OAK NOTES from Grace Bishop
October 2020



 
ELECTION YEAR UPDATE: MARKET TRENDS AND THE LOCAL BALLOT

It's hard to believe, but the election is just a few weeks away. First things first, if you've yet to register, make sure to do so before October 19th and then get out there and VOTE! Make your voice heard. We CAN make a difference!

It's been a heck of a year. The drama of this election cycle feels amplified as we stay at home and make our way through so many challenges, from fires and poor air quality to homeschooling to personal loss. Through all of this uncertainty, many people also have questions about real estate: how is the election going to affect where they live and invest? 

This question can be answered in two parts: the first is to review how the East Bay generally behaves during an election year, and the other is how local propositions and measures affect buying and selling homes going forward.

As Red Oak has reported, prices do not increase as rapidly during election years. Looking back through 1998, this appears to be the case in all years, whether you include the recession or not. However, this year, that's not the case. This is not so much because of the political climate but because of COVID. Listings fell 70% after the shelter-in-place went into effect back in March. The market has been in recovery ever since, with a straight line "up and to the right" with new listings and contracts.

This has effectively wiped clean the normal seasonality that we would typically expect: activity slowing in summer and suddenly spiking after Labor Day. It also ignores any trends that have been set by previous election years. Buyer and seller behaviors are now driven by other urgent matters, such as employment status or the desire for more space. Indeed, this recent survey concludes that the election is impacting the plans for only 22% of buyers and sellers.

The short of it is that this year, all bets are off, but the market remains incredibly resilient. See the analysis in the article below for more information.

Looking forward, there are several items on this year's ballot that affect renters and homeownership, from rent control to housing density to transfer taxes. Here's the list, with links to further details about each item. (The California proposition links also feature a brief explainer video - very helpful!) 

State of California

  • Prop 21 - Allows cities to pass rent control measures on rental housing that's 15+ years old.

  • Prop 19 - Allows age 55+ residents to transfer their low property tax from one property to another. It also requires that if you inherit a property with a low property tax, you must live in it. 

  • Prop 15 - A partial repeal of Proposition 13, updating property taxes for large businesses. Homeowners would not be affected.

City of Alameda

  • Measure Z - Repeals Article 26/Measure A which prohibited multi-family housing density of one unit per 2,000 sq. ft. of land.

Albany

  • Measure CC - Increases the transfer tax from $11.50 to $15.00 per $1,000 purchased to fund emergency and community services.

  • Measure EE - Increases the paramedic advanced life support fire engine and ambulance service special tax from $23.66 to $68 per assigned residential unit.

Berkeley

  • Measure FF - Applies a special tax of $0.1047 per sq. ft. of improvements to pay for firefighting, emergency response and wildfire prevention.

  • Measure MM - Prevents eviction of qualifying tenants for nonpayment during emergencies, sets registration fees for partially exempt units, and limits the Accessory Dwelling Unit exemption to owner-occupied properties with a single-family home and one ADU.

Oakland

  • Measure Q - Levies a parcel tax to fund parks and recreational facilities, services for unhoused people, and maintain stormwater trash collection systems.

Piedmont

  • Measure TT - Increases the transfer tax from $13.00 to $17.50 per $1,000 purchased to fund government services and infrastructure.

San Leandro

  • Measure VV - Raises the real property transfer tax from $6.00 to $11.00 per $1,000 to fund vital services.


...now get out there and vote! :)



RECENT TRANSACTIONS

MARKET UPDATE: SEPTEMBER 2020


 

We can officially say that the East Bay real estate market has roared back to life.

In September, the number of sold homes increased by 42% compared to last year. This is the highest number sold since May 2019. Median sales price also increased by 20%, partially because prices fell last year, as they do each September. Homes sold 8.8% over asking, the highest level since Covid, and days on market fell to just 18 days. If that isn't a recovery...

But the market still has a ways to go: transactions are down 13% year to date. It's hard to tell whether this difference can be made up in the last 3 months of the year - an issue that is addressed in the article at the top of this newsletter. For now, we can safely say that the market is back to its pre-Covid, competitive ways.




 
IMPORTANT VOTING INFORMATION

It's important we do what we can to exercise our right to vote whether it's participating in mail-in ballots, ballot drop-offs or physically going out to the polls - your vote should count. Here are just a few things to keep in mind during this voting season. 

If you plan to return your ballot by mail be sure to give it plenty of time to arrive at the county election office. But so long as it is postmarked on or before Election Day, your vote will be counted. Another option is visiting a ballot drop box which is available 24/7 until Tuesday, November 3rd at 8 PM. Many indoor drop boxes may not be available so be sure to check out the nearest ballot drop box to you in Contra Costa County and Alameda County.

Alameda County offers a drive-through and drop-off system that allows you to drop off your ballot to polling personnel. The Ballot Drop Stop is located at Rene C. Davidson Courthouse located at 1225 Fallon Street, Oakland. Drop ballots off between Monday through Friday until Election Day from 8:30 AM to 5 PM. The weekend before the Election on Saturday, October 31 and Sunday, November 1 you can stop by between 9 AM to 5 PM. On Election Day hours extend from 7 AM to 8 PM.

Polling stations are open for early voting Saturday, October 31st to Monday, November 2nd from 9 AM to 5 PM and Tuesday, November 3rd, 7 AM to 8 PM in Alameda County. For Contra Costa County, early voting is Friday, October 30th from 11 AM to 7 PM, Saturday, October 31st from 9 AM-5 PM and Monday, November 2nd from 11 AM-7 PM at select locations otherwise you vote on election day from 7 AM to 8 PM at Contra Costa County polling locations.

To follow your ballot from print to your mailbox to your ballot being accepted, register with Ballottrax.

Make your vote count!




 
EQUITY BOOK CLUB: THE COLOR OF LAW

It is obvious to all of us who work in real estate in the East Bay that despite the reputation of the San Francisco Bay Area as being a liberal enclave, we are still dealing with the inequities of past discrimination and the segregation of our neighborhoods. From current issues of gentrification, homelessness, school funding and the high price of housing, we are living with the results of years of segregation policies. This month we recommend reading The Color of Law, A Forgotten History of How Our Government Segregated America by Richard Rothstein.

To get an idea of what this book will cover, here's a quote from the Economic Policy Institute:

 "...Rothstein has spent years documenting the evidence that the government not merely ignored discriminatory practices in the residential sphere, but promoted them. The impact has been devastating for generations of African-Americans who were denied the right to live where they wanted to live and raise and school their children where they could flourish most successfully.

While the Fair Housing Act of 1968 provided modest enforcement to prevent future discrimination, it did nothing to reverse or undo a century's worth of state-sanctioned violations of the Bill of Rights, particularly the Thirteenth Amendment which banned treating former slaves as second-class citizens. So the structural conditions established by 20th-century federal policy endure to this day.

At every step of the way, Rothstein demonstrates, the government and our courts upheld racist policies to maintain the separation of whites and blacks—leading to the powder keg that has defined Ferguson, Baltimore, Charleston, and Chicago. The Color of Law is not a tale of Red versus Blue states. It is sadly the story of America in all of its municipalities, large and small, liberal and reactionary." 

Enjoy this insightful book.


MORTGAGE UPDATE

Federal Reserve Chairman, Jerome Powell, and his allies on the central bank faced skepticism and opposition in trying to guide markets about the future path of interest rates according to the minutes of their September meeting. After their meeting, the Federal Open Market Committee released a statement vowing to keep interest rates near zero until inflation is on track to moderately exceed the central bank's 2% target for some time. Fed officials also released projections showing they expected rates would stay near zero until at least the end of 2023. That has shifted the focus of near term rate watchers to the election and the probable impact on interest rates. The lower rate camp believes in a contested election that could rattle markets, sending investors to the safety of bonds and pushing rates lower. The higher rate camp believes that the growing spread in the polls between candidates makes a contested election far less likely. The higher rate camp also believes that even if the stock market does get rattled (something that has seemed impossible to do in 2020), that with yields already so low in mortgage-backed securities, that investors would choose other bond classes to invest in, keeping rates steady or possibly forcing them higher. 

With record low rates still available now, it is a perfect time to refinance or get pre-approved to purchase a property. For more information or any questions, please contact Faramarz Moeen-Ziai of CrossCountry Mortgage at 510.254.4696 or fmz@myccmortgage.com

Personal NMLS# 342090 · Branch NMLS# 2020284 · Company NMLS# 3029

FMZ TEAM  CROSSCOUNTRY MORTGAGE

 



Grace Bishop
Realtor | #01245471
510.872.4512