I spoke once again at the University of Washington School of Law (my alma mater) regarding small and solo firm practice. The focus of the presentation was on development of a business plan and networking as an attorney.
By Dani Romero
From Yahoo Finance
The for-rent housing market is starting to come down, with rent growth dropping in recent months.
â€œAfter four quarters of supply additions outpacing demand, the market is shifting with national asking rents declining over the last 90 days by 0.4%,â€ Jay Lybik, National Director of Multifamily Analytics, CoStar Group, stated in a press release.
CoStar Group Inc., through its Apartments.com platform, found rents declined 0.4% between August and September as the U.S. median rental price declined from $1,641 in August to $1,634 last month.
â€œWe’ve just hit a very significant point in the current multi-family cycle,â€ Lybik told Yahoo Finance in a phone interview. â€œWe have now seen rents decline quarter over quarter by $7, comparing the second quarter of 2022 to the third quarter of 2022. That’s a significant change in what we were seeing just even six months ago.”
On an annual basis, asking rents remained at 5.8% through September, the latest deceleration in rent growth after the market hit its peak earlier this year.
The same report also found that the national vacancy rose 5.4% at the end of September as the pace of newly delivered units nearly doubled to 120,000 units, signaling a shift in market conditions from just a year ago when demand significantly outpaced supply.
â€œThis is the fourth quarter in a row in which new supply additions just significantly outpaced the demand. We’re still seeing a lack of cluster demand and the new supply is not getting absorbed. It’s putting upward pressure on the vacancy rate,â€ Lybik said.
As a result, landlords are â€œreally desperateâ€ to get tenants to occupy their units, Lybik explained, which is leading to rents nationally declining on a nominal basis as more tenants stay in their current apartments.
â€œThe uncertainty in the economy right now has put so many potential households holding off making that decision about going out and renting an apartment, and they’re just continuing to stay to sit pat in whatever their current situation is,â€ Lybik said.
Rents are an important measure of inflation given their outsize share in most household budgets. Housing comprises about 30% of the headline consumer price index, and about 40% of the core index.
The consumer price index posted an annual rate of 8.3% in August, the highest figure in nearly 40 years, the Labor Department said, as shelter costs rose 0.7%.
â€œMarket rents are cooling,” Realtor.com Chief Economist Danielle Hale told Yahoo Finance in a phone interview. “The growth rate is cooling.”
At the same time, given the surge in rents last year, many tenants are still paying relatively high amounts each month in their current leases.
â€œSadly, there’s not a lot of relief on the horizon,” Hale added. “On a month to month basis, rents are coming down. They tend to do that in the fall. So there is a little bit of a seasonal relief this year.”
I was recently afforded the opportunity to again speak at U.W. Law School Small and Solo Firm Practice Class. I am consistently amazed by the quality of new law students, as well as the strength and insight of their questions. Law students tend to be very process oriented. Being long-winded (which I can definitely laugh about), I did not get to all of the topics I wanted to address.
Artificial intelligence is something that I believe will definitely impact the future of the legal profession, as it will many other industries. Videoconferencing usage is something which will probably continue to expand. On a more humanitarian note, my hope is that law students and attorneys will think outside the box in terms of their usage of dispute resolution mechanisms, in recognition of the fact that there is often more than one way to solve a problem.
There was also an inchoate discussion of the Zen concept of “beginner’s mind” and its application and potential application to legal disputes.
Nothing to buy, nothing to rent:’ Some Americans are stuck in housing limbo
By Vera Gibbons
From Yahoo Money
When Rebecca DiLorenzoâ€™s landlord of 14 months informed her that he would be raising the rent by $300 a month on the apartment in East Greenwich, Rhode Island, she shares with her fiancÃ©, Kyle, she started to look around for a place to buy.
â€œOur mindset last spring was, â€˜Weâ€™re getting married, we need to buy a houseâ€™ and for a while we were going to open houses every weekend, but the market was just getting crazier and crazier,â€ she said.
After getting outbid on four houses â€” by as much as $50,000 â€” DiLorenzo knew they needed a Plan B. â€œWe didnâ€™t want to stay in our rental because it would have cost almost double what a mortgage would have been, but we also didnâ€™t want to buy a house we really couldnâ€™t afford,â€ she said.
Priced out of both the sales and rental market, the soon-to-be newlyweds are now living with family until things settle down.
This scenario is becoming increasingly familiar, said Rick Sharga, executive vice president of RealtyTrac, a real estate information company.
â€œFirst there was nothing to buy and now thereâ€™s nothing to rent,” he said. “The eviction ban has also frozen a lot of inventory that would have otherwise come to market.â€
Availability is limited across the board, said Jay Parsons, deputy chief economist for RealPage, a leading provider of home rental analytics. â€œApartment occupancy is now at the highest level in at least three decades, and itâ€™s a similar story in single-family rentals,â€ Parsons said.
â€œThereâ€™s a great reshuffling under way and everyoneâ€™s moving all at once,â€ said Nicole Bachaud, an economic data analyst with Zillow. This includes workers moving out of shared situations and transitioning back to the office, â€˜digital nomadsâ€™ exploring new locations now that they have more guidance from their employers, and new grads moving for their first jobs.
Competition is pushing rents higher in places like Phoenix, Riverside in California, Tampa, South Florida (especially West Palm Beach and Fort Lauderdale, but even Miami as well), Atlanta, Memphis, as well as Texas, the Carolinas, and most of the Sun Belt and Mountain regions, according to Parsons.
â€œItâ€™s bonkers,â€ said Jeff Andrews, data journalist at Zumper, a national rental listing platform. â€œIn â€˜normalâ€™ times you see steady growth in any given market, but the rent increases that are happening now â€” and the intensity and pace of it â€” is unprecedented. Itâ€™s not something weâ€™ve ever seen in the U.S.â€
In some markets, prices are increasing daily. Nowhere is this more apparent than in markets that were hit the hardest and are now rebounding quickly, such as New York City.
â€œThings started turning around in April as the city reopened, and now everythingâ€™s going in a â€˜New York minute,â€™â€ said Brown Harris Stevensâ€™ Justine Bray, who has worked in real estate in city for 27 years. â€œItâ€™s insane.â€
Recently, Bray was working with a client in Thailand who was eyeing an apartment in New York Cityâ€™s Murray Hill.
â€œThis apartment went from $5,164 to $5,559, then $5,715, $5,882, $5,929,” she recalled. “So every day my client was waking up and seeing it was costing more. We ended up getting it in July for a little over $6,200.”
Prices are escalating even after contracts have been signed.
Pam Crocker recently experienced this firsthand when she put in an offer â€” at full asking price â€” for a luxury two-bedroom rental apartment on Manhattanâ€™s Upper East Side. After making a deposit (including first monthsâ€™ rent plus security), and signing the lease, she waited patiently for the owner who had accepted the offer to countersign.
â€œThere was one delay after the next and they kept telling me there were all these other higher offers,” Crocker said. “I was getting annoyed to the point where I almost backed out, but I had my heart set on this apartment.â€
It ended up costing her $1,200 more per month than the initially accepted offer. â€œIâ€™ve done a lot of real estate transactions and owned villas in Jamaica, but had never been jerked around like this,â€ said Crocker.
When will things simmer down? Soon, Parsons said.
â€œWhat weâ€™re seeing right now in the for-sale housing market is likely a sign of things to come in rental housing later this year,” Parsons said, “where the market goes from â€˜really, really hotâ€™ to just â€˜hot.â€™â€
By Dhara Singh
From Yahoo Money
Mortgage rates dropped to a new low for the 13th time this year, allowing a record number of homeowners to refinance, according to Freddie Mac, a government-sponsored agency that backs millions of mortgages.
The rate on the 30-year fixed mortgage fell to 2.72%, exceeding the previous low of 2.78% recorded the week of November 5. This is the lowest on records dating back to 1971 when the agency first began tracking rates. A year ago, the rate stood at 3.66%.
The new low would allow 19.4 million Americans to refinance their mortgages, a record high, according to exclusive data provided to Yahoo Money by Black Knight, a mortgage data and analytics firm. These homeowners could save a total of $5.98 billion on aggregate monthly payments.
â€œInvestors had to weight the promising news of another vaccine contender against this weekâ€™s disappointing retail report and still-rising COVID cases, which drove the Freddie Mac interest rate for a 30-year loan down 12 basis points to another record low,â€ said Georgie Raitu, senior economist at Realtor.com, a real estate listing website.
â€˜Buyers and owners may see different ratesâ€™
Not everyone will be able to tap into the record low rates.
â€œLow mortgage rates are good for homebuyers as well as those looking to refinance,â€ said Danielle Hale, chief economist at Realtor.com. â€œBut buyers and owners may see different rates offered depending on their credit characteristics, the type of home they are looking to buy or refinance, and whether they are doing a purchase or refinance itself.â€
As unemployment increased during the pandemic, home loans backed by the Federal Housing Administration and often used by borrowers with blemished credit have increased their minimum credit score requirements â€” up to the mid-600s at some lenders â€” to protect from a higher risk of default.
Many banks also tightened lending standards in the third quarter for most types of mortgages, including for government- sponsored mortgages, which make up the majority of bank mortgage originations, according to a recent report from the Federal Reserve.
Rates Could Dip Lower.
Rates will likely decrease in upcoming weeks, experts said, but the rate is unlikely to reach as low as 2.5%. That is largely due to lenders being unable to keep up with a mortgage refinancing boom during the pandemic.
â€œMortgage rates have traditionally been aligned with and mirrored the moves of the 10-year Treasury note,â€ Raitu said. â€œWith Treasury yields having spent the better part of 2020 under 1%, we could have expected rates to have been in the 2.5% to 2.6% [range], but many lenders have responded to high unemployment and a large wave of refinances by tightening underwriting standards and keeping rates higher.â€
Today I was afforded the opportunity once again to speak in the Small Or Solo Law Practice Class at the University of Washington School of Law. The best part of my presentation was the break out sessions, where I got to see law students analyze potential ethical issues. The student responses were on target, complex, and strikingly sophisticated. Knowing that the legal profession will be carried on by such great thinkers is really inspiring. Clients of the future will be in good hands.
By Everton Bailey Jr.
From The Oregonian
Portland landlords must pay to move residential tenants who canâ€™t afford any rent increase after the City Council unanimously agreed Wednesday to temporarily modify its renter relocation assistance policy.
The rule goes into effect immediately and applies to any rent increase between September and March 31, 2021. Tenants must provide written notice they canâ€™t afford the higher rate and will need to move.
The previous policy applied only to rent increases of 10% or more. The rule calls for landlords to pay between $2,900 to $4,500 to help tenants move. The City Council plans to discuss later this year whether to keep the temporary revision through March or extend it further.
Portland requires landlords to give tenants at least 90 days’ notice of any rent increase. With the new rules, city leaders said landlords will have the option to rescind any September rent increase and refund any increased rent paid by the tenant. To qualify, tenants must provide written notice that they need assistance either 45 days after being given notice of the rent increase or until Sept. 30, whichever period is longer.
The proposal was announced by Mayor Ted Wheeler last week and the policy change was crafted by members of his office and the Portland Housing Bureau. He said it was necessary to help keep renters in their homes amid the coronavirus pandemic as the statewide eviction moratorium is slated to end Sept. 30.
If the deadline on the moratorium isnâ€™t extended, March 31 marks the end of the six-month grace period for Oregonians to pay all of their outstanding rental payments. Wheeler and other council members acknowledged the new rule could further burden landlords and that even this provision and rent assistance funds from the city wonâ€™t be enough to more fully address issues faced by tenants and landlords without more significant state and federal aid.
â€œI want to be crystal clear about this. We arenâ€™t saving anybody,â€ Wheeler said. â€œWeâ€™re temporarily suspending the coming eviction tidal wave and the potential loss of local building owners and landlords.â€
Rent increases disproportionally impact households of color, city officials said. According to city data of around 264,000 Portland households, 47% are renters and the other 53% are homeowners. But 43% of white households in the Portland area are renters while as many as 74% of Black households rent.
Commissioner Chloe Eudaly, who was the architect behind the original relocation assistance policy, said she was disappointed rent and mortgage forgiveness programs havenâ€™t caught traction among state and federal legislators. She said she felt the city had to prioritize more vulnerable Portlanders, noting that renters typically have fewer financial resources than landlords and rent increases without the option of relocation assistance would be â€œa recipe for displacement.â€
â€œI want to assert that in this moment of crisis, when we know that half of our renters were cost-burdened before COVID, we canâ€™t balance landlord housing pressures on the backs of renters,â€ Eudaly said.
She also noted that the rule change doesnâ€™t ban landlords from raising rent and that increases can still take place in the city for tenants who can afford it.
There was no public testimony on the proposal before the City Council vote. Wednesday marked the first City Council meeting with five members as Commissioner Dan Ryan took part. He was sworn in last week.
Ryan was elected last month to serve the remaining two years on the term of late Commissioner Nick Fish, who died in January of cancer.
By Liza Ramrayka
Cincinnati native and resident Jeneya Lawrence dreams of living in a house with a garden big enough to fit a trampoline for her two young children, on a street with neighbors from diverse communities.
The 28-year-old community health worker and single mom is determined to stay in Cincinnati, near family and friends, despite gentrification and seeing average rents double over the past decade. When Lawrence found a rental unit earlier this year with separate bedrooms for her 12-year-old son and 9-year-old daughter, close to good schools and her work, she couldnâ€™t believe her luck. Then the landlord asked for a $1,300 security deposit in advance.
â€œI just did not have that. I asked him if I could split it over two payments but he said no,â€ explained Lawrence, who then had to wait another six months to find a rental in a less-convenient location where she could afford the deposit.
Lawrenceâ€™s story is a familiar one for many lower-income renters across the U.S., who have found it increasingly difficult to find homes as the housing crisis tightens its grip on cities across the country.
But Cincinnati is trying to do something to ease the burden. In April this year, it became the first city in the U.S. to require landlords to accept alternatives to a security deposit. Cincinnatiâ€™s bold move has been hailed as a way to disrupt a broken system for renters. Other cities and states are now also offering deposit alternatives to make housing more accessible to low-income renters.
The new program, dubbed â€œrentersâ€™ choice,â€ came into effect too late for Lawrence to benefit from it when she was last looking to move. But she hopes it will make it easier for her and other lower-income renters to find homes in the future.
The program could also level the playing field for the cityâ€™s homeless population, said Kevin Finn, president and CEO of Strategies To End Homelessness.
â€œOn any given day, we have 200 families that have a first monthâ€™s rent but they still canâ€™t find an apartment,â€ he said. â€œHaving a more realistic arrangement for what the deposit looks like will make it much easier to get those households into an apartment.â€
Homelessness in Cincinnati disproportionately affects the cityâ€™s Black community (62% of the homeless population) and people under the age of 35 (55% of the homeless population). And the number of unhoused people is expected to increase this year and next due to the effects of COVID-19 on job losses and evictions.
Even before COVID-19 hit the U.S., millions of low-income renters were struggling. Nationwide, there should be at least 7 million more homes for those who earn the least. â€œFor every 10 of the lowest-income renters, there are fewer than four apartments that are affordable and available to them,â€ Diane Yentel, president and CEO at the National Low Income Housing Coalition, told HuffPost.
The pandemic has exacerbated the situation. More than 40% of low- and moderate-income households in the U.S. said they had no emergency savings, while over 12% would not be able to pay for a $400 emergency expense, according to an April survey published by Brookings.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed in March, added a weekly $600 federal supplement to unemployment payments and implemented a federal eviction moratorium. But both provisions expired in July.
More than 1 in 5 renters were behind on payments in July, and widespread evictions are expected unless states extend moratoriums or introduce rental assistance. The replacement lost wages benefit â€• reliant on joint funding with states â€• offers claimants a maximum $400 a week.
Cincinnati resident Seth Weber lost his job in March when the restaurant he worked at was shuttered due to COVID-19. He got work at a bakery â€” but the bakery burned down in August. Heâ€™ll be counting on unemployment benefits to make his monthly rent of $700. But Cincinnati is looking at an eviction crisis, and heâ€™s aware that this fate could be just around the corner for him.
â€œThatâ€™s the worst thing a tenant can face,â€ said Weber, a volunteer for Cincinnati Tenantsâ€™ Union. â€œOnce you have an eviction on your record, youâ€™re only going to be able to get into substandard housing.â€
Many renters avoid getting an eviction on their records by downgrading their housing â€• perhaps moving from a two-bedroom to a one-bedroom â€• but doing so requires having enough money saved to put down a security deposit. â€œThe new legislation will help them be able to get into less-expensive housing and avoid getting an eviction on their record,â€ said Finn.
The new legislation could come in handy if Weber has to move soon to avoid eviction.
Councilmember P.G. Sittenfeld (D) introduced the legislation last November after reaching out to local tenants and landlords to address the cityâ€™s need for more affordable homes. He says rentersâ€™ choice will give low-income renters greater access to housing in a city where median household monthly income is around $2,800, and a two- or three-bedroom apartment can cost $1,000 or more.
â€œThe â€˜north starâ€™ for me throughout the crafting of this legislation was how can we remove an upfront barrier that is the traditional, steep, cash security deposit?â€ he said. â€œAnd can we replace it with something that lets people get into the housing they desire, while also still giving landlords the protection they need?â€
For many people, especially those on limited incomes, it has long been all but impossible to find the cash for security deposits â€” often, one or even two monthsâ€™ rent â€” that landlords require upfront but which arenâ€™t covered by a tenantâ€™s Section 8 housing support voucher.
â€œWhen you have such limited income, any extra expense â€• such as security deposits or requirements to pay the first and last monthâ€™s rent upfront â€• can be an insurmountable hurdle to finding an apartment you can afford,â€ said Yentel.
Cincinnatiâ€™s rentersâ€™ choice legislation applies to all landlords with 25 units or more and offers three options: an insurance premium, in which the tenant pays a small monthly, nonrefundable fee instead of an upfront deposit; an installment plan to spread the deposit equally over six months (or more if the landlord agrees); or a reduced security deposit, paid upfront, of no more than half the monthly rent.
Sittenfeld says security deposit insurance could mean a tenant paying just $5 a month to protect the landlord against damages or rent default, instead of a $1,000 security deposit. â€œI donâ€™t pay $100,000 a year in health insurance premiums anticipating that Iâ€™m going to have a catastrophic heart attack. You pay a little bit each month, then itâ€™s pooled risk.â€
The â€œongoing economic repercussionsâ€ of the pandemic â€” with thousands out of work or underemployed â€” only serve to highlight the need for rentersâ€™ choice legislation in Cincinnati, and across the country, says Sittenfeld.
Elected officials, nonprofits, and landlord groups are collaborating to publicize the new rules. â€œWhile it is still early on, weâ€™re optimistic that the legislation will be successful in ensuring renters have the ability to secure an apartment without a large upfront cash security deposit,â€ said Sittenfeld, â€œand look forward to seeing the legislation expand across the country to help renters in cities large and small.â€
Cincinnatiâ€™s legislation is part of a wider movement to disrupt what is arguably an outdated system, particularly where low-income housing is scarce.
New legislation in Virginia allows landlords to accept damage insurance in lieu of a security deposit. In Pennsylvania, a proposed amendment would require landlords to offer security deposit alternatives such as installment payments or insurance. (Both laws cap the sum of deposits and insurance at two monthsâ€™ rent.) Representatives from several other cities and states including Alabama and North Carolina have committed to introducing rentersâ€™ choice legislation.
In 2019, New York state passed a law to cap security deposits to one monthâ€™s rent and require deposit return within 14 days. In March of this year, New York Gov. Andrew Cuomoâ€™s pandemic-related executive order required landlords to allow certain tenants to use their security deposits to pay rent that is in arrears or due and to replenish the security deposit over time or â€œretain insurance that provides relief for the landlord in lieu of the monthly security deposit replenishment.â€
Some landlords argue that an insurance-based system would create more problems since theyâ€™d have to extract funds from an insurer rather than having cash in hand to make any repairs necessary at the end of the lease. Charles Tassell, chief operating officer of the National Real Estate Investors Association, commented recently: â€œIâ€™ve got to deal with an insurance claim and get my attorneys involved. And theyâ€™ve got their high-priced attorneys in-house.â€
And others warn that over a year or more, the total paid in nonrefundable insurance premiums could exceed the upfront security deposit and that renters may be unaware that such insurance does not cover them against damages or repairs that exceed the policyâ€™s coverage.
Weber worries that because the policy only applies to landlords with more than 25 units, it limits choices for tenants.
Finn adds that while tenants are learning of their options from housing nonprofits, landlords may still be in the dark, so cities and states need to do more to educate them about their new responsibilities.
Yentel says alternatives to security deposits provide creative and much-needed additional assistance to get families into homes. However, she argues that there is an urgent need to tackle the underlying issues contributing to the housing crisis. Solutions include more sustained, substantial federal investment in the Section 8 voucher program so all those in need receive help, and building more housing for low-income people through programs such as the National Housing Trust Fund.
In Cincinnati, where there is a 40,000-unit housing deficit, the city is hoping to help low-income renters with several new building projects. These include the Willkommen and Perseverance developments supported by the nonprofit Cincinnati Center City Development Corporation, which is working in partnership with the city to set aside 101 affordable rental units for those making 50-80% of the Cincinnati area median income.
Lawrence â€” who is still seeking out a rental that checks all the boxes â€” is optimistic that Cincinnatiâ€™s recent rentersâ€™ choice legislation will offer renters like her access to homes like these next time they need to move.
â€œIâ€™m happy that we can pick where we want to stay but also have three options on the money side,â€ she said. â€œThis time, I will look at places where I have the stores I need, the schools convenient for my children. As long as property owners are open-minded and not money-hungry, it wonâ€™t be hard.â€
By Jacob Passy
International buyers purchased the smallest number of existing-homes in the U.S. since 2011 this past year
Foreign buyers are purchasing fewer and fewer American homes. And the coronavirus pandemic could cause a serious pullback in new investment in U.S. residential real estate from international buyers.
During the 12-month period ending in March 2020, foreign buyers purchased 154,000 existing homes in the U.S., down 16% from the previous year, according to a new report from the National Association of Realtors. This was the smallest number of existing-homes that international buyers have purchased since 2011, and the third consecutive year that the number decreased.
Altogether, international buyers purchased $74 billion-worth of U.S. residential real-estate, down from $77.9 billion the year before and $121 billion two years ago. The report includes purchases by buyers who live abroad as well as foreign residents in the U.S.
China was the largest buyer of U.S. homes once again, accounting for the purchase of 18,400 homes worth roughly $11.5 billion. But among the top five international buyers â€” which also included Canada, Mexico, India and Colombia â€” China was the only country where the number and value of homes purchased between 2019 and 2020 decreased.
A number of factors have reduced Chinese interest in U.S. real estate in recent years â€” including government efforts to stem these purchases.
â€œThe Chinese government has become much more restrictive about how much cash they can take out of the country,â€ said Lawrence Yun, chief economist at the National Association of Realtors.
â€œThereâ€™s always a way to go around it, but the fact that the Chinese government is placing capital controls means there could be more monitoring of their citizens,â€ Yun added. â€œJust the sense the government may be watching them has reduced the number of Chinese buyers here in the U.S.â€
Continued trade tensions between the U.S. and China has also worked to hold back some activity, as have restrictions on visa issuance to Chinese visitors.
How the pandemic will affect international purchases of U.S. homes
The National Association of Realtors (NAR) report only covers the period between April 2019 and March 2020, so it doesnâ€™t reflect the full impact of the coronavirus pandemic.
But even before the pandemic became a crisis here in the U.S. it was having an effect on home-buying activity. Back in February, when China was still the main epicenter for the pandemic, real-estate agents told MarketWatch that uncertainty and travel restrictions had led Chinese investors to pull out of planned deals.
Much has changed since then. The U.S. now has the largest number of cases worldwide, and many countries have imposed travel restrictions. This will seriously curtail foreign buying of U.S. real-estate, Yun said.
â€œFor the most part, people need to see the property in person,â€ Yun said. Buyers from abroad arenâ€™t just purchasing properties for investment purposes.
Over half (51%) of non-resident foreign home buyers plan to use the property as a primary residence or vacation home, while another 10% expect to have it double as a rental property and vacation home, according to NAR data.
Over half of non-resident home buyers use the property as a primary residence or vacation home.
Moreover, the most popular real-estate markets for foreign buyers are located in states with some of the highest coronavirus case counts. Florida was the top destination for foreign buyers, followed by California, Texas, New York and New Jersey.
Given the difficulty and risks posed by traveling, many foreign buyers may decide to hold off on buying an American home until they can enjoy it.
International buyers also donâ€™t have the same incentives to buy a home in the U.S. right now as their American peers. â€œInternational buyers are much more likely to buy with cash or use more limited financing,â€ said Danielle Hale, chief economist at Realtor.com. â€œAs a result, we donâ€™t see a surge in international demand when interest rates drop.â€
A number of factors could provide a boost to international demand, though. The upcoming presidential election could result in a dramatic shift in international relations depending on the outcome. â€œA Biden administration could potentially be more welcoming,â€ Yun said.
The U.S. real-estate marketâ€™s quick rebound from its coronavirus lows could be a draw in and of itself for foreign buyers, said Daren Blomquist, vice president of market economics at Auction.com, a listing site for foreclosed properties. Plus, some economists have suggested that the flight to the suburbs could lead to softer prices for properties in major cities, which could attract foreign buyers.
Ultimately, though, a decline in international buying isnâ€™t likely to hurt the U.S. real-estate market, because foreign buyers only account for 4% of existing-home sales. In fact, it could be the opposite.
â€œThe fact that foreigners have stepped back is actually providing a better chance for domestic buyers to get those properties,â€ Yun said.
The wave has already begun: Evictions surge as cities suspend moratoriums
by Akiko Fujita
Legal aid groups and housing advocates are bracing for a surge in evictions, as local governments begin lifting moratoriums that deferred rent payments for millions of tenants who lost jobs to the pandemic.
In Michigan, where the state is set to lift the eviction moratorium next Wednesday, Ruthie Paulson has seen a 76% spike in calls to her 211 call center, which provides social services to those most in need. Nationally, the call volume has jumped 200%.
â€œA lot of the tenants are living in fear, day to day, not knowing if theyâ€™re going to receive a stimulus check, not knowing if theyâ€™re going to receive an unemployment check,â€ Paulson said. â€œThey know that date is coming, when legally they know their landlord will be able to get a court order to officially evict them. They know theyâ€™re not going to be able to pay that money.â€
States that have already lifted the moratorium have seen a dramatic spike in eviction cases. In Memphis, Shelby County courts faced a backlog of 9,000 eviction cases when hearings resumed last month. In Milwaukee, eviction filings spiked 15% since the cityâ€™s moratorium was lifted, according to data from the Eviction lab. Columbus, Ohio, converted the cityâ€™s convention center into a socially-distanced housing court to prepare for the impending wave of evictions and homelessness.
â€œIn many ways, the wave has already begun. We need to work to stop it from becoming a tsunami and we’re running out of time,â€ said Diane Yentel, President of the National Low-Income Housing Coalition. â€œWe’re seeing now a really frankly horrifying confluence of increasing evictions in states where new coronavirus cases are surging.â€
20 million renters at risk of eviction
More than 20 million people, or one in five of the 110 million Americans who live in households that rent, are at risk of eviction by the end of September, according to the COVID-19 Eviction Defense Project. While economic stimulus payments and unemployment insurance have allowed tenants to remain in their homes throughout the pandemic, CEDP Co-Founder Zach Neumann says that is likely to change dramatically, with enhanced unemployment insurance set to expire at the end of the month.
Black and Latino families are at highest risk of eviction, according to Yentel.
Those seeking help arenâ€™t limited to low-income families, but young professionals now out of work.
â€œYou have a lot of folks who had strong incomes, in a lot of cases high five figure or low six figure
. They didn’t have a lot of savings, lost their jobs or were furloughed, and there was not any severance attached to that, but had rents that were in line with the salaries they were earning,â€ Neumann said. â€œThe client pool economically looks a lot different than it has in the past.â€
Eviction hearings conducted by Zoom
The threat of homelessness coincides with a troubling uptick in coronavirus cases across the South and West, leaving tenants especially vulnerable. In Tucson, where a surge in infections has filled hospitals to capacity, courts are processing over 52 eviction cases a day, 2 to 5 times the case load from the same period last year, according to Yentel. A disturbing spike in COVID-19 cases and hospitalizations prompted Texas Governor Greg Abbott to roll back the stateâ€™s reopening plans last month, but eviction hearings are moving forward on Zoom. Thatâ€™s complicated the legal fight for tenants, who donâ€™t have access to the technology.
Tenant rights vary from state to county to city, adding to the confusion. In some jurisdictions, failure to dial into a hearing by video call paves the way for landlords to move forward with an eviction.
â€œWith a Zoom hearing you never have the opportunity to access a lawyer, to speak to someone who can give you advice to explain how the process goes. So the odds of not having your full rights under the law or not having representation, go down even further,â€ said Neumann, who offers legal aid to tenants in Colorado. â€œEven before COVID it was an extreme problem â€” 98% of landlords in Colorado went to court with an attorney and 2% of tenants did. We expect to see that 2% go down to an even lower number, which obviously affects outcomes across the system.â€
Housing advocates say the pandemic has exacerbated an affordable housing crisis the country faced even before COVID-19. Yentel says 8 million households, or roughly 25 million people, were paying at least half of their income towards rent each month.
â€œWhen you have such limited income to begin with and you’re paying so much of it for your home, you’re always one financial emergency away from not being able to pay the rent and facing eviction, and in worst cases homelessness,â€ Yentel said.
Sen. Elizabeth Warren (D-Mass.) has introduced legislation to extend the 120-day rent moratorium in the CARES Act to March 2021. Though the initial provision, set to expire on July 25, only covers federally assisted housing, or roughly 30% of renters nationwide, Warrenâ€™s proposal extends the proposal to include most tenants.
But with Congress on recess until July 20, any action may be too late for tenants living in cities where the moratorium has already been lifted.
â€œWeâ€™re running out of time,â€ Yentel said. â€œThe stakes couldn’t be higher right now, and every day of inaction is putting more low income people at risk of losing their homes.â€