The manufacturing sector was gathering momentum as of June
Orders for non-defense, non-aircraft capital goods rose 3.2% in June from May, the strongest monthly improvement in almost two years.
The metric – generally viewed as a proxy for business activity – was just 2.3% below last June's levels.
So what?
A report from the New York Times and SurveyMonkey shows that differing views on the coronavirus pandemic across party lines go far beyond whether or not to wear a mask or reopen schools. Of the people who responded to the survey that identify as Republican, 73% said they would feel safe eating at an indoor restaurant. Just 21% of people who identify as Democrats felt that way. More than half of surveyed Republicans (55%) stated that they'd be comfortable taking in a movie in the theater, while only 10% of Democrats expressed the same confidence. Similar differences were revealed around many other topics the survey covered, and the survey also shed light on differing views between genders, age groups and races. The divide on what's deemed appropriate social behavior will complicate the curtailment of the virus and subsequently lengthen the time it takes the national economy to fully recover.
In the immediate wake of the pandemic and subsequent swift economic fallout, the Federal Reserve took unprecedented measures aimed at calming financial markets and allowing money to continue to move through the economy with relative ease. These measures, which involved injecting significant amounts of capital into the economy, generally achieved their immediate goal: Financial stress eased in the mid-Spring as investors saw that the central bank had their back. The measures also caused the Fed's balance sheet to balloon in the spring, rising to about $7 trillion in June, up from $4.2 trillion in February. Since then, however, the pace of the Fed's asset buying has slowed, in part because demand for programs that offer direct support to the private sector, including small businesses, and local governments has begun to wane. The programs offering relief to these groups allow for up to $3 trillion in borrowing. As of writing, the Fed has only extended $104 billion. In fairness to the Fed, the central bank has very little prior experience offering relief directly to these groups. But the limited participation by some groups at a time when local governments and small businesses are struggling so mightily with their finances is telling. That said, should the recovery continue to stall or even reverse downward, participation in these programs might tick up. We will learn more about the Fed's view on these programs' successes later this week at the culmination of the July FOMC meeting.
In the latest sign that the U.S. economy was on its way back in the late spring, before the resurgence in coronavirus case volumes, purchases of U.S.-made capital goods rose in June from May at its strongest pace in nearly two years. The metric is often viewed as a proxy for business spending, and the monthly improvement brought spending on capital goods (omitting defense products and aircrafts) back 3.2% below their pre-pandemic benchmark. While that is good news for the economy, many believe that the recent increases in COVID-19 case volumes will prevent these improvements from continuing, so the celebration may be short-lived. In addition to weighing on consumer and business sentiment, increased case volumes and the pausing of some states' plans to reopen will weigh on demand and introduce disruptions in supply chains. Next month's report will be a good read on how the outlook for manufacturing and other so-called heavy sectors has changed as a result of the virus's resurgence.
Click here to read past editions of Zillow’s Market Pulse updates.
In search of dreamy real estate, we cast our eyes to the apex of the market—the rare air of America’s most expensive homes on the market right now.
When we last looked in summer 2019, the nation’s most expensive home was Chartwell, the renowned Bel-Air estate, priced at $195 million. However, it’s no longer on our list, thanks to its $150 million sale late last year.
It’s a new cast of eye-popping places, with a few familiar faces from our sojourns into seriously expensive mansions.
And while it may seem counterintuitive to have a $100 million-plus listing on the market at this moment in history, the time might be exactly right for a rarified group.
Major pieces of property with lots of land and high-end amenities are quite appealing in this era of sheltering at home. And what better way to encase yourself in a bubble than in one of these 10 regal residences?
Scroll on down for a full look at the priciest properties for sale in America.
Price: $160 million Posh particulars: If you’re going to spend the price of a small town on a single property, then that’s what you should get, right? Villa Firenze bills itself as an “authentic Italian village.”
Seven years in the making, the property is the “largest assemblage in Beverly Park.”
Set on 9 acres and accessed by its own street, the gated compound includes a 30-car courtyard, surrounded by 40-foot-tall palms. The setting will make you think you’ve been transported to Europe. The 20,000-square-foot mansion, designed by William Hablinski Architecture, has 20 beds and 23 baths.
The interior boasts “every possible amenity,” including high ceilings, large formal gathering spaces, and arched doorways. Out back, there’s 4 landscaped acres, which include a pool and pool house, two-story guesthouse, tennis court, and a walking/jogging trail. Not enough space? A separate lot comes with room for additional development.
The area is home to such celebs as Mark Wahlberg and Eddie Murphy. This pricey property is reportedly owned by the CEO of Air Lease Corp., Steven F. Udvar-Házy, and his wife, Christine. The couple listed the mansion three years ago for $165 million. The price was reduced this month.
Price: $150 million Posh particulars: Get out of the city and head to the Hamptons! With this spread, you can bring your entire extended family. It’s been on the market for three long years, but hasn’t attracted a billionaire buyer, yet.
The 14-acre parcel with 700 feet of beachfront includes three contiguous lots with opportunities to build. There’s a 12,000-square-foot main residence with indoor pool, a tennis court with tennis house, pool and spa, pool house, and two golf greens with golf houses.
The sprawling coastal property was purchased in three separate transactions, and the buyer had big plans to build a family compound. Instead, he placed the entire property back on the market in 2017 for $150 million, where it has sat ever since.
Price: $137.5 million Posh particulars: Called Gemini and owned by the wealthy Ziff family, the 15-acre, ocean-to-lake estate comes with some 1,200 feet of dune-lined beach. It is the only home on the beach for miles.
The South Florida showstopper comes with a 12-bedroom, 62,200-square-foot main residence; a couple of four-bedroom cottages; a seven-bedroom Mango House; and guest/staff quarters comprising four studios and apartments.
You’ll never need to leave the premises. The recreational perks include a swimming pool, PGA-standard golf area, regulation tennis court, half-basketball court, fitness center, and spa. Paths lead to the ocean and the lake, which features a dock and pier.
It made a splashy debut in 2016 with a whopping $195 million list price. The price was reduced by $30 million the following year. It was reduced to its current price in 2017.
Price: $125 million Posh particulars: Built by country singer Kenny Rogers, who died in March, the home was designed for a celeb lifestyle. Rogers was reportedly fined $2 million for installing a funicular that goes from the cliff to a beach cabana. It’s not our money, but we say it was worth it!
The 3-acre property is located in Malibu’s Paradise Cove. It includes a main house, guesthouse, pool, and 256 feet of beach frontage. The current owner is Diana Jenkins, founder of the health drinks company Neuro Drinks, according to the Wall Street Journal.
The main residence features vaulted ceilings, herringbone-patterned floors, an entertainment room, chef’s kitchen, wine room, recording room, and staff office. The three-story guesthouse includes three rooms, a kitchen, and a patio with an aquarium wall.
Price: $125 million Posh particulars: This storied home was once owned by newspaper magnate William Randolph Hearst and his mistress, the actress Marion Davies. The estate also served as a destination on Jacqueline and John F. Kennedy‘s honeymoon, and later, as Kennedy’s West Coast presidential election headquarters. The iconic mansion also appeared in “The Godfather” and “The Bodyguard.”
The legendary home set on 3.5 acres has 18 bedrooms and 22.5 baths. The grounds include walkways, fountains, waterfalls, a tennis court, as well as a swimming pool and pool house.
Known as the Beverly House, the property was stuck in a “tangled financial web” in 2016. It’s bounced on and off the market for a few years and was priced as high as $195 million in 2016. It was relisted two years ago for $135 million.
Price: $115 million Posh particulars: What a difference three years makes. The Holmby Hills home dubbed Owlwood flew onto the market in 2017 for a hefty $180 million. The price has since been reduced by 36%.
Designed by architect Robert D. Farquhar in 1936, the European-style estate is set behind tall hedges and includes 10 acres of rolling lawns, a tennis court, pool, and pool house.
The 12,000-square-foot residence has 10 bedrooms and nine baths. According to the listing, the property is the largest compound in Holmby Hills and comprises three contiguous lots, which offers a buyer “endless opportunities.”
Renderings of a modern mansion with luxurious finishes and a sleek interior suggest what the next owner could do to bring it into this century.
Price: $115 million Posh particulars: While the Mar de Amor, or Sea of Love, built in the 1990s, offers plenty to like, it may not be what comes to mind when thinking “beach house.”
The 10,646-square-foot modern residence set on 2.5 acres comprises two wings that face each other. They’re connected by a two-story entry with a floor-to-ceiling chandelier, a spiral staircase, and walls of windows. It first surfaced on the market in February.
The 12-bedroom, 14-bathroom home features an open floor plan. Out back, the dramatic infinity pool seems to float over the coastline. There’s also a tennis court, eight-car underground garage, and private beach.
Price: $110 million Posh particulars: Located on Billionaires Row, this Mediterranean-style mansion on 2 acres is about a half-mile south of President Donald Trump’s Mar-a-Lago. The owners purchased the property in 2001 for $17.7 million, knocked down an existing home, and custom-built this oceanfront estate.
Called Pietra Mare, it first came on the market for $109.5 million in 2018. It was recently relisted with a slightly higher price tag.
The 28,399-square-foot residence has seven bedrooms, nine bathrooms, and six half-baths. The home features soaring ceilings, stone floors, and walls of arched windows.
Landscaped grounds include a pool and spa, guesthouse, and 170 feet of beach frontage. There’s also covered outdoor space for dining and lounging.
Price: $110 million Posh particulars: El Rancho Tajiguas offers 3,500 acres that combine natural beauty and luxury real estate. The property features two ocean-facing mansions built within the past five years.
Each home has five bedrooms, a guesthouse, wine cellar, home theater, pool, and helipad.
Originally a land grant from Carlos III, the King of Spain, the breathtaking property includes hillsides, coastal meadows, orchards, and grassland, along with farmlands and a cattle range. The secluded property is close to the affluent hubs of Santa Barbara and Montecito.
Price: $100 million Posh particulars: This brand-new build in Bel-Air is filled with luxe amenities. Called Unica, the jaw-dropping residence measures 41,000 square feet and features a variety of health and wellness options.
There’s a full-size basketball court, as well as a wellness center with a 75-foot indoor lap pool, a sauna, steam room, and gym.
To relax, there’s a 36-seat home theater, wine cellars, and a recording studio.
If you’d like to kick back outside, there’s a resortlike yard, multilevel patios, infinity pool and spa, weather-proof Samsung wall, and kitchen. You can easily host guests with eight bedrooms, 21 bathrooms, and a 20-car auto gallery.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 4.5% year-over-year in May (non-seasonally adjusted), down from 4.7% in April.
Annual growth was down from April in the smaller 20-city index (to 3.7%, from 4%) and in the 10-city index (to 3.1% from 3.4%).
Phoenix (+9.0%), Seattle (+6.8%), and Tampa (+6.0%) reported the highest year-over-year gains among markets in the 19-city index (Detroit was excluded from the 20-city index this month).
In a remarkable show of resilience, the housing market has stared the pandemic right in the eye and hasn't blinked.
The national Case-Shiller Home Price Index rose 4.5% year-over-year in May. The smaller 10- and 20-city composite indices grew more slowly, at 3.1% and 3.7% year-over-year, respectively. The annual rate of growth was lower in May than in April in the national, 10-city and 20-city indices. On a monthly (seasonally adjusted) basis, the 10- and 20-city indices were unchanged from April; the national index was up 0.1% month-over-month.
Zillow Forecast, Released 6/30/20
Actual Case-Shiller Indices,
Released 7/28/20
Historical Median Absolute Error*
10-City Composite,
Month-Over-Month (SA)
0.3%
0%
0.2%
10-City Composite,
Year-Over-Year (NSA)
3.3%
3.1%
0.2%
20-City Composite,
Month-Over-Month (SA)
0.3%
0%
0.2%
20-City Composite,
Year-Over-Year (NSA)
3.9%
3.7%
0.1%
U.S. National
Month-Over-Month (SA)
0.4%
0.1%
0.1%
U.S. National
Year-Over-Year (NSA)
4.8%
4.5%
0.1%
*Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011. The national Case-Shiller forecasts began in 2014.
Record-low mortgage rates and a shortage of available homes have fueled competition amongst buyers in the spring and early summer, leading to homes flying off the market at their fastest pace in years and home prices to continue to rise. The savings afforded by record-low mortgage rates allows those who are still in a strong financial position the opportunity to buy a home – and might also allow them to pursue homes that were previously above their price range. Some, of course, are not nearly as fortunate. Data since May suggest that demand and price dynamics have continued, but substantial risks have emerged in recent weeks. A resurgence in coronavirus case counts, and the broader economic uncertainty that accompanies it, poses new risks to the outlook for home prices, and seasonal factors should start to erode buyer demand. It's likely that the housing market will feel the effects of this downturn at some point, but a shortage of inventory and low rates should continue to place upward pressure on prices.
Annual growth in May as reported by Case-Shiller is expected to slow slightly in the 10- and 20-city indices, and accelerate somewhat in the national index. S&P Dow Jones Indices is expected to release data for the June S&P CoreLogic Case-Shiller Indices on Tuesday, August 25.
Index
Actual May
Case-Shiller Change
Zillow’s Forecast for the Case-Shiller June Indices
10-City Composite,
Month-Over-Month (SA)
0%
0.1%
10-City Composite,
Year-Over-Year (NSA)
3.1%
2.8%
20-City Composite,
Month-Over-Month (SA)
0%
0.1%
20-City Composite,
Year-Over-Year (NSA)
3.7%
3.4%
U.S. National
Month-Over-Month (SA)
0.1%
0.2%
U.S. National
Year-Over-Year (NSA)
4.5%
4.3%
Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.
Millions of renters could soon lose the roof over their heads in the midst of a deadly pandemic, now that the clock has run out on a federal rule shielding them.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act moratorium on evictions, which protected about 1 in 4 renters, expired last week, prompting fears that a tsunami of evictions may not be far behind. Landlords had previously been prohibited from evicting tenants from homes with federally backed mortgages.
The prospect of back rent coming due is happening against a backdrop of an economy battered by new rounds of business closures, as coronavirus cases pile up throughout the country resulting in the highest unemployment since the Great Depression. It’s also occurring in tandem with local eviction bans and the extra $600 a week in unemployment benefits running out. (Senate Republicans on Monday appeared to favor extending the eviction ban, but it’s unclear if that will make it into the final version of the bill.)
“We’re talking about millions of households who are in this deep, deep hole, who are therefore at increased risk of evictions,” says Aaron Shroyer, a policy associate at the Urban Institute, a nonpartisan research group based in Washington, DC. “This extra $600 has been a lifeline. Without that, renters who have lost their jobs could be staring down the beginnings of mass evictions.”
Even before the pandemic, many tenants were struggling to get by as home and rental prices have soared in recent years. About 1 million renters were considered severely rent burdened, where they paid at least half of their income—or more—on housing. That doesn’t leave much left over for other essentials, such as food, transportation, or medications, let alone emergencies.
(Renters typically earn less than homeowners. They brought in a median $40,500 in 2018—almost half of the $78,000 for homeowner households, according to 2018 U.S. Census Bureau data.)
At the height of the coronavirus crisis, about 8.9 million renter households had at least one person out of work, according to the Urban Institute. That’s fallen to 6 million households in June.
Unsurprisingly, this led to about 1 in 3 renters not making a full rent payment in July, according to a recent report from Apartment List, a rental website. About 19% made no payment, while 13% made only partial payment.
Without additional assistance, such as the extra $600 a week in unemployment payments, it could become even harder for many renters to muster up the money to pay their landlords. Congress is still working on a new coronavirus stimulus plan, but President Donald Trump has supported replacing the $600 boost with unemployment benefits totaling 70% of a worker’s former wages.
The nation could experience a 40% to 45% surge in homelessness compared with last year, according to an analysis by Columbia University economics professor Brendan O’Flaherty. That translates to about 250,000 people losing their homes. (The analysis was based on unemployment rates and a similar federal government response to the Great Recession. During this crisis, the government has provided more assistance.)
It isn’t likely to get that bad—not every landlord will be rushing to housing court. Many will recognize the pool of potential renters with good jobs has shrunk.
“Landlords are not going to evict if they don’t think they’re going to get another tenant,” says O’Flaherty.
In June, the federal government extended mortgage forbearance for landlords for an additional three months—as long as they don’t kick out tenants affected by the coronavirus crisis during that time. But that applies to only about 1 in 10 renters, according to the Urban Institute. Only landlords with federally backed mortgages for multifamily properties with five or more units are eligible for the program.
Prominent Democrats recently unveiled legislation that would extend the eviction bans.
Former presidential hopeful Sen. Elizabeth Warren‘s bill would add eight more months to the eviction moratorium on properties with federally backed mortgages and prohibit landlords from charging fees for missed payments.
Sen. Kamala Harris, who had also launched a presidential bid, would ban both evictions and foreclosures for a year.
“Experts are predicting an avalanche of evictions if we don’t institute new protections. We are already seeing a rise in evictions in cities where local eviction bans have lapsed,” Warren said at a press conference last week. “Failing to put a safeguard in place to keep people in their homes is most likely to harm the most vulnerable Americans, and to harm communities of color.”
That legislation has yet to be passed. But there is a patchwork of protections in cities and states across the country. They’re on hold in the state of Illinois until Aug. 22, while most San Francisco evictions are banned until Jan. 31, 2021.
In a typical year, about 3.7 million evictions are filed—roughly one every seven minutes, Matthew Desmond, author of “Evicted: Poverty and Profit in the American City,” told National Public Radio.
Roughly 1 in 20 renters faces eviction each year, he said. That rate is nearly double for Black tenants, at 1 in 11.
Throw in a pandemic, recession, and what could be multiple rounds of business closures, and “there’s going to be a very large number of renters at risk,” says Samantha Batko, a senior research associate at the Urban Institute.
