Tuesday, May 17, 2022
This has been a different kind of moving experience. For one thing, it was short. Meeting with a realtor to close of escrow took exactly 75 days.
- Day 1: Met with realtor
- Day 36: Moved to rental house in Temecula
- Day 52: House sold. Opened escrow.
- Day 75: Closed escrow.
If you’ve been watching the housing market at all, you’ve seen that housing prices have gone up fast during the last two years. That’s right–during the pandemic. I’ve lived in this house five years, but the value was flat for the first three years, as shown in this chart in Zillow.
Essentially, my house doubled in two years. I had been thinking of moving closer to family, but this appeared to be a now-or-never moment. Because (1) this trend may not last, and (2) mortgage interest rates are going up (the Fed approved an interest rate increase on March 16 and again on May 16, 2022, and predicted more to come), (3) it’s always best to sell in the spring.
Some housing finance gurus predict that this is a bubble about ready to burst. Others say that housing prices will continue to rise, but the rate of increase will slow down. And of course, either way, there will be regional differences both in timing and degree of change.
Housing bubble or not, it looked like an opportunity to me.
Selling has changed over the years. Especially staging. In 1992, we were told to remove all the bookshelves and books from the house and clean up. For several weekends we took the kids camping so that the realtor could hold an open house which was open to everyone who wanted to wander in. A couple of houses later, in 2016, we removed all the books and half our furniture, some of which was temporarily replaced with smaller, more modern pieces. In 2022, my whole kitchen was remodeled in three days and all my furniture was replaced with white stylish pieces that wouldn’t last a week with my family living in it. But the photos looked gorgeous.
COVID rules have eased somewhat, but one thing that remains is the restricted viewing time. The house was on display for one weekend, by appointment only. There may have been a short time window for limited walk-ins. The offer deadline was two days later. And then it was over.
COVID has a way of accelerating changes that are already in the works. Another example is the use of DocuSign. I’ve used it before, but never so much. Signing documents can be done anywhere, with no contact. Except for papers that have to be notarized. The escrow company still sends someone to your home.
While all this was going on, I was contacting rental agents in Temecula, using Zillow to find properties. I didn’t want to rent a house without seeing the inside, but each time I called to see a place I liked, it had been taken the night before. I filled out three applications and emailed all my financial records and paid application fees in vain. But now I had everything assembled. So the next house I liked, I jumped on by emailing my application and records in immediately and meeting with the agent the next morning at the house, and signing a contract. There’s a rental shortage as well as a sales shortage.
Some of the reasons given for the current housing shortage include: the extended moratorium on foreclosures and evictions, widespread investor buying, increased purchases of second or third homes because of low interest rates (“the wealth effect”), less homebuilding, too many Airbnb units, supply chain issues, too many millennials at the “home-buying” age, too many boomers staying put. Which factors are most significant? I don’t know. In any case, it didn’t start with the pandemic. The pandemic just made it worse.
News sources agree that there is a housing shortage. They disagree on the reasons and on where we are going from here. As for me, I threw away my crystal ball in 2021.
P.S. I love my rental house.
Today’s Notable Headlines
“Home prices could fall in some U.S. cities. Here’s where and why,” NPR, May 12, 2022. https://www.npr.org/2022/05/12/1097979009/home-prices-could-fall-in-some-u-s-cities-heres-where-and-why
“Powell says the Fed will not hesitate to keep raising rates until inflation comes down,” CNBC, May 17, 2022. https://www.cnbc.com/2022/05/17/powell-says-the-fed-will-not-hesitate-to-keep-raising-rates-until-inflation-comes-down.html
“Fed raises rates by half a percentage point — the biggest hike in two decades — to fight inflation,” CNBC, May 5, 2022. https://www.cnbc.com/2022/05/04/fed-raises-rates-by-half-a-percentage-point-the-biggest-hike-in-two-decades-to-fight-inflation.html
“New York Now Has More Airbnb Listings Than Apartments for Rent,” Curbed, May 17, 2022. https://www.curbed.com/2022/05/new-york-more-airbnb-listings-apartments-rentals.html
“Home Depot’s strong quarter shows housing market is still booming,” CNN, May 17, 2022.https://www.cnn.com/2022/05/17/investing/housing-market-home-depot-earnings/index.html
Why am I doing this?
The pandemic hit like a tsunami and the ripple effect will be felt for decades. World upheavals, deglobalization, housing shortages, the Great Resignation, supply chain disruptions–we’re navigating changes not entirely caused by the pandemic, but accelerated by it. Since March 11, 2020, this blog has examined the modern pandemic experience in the media and in everyday life, drawing on my experience as a medical technologist, a historian, and an ordinary person living through extraordinary times.