September 2020

A Tale of Two Cities

With the current National unemployment rate at 8.4%, and so much uncertainty regarding the economy, COVID-19 and the election, it is hard to understand why the stock market is still at record highs? We are seeing the same dichotomy in the housing markets. The National Association of Realtors reported that August was the third straight month that existing home sales moved upward. Total existing home sales rose 2.4% from July to a seasonally adjusted rate of 6.00 million. Year over year sales were up 10.5% from August of 2019. This represents that highest annualized sales rate since 2006!

Despite the Pandemic, the eagerness to purchase a home has been accelerated by historically low mortgage rates. Mortgage applications are up 22% over last year. A report by Redfin showed that lower interest rates have given buyers an additional 6.9% of purchasing power. The U.S 30-year mortgage rate has hit nine record lows in 2020 alone. Home prices have also been appreciating at a record pace amid historically low supply. The NAR found that the median home price in August was $310,600 up 11.4% from a year ago. The median home price in California broke $700,000 for the first time which represented an annual increase of 14.5%. “Housing demand is robust, but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities”, commented NAR’s chief economist Lawrence Yun. At the end of August, the supply of inventory dwindled down to just 3.3 months. This is the lowest level on record according to government data dating back to 1963.

On the flip side of this bifurcated market lies homeowners who are seriously delinquent on their mortgages. According to mortgage technology firm Black Knight, approximately 3.7 million borrowers are currently in mortgage forbearance programs. This accounts for about 7% of all active mortgages. These plans allow borrowers to delay monthly mortgage payments for at least three months, and in some cases up to one year. According to CoreLogic, serious delinquencies could double by early 2022, barring further government support. During the Great Recession close to 10 million Americans lost their homes through foreclosures or short-sales. This time around, numbers are likely to be much lower as borrowers have significantly more equity in their homes, and many states and federal agencies have put foreclosure moratoriums in place through the end of this year.

We are watching these unprecedented diverging trends very closely.

Edward M. Aloe
Founder and CEO

So proud of our CALCAP Real Estate Advisors, Inc. Team! We made the Inc. Magazine's list of the 5000 Fastest-Growing Private Companies in America! CALCAP ranked No. 774 overall and No. 26 in our industry!
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Latest Headlines...

Rising student loan debt could impact future Millennial homeownership

In the second quarter of 2020 nearly 11 million households fell behind on their rent or mortgages – however nearly triple that number, approximately 30 million individuals, missed at least one student loan payment, according to a recent report from the Mortgage Bankers Association’s Research Institute for Housing America.
The data compiled from the Understanding America Study was the result of a panel survey tailored to study the impact of the pandemic specifically on mortgagors, renters and student loan borrowers.

NMHC Rent Payment Tracker: 90.1% of Apartment Households Paid Rent by Sept. 20

This marks a 1.7 percentage point drop from the share that paid rent by Sept. 20, 2019.

The National Multifamily Housing Council’s Rent Payment Tracker shows that 90.1% of apartment households had made a full or partial rent payment by Sept. 20, out of a sample of 11.4 million units of professionally managed market rate apartment units.
This marks a 1.7 percentage point decrease from the share of households that paid rent by Sept. 20, 2019, a difference of 192,936. One month ago, 90% of households were able to make a full or partial rent payment by Aug. 20.

Rent payments collected in August tick down

In New York, 64.5% of households made rent payments

“Over the past few months apartment residents have largely been able to meet their housing obligations,” David Schwartz, NMHC chair and CEO said in a statement. “In no small part, this is due to the enhanced unemployment benefits enacted under the CARES Act and significant steps by apartment owners and operators to help their residents.”
“These unemployment benefits that have proven so important to so many households have now lapsed, meaning greater financial distress for millions and the potential worsening of America’s housing affordability crisis,” Schwartz said.

On the lighter side....
About CALCAP Advisors
California Capital Real Estate Advisors, Inc., and its affiliate entities (CALCAP Asset Management I & II, CALCAP Properties, CALCAP Lending, and CALCAP Senior Healthcare I, collectively known as "CALCAP"), is a California based investment company founded and 2008 and headquartered in Pasadena, California. The Company sponsors alternative real estate investment opportunities focused on demographically driven housing. CALCAP has been able to consistently provide both individual and institutional investors with outstanding returns over the last 10 years. The Company's core strategies look to actively create alpha for investors while managing risk. CALCAP currently has over $350mm in Assets Under Management. To learn more visit
Social Mission
CALCAP has created the CALCAP CARES program to encourage employees to find a way to give back to the neighborhoods where we invest. CALCAP has created "GiveTime4Autism" as its initial program which will allow employees the ability to donate unused vacation and sick days for a very worthy cause.
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