Agents owned their real estate data in the 1980s when Leslie Appleton-Young joined the California Association of Realtors as an economic researcher.
Home listings were published in thick volumes that resembled the phone book, and house hunters had to consult an agent to find a home.
“Then, it was about controlling the information,” Appleton-Young recalled recently. “That’s not the case now.”
Appleton-Young will retire at the end of 2020, ending her 36-year career at CAR, most of them as chief economist. She’s witnessed two market crashes, seen her industry struggle with and adapt to the rise of the Internet, and lately watched as the coronavirus cast a pall of uncertainty over the market.
In her final housing forecast, Appleton-Young was optimistic about chances for continued gains in home sales and prices in 2021 — provided there’s widespread vaccine use by June and new COVID-19 cases remain under control. If not, home sales and prices will plummet, she predicts.
We spoke with Appleton-Young about how the pandemic is affecting the housing market and how the industry has changed during her tenure.
Q: The housing market crashed when the pandemic first hit, then came roaring back. When will things get back to normal?
A: It will get back to normal partly when we have a vaccine and the pandemic is in the rear-view mirror. But in the foreseeable future, people will be buying and selling residences based on needs that have arisen out of the pandemic.
“I don’t have a home office, and I desperately need one. In fact, we need two home offices.”
“Oh, my goodness, my parents moved in with us.”
“Oh, I’m going to be homeschooling.”
There’s been a change in the type of housing that people need.
And then, there’s also been the opportunity to work from anywhere for some people. So we’ve seen the increase in sales in the resort areas that were typically second-home markets, and now they’re looking a little bit more like primary home markets because people are moving in with the anticipation of being there full-time.
Whatever normal we’re going to is not going to look like the market in the past because consumer preferences have changed.
Q: Will prices soften next year as mortgage forbearance ends?
A: There’s no way of knowing right now. If we get a vaccine, and the economy gets back moving full speed ahead, you’re not going to see anywhere close to the foreclosure phenomena that we had in 2008, ’09 and ’10.
The amount of equity that people have in their homes today is quite impressive. And you won’t lose your home to foreclosure. You’ll sell it. The conditions that created the Great Recession and the aftermath in the housing sector — we had almost a 60% drop in the statewide median home price — are just not in play right now.
From what I’m reading, we should have a vaccine somewhere in the first half of 2021. I think that will be a game-changer in terms of people feeling more comfortable being out in public.
Q: How has real estate changed since you joined CAR in 1984?
A: The digitization of the transaction. The movement from the Realtor as the gatekeeper of information to the facilitator of the transaction. The ubiquity of data.
When I started, CAR was the only source for information on the existing single-family housing market in California. And now there’s multiple sources. Consumers could only get information on what houses were for sale from their agent. And there was a book that was published every week. And now it’s instantaneous information available through agents, brokers, portals, all of that.
I would say the entrance of kind of the Wall Street money, companies from outside, the tech companies that have gotten into real estate has been a really big change.
Back in the ’90s, we used to talk about disintermediation in this business all the time. We would talk about the travel agents and the commoditization of what Realtors were doing.
But selling a house is not like selling an airplane ticket. So one of the things that hasn’t changed is the great, great majority — over 90% of the transactions — are facilitated by a Realtor today. Many other industries have not fared so well.
Q: You forecast a “soft landing” for the housing market in 2006. It turned out to be the biggest crash since the Great Depression. Was that your biggest forecasting blooper?
A: I think just about everybody got it wrong, except for a few people who were in “The Big Short.”
At that time, we were tracking the exotic mortgages, but we weren’t taking it to the next step and tracing it through the global financial system and through Wall Street. And most people weren’t.
Ten years later, we’re looking back and saying, how did we get from there to here? Because no one at that time thought you would see the kind of recovery in prices that we have seen since then.
Q: What lessons have you learned in your 36 years with CAR?
A: For buyers and sellers, it’s just how important it is to have a plan, have a realistic goal in terms of what you can afford and to not miss an opportunity to start to build equity really as soon as you can.
The market goes up, and the market goes down. But kind of looking long term, this is how you create intergenerational wealth, is through homeownership. I don’t think the value of homeownership has changed. I think people’s desire for homeownership is as high as it ever was. That’s pretty amazing.
Q: We’ve been thinking a lot about social justice and housing inequality this year. Has there been any improvement in housing inequality in your tenure?
A: Not enough. There’s still a huge gap between white homeownership and Black homeownership and Hispanic homeownership.
I will say the response of the industry, the National Association of Realtors and CAR, has been absolutely amazing. We have a Diversity Equity and Inclusion Officer. There’s a huge recognition that more needs to be done as quickly as possible.
Progress has been slow. We have a lot of work to do to close that homeownership gap and really address the inequalities and the ability to get loans and how appraisals are done.
LESLIE APPLETON-YOUNG
- Title: Chief Economist
- Organization: California Association of Realtors
- Residence: Pasadena until March; she’s living now in Sarasota, Fla.
- Education: Bachelor’s degree in economics, UC Berkeley; master’s degree, University of Pennsylvania
- Previous jobs: Center for Responsible Lending, Federal Reserve Bank of San Francisco
FIVE FACTS ABOUT LESLIE APPLETON-YOUNG
- An avid fan of Soul Cycle/Peloton
- Saw “Hamilton” six times in three cities
- A big Frank Sinatra fan
- Does calligraphy
- Plans to spend more time with family – especially her grandchild, Izzy
Source: Orange County Register
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