The Indicator from Planet Money - The Coronavirus Housing Boom

Most of the U.S. economy is in crisis: Unemployment and bankruptcies are skyrocketing, and millions aren't paying rent. But home sales are skyrocketing, too. In fact, they're rising at a record pace.

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Content Keywords: Tanya Zapata San Francisco daughter move school
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Tanya Zapata and her husband moved to San Francisco about 7 years ago, they both work in text. So it was a smart professional move and they both grew up in big cities and they like City life. I just love, you know, like the the the Practical life of the city and I like walking to the supermarket walking to places being able to have all of the wonderful things that a city which is to go to the theater museums on top of knowing that we wanted also to be close to you know, I like anything that was related to to work Tanya and her husband found a really nice apartment. It was in a high-rise in downtown San Francisco two bedrooms 1400 square feet. That sounds great live in big cities. But yes, it does. Oh my gosh, I know and and that was enough space for them and their seven-year-old daughter it was

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really expensive but their daughter's school was a half a block away in the city was at their feet every San Francisco 1400 square feet is kind of like a palace really but Tanya says after coronavirus closed the city down there Palace started to seem a little less palatial, you know, I'd once you have to be in your apartment 24/7

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You know you sort of start saying how small this piece is, especially when you have a child things will start to kind of get a smaller on you and I was like your Wolf start you kind of get closer and closer as if they were moving museums restaurants theaters. They were all closed onion her husband were both working from home and it seems like their daughter school is not going to reopen in the fall and also tie and her husband are expecting another child. So they started to think we're paying all this rent and it seems like we're dealing with all of the hard part of City Life and not getting any of the benefits. So why are we here as it turns out millions of people all across the country are asking themselves. This exact question right now close to an exodus is the CEO of Redfin in online realtor when the economic Fallout of covid-19 first hit housing demand crash.

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And he assumed that they were in for some lean years, but that's not what happened at all hiring hundreds of people and we're saying there's unemployment. There's people protesting in the streets of social unrest there's a second surge of infections. Should we really hire more real estate agents?

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An answer so far has been yes because there's just so much demand. There's so much demand website is up 40% and Realtors are so overbooked that they are actually turning customers away, which is pretty mind-blowing if you consider the unemployment rate in the US right now is the worst it's been since the Great Depression. This is the indicator from Planet Money. I'm Stacey Vanek Smith Garcia on the show coronavirus housing. Boom who is buying houses and also why and how this is even possible and a time when the tire country is in terrible economic crisis.

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Glenn kelman has been the CEO of red fin for 15 years and he says for all that time people looking for a home always put this one thing as their top priority rich-poor urban-rural people buying homes. Always had this one big question. What about the commute the commute to work? Yes, it's sold real estate Mantra right time to Memorial location location location, most of the time those locations where big cities were most of the jobs were concentrated and as a result buying a home in these cities had become a kind of Bloodsport the New York real estate market is San Francisco real estate market. These were insane Mark that's where they were bidding wars with 20 30 40 buyers different world and back over the last 4 years housing sales have been a little sluggish and there's a bunch of speculation about why Millennials weren't buying houses and what was going on that has changed.

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National Association of Realtors announced just today that from May to June just as a covid-19 crisis was bearing down on businesses and millions of people losing their jobs pending home sales Rose more than 16% That's the biggest monthly rise on record that is crazy to me because you know, like one in every five Americans is unemployment, like blowing my mind that homeownership rates might also be going up with it. There's a kind of a real estate boom, but it sounds like there is well, it's white-collar professionals were able to work from home in some ways. This is a sign that the economy is just officially split into you have people who were worried about unemployment benefits running out and at the same time you have other people who are able to work from home and thinking about the home all the time and that's where they want to spend their money.

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These are the people who are really benefiting now because even if the economy is going through a crisis for them, it's not a crisis. It's just a sale for the people who are lucky enough to have kept their jobs a huge number of them are working from home. Now that's changed everything the traffic to listings that are in town two populations of less than 50,000 people is up 87% In other words. It's no longer location location location. It's more like space space space and Glenn says, he's also seeing a big migration of people out of big cities like New York La Chicago and San Francisco to smaller cities like Palm Springs Tucson, Austin Grand Rapids and Nashville and those tiny San Francisco and New York apartments that had 40 people in a bidding war people are leaving those apartments in droves. It's Tanya Zapata and her husband noticed this a couple of months ago. A lot of people were moving out of their San Francisco high rise.

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I started seeing a lot of people moving out of the building and planning her husband started to think maybe they have the right idea and they started looking around on the internet and then one day my husband saw this house and not that which is in the middle of Vineyard and and the house is so beautiful cuz you have Vineyards all around the house and has space with fruit trees and also, you know, I got raised beds for for growing your own vegetables.

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So we were like well, this is amazing. But it had more than three times the amount of space Also their parents could move in with them that this big yard and I'll just land for their daughter to run around that Glenn. Kehlmann Co Redfin, he says people are making Tanya's calculation everyday now paying the same amount of money that they were paying it then City but getting way more space for devil. He is seeing a lot of requests for extra bedrooms for parents and grandparents and request for extra rooms for offices and Home Gyms. And now with so many people investing in homes and lives that are pretty far away from their offices Glen thinks we will never go back to work the way that we used to in stock. He says this is what he found it Redfin when he surveyed his staff about coming back to the office.

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Because we have an office. There's a fridge stocked with Diet Cokes and baskets of almonds and chocolates and won't you come back and eat all this food and the answer was no 14% of our workers said they want to work at least four days a week in the office. And the rest said I want to come in only occasionally. I want to stay at home. So we will ask again before breaking our lease, but at some point you just have to wonder why do we have four floors in downtown Seattle? Meanwhile, is that she and her family have been settling into their new life in wine country and so far she is not miss the city at all. I remember the day that we moved here. We're getting out of the car and my daughter asked me do I need to get out the car with a mask? And he'll know you don't have to go home now.

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I don't know. I mean, we'll see it. We'll see how things turn out within the year you're going to have to but so far. I'm so happy. So happy that we moved.

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This episode of the indicator was produced by Camille Peterson fact-checked by Britney Cronin. The indicator is edited by Patty Hearst and is a production of NPR.
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