Housing market in the Bay Area

OF THE HOUSING MARKET IN THE BAY AREA

Lewis Sanders III I n March, the governor for California gave the stay at home order. And while the order is meant for good, to save American lives at a time when the US is leading the death toll, the order brought to light a series pandemic that lawmakers have been struggling with for a long time. The terms “housing crisis” provoke serious questions that previously were ignored. How do you shelter in place without a home? How do you isolate yourself in an overcrowded apartment? With the coronavirus pandemic pushing the global economy to the brink of collapse, California is yet again struggling with finding a solution for the more than 150,000 Californians without a home. State legislators were introducing controversial bills to help ease the situation by making it easier for the builders to develop more buildings, with the hope to counter the crippling shortage, which was responsible for the skyrocketing prices and rents in the country. The Newsom and the local administration were about to square off over how to spend the $1 billion in proposed help for the homeless. While that may seem like decades ago, the coronavirus pandemic has brought to light a serious issue, and the housing crisis means something different for the state. First of all, the state’s housing crisis makes it very difficult to deal with the pressing COVID-19 crisis. How will California be able to protect more than 150,000 homeless Californians from the virus that’s spreading like wildfire? The governor gave orders to stay at home, where do these people go. The state is reporting that 108,000 people are sleeping outside; 43,000 people are in shelters, which both are major underestimates. These figures are more than one year old, and not only that, counting the homeless people in such a state is inherently unscientific and imprecise given the time it took. Simply, this means more emergency housing units, money, and supplies will be needed than what the official statistics might indicate. Remember that California is the leading state when it comes to the homeless population, which means, as other states advance their fight against the Coronavirus pandemic, California will be stepping back trying to deal with the homelessness crisis. Most of the homeless people are seniors with underlying health conditions and are very susceptible to COVID-19. While that is one dimension of housing that is making the fight against the coronavirus so hard, there are other dimensions at play. California is ranked at the top of the worst states in the country, mostly because of overcrowding. The issue of overcrowding stems from the high costs of living in California. That issue presents a whole new set of problems for the millions of Californians who have been ordered to stay at home, especially if the household member is showing signs of COVID-19 infections. One of the guidelines given by the CDC is that if a person is showing signs and symptoms, they should isolate themselves in a “sick-room” with a separate bathroom. That, for millions of Americans, maybe a problem. The coronavirus presents the most pressing issue and needs to be dealt with ASAP, but researchers are worried about the long-term physical and health effects brought about by overcrowding if the schools and jobs remained closed for a long while. “On a daily basis, people are experiencing the crowdedness of their homes for longer periods of time throughout the day,’ said Claudia Solari, who researches housing overcrowding at the Urban

Supposing that the state can come up with an ingenious solution to house the unhoused. It would take extraordinary effort to accomplish this in totality. The state gave the local governments $100 million for emergency shelters with more money on the way. It went ahead to purchase about 1,300 trailers from the Federal Emergency Management Agency to isolate homeless people who are symptomatic and also offered to negotiate leases with more than 950 hotels on behalf of the counties to get more people off the streets. Luckily, two hotels have bought the idea in Oakland, providing 393 rooms.

Los Angeles is the county with the most homeless count, and it has recently announced that efforts are underway to convert 42 city recreational centers to emergency shelters to create 6,000 new beds. The efforts both by the local governments and the state are so much encouraging, but as swift, as they are, the task ahead is quite demanding, and it won’t be easy. This leaves one question for the public health experts and providers of services for the homeless.

For instance, in the coming weeks, how will health officers discharge someone homeless with a directive to self isolate? Or what do you do with encampments if a person starts coughing or has a running fever? All these questions pose a problematic situation in the near future. It brings the question of whether large-scale sweeps may be necessary, but public health experts argue that dispersing an encampment would be an even larger public health risk. However, there is also the fear that the contagion could be a pretext for the governments to sweep people off the street, especially for the Trump administration, which has threatened such an action before. Going by the models provided by the state, it shows that up to 60,000 people could fall sick from the contagion, and about 20 percent of these people will require hospitalization.

For the people already owning a home, the situation could get even worse for the homeowners and renters. Homeowners with a mortgage are a particular risk unless a bolder action is taken by the federal and the state government. For instance, some federal lawmakers are pushing for a $1,000 stimulus check for the American people. That’s encouraging. But a check like that can only cover rent for the average one-bed apartment in Phoenix or Dallas but not is a place like San Francisco, where it could only cover half what a one-bed apartment costs. Another issue at play is that rents and probably the home prices may go down. Well, that sounds merry, but it is not. Economists are saying that it is like the county is already in recession. At this point, it is uncertain what the breadth and the depth of recession look like. The worst scenario can play out, leaving 20% unemployment and a massive layoff over a prolonged period, all of which are scary outcomes. In most other recessions, as the jobs and incomes went down, so did the home prices and rents. Supposing that the coronavirus induces a downturn in the economy, which is brief and the economy rebounded, the rents and home prices might only dip temporarily. However, the possibility of a prolonged drop in housing costs is quite real.

If the pricing for houses drops, is that not a good thing? Well, not really. A rapid decline in home prices and rents could be beneficial to the Californians who can keep their jobs and incomes steady, but for the low-income earners, especially those in the service sectors, the rent will not drop as fast as the incomes, thars the reality, making Bay Area a whole new level of unaffordable.

If you are looking for market insights about the Bay Area, talk to Lewis Sanders. He is an industry expert operating in the Bay Area. Lewis is part of the Power Is Now VIP Agents program. Find out more about the program here.

Lewis is a licensed real estate expert for many years. He started working in the communications business learning to establish myself with the public and local communities by serving as a barbershop business owner in the Bay Area. There he discovered his hidden talent and skills through helping my clients as he entered the mortgage industry, which led to his career as a licensed real estate agent.

To find out more about the Bay Area, contact Lewis. If you would like to purchase a property in the Bay Area, Lewis has the best houses at a very affordable rate. The good news is that you do not have to worry about down payments, Lewis will show you an easy way to get into a home with zero money down. Find out more about Lewis and his work here.

Sources & Work Cited

https://calmatters.org/housing/2020/03/californiacoronavirus-housing-crisis-renters-homelessness-covid19- gavin-newsom/ https://www.fancypantshomes.com/market-reports/realestate-developers-solution-for-bay-area-housing-market https://www.mercurynews.com/2020/01/04/pessimismseeping-into-bay-area-home-market-for-new-year/