Work From Home — Day 39
Forbes Magazine & Selma Hepp
5:15AM PST
Team –
What a treat to be featured in Forbes in a real estate article with our former Chief Economist, Selma Hepp. The article is effectively a Q&A on the California real estate markets and the impact of our current crisis. It’s a quick read. I hope you and your clients enjoy it!
If you recall, Selma Hepp served as our Chief Economist and VP Business Intelligence from early 2016 until the end of 2019. Selma brought an exceptional intellect to our business and to your clients. She played a vital role in our strategic planning, our Real Estate Outlooks and in all our daily social media activity.
Selma has relocated to the Washington DC area and is now the Deputy Chief Economist at CoreLogics. We congratulate Selma on her new role.
Beginning Monday, April 27, I will dial my writings back to my morning post and the Monday and Thursday evening pending, closing and cancellation reports. As the curves start to flatten and we anticipate life with SIP relaxations, the cadence of communication will be plenty at one per day.
You can look forward to our pending, closing and cancellation report at 5PM today.
This is Where We Are Now.
Thanks!
Mark
Mark A McLaughlin
Work From Home — Day 39 — Closing Bell
Closed, Pending & Cancellations — Sleep Fast
5:35PM PST
Team –
Your clients expect your leadership, your transparency, your advice and recommendations. Please take the time to review and understand these reports. They are vital to our/your business.
We have a slightly different cancellation report today that I encourage you to review. The cancellation reports, for NorCal and SoCal, are now by week on a YTD basis. They demonstrate consumer behavior in a very compelling manner.
We have been saying, anecdotally, that our post-SIP new escrows are more durable than the pre-SIP. Now the reports prove the point.
If you have a pre-approved buyer, with a solid lending commitment, escrows are stickier. Look at the difference between NorCal and SoCal.
NorCal is back to two cancellations per day over the last three weeks. The same average as the first nine weeks of the year. Sure it’s fewer transactions, but directionally we see stabilization.
Remember, SoCal went into SIP nine days behind NorCal. This could be foreshadowing for SoCal. The Chartwell cancel report is interesting as well. Percentage cancels [remember, a 14-week moving average] are still above the normal high-teens, but our denominator is significantly smaller as well. Again, directional. Think of the trend as a leading indicator.
Today’s Update 4/23/2020 – we are down to 560 April closings. This is 10 percent below what we thought in the first week of April. Many have pushed to May. This could be lender delay and general compromised SIP speed.
In the next week or two, we will have our first meaningful numbers of closings from SIP generated escrows. This is where the markets will “open” in my mind. The new markets. New pricing.
I spoke with at least a dozen of our professionals today. All are active. The trades that have been described to me reflect the pricing revealed in our recent survey. Below $3 million, 5 to 10 percent off pre-SIP list prices. Above $3 million, 15 to 20 percent off.
Be ready! It’s almost time to Sleep Fast again.
This is Where We Are Now.
Thanks!
Mark
Mark A McLaughlin