The week leading up to the Fourth of July holiday is almost always a slow time for the housing market.
Last year was an exception to the rule due to pandemic madness, but this year’s 2021 Independence Day might start to revert to the mean of more moderate action.
And, while the hot housing market might take a pause for a week or two, there was some huge news out of Sacramento this week worth taking note.
For this week’s post, I will touch on the two topics below:
- Important legal updates coming out of the State Capitol (and Washington, D.C. too).
- Scoring a potential 4th of July deal in the South Bay home market.
Important Real Estate Legal Updates
Let’s break down some of the latest updates regarding landlord and tenant laws regarding rent collection.
To analyze new laws, keep in mind the old saying: “The most restrictive restriction, restricts the rule.”
Below is a list of Federal/County/State/City laws, and make sure that from there, the most restrictive part of all the laws together will be the rule of law you have to follow…
The Centers for Disease Control and Prevention (CDC) announced that it is extending the nationwide eviction moratorium to July 31, 2021. According to their website, this is intended to be the final extension of the moratorium nationally.
(The Supreme Court just ruled they exceeded their powers in a 5-4 vote, but did not strike down the moratorium ending in July.)
From there, you need to figure out your state, county, and local guidelines.
County of Los Angeles
Last week, the Los Angeles County Board of Supervisors unanimously extended the county’s eviction moratorium to September 30, 2021. It was originally set to expire this week on July 1, 2021.
State of California
On Monday, Gavin Newsom signed into law that the state will extend eviction protections through September 30, 2021, as well.
The BIG news is that part of the Covid Eviction Moratorium & Rent Relief Plan (AB 832) is that California will not only give renters longer protections from eviction, but that they will expand payment rates to property owners to reimburse 100% of unpaid rent.
Since the bill is relatively new, these are a few highlight points of how I understand it (please do your own research):
- Landlords will be paid 100% of rent owed if Tenants have household income less than 80% of Area Median Income (and reimbursements can occur even if the tenant has moved and now lives elsewhere).
- Tenants and Landlords will be able to apply for billions of dollars in assistance payments from Federal and State allocations.
- After current eviction protections end on October 1, 2021, tenants cannot be evicted for the next six months if they complete an application for government rental assistance. Assistance payments will still be made to Landlords on behalf of Tenants beyond October 1st until funds run out.
Neither landlords or tenants are happy.
Tenants wanted longer protections, while landlords want possession of their property for non-payment of rent.
Regardless, the league news is huge. To see reimbursement of 100% of lost rent (if you meet qualifications) is unprecedented as well as an extension of evictions, likely well into 2022 is equally as unparallelled.
In short, it is still a shit show for tenants and landlords, but the new State legislation is a start.
This is a link to the bill’s text if you want to get into the weeds:
Bonus: City of Los Angeles
For many of our readers, be sure to check out the local guidelines in your South Bay city jurisdiction.
To give you an idea of the City of Los Angeles’ updated rules on evictions, the city of Los Angeles does not permit evictions until Mayor Garcetti lifts the Emergency Order/Declaration.
Currently, the Emergency Declaration is still in effect. Additionally, the city passed an ordinance to protect tenants that have unpaid rent due to COVID-19 until August 1, 2022…which is still about 13 months away.
Do not forget to study your city’s rules as well! Or just hire an experienced landlord/tenant attorney.
How to Score a Independence Day Deal
If you read my July 2019 blog post, then you know I think the summer slow down and 4th of July holiday is a great time to snag a deal if you want to hustle over a holiday weekend.
This is the past post for reference:
In years past, buyers have had a “double-whammy” of seeing much of their competition leave town on summer vacation, along with anyone staying local shutting down their real estate search to celebrate Independence Day.
This year, in my opinion, there is a “triple whammy” and maybe even a “quadruple whammy.”
The triple being that everyone has been cooped up from the pandemic, there are likely more people than ever leaving town or taking the holiday off…and quite frankly, the quadruple aspect is that buyers are just exhausted and going to take a break from the most competitive market maybe ever.
If you are willing to sacrifice the long upcoming weekend for a chance at a deal (although, there are never any guarantees), then these are my suggestions:
- Search for properties that have been on the market for an extended period of time. Lowball them on Friday afternoon and work to ink a deal before Tuesday.
- If any Seller is silly enough to bring out a new listing this week/weekend, get overly aggressive with your initial offer where it would be very intriguing to the seller, but you feel that it is still a great buy. Once your offer is submitted, put pressure on the seller to respond or accept with a short deadline. And, as stated before, try and ink the deal before Tuesday.
- Call on properties that have been in escrow far too long, and see if things are getting shaky. If they have been in escrow for a few months, it is probably at a price lower than today’s prices. Submit a back-up offer (at the current contract price or lower) on as many pending properties as you can, get them accepted ASAP, and hope a ink a deal that might be at February pricing rather than current market prices.
If you are a Seller considering listing this week or over the weekend… Don’t do it.
There might be very, very, very, veryyyyyy few exceptions to sell this weekend. But, in general, it is not to a seller’s advantage.
For all of my clients, I love you, but I am taking the long holiday off to spend with my family.
Happy 4th of July! Enjoy it!
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