In this issue:
  • September sales and lease data from HAR
  • Which political party is better for property investors?
  • The digital real estate world

Hello fellow property investors!  It seems so much always happens in between my monthly property investor letters, and this month did not disappoint!  Politics have remained as crazy as ever with one of the most memorable/infamous presidential debates ever, President Trump days later testing positive for COVID, and then one of the debates being canceled entirely. 

The stock market continues to be close to or at record highs, even though jobless claims remain close to 1 million weekly and no further stimulus package is in site until after the election.  And, we get professional football re-scheduling games almost every day of the week due to COVID related outbreaks !  A continually unpredictable and exciting world.  Let’s see how the local market faired in September first.

September HAR Release

Almost a repeat of what we saw in August.  Low interest rates and other unknown factors helped spur the high end of the market and pulled the overall averages up.  Homes priced at $750,000 and up saw an 81.5% increase in sales volume year over year!  But, yet again, the lower priced segments (and more investor friendly ones) saw a decrease in sales.  

  • $1 – $99,999: decreased 23.1 percent
  • $100,000 – $149,999: decreased 22.3 percent
  • $150,000 – $249,999: increased 18.2 percent
  • $750,000 and above: increased 81.5 percent

Overall, year to date sales are still higher than 2019 by 5.4%, but there has been a striking divergence between the upper and lower ends of the pricing spectrum over the last few months.  Coupled with lower levels of listings, overall inventory has dropped again to 2.5 months, the lowest since December 2014.

Leases fell 3.9% for single family homes but did see a small increase of 5.5% in monthly rent amount.

Which political party is better for property investors?

Ok, so this one was a little bit of a teaser.  I won’t be writing out a long analysis of each party’s stances and what that means for investors.  What I will say, is that there is an immense amount of uncertainty to this question, and I welcome anyone’s thoughts on it.  We know Biden loves talking about increasing taxes on the wealthy, but this includes not just federal income taxes but also possibly taking away the 1031 exchange opportunities for anyone making more than $400,000 per year.  That would create a huge capital gains tax burden for many property investors in this country.  On the other side of the aisle, President Trump in conjunction with the CDC came out with what I will say is a very anti-landlord eviction moratorium.  This is in place until the end of 2020 and very well could be extended after.

At some point we will see a flood of evictions and foreclosures.  Regulations and stimulus have prevented this from occurring up to this point.  If the Democrats win, the timeline will likely be pushed out further due to a larger stimulus package being passed than if the Republicans win.  But, at some point, the bills will come due. Regardless who wins, investors need to pay attention to this in order to take advantage of opportunities.

The Digital Real Estate World

At the beginning of the pandemic, businesses were forced to learn how to communicate and work in a more remote world.  Zoom or similar video conferencing applications are now commonplace, and businesses have figured out new ways to have work with customers without meeting face to face.  Real Estate is no different.  We’ve discussed how we now have virtual tours and have gone completely digital for applications and leases.  Our Business Development Manager Sharon Strickland did a great job breaking down some of these changes and others that are likely here to stay. 

A great video for those interested:

That will do it for this edition.  I wish you all the best as we go into the last couple months of the year.

Charlie Roseland
Advantage Asset Management