Dear MCAR Member,

Join us in remembrance of John Saar.

Please read the important news from the Department of Real Estate regarding The Tenant, Homeowner and Small Landlord Relief and Stabilization Act of 2020. Some landlords may be required to give appropriate notice to tenants by September 30. Read the announcement and see The Business, Consumer Services and Housing Agency's new web app for details.

Please also read the latest news for REALTORS® from C.A.R.

Kevin
John Saar
May 19, 1947 - September 1, 2020

With sadness we share that John Saar passed away on September 1, 2020 in Southern CA after a few years of failing health. John was well respected for his relentless pursuit of marketing perfection. John like no other, captured through photography and the written word, the true essence of the renown properties he represented. He held a degree in Oceanography and served as a Coast Guard Executive Officer stationed in Hawaii. His successful real estate career began in Newport CA over 40 years ago which he continued upon moving to the Monterey Peninsula in 1989 to be near his Mother and Step Father in their final years. Those of us who know John well will remember his boundless energy, his presence often preceded by his booming voice calling out to one of his beloved dogs, his creative genius with a little chaos mixed in, his love of gardening, landscape design and nature, especially Big Sur that inspired him like no other place on earth. John was indeed a unique man on so many levels, he will be deeply missed. He is survived by his son, Jack, and sister Kristen.
The Business, Consumer Services and Housing Agency (BCSH) issued a news release this morning announcing a new web-based app that is now available to help Californians understand their rights and options under The Tenant, Homeowner and Small Landlord Relief and Stabilization Act of 2020 (Act).
 
The news release can be found here: https://www.bcsh.ca.gov/media/press_releases/bcsh_20200915.pdf. 
Welcome to the 26th issue of the California Coronavirus Weekly Recap newsletter. Before we get started with this week’s news, we want to remind you that we have updated our Step-by-Step Guidance for PUA Certification and Other Post-Application Information, which you can find on the COVID Legal Documents page on car.org.


In This Issue:
  • The Economy & Your Finances: No state or federal taxes on PPP loan forgiveness
  • The Market & Industry: Record-low mortgage rate and inventory
  • Around the State: Wildfires continue to exacerbate COVID crisis
  • Health Check-Up: COVID-19 life-threatening to people of all ages

The Economy & Your Finances: No state or federal taxes on PPP loan forgiveness

Governor Newsom signed AB 1577 last Wednesday to conform state tax law with federal tax law in regard to the treatment of forgiven Paycheck Protection Program (PPP) loans. The new law excludes forgiven PPP loans from gross income calculated for state income tax purposes. This means that if you applied for and received a forgivable PPP loan, you will not need to pay federal or state income tax on the loan proceeds if the loan is forgiven. However, keep in mind that otherwise deductible business expenses that are paid with forgiven PPP loan funds will be disallowed as tax deductions when computing your taxable income for both federal and state income taxes. We have updated our FAQ on SBA Loans for Agents and FAQ on SBA Loans for Brokers to reflect this change.

Governor Newsom also signed SB 1447 that provides tax credits to small businesses that hire during the pandemic. Specifically, SB 1447 allows small businesses with under 100 employees to claim a credit against their personal and corporate income taxes of $1,000 for each net increase in qualified employees, up to $100,000, so long as the business’ gross income has declined at least 50 percent in the previous year.

Last week, over 880,000 Americans applied for unemployment, bringing total jobless claims to nearly 60 million since mid-March. Of those, 237,500 claims came from California, meaning the state accounted for 27 percent of all unemployment claims filed nationwide. California has one of the five worst unemployment rates in the nation, behind Hawaii and Puerto Rico.

Sources: Yahoo! Finance, Office of the Governor of California, California State Legislature, Business Insider, The Hill, The Mercury News
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The Market & Industry: Record-low mortgage rates and inventory

Mortgage rates dropped to a record low last week, averaging 2.86 percent for a 30-year fixed-rate loan. This marks the ninth time in 2020 that mortgage rates have hit a new floor. At the same time, mortgage credit availability shrunk to a six-year low in August, meaning lending standards have tightened.

Buyer demand still remains high, with mortgage applications up 40 percent from a year ago. California REALTORS® surveyed by C.A.R. reported encouraging business results last week, though optimism about future slides slipped modestly.

Demand continues to surge in “Zoom towns,” smaller, more affordable markets outside of bigger metropolitan areas that have become more popular as more people have been working remotely. A new study from Zillow found that nearly 2 million American renters could become homebuyers if they were able to work remotely and move to a less expensive area.

Meanwhile, the number of homes for sale nationwide is in record low territory, with some of the more affordable areas seeing the biggest drops in inventories. And Black homebuyers, who are less likely than their white counterparts to have jobs that allow them to work remotely, are facing disproportionately high prices and tight inventories. And a June surge in mortgages at least 90 days overdue has experts worried the U.S. could be heading towards a foreclosure crisis.

In Q2 2020, iBuying activity on the part of RedfinNow, Offerpad, Opendoor and Zillow plummeted 88 percent. But now, with activity resumed, Opendoor is reportedly in talks to go public through a merger with Social Capital Hedosophia Holdings Corp. II, a company that acquires other companies in order to take them public.

Sources: MSN Money, REALTOR® Magazine, C.A.R. Research & Economics, NPR, Inman News, Mortgage Professionals of America, HousingWire, Redfin

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Around the State: Wildfires continue to exacerbate COVID crisis

The massive wildfires spreading through California have exacerbated the coronavirus crisis, with experts worried both about thousands of evacuees gathering in crowded spaces and about people in evacuation zones choosing to remain at home and in danger due to fear of catching the virus. Doctors warn the bad air quality stemming from the wildfire smoke could make people both more vulnerable to contracting COVID-19 and more likely to contract a severe case.

The fires are also exacerbating another crisis: The rising number of California homeowners who can’t obtain or afford fire insurance. As wildfires have become more destructive and prevalent in recent years, some insurance companies have drastically raised premiums, while others have pulled out of the state altogether. For more information on this issue you can pass along to your clients, see C.A.R.’s Wildfire Resources Center.

As of yesterday at 10:06 p.m., cases in California numbered 768,507 and deaths had hit 14,614. California has the highest number of coronavirus cases in the country, ahead of Texas and Florida. Despite topping 14,000 deaths last week, California’s new coronavirus cases are slowing statewide, dropping substantially since late July when the state recorded nearly 11,000 cases in a single day. Turnaround times for coronavirus tests have improved as well.

Even with 25 counties allowed to reopen schools in the weeks ahead, many schools remain closed — particularly those in less affluent, majority-Latino neighborhoods. The California State University System announced last Thursday that it will continue with remote learning through spring of 2021. In the Bay Area, salons and gyms are opening at limited capacity, and Governor Newsom is reportedly getting closer to a decision on when and how to reopen Disneyland.

Sources: Los Angeles Times, The New York Times, The Mercury News, C.A.R., The San Francisco Chronicle, The Orange County Register
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Health Check-Up: COVID-19 life-threatening to people of all ages

A new study from Harvard University established that while originally thought to be dangerous only to older adults, “COVID-19 is a life-threatening disease in people of all ages.” The senior author of the research letter emphasized that while the proportion of young people who become so sick they need intensive care remains low, some young people will become seriously ill — and Black and Latinx people are overrepresented among that group.

Dr. Anthony Fauci, director of the National Institute of Health and Infectious Disease, has said a future vaccine could be only about 50 percent effective. But, like with the influenza vaccine, patients who still contract COVID-19 after getting the vaccine may get a milder version. Meanwhile, the world’s largest vaccine maker Serum Institute warned it could take until 2024 to get a dose of the vaccine to everyone who needs one, particularly if two doses are required.

Since the start of the pandemic, more Californians have reported experiencing mental health challenges like anxiety and depression. According to a recent report from the CDC, the prevalence of anxiety disorder symptoms have tripled this year nationwide. Black and Latinx people, disproportionately affected by COVID-19, are more likely to report anxiety or sadness. Women are also significantly more likely to struggle with mental health than men.

Sources: The New York Times, NPR, CNN, Public Policy Institute of California, The San Francisco Chronicle, Quartz