All Forum Posts by: Mark Rogers

Pulaski County single family residential sales for the week of May 10-16 held fairly steady. Sales volume was down 57% from 2019, but houses are selling at a median of 11 days on market for 98.2% of list price. Inventory remained at a very low 1.2 months.

I am deeply troubled by the latest HEROES Act and hope that it will not survive in its present form. Section 110203 beginning on page 961 may be one of the biggest land grabs and transfers of wealth in recent memory and looks like it is forcing Mom & Pop landlords to pay to house millions without meaningful recourse.  It also creates a very real risk that mortgage lenders will pull back from the market.  For many areas of the country, the real estate market is strong and is poised to lead a recovery, as long as lenders don't pull back and decimate demand. If lenders pull out, the next Great Recession could easily become the next Great Depression. The HUGE expansion of the definition of a "Covered Dwelling" is problematic and amounts to a seizing of property and an interfering with the right to contract of Mom & Pops landlords.  Under this proposed Act, most of our houses would be considered a "Covered Dwelling," so our renters could quit making payments, without penalty.  If you can't collect rent for a year, you have a cause of action for rent (but no penalties) against an insolvent renter with no assets.  Even if you ruin your ability to borrow more by seeking forbearance, you still have to pay the principal, interest, property taxes, and insurance, and other expenses to your lender, regardless of your ability to collect rent during a time when the government would not let you evict. 

I apologize for going so negative on this one. This just looks too much like a third world country seizing a mine, only this time, it's the US seizing our houses and seriously undermining our ability to keep our promises to repay our lenders by preventing us from renting our houses to people who will pay rent. Many of us have deep reserves and will survive, but a seizure by any other name is still deeply disturbing.  

Some form of the law will likely be passed by Friday.  If the current version strikes you as a bad idea, please consider contacting your representatives.  

Thanks,
Mark

On Friday, May 8, the Arkansas Supreme Court announced that "beginning May 18, 2020, Arkansas courts in all divisions shall resume conducting hearings with certain measures to combat the spread of the disease to the public . . . ."  The Order also stated that "There is no restriction on the type of case for which hearings shall resume."  

The Pulaski County Courts have not yet rescinded their order stating that they would not be issuing Writs of Possession, but the Supreme Court order is a good first step.  

Link to Ark Supreme Court Order

More of the same for Pulaski County single family residential sales for the week of May 3-9. Sales volume was down 50% from 2019, but houses are selling at a median of 11 days on market for 98.4% of list price. Inventory remained at a very low 1.2 months.

In another very positive sign, real estate showings in Arkansas surpassed 2019 numbers for the first time since the pandemic restrictions. Arkansas showings plunged after March 17 and were tracking at around 60% below 2019 numbers. Showings began a sharp rise after April 12, surpassed 2019 numbers on May 3, and ended the week 19.2% higher than 2019 numbers.

Probably not yet, and it will be a County by County issue.   In Pulaski County, only one Judge will issue Writs of Possession at the moment, and I don't believe that the Sheriff's Office will execute the Writs yet.  I have not heard any indication of when the Pulaski County Judges will start issuing Writs again or when the Sheriff's Office will resume enforcing them.  Hopefully, long before the July 25 date that will still apply to federally covered dwellings.

Pulaski County numbers on single family residential sales for April 26 - May 2 was more of the same and remains a strong seller's market. Volume is down 53% from this time last year, but houses are selling at a median of 19 days on market at 97.9% of list price, and inventory has dipped to a crazy low of 1.2 months.

If you file a new case in Arkansas between now and July 25, 2020 seeking an eviction, you "are required to affirmatively plead that the property that is the subject of the eviction dispute is not a covered dwelling under the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act)".  IN RE RESPONSE TO THE COVID-19 PANDEMIC—EVICTION FILINGS, 2020 Ark. 166 (April 28, 2020).

Covered dwellings  are rental units in properties: (1) that participate in federal assistance programs, (2) are subject to a “federally backed mortgage loan,” or (3) are subject to a “federally backed multifamily mortgage loan.  A “federally backed mortgage loan” is a single-family (1-4 units) residential mortgage owned or securitized by Fannie Mae or Freddie Mac or insured, guaranteed, or otherwise assisted by the federal government.  If you have a 30-year-fixed on the property that has been sold into the secondary market, it is almost certainly a "covered dwelling." 

https://opinions.arcourts.gov/ark/supremecourt/en/470061/1/document.do

Pulaski County numbers on single family residential sales for April 19-25 continued the trend of low volume and a strong seller's market. Volume is down 55% from this time last year, but houses are selling at a median of 11.5 days on market at 98.6% of list price, and inventory has dipped to 1.3 months. In a positive sign last week, FHFA gave a little relief to mortgage servicers. It falls far short of what Ginnie Mae has done but is a step in the right direction.

@Hadar Orkibi, good catch!  Series 1 (blue) is data from 2019 and Series 2 (red) is data from 2020.  

Pulaski County numbers on single family residential sales for April 12-18 showed strength and continued to benefit from low inventory. There are still concerns that FHFA's refusal to help bear some of the harm that its policies are inflicting on mortgage servicers will continue to restrict funding available to home buyers and evaporate a meaningful percentage of demand. Real estate is poised to help lead a recovery in many markets if federal policies don't scare off lenders.