REAL ESTATE’S REALITY

Home Prices Up, Sales Down in April. Home prices in major U.S. metropolitan areas edged up in April for the second consecutive month, according to data from the S&P CoreLogic Case-Schiller National Home Price Index.
Prices in March gained 4.6 percent, followed by a 4.7-percent bump in April.
Sales of existing homes – the majority of home sales – were down 17.8 percent compared to April 2019, and there were 19.7 percent fewer homes on the market this April than last.
Sales fell because so few homes were on the market, analysts say. Those that were available had eager buyers willing to pay higher prices.
NYC Real Estate Market Still Weak. Manhattan apartment sales in the second quarter were 54 percent below those of 2019’s in the same period, the fewest apartments sold since the city began tracking the data in 2005.
About 90 percent of those sales already were in process when the virus struck the city.
Agents report a few buyers looking, but many remain bunkered outside the city or are rethinking living in the urban throng in an age of pandemics, brokers say.
Also, with few properties selling, neither buyers nor sellers have a firm sense of fair prices, according to analysts.
The median price of a Manhattan apartment was $1.01 million in 2020’s second quarter, down 21 percent from a year earlier. During May and June, 80 percent fewer contracts were signed compared to the same period in 2019.
Some agents believe the lost selling season of this spring and summer will appear in the fall; others think that buyers are likely to wait out an uncertain national election and the prospect of a resurgent virus later this year and return to the market in 2021.
TREND FORECAST: Who is elected president of the United States in November will have no impact on real estate, retail, or employment trends. Trends Journal subscribers have been long forewarned. The “Greatest Depression” has begun.
Should the media continue to hype the virus and warn of a strong resurgence, it will drag real estate prices lower.
Reopening of Offices is Complicated. ExxonMobil redesigned its Houston office space and made cleaning procedures more rigorous; now about 40 percent of those workers can return, especially executives with private offices that have doors.
Shell Oil had allowed about 11 percent of its Houston workers back into their offices last month but sent them home again when Texas’s COVID infection rate spiked upward. Most of Phillips 66’s 2,300 workers are back in their offices but working staggered shifts to reduce crowding.
Dell Technologies, the Austin-based computer maker, has created a software program that gathers and analyzes more than a dozen data points, including local infection rates and hospitalizations, to guide its decisions about asking employees back to the office.
Even so, the company estimates at least half of its workers will work from home from now on, even after the pandemic ends.
“Within our company and, more broadly, the future of work looks different,” said Jennifer Davis, Dell’s senior vice-president of global communications.
TREND FORECAST: As forecast, the more rules, regulations, and work-at-home directives coming from businesses big and small, the lower the demand for commercial real estate, which will push rents and property values lower.
It should also be noted that vacancy rates were on the rise before the lockdown in top spots such as Manhattan, and many cities were being overbuilt with new construction. Thus, there will be a surge in bankruptcies among real estate investors and builders large and small.