Robert is a realtor in Bedford NY. He has been successfully working with buyers and sellers for years. His local area of expertise includes Bedford, Pound Ridge, Armonk, Lewisboro, Chappaqua and Katonah. When you have a local real estate question please call 914-325-5758.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.81 percent, the lowest rate in our survey’s history which dates back to 1971.
“Low mortgage rates have become a regular occurrence in the current environment,” said Sam Khater, Freddie Mac’s Chief Economist. “As we hit yet another record low, the tenth record this year, many people are benefitting as refinance activity remains strong. However, it’s important to remember that not all people are able to take advantage of low rates given the effects of the pandemic.”
30-year fixed-rate mortgage averaged 2.81 percent with an average 0.6 point for the week ending October 15, 2020, down from last week when it averaged 2.87 percent. A year ago at this time, the 30-year FRM averaged 3.69 percent.
15-year fixed-rate mortgage averaged 2.35 percent with an average 0.5 point, down from last week when it averaged 2.37 percent. A year ago at this time, the 15-year FRM averaged 3.15 percent.
The PMMS® is focused on conventional, conforming, fully-amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
The Canadian Thanksgiving long weekend brought a not-surprising further drop in prices of most benchmark construction framing dimension softwood lumber commodities, as the days got increasingly shorter and the weather turned ever more winter-like. Demand across North America was almost entirely for small fill-in orders, while sawmills were preoccupied with locating shipments long-ago sent to customers but still not arrived, according to Madison’s Lumber Reporter.
The big question on the mind of industry players is, “Where is the price bottom and when will that arrive?” No one yet knows the answer for this, except to say it will be much higher and much later than in usual years. The latest lumber production and sawmill capacity utilization rates data release from the Western Wood Products Association — for July — shows a marked downturn in Canada. In the US, softwood lumber production continued to recover. The all-important wood manufacturing volumes in Canada took a significant tumble downward in July 2020, after recovering nicely in May and June from terrible lows of April. This decrease in lumber available for sale after the supply constraints earlier in the year well explains why prices remained so high even until now.
Prices continued to crash down in the Eastern S-P-F market last week. A large contingent of buyers participated, but the focus was on Less-Than-Truckload orders from the distribution network at wildly varying – but resoundingly lower – numbers. Overall sales volumes were strong but individual orders remained small as customers refused to take long positions in a falling market. Prompt wood became more common with each passing day as sawmills began to run into order files on a number of items, while production of bread and butter items were booked at around two weeks.
For the week ending October 9, 2020 the price of Eastern softwood lumber commodity item Eastern S-P-F KD 2×4 #2&Btr dropped once more, to land at US$920 mfbm, said Madison’s Lumber Reporter. This price is now -$85, or -8%, less than it was one month ago. Compared to one year ago, this price is up a remarkable +$465, or +102%.
Compared to one-year-ago, last week’s Eastern S-P-F KD 2×4 #2&Btr price was +$343, or +59%, higher than the 1-year rolling average price of US$577 mfbm and was up +$416, or +83%, compared to the 2-year rolling average price of US$504 mfbm.
The below table is a comparison of recent highs, in June 2018, and current October 2020 benchmark dimension Softwood Lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of September 2015:
Many renters are struggling financially due to the coronavirus pandemic. And though a new eviction moratorium prevents you from being removed from your home, it doesn’t cover rent payments or help lighten the load financially.
If you’re having a hard time paying your rent during the COVID-19 pandemic, here’s what you need to know.
Know Your Rights as a Renter
The Centers for Disease Control (CDC) and the U.S. Department of Health and Human Services issued a federal eviction moratorium in early September 2020. Under the new rule, qualified renters can’t be evicted through Dec. 31, 2020.
To be eligible, you have to self-certify—under penalty of perjury—that you:
Are unable to pay rent due to substantial income loss, loss of hours, a layoff, or high medical bills
Have made all efforts to obtain government rent assistance
Expect to earn $99,000 or less for the year ($198,000 is you file your tax returns jointly), were not required to report any income in 2019 to the IRS, or received a stimulus check per the CARES Act
Are attempting to make at least partial payments on your rent when possible
Would likely become homeless if evicted or would need to live in very close quarters with someone
This all must be certified on the official declaration form from the CDC. You must then submit it to your landlord in order to qualify.1
Unlike the moratorium enacted by the CARES Act earlier this year, this one extends to all renters—not just those on federally financed or subsidized properties.
Understand Your Local Rights, Too
Many states and municipalities have also put their own eviction moratoriums in place. In some areas, these moratoriums have already expired, and evictions have resumed for non-paying renters.https://da3ebb9f344d2a4fa693b236fea189a0.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
You should also work to understand your rights as a tenant and read your lease thoroughly. Note any grace periods you may be due and what your landlord’s options for recourse are. Your city should also have tenant protections in place, so study up on renter’s rights in your area. Your local housing agency is a good place to start.
Talk to Your Landlord
In order to qualify for the eviction moratorium, you must certify that you’re making your best efforts to pay rent and meet the obligations of your lease agreement. If you’re currently unable to pay your rent, your first step is to talk to your landlord. They might be willing to work with you on payment options.
“Contact your landlord and discuss a deferred payment plan,” Howard Dvorkin, a certified public accountant (CPA) and chairman of Debt.com, told The Balance via email. “This is definitely worth a shot, as most landlords do not want to pay the fee to file a lawsuit, go to court, and find a new tenant.”
Consider talking to your landlord about these other options:
Deferred payments: You pay your overdue rent by a later, agreed-upon date.
Partial or flexible payments:You are permitted to make smaller, incremental payments across the month.
Security deposit payments:Your landlord uses your security deposit toward the overdue rent.
Depending on where you live, you may also be able to pay your rent by credit card. Though this can ensure you’re not delinquent on your rent, it also results in additional credit card debt and potentially more interest paid over time. Make sure you’re prepared to pay off your credit card as soon as possible to avoid further financial distress.
Find Local Assistance
If working directly with your landlord is unsuccessful, you can look to federal, state, and local resources to help cover your rent. Again, this is a recourse you must explore before qualifying for the September 2020 eviction moratorium.1
If your financial hardship is due to the coronavirus pandemic, there are some resources you can tap for help. First, there are several HUD Rental Assistance programs, which received several billion dollars as part of the CARES Act.2
There’s also Fannie Mae’s Disaster Recovery program, which offers housing counseling and can connect you with additional federal and state resources that can help. Fannie Mae’s recovery experts can also help you better communicate with your landlord.
If your landlord does move to evict you, Dvorkin suggested seeking legal counsel immediately.
“You don’t have to have a lawyer in court for an eviction,” he said. “But many cities offer free legal counsel and other landlord and tenant resources to help you understand rights and how to proceed.”
If you’re struggling to pay your rent due to the coronavirus pandemic or any financial hardship, it does not necessarily mean you’ll be evicted. Talk to your landlord, identify any local resources or assistance programs you may be eligible for, and fill out the CDC’s declaration form to ensure you’re not evicted. There are many options to help you keep your home and avoid further distress.ARTICLE TABLE OF CONTENTSSkip to section
According to the data from the Census Bureau’s Survey of Construction (SOC), stucco was the most common principal exterior material on new single-family homes started in 2019 (27 percent), followed by Vinyl siding (25 percent), fiber cement siding (such as Hardiplank or Hardiboard (21 percent), brick or brick veneer (20 percent). Far smaller shares of single-family homes started last year had wood or wood products (5 percent) or stone or rock or other stone materials (1 percent) as the principal exterior wall material.
The Census Bureau’s SOC data is available by the nine census divisions and there are substantial differences in the use of siding across divisions. Vinyl siding was the most widely used primary exterior material in 4 out of 9 census divisions. In the Middle Atlantic and New England, vinyl siding was used in 75 percent and 68 percent of the new homes started in 2019. In the East and West North Central divisions, vinyl siding accounted for 62 and 44 percent respectively.
Stucco was the most common widely used as the primary exterior wall material in the Pacific, Mountain and South Atlantic divisions in 2019: 57 percent, 52 percent and 38 percent, respectively, of the new single-family homes started in those areas used it. Brick or brick veneer was the top choice in East and West South Central divisions. In the West South Central, 62 percent of the new single-family homes started in 2019 used Brick or brick veneer as the primary exterior material, compared to 44 percent in East South Central division.
Sales of existing homes rose 2.4% to a seasonally adjusted annualized rate of 6.0 million units, according to the National Association of Realtors.
Sales were 10.5% higher compared with August 2019. This is the highest sales pace since December 2006, before the Great Recession.
Tough competition has the market moving very quickly. It took just 22 days to sell a home in August, matching the fastest on record.
A home for sale is seen in Santa Monica, California.
After a record-setting July, the housing market still shows no sign of cooling off.
Sales of existing homes rose 2.4% to a seasonally adjusted annualized rate of 6 million units, according to the National Association of Realtors. Sales were 10.5% higher compared with August 2019. This is the highest sales pace since December 2006, before the Great Recession.
Sales were hampered only by lack of supply. There were 1.49 million homes for sale at the end of August, down 18.6% annually to a 3.0-month supply. The number of homes for sale when sales were last this robust, in 2006, was more than double the current supply.
That tight supply pushed the median price of an existing home sold in August to a record high of $310,600. That is up 11.4% annually. In the third quarter of this year the housing wealth will have increased by $1.5 trillion from the second quarter.
“The imbalance of supply and demand will hurt affordability soon. Once that appears it will hinder home ownership rates,” said Lawrence Yun, chief economist for the Realtors.
Tough competition has the market moving very quickly. It took just 22 days to sell a home in August, matching the fastest on record.
Mortgage rates set several record lows in August, which only added to the fierce competition for housing. Low rates also kept the heat on home prices, as they give buyers additional purchasing power.
Regionally, sales were strongest in the Northeast, rising 13.8% month to month. Sales were 1.4% higher in the Midwest and 0.8% higher in both the South and West. The Northeast saw some of the strictest shutdown rules early in the coronavirus pandemic, so the recovery now may be making up for that.
Sales of newly built homes, which are counted by signed contracts, not closings, jumped 36% annually in July. Builders are benefiting from the tight supply of existing homes for sale, as well as for the new consumer demand for higher-tech homes in suburban and rural locations.
Strong demand is expected to continue into the usually slower fall months, but there may be a brief drop in the numbers because of the various natural disasters across the nation.
“In early September, new housing supply took a hit from the wildfires and hurricanes, and sales activity weakened. But because the impact of natural disasters has been more supply-oriented than demand-oriented, prices are expected to remain high,” said Danielle Hale, chief economist at realtor.com. “The combination of high prices and low supply is going to continue to make finding a home an even more difficult task than it already is.”
The number of empty rental apartments in Manhattan nearly tripled compared with last year, according to a report from Douglas Elliman and Miller Samuel.
The inventory of empty units, which rose to 15,000 in August, is the largest ever recorded since data started being collected 14 years ago, the report said.
Hopes for a rebound in the fall or the end of 2020 look increasingly unlikely.
A man enters a building with rental apartments available on August 19, 2020 in New York City.
The number of empty rental apartments in Manhattan nearly tripled compared with last year, as more New Yorkers fled the city and prices declined.
There were more than 15,000 empty rental apartments in Manhattan in August, up from 5,600 a year ago, according to a report from Douglas Elliman and Miller Samuel. The inventory of empty units is the largest ever recorded since data started being collected 14 years ago, the report said.
Analysts say the rental market is the best barometer of overall strength in Manhattan’s real estate market, since rentals account for 75% of apartments and that market reacts more quickly to demand changing than the sales market.
Experts say the migration from the city to the suburbs during the Covid-19 crisis has been fueled in large part by Manhattan renters leaving the city.
“The rental market is weak and getting weaker,” said Jonathan Miller, CEO of Miller Samuel. “The first-time buyers in outlying areas are largely coming from the Manhattan rental market.”
Hopes for a rebound in the fall or the end of 2020 look increasingly unlikely. Although rental prices have come down — median rental prices fell 4% in August — the discounts are not steep enough yet to lure new renters back to the city. The average rental price for a two-bedroom in Manhattan is still $4,756 a month.
The fall is generally a slow period in the Manhattan rental market, especially before an election, Miller said.
Landlords are offering ever-larger incentives to try to entice renters, with the largest share of landlords offering concessions in history. On average, landlords were offering 1.9 months of free rent to new renters in August. The weakest segment of the rental market is the lower end, for one bedrooms and studios, partly a result of the pandemic’s greater impact on lower earners.
Average rental prices for studios fell 9%, to $2,574, while the average for one-bedroom apartments fell 5% to $3,445.
The big question for the Manhattan economy and beyond is how far will the economic ripples from the weak rental market spread. While big landlords like REITs and real estate companies have access to capital, smaller mom and pop landlords with just one or two buildings may have trouble paying their mortgages and property taxes, which could later hit banks and lenders, as well as New York’s tax revenue.
“Where you are already seeing stress on landlords is on the low end of the price spectrum,” Miller said. “You’re clearly seeing weakness in the smaller end of the rental market.”
Sales activity continued to strengthen in NYC, with July 2020 up 40% M-o-M and down only 33% Y-o-Y
Weekly sales surpassed 500 transactions for first time in 15 weeks, monthly sales top 2,000 for first time in four months
Queens median sale price marks first Y-o-Y drop, down 10% in July
At $1.065 million, Manhattan YTD median slides 15% below 2019 figures
The Bronx has highest price growth with July median up 7% Y-o-Y
Brooklyn median drops 9% Y-o-Y, virtually erasing year-to-date gains
After a tumultuous first half of the year, all of the state of New York is now in Phase Four of reopening, which means the performance of the residential market performance is of heightened interest. The year actually started off well, promising increased sales activity — until projections and expectations were shattered by the uncertainty and upheaval of March. It was followed by an April marked by historical lows in sales activity and the strongest pricing trends of 2020 up to that point.
However, as the curve flattened and the general public started readjusting to the new normal, the state’s gradual reopening brought a tentative return of transactional activity in May. Then, June presented a whole new picture with strengthening sales trends and the first significant year-over-year (Y-o-Y) price drop, despite recording the highest median sale price this year at $717,733.
July, however, posted the sharpest decrease of the four boroughs’ median sale price, and also marked the strongest month of sales since March.
Transactional activity, of course, has trended negative since the beginning of the crisis. March kicked off with sales activity 15% higher than the same period last year, only to see it drop 36% Y-o-Y by month’s end. Later, sales activity bottomed out in April — its 1,549 deals equated to a 61% Y-o-Y drop. And, while May’s 1,337 recorded sales were certainly a drop in sheer numbers compared to April, they also represented a decrease of only 52% Y-o-Y, promising a tentative return of transactional activity.
In June, sales trends strengthened even further and, at this point, the monthly sales activity was the highest since the beginning of the crisis in March. Specifically, there were 1,670 residential sales for the month, coming in just 41% lower Y-o-Y. However, it must be noted that June 2020 figures were skewed beyond just the pandemic’s effects – sales activity and the median sale price surged artificially in June 2019 as buyers and sellers rushed to close deals before the new mansion tax went into effect in July 2019.
Similarly, July marked only one week with fewer than 400 sales. What’s more, two weeks of the month surpassed 500 transactions — a level of transactional activity not seen since late March. In fact, the second week of the month totaled 562 sales, just four deals shy of equaling the last week of March.
What’s more, the third week of July recorded a 23% Y-o-Y drop — the smallest rate of contraction in sales activity since the third week of March. All in all, July’s sales activity was the most dynamic in the last four months, closing a total of 2,343 deals across the four boroughs for a drop of just 33% Y-o-Y. Moreover, compared to June, sales activity experienced a month-over-month surge of 40%.
While pricing trends remained firmly positive at the beginning of the crisis and the NYC median sale price remained steadily above the same period last year, that trend started shifting in June and reversed completely in July.
Specifically, both March and April boasted a 5% Y-o-Y price expansion. Moreover, each week in March also posted a median sale price higher than the same period in 2019 — a trend that remained steady throughout April. Overall, May kept up with that trend, as well, and closed with a median sale price of $705,000 for a 4% gain over May 2019.
Along the same lines, June 2020 kicked off with the strongest pricing trends so far this year. The NYC the median sale price was $743,000 in its first week, which pushed the month’s overall median to $717,700. This also made June 2020 the most expensive month YTD, even as it closed with a 2% Y-o-Y drop in its median, which was influenced, once again, by the artificially inflated pricing in June 2019.
July, however, presented a whole new picture. While the $780,000 median of July 2019 also reflected the pre-mansion tax sales frenzy that had occurred in the upper end of the market, this was not the sole cause of the 13% Y-o-Y drop that was recorded in July 2020. Rather, at $680,000, July 2020 featured the lowest median sale price since March, bringing down the YTD median for the four boroughs.
So, while the elevated pricing trends of Q2 resulted in a H1 median sale price of $690,000 and a 3% gain over H1 2019, the contrary pricing trends of July almost completely erased that. In particular, July 2019’s artificially inflated median — paired with a July 2020 that was more in line with pre-pandemic figures — brought the YTD median sale price in NYC to $687,419, representing a negligible .35% Y-o-Y gain.
At the same time, year-to-date sales activity stood at 16,559 transactions, down 26% compared to the same timeframe last year. As a result, July’s recovering sales activity also decreased the YTD sales activity by only 1% Y-o-Y.
Manhattan was the hardest hit residential market in the city in the first half of the year. Here, sales activity was down 31% Y-o-Y and the median sale price dropped 13%. Specifically, the first half of 2019 totaled 5,487 residential sales for a median sale price of $1.2 million, while H1 2020 recorded 3,775 sales for a $1.05 million median. While pricing trends remained firmly positive in the other three boroughs throughout Q2, for Manhattan, that was the exception rather than the rule.
In fact, only April saw prices increase Y-o-Y reaching a YTD high of $1.34 million — while both March and June slipped under the $1 million mark, reaching $950,000 and $966,000, respectively. June’s median also resulted in a Y-o-Y price contraction of 37% — due, in part, to the rush to close high-end deals prior to the mansion tax during the year prior. From a sales activity perspective, July’s 633 sales made for Manhattan’s strongest month since the beginning of the crisis. That figure represented a 36% Y-o-Y drop in sales — the least-drastic decrease since March.
At the same time, the median sale price for NYC’s most expensive borough came in at $1.15 million, down 26% Y-o-Y. But, it must be noted that of all the boroughs, Manhattan’s year-ago metrics were the most influenced by the spike in sales of higher-priced assets prior to the mansion tax, pushing July 2019’s median to $1.56 million. Additionally, Manhattan was the only borough to record M-o-M price growth in July, gaining 19% for a $1.15 million median in July.
On the other hand, Queens seemed to navigate the crisis in the calmest manner, all things considered. Its sales activity was down 22% Y-o-Y in the first half 2020, but its median sale price went up 10%, for the highest price increase across the four boroughs. In fact, although sales activity growth in the borough bottomed out at a negative 58% in April, the median sale price jumped 19% to reach a YTD high of $630,000, followed closely by June’s $619,000.
July, however, reversed the upward trend in price growth observed in the first half of the year, becoming the first month in 2020 so far with negative price growth Y-o-Y. More precisely, at $576,500, Queens’ July median sale price was 10% below July 2019 — which, at $640,000, was 2019’s most expensive month up until that point. As a result, July 2020’s median was more in line with early 2020 pricing trends as opposed to the elevated medians recorded in Q2 and brought the borough’s YTD median to $584,500
Sales activity, however, strengthened in July, reaching 855 transactions and making this Queens’ most active month since March. In particular, July sales were down 28% Y-o-Y, resulting in the lowest rate of contraction in four months. Meanwhile, sales were up 55% compared to June — a promising sign in what is usually the most active borough for residential sales. Overall, that brought Queens’ YTD sales activity to 5,992 deals — 23% lower than the same period last year.
In the meantime, Bronx sales activity remained in negative growth territory Y-o-Y, coming in 22% below July 2019 for the lowest Y-o-Y decrease in sales activity across the four boroughs. But, the Bronx’s 260 sales recorded in July also represented a 60% increase M-o-M. That brought the borough’s number of sales to 1,679 YTD, for a 24% decrease compared to the first seven months of 2019.
Although the Bronx closed the first half of 2020 with the lowest median sale price of the four boroughs as usual, it actually recorded the second-highest price increase. Specifically, its 8% Y-o-Y gain took its H1 median sale price from $420,000 in 2019 to $455,000 in 2020. In fact, May brought a 33% price surge to the Bronx and lifted the median sale price to a YTD high of $531,000. Likewise, although July’s median was a more modest $493,500, it was still up 7% Y-o-Y – a notable achievement considering that July was 2019’s priciest month by that point.
From a pricing perspective, Brooklyn performed somewhat weaker in the first six months of the year. Its $750,000 median sale price was just 3% higher than it was in the first half of 2019. And, while 2020 transactional activity bottomed out at only 395 sales in May, Brooklyn’s median sale price surged to a YTD high of $820,000, followed closely by June’s $799,000 median sale price.
July’s median came in at $742,500, down 9% compared to the July 2019 median of $815,000. As a result, the borough’s YTD median of $750,000 also represented a 1% increase over the same period last year.
However, Brooklyn’s YTD sales activity was down 24% compared to the same period last year, with a total of 4,480 sales recorded in the first seven months of the year. Sales activity here contracted at the least sharpest rate in H1, coming in 21% below the first half of 2019.
July sales activity, however, did not experience the same influential increase in Brooklyn as the other three boroughs. It came in 41% lower than July 2019. But, compared to June 2020, sales were up, with its 595 sales representing a 19% gain M-o-M.
For this snapshot of the COVID-19 pandemic’s influence on the NYC residential market, we considered all sales of condo, co-op, single- and two-family homes registered between January 1, 2019, and August 2, 2019, as well as January 1, 2020, and July 31, 2020. We excluded all sales below $10,000, as well as all package deals. We defined NYC as the four boroughs of Manhattan, Brooklyn, the Bronx and Queens.
Despite an economic downturn this summer, a homebuying frenzy boosted home prices by almost 9% and drove available housing inventory down 30% in August compared to the same time last year, according to Zillow.
A foreclosure moratorium on federally-backed mortgages (now extended through December 31), which was designed to keep people in their homes during the coronavirus pandemic, has inflated the housing market, according to economists.
“That is a whole bunch of inventory [homes in forbearance], which would normally actually be selling at fire sale prices. Where instead — and I mean this is great news for those folks, that they can hunker down [and] they can stay put — but it is actually kind of locking up a lot of home inventory,” Jeff Tucker, economist at Zillow, told Yahoo Finance’s The Final Round.
In the Great Recession of 2008, banks foreclosed on almost 2% of houses in the U.S., unleashing a glut of houses onto the market and causing home prices to plummet. But today the Coronavirus Aid, Relief, and Economic Security (CARES) Act instituted protections to keep people in their homes during the coronavirus pandemic, offering foreclosure moratoriums and mortgage forbearance options for homes with federally-backed mortgages.
“I think that’s probably one of the biggest things stopping home sales right now,” said Tucker.
As the economy recovers, some 7% of mortgages are still in forbearance, according to the Mortgage Bankers Association, a Washington, D.C.-based professional organization. But forbearance and foreclosure protections won’t last forever, and for many homeowners, mortgage payments are stacking up — which could spell uncertainty for the housing market next year.
Mortgage forbearance is “going to expire for a lot — millions — of homeowners in March, April, May of next year. It’s a really big open question. How many of those folks are back in work by then? How many of them are able to get back on track with their mortgage payments?” said Tucker.
But these protections aren’t the only reason housing supply is so low. The U.S. has had an affordable housing shortage for more than a decade, and now 5 million millennials (age 26 to 35) are reaching the age where they want to buy, fueling demand.
Plus, demand skyrocketed this summer beyond what was predicted: pending sales in the last week of August were up 19% from the same time last year. Shutdowns this spring created pent-up demand that pushed peak homebuying season into late summer and early fall. And lifestyle changes during the pandemic have prompted many city dwellers to move to the suburbs.
“A lot of the sales that would have happened in March and April are getting pushed back later into summer. And especially since a lot of people have kids just at home doing remote school, they’re more willing to continue shopping and make that big move in September or October at this point,” said Tucker.
Developers struggle to build apartments in busy, social neighborhoods at a price Gen Z is willing to pay.
Developers often want their new developments to appeal to the youngest renters. That may be difficult with the young people of Generation Z, now graduating from college and looking for places to live.
They are notoriously frugal. The oldest—born from the mid- to late 1990s—came of age during the long, slow recovery from the global financial crisis. They were used to living on a budget long before the new economic crisis caused by the spread of the novel coronavirus.
“Gen Z tends to value experiences more than they value things or possessions,” says Lela Cirjakovic, executive vice president of operations for Waterton, an apartment company based in Chicago. “They also place a high value on community… Spending time with people doing things is more valuable to them than having luxury items.”
That frugality might keep Generation Z away from new buildings in the most expensive housing markets—even though they are drawn to social areas.
“Land costs in the urban core likely preclude the delivery of new apartments that most Gen Z renters can afford,” says Greg Willett, chief economist for RealPage, a technology and data company based in Richardson, Texas. “Those who can afford new developments at all probably will opt for suburban settings.”
New Apartments Designed for Frugality
In October, AvalonBay Communities will open 238 new apartments at Kanso Twinbrook in Rockville, Md., near Washington, D.C.
“Kanso will be our first new development without any physical amenities or even a leasing office,” says Karen Hollinger, senior vice president of strategic initiatives for AvalonBay Communities, headquartered in Arlington, Va. “I’m not sure any one generation has the lock on frugality, but certainly there is a growing demand by a younger generation for a lower net cost housing model.”
Willett adds that research typically paints Gen Z as a practical group with frugal spending patterns. “So many of them grew up in cash-strapped households. … Housing affordability has been a challenge for the group, especially for those with substantial student debt.”
However, these young adults do require strong, fast Internet and cellphone service.
“Tech is a deal breaker,” says Cirjakovic. “On a very basic level, reliable and robust service in apartments and common spaces is critical.”
Young renters are also more likely to expect their homes to include Internet-enabled devices like smart thermostats and electronic locks. Elie Rieder, CEO of Castle Lanterra Properties, says, “Smart homes are a gimmick to previous generations but a must for Generation Z, as conservation and control are simply standard with them.”
Being frugal, these younger renters are often less likely than older renters to pay a premium of extra rent for this Internet-enabled gear. “It will be the base expectation versus a differentiator for them,” says Rieder.
Gen Z May Choose Roommates Despite Pandemic
When times get tough, young renters often double up with roommates or move home to live with their parents for a time.
“Younger cohorts are typically disproportionately affected by employment losses in recessions, a fact already reflected in the April and May job reports,” says Andrew Rybczynski, managing consultant in the Boston office of CoStar Portfolio Strategy. “We expect household consolidation for economic reasons, which could also prevent move-outs from parents’ households.”
Apartment developers had begun to build new “co-living” communities based around the idea that renters would want to share space as roommates.
“The model of large-scale shared housing fits well with a desire for lowered costs and increased socialization, but it certainly doesn’t fit well with the need to quarantine,” says AvalonBay’s Hollinger. “If financing was tough before, it just got much tougher.”
In the aftermath of the pandemic, tough economic times and the ability to work remotely may steer young renters away from the most expensive urban markets, like San Francisco and New York City. “Markets with high rents will likely suffer the most, as Gen Z decides to seek markets where they can achieve a much more favorable balance,” says Cirjakovic.
Young renters may also have less need to live near job centers. “Post-pandemic, almost anyone who is not a service provider can potentially work remotely,” says Cirjakovic.
However, these young renters will probably still want live near entertainment, dining, and other people in their age group. “Culture, connectivity, and proximity to similar people will be the draw,” says Rieder. “True walkable live-work-play locations are key. That usually means very urban.”
The CDC issues a nationwide ban on evictions through Dec. 31, but tenants who are behind on rent must advocate for themselves. We explain.
A national eviction moratorium is back in effect, this time with far broader protections than the now-defunct eviction ban established by the CARES Act. While the previous law only covered certain types of properties, the new moratorium effectively protects everyone living in one of the nation’s 43 million rental households, regardless of where they reside.
But the new ban on evictions, which went into effect Sept. 1 and is set to expire Dec. 31, didn’t come from Congress or the Department of Housing and Urban Development. Instead, it was issued by the Centers for Disease Control and Prevention, using authority granted to the federal government in a 1944 public health law. To that end, the stated purpose of the order is to keep people out of homeless shelters or other crowded living conditions that could worsen the spread of COVID-19.
Unlike previous federal measures, the CDC’s real estate leads order requires tenants who fall behind on rent to submit a declaration to their landlord that states they’ve lost income due to the coronavirus pandemic and have made an effort to look for financial assistance, as well as a few other conditions.
We’ll dig into this new eviction moratorium to unpack who is covered, what might not be covered and what you need to do now if you’re worried about getting evicted. Plus we’ll take a look at what other resources and options are available to help you stay in your home. We update this story frequently.
What does the new eviction ban do (and not do)?
The CDC’s new order halts evictions across the US for anyone who has lost income due to the coronavirus pandemic and has fallen behind on rent. It doesn’t prohibit late fees, nor does it let tenants off the hook for back rent they owe. It also doesn’t establish any kind of financial fund to help renters get caught up — a safeguard some have say is critical to preventing a massive wave of evictions when the ban lifts.
The order only halts evictions for not paying rent. Lease violations for other infractions — criminal conduct, becoming a nuisance, etc. — are still enforceable with eviction. And it only protects renters earning less than $99,000 per year ($198,000 for joint filers).
The order requires renters facing eviction to fill out an as-yet unreleased government form attesting to several things: The tenant has lost income due to the pandemic, is currently unable to pay full rent, has made an effort to pay as much as possible, has sought financial help where available and would likely end up homeless or otherwise forced to live in crowded quarters if evicted.
CDC’s order doesn’t change state laws
Any state-level eviction bans still in effect will remain in place as they are as broad or broader than that established by the CDC. To help you find out the status of eviction protection in your state, legal services site Nolo.com maintains an updated list of state eviction provisions.
Nonprofit 211.org connects those in need of help with essential community services in their area and has a specific portal for pandemic assistance. If you’re having trouble with your food budget or paying your housing bills, you can use 211.org’s online search tool or dial 211 on your phone to talk to someone who can try to help.
The online legal services chatbot at DoNotPay.com has a coronavirus financial relief tool that it says will identify which of the laws, ordinances and measures covering rent and evictions apply to you based on your location.
If you’re seriously delinquent or know you will be soon, you may want to consult a lawyer to better understand how laws in your area apply to your situation. Legal Aid provides attorneys free of charge to qualified clients who need help with civil matters such as evictions. You can locate the nearest Legal Aid office using this search tool.
Finally, if you can no longer afford rent on your current home, relocation might be an option. Average rental prices have declined across the US since February, according to an August report by Zillow. Apps like Zillow, Trulia and Zumper can help you find something more affordable. Just be aware that you may still be held responsible for any back rent you currently owe as well as any rent that accrues between now and the end of your lease (if you have one), whether or not you vacate.