It has only 28 days since our last publication but what a month it’s been. A long awaited and hotly contested stimulus bill was signed (that includes rent relief!), the results of two runoff elections in Georgia have shifted the balance of power in the U.S. Senate, vaccine distribution has begun nationwide, and we successfully survived 2020! However, the optimism that comes with each new year was quickly challenged by reports of the Capitol being stormed, resulting in what felt like a watershed moment in American history. Let’s hope all Americans use this as an opportunity to reflect on where we stand as a nation and commit to a more unified future.
Headlines
- December Jobs Report - Hopes of a job market recovery were quickly dashed as the US economy shed 140,000 jobs in December. The unemployment rate remained steady at 6.7%, but the data was far worse than economists predicted. We remain down approximately 9.8 million jobs since February and the incoming administration will have their hands full in addressing a jobs recovery that has stalled.
- Jobless Claims - 787,000 Americans filed for first time unemployment benefits in the week ending January 2nd. This figure represents a slight decrease from the previous week but claim numbers are traditionally volatile around the holidays. 5.1 million people are still receiving continued benefits and new claims are roughly four times what they were this time last year. Locally, Utah claims spiked again with 5,588 new filings. Continuing claims rose to 27,292 last week after 34 weeks of declines, and although well below our pandemic high of 127,532 filings, these figures are almost triple what we saw during the great recession.
- Runoff Elections - This week brought the results from two Georgia runoff elections where both Democratic candidates Jon Ossoff and Raphael Warnock emerged victorious. This was especially meaningful because it gives the Democrats control of the Senate (after accounting for VP-elect Kamala Harris’s tie breaking vote) in addition to the House and Presidency following the inauguration of Joe Biden on January 20th. This will give the president elect a considerably smoother path to confirming his nominees and implementing his agenda which could include additional stimulus or an extension of the existing eviction moratorium.
Stimulus Bill - What we know and what we don’t
As you may have read in our last update, the new COVID-19 Stimulus bill was passed and signed into law last week. Like any good piece of legislation, there are many unanswered questions so we will take this opportunity to update you on what we know as of today.
Modified LHAP Program
What we know: For 2021, all states, including Utah, will be getting $200 million for rental assistance. The funds are authorized for rent payments, utility expenses, arrearages and “other housing related expenses”. The eligibility requirements have changed and some tenants will no longer qualify. Funds will be sent to the landlord (PM company) and must be applied to the tenant’s ledger.
Awaiting clarification: We are unsure what is covered under “other expenses”, but interpret that to mean other amounts owed under the lease agreement. Funds are likely to be disbursed through the DWS and/or the LHAP program and the claim submission process should be similar to what we did in 2020. Landlords should be able to file for benefits on behalf of their tenants so long as eligibility criteria is met and the tenant can attest to the required information.
Impact: This is a huge win for both landlords and tenants. When you consider that Utah spent roughly $23.5 million in rental assistance in 2020, that means we have almost ten times the funds available for rent relief in 2021. Assuming we do not face any hurdles with eligibility criteria, this will drastically reduce non payment issues in 2021. As such, all occupied units represent a reduced risk of default and prioritizing occupancy via lease renewals will be a winning strategy in the new year.
CDC Eviction Moratorium
What we know: The CDC Order halting evictions for non-payment has been extended through the end of January. Under that order, tenants must still attempt partial payments and use their best efforts to get rental assistance. The moratorium only applies to non-payment evictions, so end of term, lease violation or nuisance evictions can still proceed as usual.
Awaiting clarification: We do not know if the moratorium will be extended beyond January 31st. It is definitely possible considering what we’ve seen this past year, and especially so, with plentiful rent relief funds available.
Impact: There is now no excuse for non payment for tenants who submit a CDC declaration. We will continue to serve pay or vacate notices and educate those struggling about the relief options available to them.
Utah Real Estate Market
Another month, another record high median sold price for Salt Lake, Utah and Davis counties as inventory levels dip. In fact, the median sold price for a single family home in those counties has skyrocketed 16.3% in just the last 12 months. Translating that into real dollars, anyone who purchased a home at the median sold price in December of 2019 now has over $60,000 in additional equity via price appreciation.
Median Sold Price
November: $428,121
December: $435,000
% Change: Up 1.6%
Sold Count
October: 2,373
November: 2,076
December: 2,021
% Change: Down 2.6%
Average Number of Active Listings
November: 1,644
December: 1,227 (12/31)
% Change: Down 25.4%
Industry Updates
- ESA’s - That’s “emotional support animals'' for those not in the industry. There is a lot of confusion and misinformation surrounding ESA’s, what’s legally required of a landlord, and how to avoid discrimination issues. Learn more about emotional support animals here.
- Multi family transaction volume - After record multifamily transaction volume in 2019, COVID-19 caused deal flow to plummet in 2020. Silver lining? Sales picked up in Q3, but total volume was still 51.1% below the same period from a year ago.
