Bay Area California Real Estate Blog and NewsRecently posted or modified blog postshttps://www.bayareamodern.com/blog/Copyright BayAreaModern.com2024-03-14T10:12:00-07:00tag:bayareamodern.com,2012-09-20:33473Why Today’s Seller’s Market Is Good for Your Bottom Line<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240311/20240314-Why-Today-s-Seller-s-Market-Is-Good-for-Your-Bottom-Line.png" alt="" class="img-thumbnail mx-auto d-block" />
Thinking about <a href="https://www.mykcm.com/2024/03/06/why-access-is-so-important-when-selling-your-house/" rel="noopener noreferrer" target="_blank">selling your house</a> and wondering if now’s a good time to do it? Here’s what you need to know. Even though the number of <a href="https://www.mykcm.com/2024/02/27/why-todays-housing-supply-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">homes for sale</a> has been growing this year, there still aren’t enough homes on the market for all the buyers who want to buy.
So, what does that mean for you? To keep it simple, it means it’s still a seller’s market. Here’s how it works:
A neutral market is when supply and demand is balanced. Basically, there are enough homes to meet buyer demand based on the current sales pace, and home prices hold fairly steady.
A buyer’s market is when there are more homes for sale than there are buyers. When that happens, buyers have more negotiation power because sellers are willing to make compromises to close the deal. In a buyer’s market, sellers may have to do price cuts to re-ignite interest in their home, and prices may go down. But we haven’t seen this for years since there are so few homes available to buy.
In a seller’s market, it’s just the opposite. When the supply of homes for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. That creates increased competition among purchasers which can lead to more bidding wars. And if buyers know they may be entering a bidding war, they’re going to do their best to submit a very attractive offer upfront. This could drive the final sale price of your house up.
The graph below uses <a href="https://www.nar.realtor/newsroom/existing-home-sales-rose-3-1-in-january" rel="noopener noreferrer" target="_blank">data</a> from the National Association of Realtors to show just how deep into seller’s market territory we still are today:
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240313/20240314-Months-Inventory-of-Homes-for-Sale.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240313/20240314-Months-Inventory-of-Homes-for-Sale.png" alt="a screenshot of a chart" /></a>
What Does This Mean for You?
The market is still working in your favor. If you lean on <a href="https://www.mykcm.com/2024/02/28/why-you-want-an-agents-advice-for-your-move/" rel="noopener noreferrer" target="_blank">an agent</a> for advice on how to get your house <a href="https://www.mykcm.com/2024/02/19/its-time-to-prepare-your-house-for-a-spring-listing/" rel="noopener noreferrer" target="_blank">list ready</a> and how to price it competitively, it should get a lot of attention from eager buyers. That means you’ll likely get multiple offers and see your house <a href="https://www.mykcm.com/2024/02/06/houses-are-still-selling-fast/" rel="noopener noreferrer" target="_blank">sell quickly</a> and for top dollar. As a recent article from Ramsey Solutions <a href="https://www.ramseysolutions.com/real-estate/housing-market-forecast" rel="noopener noreferrer" target="_blank">explains</a>:
“A seller’s market is when demand for homes is higher than the supply of homes. And that’s still the case right now. If you’re planning to sell your house, you can expect to sell it fairly quickly for close to your asking price—as long as your asking price is realistic for the current market.”
Bottom Line
Today’s housing market still favors sellers. If you’re ready to sell your house, let’s connect so you can start making your moves.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-03-14T10:10:28-07:002024-03-14T10:12:00-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:33384Finding Your Perfect Bay Area Home in a Fixer Upper<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240308/Header-Image-202302-SG.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re trying to <a href="https://www.mykcm.com/2024/02/26/the-truth-about-down-payments/" rel="noopener noreferrer" target="_blank">buy a home</a> and are having a hard time finding one you can afford, it may be time to consider a fixer-upper. That’s a house that needs a little elbow grease or some updates, but has good bones. Fixer-uppers can be a really great option if you’re looking to <a href="https://www.mykcm.com/2024/02/20/strategic-tips-for-buying-your-first-home/" rel="noopener noreferrer" target="_blank">break into</a> the housing market or want to stretch your budget further. <a href="https://www.nerdwallet.com/article/mortgages/buying-a-fixer-upper" rel="noopener noreferrer" target="_blank">According</a> to NerdWallet:
“Buying a fixer-upper can provide a path to homeownership for first-time home buyers or a way for repeat buyers to afford a larger home or a better neighborhood. With the relatively low inventory of homes for sale these days, a move-in ready home can be hard to find, especially if you’re on a budget.”
Basically, since the number of homes for sale is still so low, if you’re only willing to tour homes that have all your dream features, you may be cutting down your options too much and making it harder on yourself than necessary. It may be time to cast a wider net.
Sometimes the perfect home is the one you perfect after buying it.
Here’s some information that can help you pinpoint what you truly need so you can be strategic in your <a href="https://www.mykcm.com/2023/12/08/your-homebuying-adventure-infographic/" rel="noopener noreferrer" target="_blank">home search</a>. First, make a list of all the features you want in a home. From there, work to break those features into categories like this:
Must-Haves - If a house doesn’t have these features, it won’t work for you and your lifestyle.
Nice-To-Haves - These are features you’d love to have but can live without. Nice-to-haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of these, it’s a contender.
Dream State - This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner.
Once you’ve sorted your list in a way that works for you, share it with your <a href="https://www.mykcm.com/2024/02/28/why-you-want-an-agents-advice-for-your-move/" rel="noopener noreferrer" target="_blank">real estate agent</a>. They’ll help you find homes that deliver on your top needs right now and have the potential to be your dream home with a little bit of sweat equity. Lean on their expertise as you think through what’s possible, what features are easy to change or add, and how to make it happen. <a href="https://www.progressive.com/answers/buying-a-fixer-upper/" rel="noopener noreferrer" target="_blank">According</a> to Progressive:
“Many real estate agents specialize in finding fixer-uppers and have a network of inspectors, contractors, electricians, and the like.”
Your agent can also offer advice on which upgrades and renovations will set you up to get the greatest return on your investment if you ever decide to sell down the line.
Bottom Line
If you haven’t found a home you love that’s in your budget, it may be worth thinking through all your options, including fixer-uppers. Sometimes the perfect home for you is the one you perfect after buying it. To see what’s available in our area, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
<a href="https://www.mykcm.com/blog" class="router-link-active"></a>2024-03-11T13:34:45-07:002024-03-11T13:36:47-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:33219Why We Aren't Headed for a Housing Crash<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229-Why-We-re-Not-Headed-for-a-Housing-Crash.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re holding out hope that the housing market is going to crash and bring <a href="https://www.mykcm.com/2024/02/15/dont-let-the-latest-home-price-headlines-confuse-you/" rel="noopener noreferrer" target="_blank">home prices</a> back down, here’s a look at what the data shows. And spoiler alert: that’s not in the cards. Instead, experts say <a href="https://www.mykcm.com/2024/02/22/expert-home-price-forecasts-for-2024-revised-up/" rel="noopener noreferrer" target="_blank">home prices</a> are going to keep going up.
Today’s market is very different than it was before the housing crash in 2008. Here’s why.
It’s Harder To Get a Loan Now – and That’s Actually a Good Thing
It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one.
Things are different today. Homebuyers face increasingly higher standards from mortgage companies. The graph below uses <a href="https://www.mba.org/news-and-research/newsroom/news/2024/02/09/mortgage-credit-availability-increased-in-january" rel="noopener noreferrer" target="_blank">data</a> from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is:
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229-Lending-Regulations-Are-Steady.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229-Lending-Regulations-Are-Steady.png" alt="a graph showing a line going up" /></a>
The peak in the graph shows that, back then, lending standards weren’t as strict as they are now. That means lending institutions took on much greater risk in both the person and the mortgage products offered around the crash. That led to mass defaults and a flood of <a href="https://www.mykcm.com/2024/01/31/foreclosure-activity-is-still-lower-than-the-norm/" rel="noopener noreferrer" target="_blank">foreclosures</a> coming onto the market.
There Are Far Fewer Homes for Sale Today, so Prices Won’t Crash
Because there were too many homes for sale during the housing crisis (many of which were short sales and <a href="https://www.mykcm.com/2024/02/02/theres-no-foreclosure-wave-in-sight-infographic/" rel="noopener noreferrer" target="_blank">foreclosures</a>), that caused home prices to fall dramatically. But today, there’s an inventory shortage – not a surplus.
The graph below uses data from the <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank">National Association of Realtors</a> (NAR) and the <a href="https://fred.stlouisfed.org/series/HOSSUPUSM673N" rel="noopener noreferrer" target="_blank">Federal Reserve</a> to show how the months’ supply of homes available now (shown in blue) compares to the crash (shown in red):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229-Housing-Supply-Is-Lower-Than-Before.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229-Housing-Supply-Is-Lower-Than-Before.png" alt="a graph of a number of people" /></a>
Today, unsold inventory sits at just a <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-01-2024-overview-2024-02-22.pdf" rel="noopener noreferrer" target="_blank">3.0-months’</a> supply. That’s compared to the peak of 10.4 month’s supply back in 2008. That means there’s nowhere near enough inventory on the market for home prices to come crashing down like they did back then.
People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s
Back in the lead up to the housing crash, many homeowners were borrowing against the equity in their homes to finance new cars, boats, and vacations. So, when prices started to fall, as inventory rose too high, many of those homeowners found themselves underwater.
But today, homeowners are a lot more cautious. Even though prices have skyrocketed in the past few years, homeowners aren’t tapping into their equity the way they did back then.
Black Knight <a href="https://www.blackknightinc.com/wp-content/uploads/2024/02/ICE_MM_FEB2024_Report.pdf" rel="noopener noreferrer" target="_blank">reports</a> that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has actually reached an all-time high:
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229Tappable-Equity-at-an-All-Time-High.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240228/20240229Tappable-Equity-at-an-All-Time-High.png" alt="a graph of a growing graph" /></a>
That means, as a whole, homeowners have more equity available than ever before. And that’s great. Homeowners are in a much stronger position today than in the early 2000s. That same report from Black Knight goes on to <a href="https://www.blackknightinc.com/wp-content/uploads/2024/02/ICE_MM_FEB2024_Report.pdf" rel="noopener noreferrer" target="_blank">explain</a>:
“Only 1.1% of mortgage holders (582K) ended the year underwater, down from 1.5% (807K) at this time last year.”
And since homeowners are on more solid footing today, they’ll have options to avoid foreclosure. That limits the number of distressed properties coming onto the market. And without a flood of inventory, prices won’t come tumbling down.
Bottom Line
While you may be hoping for something that brings prices down, that’s not what the data tells us is going to happen. The most current research clearly shows that today’s market is nothing like it was last time.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-03-01T12:14:32-07:002024-03-01T12:16:02-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:33153The Truth About Down Payments<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240222/20240226-The-Truth-About-Down-Payments.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re planning to <a href="https://www.mykcm.com/2024/01/19/key-terms-every-homebuyer-should-learn-infographic/" rel="noopener noreferrer" target="_blank">buy</a> your first home, saving up for all the costs involved can feel daunting, especially when it comes to the <a href="https://www.mykcm.com/2023/12/15/what-you-need-to-know-about-down-payments-infographic/" rel="noopener noreferrer" target="_blank">down payment</a>. That might be because you’ve heard you need to save 20% of the home’s price to put down. Well, that isn’t necessarily the case.
Unless specified by your loan type or lender, it’s typically not required to put 20% down. That means you could be closer to your <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">homebuying dream</a> than you realize.
As The Mortgage Reports <a href="https://themortgagereports.com/18520/20-percent-downpayment-risk-mortgage-interest-rate" rel="noopener noreferrer" target="_blank">says</a>:
“Although putting down 20% to avoid mortgage insurance is wise if affordable, it’s a myth that this is always necessary. In fact, most people opt for a much lower down payment.”
<a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">According</a> to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, for all homebuyers today it’s only 15%. And it’s even lower for first-time homebuyers at just 8% (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240222/20240226-Today-s-Median-Down-Payment-Is-Less-Than-20-.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240222/20240226-Today-s-Median-Down-Payment-Is-Less-Than-20-.png" alt="a graph of a number of blue squares" /></a>
The big takeaway? You may not need to save as much as you originally thought.
Learn About Resources That Can Help You Toward Your Goal
<a href="https://downpaymentresource.com/" rel="noopener noreferrer" target="_blank">According</a> to Down Payment Resource, there are also over 2,000 homebuyer assistance programs in the U.S., and many of them are intended to help with down payments.
Plus, there are loan options that can help too. For example, <a href="https://www.hud.gov/buying/loans" rel="noopener noreferrer" target="_blank">FHA loans</a> offer down payments as low as <a href="https://www.benefits.gov/benefit/504" rel="noopener noreferrer" target="_blank">3.5%</a>, while <a href="https://www.va.gov/housing-assistance/home-loans/loan-types/" rel="noopener noreferrer" target="_blank">VA</a> and <a href="https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program" rel="noopener noreferrer" target="_blank">USDA loans</a> have no down payment requirements for qualified applicants.
With so many resources available to help with your down payment, the best way to find what you qualify for is by consulting with your loan officer or broker. They know about local grants and loan programs that may help you out.
Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, lean on the professionals to find resources that can help you make your dreams a reality. If you put your plans on hold until you’ve saved up 20%, it may actually cost you in the long run. <a href="https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/down-payment.html" rel="noopener noreferrer" target="_blank">According</a> to U.S. Bank:
“. . . there are plenty of reasons why it might not be possible. For some, waiting to save up 20% for a down payment may “cost” too much time. While you’re saving for your down payment and paying rent, the price of your future home may go up.”
Home prices are expected to <a href="https://www.mykcm.com/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/" rel="noopener noreferrer" target="_blank">keep appreciating</a> over the next 5 years – meaning your future home will likely go up in price the longer you wait. If you’re able to use these resources to buy now, that future price growth will help you build equity, rather than cost you more.
Bottom Line
Keep in mind that you don't always need a 20% down payment to buy a <a href="https://www.mykcm.com/2024/02/14/why-so-many-people-fall-in-love-with-homeownership/" rel="noopener noreferrer" target="_blank">home</a>. If you're looking to make a move this year, let’s connect to start the conversation about your homebuying goals.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-02-27T12:04:47-07:002024-02-27T12:06:35-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:33073Some Experts Say Mortgage Rates May Fall Below 6% Later This Year<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240220/20240221-Some-Experts-Say-Mortgage-Rates-May-Fall-Below-6-Later-This-Year.png" alt="" class="img-thumbnail mx-auto d-block" />
There’s a lot of confusion in the market about what’s happening with day-to-day movement in mortgage rates right now, but here’s what you really need to know: compared to the near 8% peak last fall, <a href="https://www.mykcm.com/2024/01/26/why-its-more-affordable-to-buy-a-home-this-year-infographic/" rel="noopener noreferrer" target="_blank">mortgage rates</a> have trended down overall.
And if you’re looking to <a href="https://www.mykcm.com/2024/01/24/are-more-homeowners-selling-as-mortgage-rates-come-down/" rel="noopener noreferrer" target="_blank">buy</a> or <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">sell a home</a>, this is a big deal. While they’re going to continue to bounce around a bit based on various economic drivers (like inflation and reactions to the consumer price index, or CPI), don’t let the <a href="https://www.mykcm.com/2024/02/12/whats-really-happening-with-mortgage-rates/" rel="noopener noreferrer" target="_blank">short-term volatility</a> distract you. The experts agree the overarching downward trend <a href="https://www.mykcm.com/2023/12/20/why-mortgage-rates-could-continue-to-decline/" rel="noopener noreferrer" target="_blank">should continue</a> this year.
While we won’t see the record-low rates homebuyers got during the pandemic, some experts think we should see rates dip below 6% later this year. As Dean Baker, Senior Economist, Center for Economic Research, <a href="https://cepr.net/contrary-to-what-the-washington-post-tells-you-homeownership-rates-for-young-people-are-above-the-pre-pandemic-level/" rel="noopener noreferrer" target="_blank">says</a>:
“They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”
And Baker isn’t the only one saying this is a possibility. The latest Fannie Mae projections also indicate we may see a rate below 6% by the end of this year (see the green box in the chart below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240221/20240221-Mortgage-Rate-Projections.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240221/20240221-Mortgage-Rate-Projections.png" alt="a screenshot of a graph" /></a>
The chart shows mortgage rate projections for 2024 from Fannie Mae. It includes the one that came out in <a href="https://www.fanniemae.com/media/49866/display" rel="noopener noreferrer" target="_blank">December</a>, and compares it to the updated 2024 forecast they released just <a href="https://www.fanniemae.com/media/50096/display" rel="noopener noreferrer" target="_blank">one month</a> later. And if you look closely, you’ll notice the projections are on the way down.
It’s normal for experts to re-forecast as they watch current market trends and the broader economy, but what this shows is experts are feeling confident rates should continue to decline, if inflation cools.
What This Means for You
But remember, no one can say for sure what will happen (and by when) – and short-term volatility is to be expected. So, don’t let small fluctuations scare you. Focus on the bigger picture.
If you’ve found a home you love in today’s market – especially where finding a home that meets your budget and your needs can be a challenge – it’s probably not a good idea to try to time the market and wait until rates drop below 6%.
With rates already lower than they were last fall, you have an opportunity in front of you right now. That’s because even a small quarter point dip in rates gives your <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">purchasing power</a> a boost.
Bottom Line
If you wanted to move last year but were holding off hoping rates would fall, now may be the time to act. Let’s connect to get the ball rolling.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-02-21T18:16:11-07:002024-02-21T18:47:02-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:32936Don’t Let the Latest Home Price Headlines Confuse You<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240213/20240215-Don-t-Let-the-Latest-Home-Price-Headlines-Confuse-You.png" alt="" class="img-thumbnail mx-auto d-block" />
Based on what you’re hearing in the news about <a href="https://www.mykcm.com/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/" rel="noopener noreferrer" target="_blank">home prices</a>, you may be worried they’re falling. But here’s the thing. The <a href="https://www.mykcm.com/2024/02/02/theres-no-foreclosure-wave-in-sight-infographic/" rel="noopener noreferrer" target="_blank">headlines</a> aren’t giving you the full picture.
If you look at the national data for 2023, <a href="https://www.mykcm.com/2024/01/18/3-key-factors-affecting-home-affordability/" rel="noopener noreferrer" target="_blank">home prices</a> actually showed positive growth for the year. While this varies by market, and while there were some months with slight declines nationally, those were the exception, not the rule.
The overarching story is that prices went up last year, not down. Let’s dive into the data to set the record straight.
2023 Was the Return to More Normal Home Price Growth
If anything, last year marked a return to more normal <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">home price appreciation</a>. To prove it, here’s what usually happens in residential real estate.
In the housing market, there are predictable ebbs and flows that take place each year. It’s called seasonality. It goes like this. Spring is the peak homebuying season when the market is most active. That activity is usually still strong in the summer, but begins to wane toward the end of the year. Home prices follow along with this seasonality because prices grow the most when there’s high demand.
The graph below uses data from <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview" rel="noopener noreferrer" target="_blank">Case-Shiller</a> to show how this pattern played out in home prices from 1973 through 2022 (not <a href="https://www.census.gov/construction/nrs/faqs/faqs_seas.html#quest2" rel="noopener noreferrer" target="_blank">adjusted</a>, so you can see the seasonality):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240213/20240215-49-Year-Average-Monthly-Price-Movement.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240213/20240215-49-Year-Average-Monthly-Price-Movement.png" /></a>
As the data shows, for nearly 50 years, home prices match typical market seasonality. At the beginning of the year, home prices grow more moderately. That’s because the market is less active as fewer people move in January and February. Then, as the market transitions into the peak homebuying season in the spring, activity ramps up. That means home prices do too. Then, as fall and winter approach, activity eases again and prices grow, just at a slower rate.
Now, let’s layer the data that’s come out for 2023 so far (shown in green) on top of that long-term trend (still shown in blue). That way, it’s easy to see how 2023 compares.
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240213/20240215-2023-Price-Movement-vs-49-year-average.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240213/20240215-2023-Price-Movement-vs-49-year-average.png" /></a>
As the graph shows, moving through the year in 2023, the level of appreciation fell more in line with the long-term trend for what usually happens in the housing market. You can see that in how close the green bars come to matching the blue bars in the later part of the year.
But the headlines only really focused on the two bars outlined in red. Here’s the context you may not have gotten that can really put those two bars into perspective. The long-term trend shows it’s normal for <a href="https://www.mykcm.com/2023/12/19/expert-quotes-on-the-2024-housing-market-forecast/" rel="noopener noreferrer" target="_blank">home prices</a> to moderate in the fall and winter. That’s typical seasonality.
And since the 49-year average is so close to zero during those months (0.10%), that also means it’s not unusual for home prices to drop ever so slightly during those times. But those are just blips on the radar. If you look at the year as a whole, home prices still rose overall.
What You Really Need To Know
Headlines are going to call attention to the small month-to-month dips instead of the bigger year-long picture. And that can be a bit misleading because it’s only focused on one part of the whole story.
Instead, remember last year we saw the return of seasonality in the housing market – and that’s a good thing after home prices skyrocketed unsustainably during the <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a> of the pandemic.
And just in case you’re still worried home prices will fall, don’t be. The expectation for this year is that prices will <a href="https://www.mykcm.com/2024/01/23/experts-project-home-prices-will-increase-in-2024/" rel="noopener noreferrer" target="_blank">continue to appreciate</a> as buyers re-enter the market due to <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">mortgage rates</a> trending down compared to last year. As buyer demand goes up and <a href="https://www.mykcm.com/2024/01/24/are-more-homeowners-selling-as-mortgage-rates-come-down/" rel="noopener noreferrer" target="_blank">more people move</a> at the same time the supply of homes for sale is still low, the upward pressure on prices will continue.
Bottom Line
Don’t let home price headlines confuse you. The data shows that, as a whole, home prices rose in 2023. If you have questions about what you’re hearing in the news or about what’s happening with home prices in our local area, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-02-15T13:54:53-07:002024-02-15T13:56:43-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:32652Don’t Wait Until Spring To Sell Your House<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240131/20240201-Don-t-Wait-Until-Spring-To-Sell-Your-House.png" alt="" class="img-thumbnail mx-auto d-block" />
As you think about the year ahead, one of your big goals may be moving. But, how do you know when to make your move? While spring is usually the peak homebuying season, you don’t actually need to wait until spring to sell. Here's why.
1. Take Advantage of Lower Mortgage Rates
Last October, the 30-year fixed <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">mortgage rates</a> peaked at 7.79%. In January, they hit their <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">lowest level</a> since May. That means you may not feel as locked-in to your current mortgage rate right now. That downward trend in rates has made moving <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">more affordable</a> now than it was just a few months ago.
Another reason today’s rates make now a good time to sell? More buyers are jumping back into the market. Many had been waiting on the sidelines for rates to fall, but now that that’s happening, they’re eager and ready to buy. That means more demand for your house. <a href="https://freddiemac.gcs-web.com/node/28286/pdf" rel="noopener noreferrer" target="_blank">According</a> to Sam Khater, Chief Economist at Freddie Mac:
“Given this stabilization in rates, potential homebuyers with affordability concerns have jumped off the fence back into the market.”
2. Get Ahead of Your Competition
Right now, there are still more people looking to buy a home than there are houses for sale, which puts you in a great position. But keep in mind, with the recent uptick in <a href="https://www.mykcm.com/2024/01/24/are-more-homeowners-selling-as-mortgage-rates-come-down/" rel="noopener noreferrer" target="_blank">new listings</a>, we’re seeing more sellers may already be re-entering the market.
<a href="https://www.mykcm.com/2024/01/22/3-must-dos-when-selling-your-house-in-2024/" rel="noopener noreferrer" target="_blank">Listing your house</a> now helps you beat your competition and makes sure your house will stand out. And if you work with an agent to price it right, it could sell fast and get multiple offers. U.S. News <a href="https://realestate.usnews.com/real-estate/articles/understanding-housing-inventory-and-what-it-means-for-you" rel="noopener noreferrer" target="_blank">explains</a>:
“When there is low housing inventory, sellers could get top dollar for their homes.”
3. Make the Most of Rising Home Prices
<a href="https://www.mykcm.com/2024/01/23/experts-project-home-prices-will-increase-in-2024/" rel="noopener noreferrer" target="_blank">Experts forecast</a> home prices will keep <a href="https://www.mykcm.com/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/" rel="noopener noreferrer" target="_blank">going up</a> this year. What does that mean for you? If you're ready to sell your current house and plan to buy another one, it may be a good idea to think about moving now before prices go up more. That would give you the chance to buy your next home before it gets more expensive.
4. Leverage Your Equity
Homeowners today have tremendous amounts of <a href="https://www.mykcm.com/2024/01/09/ways-your-home-equity-can-help-you-reach-your-goals/" rel="noopener noreferrer" target="_blank">equity</a>. In fact, a recent <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q3-2023/" rel="noopener noreferrer" target="_blank">report</a> from CoreLogic says the average homeowner with a mortgage has more than $300,000 in equity.
If you've been waiting to sell because you were worried about home affordability, know your equity can really help with your next move. It might even cover a big part, or maybe all, of the down payment for your next home.
Bottom Line
If you're thinking about <a href="https://www.mykcm.com/2023/12/29/the-benefits-of-working-with-an-agent-when-you-sell-your-house-infographic/" rel="noopener noreferrer" target="_blank">selling your house</a> and moving to another one, let’s connect to get the process started now so you can get a leg up on your competition.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-02-01T13:13:12-07:002024-02-01T13:15:08-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:32596Will a Silver Tsunami Change the 2024 Housing Market?<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240125/20240129-Will-a-Silver-Tsunami-Change-the-2024-Housing-Market.png" alt="" class="img-thumbnail mx-auto d-block" />
Have you ever heard the <a href="https://www.mykcm.com/2024/01/19/key-terms-every-homebuyer-should-learn-infographic/" rel="noopener noreferrer" target="_blank">term</a> “Silver Tsunami” and wondered what it's all about? If so, that might be because there’s been lot of talk about it online recently. Let's dive into what it is and why it won't drastically impact the housing market.
What Does Silver Tsunami Mean?
A recent article from HousingWire <a href="https://www.housingwire.com/articles/silver-tsunami-could-have-a-bigger-impact-on-2024s-housing-market-analyst/" rel="noopener noreferrer" target="_blank">calls it</a>:
“. . . a colloquialism referring to aging Americans changing their housing arrangements to accommodate aging . . .”
The thought is that as baby boomers <a href="https://www.mykcm.com/2023/12/27/retiring-soon-why-moving-might-be-the-perfect-next-step/" rel="noopener noreferrer" target="_blank">grow older</a>, a significant number will start <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">downsizing</a> their homes. Considering how large that generation is, if these moves happened in a big wave, it would affect the housing market by causing a significant uptick in the number of larger homes for sale. That influx of homes coming onto the market would impact the balance of supply and demand and more.
The concept makes sense in theory, but will it happen? And if so, when?
Why It Won’t Have a Huge Impact on the Housing Market in 2024
Experts say, so far, a silver tsunami hasn’t happened – and it probably won't anytime soon. According to that same <a href="https://www.housingwire.com/articles/silver-tsunami-could-have-a-bigger-impact-on-2024s-housing-market-analyst/" rel="noopener noreferrer" target="_blank">article</a> from HousingWire:
“. . . the silver tsunami’s transformative potential for the U.S. housing market has not yet materialized in any meaningful way, and few expect it to anytime soon.”
Here’s just one reason why. Many baby boomers don’t want to move. <a href="https://www.aarp.org/content/dam/aarp/research/surveys_statistics/liv-com/2021/2021-home-community-preferences-chartbook.doi.10.26419-2Fres.00479.001.pdf" rel="noopener noreferrer" target="_blank">Data</a> from the AARP shows over half of the surveyed adults ages 65 and up plan to stay put and age in place in their current home rather than move (see chart below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240125/20240129-60-percent-of-adults-aged-65-expect-to-stay-in-their-home-as-they-get-older.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240125/20240129-60-percent-of-adults-aged-65-expect-to-stay-in-their-home-as-they-get-older.png" /></a>
Clearly, not every baby boomer is planning to sell or move – and even those who do won’t do it all at once. Instead, it will be more gradual, happening slowly over time. As Mark Fleming, Chief Economist at First American, <a href="https://finance.yahoo.com/news/tides-changed-housing-market-experts-113000181.html" rel="noopener noreferrer" target="_blank">says</a>:
“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they're going to take about two decades to work their way through.”
Bottom Line
If you’re worried about a Silver Tsunami shaking up the housing market, don’t be. Any impact from baby boomers moving will be gradual over many years. Fleming <a href="https://finance.yahoo.com/news/tides-changed-housing-market-experts-113000181.html" rel="noopener noreferrer" target="_blank">sums</a> it up best:
“Demographic trends, they don't tsunami. They trickle.”
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-01-29T18:40:51-07:002024-01-29T18:46:19-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:324343 Must-Do’s When Selling Your House in 2024<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240118/20240122-3-Must-Do-s-When-Selling-Your-House-in-2024.png" alt="" class="img-thumbnail mx-auto d-block" />
If one of the goals on your list is <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">selling your house</a> and <a href="https://www.mykcm.com/2024/01/16/why-you-may-want-to-seriously-consider-a-newly-built-home/" rel="noopener noreferrer" target="_blank">making a move</a> this year, you’re likely juggling a mix of excitement about what’s ahead and feeling a little sentimental about your current home.
A great way to balance those emotions and make sure you’re confident in your decision is to keep these three best practices in mind when you’re <a href="https://www.mykcm.com/2024/01/09/ways-your-home-equity-can-help-you-reach-your-goals/" rel="noopener noreferrer" target="_blank">ready to sell</a>.
1. Price Your Home Right
The <a href="https://www.mykcm.com/2023/12/19/expert-quotes-on-the-2024-housing-market-forecast/" rel="noopener noreferrer" target="_blank">housing market</a> shifted in 2023 as <a href="https://www.mykcm.com/2023/12/20/why-mortgage-rates-could-continue-to-decline/" rel="noopener noreferrer" target="_blank">mortgage rates</a> rose and <a href="https://www.mykcm.com/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/" rel="noopener noreferrer" target="_blank">home price appreciation</a> started to <a href="https://www.mykcm.com/2023/10/20/home-price-growth-is-returning-to-normal-infographic/" rel="noopener noreferrer" target="_blank">normalize</a> once again. As a seller, you still need to recognize how important it is to price your house appropriately based on where the market is today. Hannah Jones, Economic Research Analyst for Realtor.com, <a href="https://www.realtor.com/news/trends/home-seller-alert-weve-found-the-very-best-week-to-list-your-home-in-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“Sellers need to become familiar with their local market and work closely with a local agent to make sure their listing is attractive to buyers. Buyers feeling the pressure of affordability are likely to be pickier, so a well-priced, well-maintained home is the ticket to drumming up big demand.”
If you price your house too high, you run the risk of deterring <a href="https://www.mykcm.com/2023/12/18/why-now-is-still-a-great-time-to-sell-your-house/" rel="noopener noreferrer" target="_blank">buyers</a>. And if you go too low, you’re leaving money on the table. An experienced <a href="https://www.mykcm.com/2023/12/21/sell-smarter-why-working-with-a-real-estate-agent-may-beat-going-solo/" rel="noopener noreferrer" target="_blank">real estate agent</a> can help determine what your ideal asking price should be, so your house moves quickly and for top dollar.
2. Keep Your Emotions in Check
Today, homeowners are staying in their houses <a href="https://www.mykcm.com/2023/12/27/retiring-soon-why-moving-might-be-the-perfect-next-step/" rel="noopener noreferrer" target="_blank">longer</a> than they used to. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">National Association of Realtors</a> (NAR), since 1985, the average time a homeowner has owned their home has increased from 6 to 10 years (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240118/20240122-Todays-homeowners-are-staying-in-their-houses-for-an-average-of-10-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240118/20240122-Todays-homeowners-are-staying-in-their-houses-for-an-average-of-10-years.png" /></a>
This is much more than what used to be the norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your loved ones grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even tougher to separate the emotional value of the house from fair market price. That’s why you need a real estate professional to help you with the negotiations and the best pricing strategy along the way. Trust the professionals who have your best interests in mind.
3. Stage Your Home Properly
While you may love your decor and how you’ve customized your house over the years, not all buyers will feel the same way about your vibe. That’s why it’s so important to make sure you focus on your home’s first impression, so it appeals to as many buyers as possible.
Buyers want to be able to picture themselves in the home. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. As Jessica Lautz, Deputy Chief Economist and Vice President of Research at NAR, <a href="https://www.nar.realtor/newsroom/nearly-half-of-sellers-agents-said-staging-a-home-reduced-its-time-on-market-nar-report-finds" rel="noopener noreferrer" target="_blank">says</a>:
“Buyers want to easily envision themselves within a new home and home staging is a way to showcase the property in its best light.”
A real estate professional can help you with expertise on getting your house <a href="https://www.mykcm.com/2023/12/22/get-your-house-ready-to-sell-this-winter-infographic/" rel="noopener noreferrer" target="_blank">ready to sell</a>.
Bottom Line
If you’re considering selling your house, let’s connect so you have help navigating the process while prioritizing these must-do’s.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-01-22T17:19:21-07:002024-01-22T17:21:39-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:323973 Key Factors Affecting Home Affordability<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240116/202401183-Key-Factors-Affecting-Home-Affordability.png" alt="" class="img-thumbnail mx-auto d-block" />
Over the past year, a lot of people have been talking about <a href="https://www.mykcm.com/2023/12/28/what-you-need-to-know-about-saving-for-a-home-in-2024/" rel="noopener noreferrer" target="_blank">housing affordability</a> and how tight it’s gotten. But just recently, there’s been a little bit of relief on that front. Mortgage rates have gone down since their most recent peak in October. But there’s more to being able to <a href="https://www.mykcm.com/2023/12/26/get-ready-to-buy-a-home-by-improving-your-credit-score/" rel="noopener noreferrer" target="_blank">afford a home</a> than just mortgage rates.
To really understand home affordability, you need to look at the combination of three important factors: mortgage rates, home prices, and wages. Let’s dive into the latest data on each one to see why affordability is improving.
1. Mortgage Rates
<a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">Mortgage rates</a> have come down in recent months. And looking forward, most experts expect them to <a href="https://www.mykcm.com/2023/12/20/why-mortgage-rates-could-continue-to-decline/" rel="noopener noreferrer" target="_blank">decline further</a> over the course of the year. Jiayi Xu, an economist at Realtor.com, <a href="https://www.cnn.com/2024/01/11/economy/mortgage-rates-climb-for-the-second-week-in-a-row/index.html" rel="noopener noreferrer" target="_blank">explains</a>:
“While there could be some fluctuations in the path forward … the general expectation is that mortgage rates will continue to trend downward, as long as the economy continues to see progress on inflation.”
And even a small change in mortgage rates can have a big impact on your <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">purchasing power</a>, making it easier for you to afford the home you want by reducing your monthly mortgage payment.
2. Home Prices
The second important factor is home prices. After going up at a relatively normal pace last year, they’re expected to continue rising moderately in 2024. That’s because even with inventory projected to grow slightly this year, there still aren’t enough homes for sale for all the people who want to buy them. <a href="https://brightmls.com/article/2024-national-housing-market-outlook" rel="noopener noreferrer" target="_blank">According</a> to Lisa Sturtevant, Chief Economist at Bright MLS:
“More inventory will be generally offset by more buyers in the market. As a result, it is expected that, overall, the median home price in the U.S. will grow modestly . . .”
That’s great news for you because it means prices aren’t likely to skyrocket like they did during the pandemic. But it also means it’ll probably cost you more to wait. So, if you’re ready, willing, and able to buy, and you can find the right home, purchasing before more buyers enter the market and prices rise further might be in your best interest.
3. Wages
Another positive factor in affordability right now is rising income. The graph below uses <a href="https://fred.stlouisfed.org/series/CES0500000017" rel="noopener noreferrer" target="_blank">data</a> from the Federal Reserve to show how wages have grown over time:
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240116/20240118-Wages-Climbing-at-a-faster-pace.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240116/20240118-Wages-Climbing-at-a-faster-pace.png" /></a>
If you look at the blue dotted trendline, you can see the rate at which wages typically rise. But on the right side of the graph, wages are above the trend line today, meaning they’re going up at a higher rate than normal.
Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage. That’s because you don’t have to put as much of your paycheck toward your monthly housing cost.
What This Means for You
<a href="https://www.mykcm.com/2024/01/01/3-keys-to-hitting-your-homeownership-goals-in-2024/" rel="noopener noreferrer" target="_blank">Home affordability</a> depends on three things: mortgage rates, home prices, and wages. The good news is, they’re moving in a positive direction for <a href="https://www.mykcm.com/2024/01/10/avoid-these-common-mistakes-after-applying-for-a-mortgage/" rel="noopener noreferrer" target="_blank">buyers</a> overall.
Bottom Line
If you're thinking about <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">buying a home</a>, it's important to know the main factors impacting affordability are improving. To get the latest updates on each, let's connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-01-18T14:43:22-07:002024-01-18T14:45:34-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:32151Why Pre-Approval Is Your Homebuying Game Changer<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231220/20240103-Why-Pre-Approval-Is-Your-Homebuying-Game-Changer.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re thinking about buying a home, pre-approval is a crucial part of the process you definitely don’t want to skip. So, before you start picturing yourself in your new living room or dining on your future all-season patio, be sure you’re working with a trusted lender to prioritize this essential step. Here’s why.
While <a href="https://www.mykcm.com/2023/12/04/experts-project-home-prices-will-rise-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">home price</a> growth is moderating and <a href="https://www.mykcm.com/2023/12/19/expert-quotes-on-the-2024-housing-market-forecast/" rel="noopener noreferrer" target="_blank">mortgage rates</a> have been coming down in recent weeks, <a href="https://www.mykcm.com/2023/11/28/are-the-top-3-housing-market-questions-on-your-mind/" rel="noopener noreferrer" target="_blank">affordability</a> is still tight. At the same time, there’s a <a href="https://www.mykcm.com/2023/12/13/the-surprising-trend-in-the-number-of-homes-coming-onto-the-market/" rel="noopener noreferrer" target="_blank">limited number of homes</a> for sale right now, and that means ongoing competition among hopeful buyers. But, if you’re strategic, there are ways to navigate these waters – and pre-approval is the game changer.
What Pre-Approval Does for You
To understand why it’s such an important step, you need to know more about pre-approval. As part of the homebuying process, a lender looks at your finances to determine what they’re willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/how-do-i-get-pre-approved-mortgage" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”
Getting pre-approved starts to put you in the mindset of seeing the bigger financial picture, one step at a time. And the key is actually more than just getting a pre-approval letter from your lender. The combination of pre-approval and strategic budgeting is your golden ticket to understanding what you can actually afford. It saves you from painful heartaches down the road so you don’t fall in love with a house that might be out of reach.
Pre-Approval Helps Show Sellers You’re a Serious Buyer
But that's just the beginning. Let’s face it, there are more people looking to buy than there are homes available for <a href="https://www.mykcm.com/2023/12/11/the-perfect-home-could-be-the-one-you-perfect-after-buying/" rel="noopener noreferrer" target="_blank">sale</a>, and that creates competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you get ready to make your move. But getting pre-approved for a mortgage can help you stand out from other buyers.
In today's fast-moving housing market, having that pre-approval in your back pocket can be your secret weapon. When sellers see you're pre-approved, it tells them you're a strategic and serious buyer. In a world of multiple offers, that's a big deal. As an article from the Wall Street Journal (WSJ) <a href="https://www.wsj.com/buyside/personal-finance/mortgage-pre-approval-25dd076c" rel="noopener noreferrer" target="_blank">says</a>:
“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”
Pre-approval shows sellers you’re more than just a window shopper. You’re a buyer who’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or issues. Sellers love that because they see your offer as a reliable one. A win-win, right?
Bottom Line
So, before you start mentally arranging furniture in your dream home, work with a trusted lender to get your pre-approval set. It’ll save you time, stress, and a lot of headaches that could come up along the way without it. The reality is, the more prepared you are, the more likely you are to land the home you’re longing for.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2024-01-04T18:24:04-07:002024-01-04T18:25:54-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:32065Retiring Soon? Why Moving Might Be the Perfect Next Step<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231220/20231227-Retiring-Soon-Why-Moving-Might-Be-the-Perfect-Next-Step.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re thinking about retirement or have already retired this year, it’s a good time to consider if your current house is still a good fit for the next chapter in your life.
Fortunately, you may be in a better position to <a href="https://www.mykcm.com/2023/12/05/when-you-sell-your-house-where-do-you-plan-to-go/" rel="noopener noreferrer" target="_blank">make a move</a> than you realize. Here are a few things to think about as you decide whether or not to sell and make a move.
How Long You’ve Been in Your Home
From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">rising</a> today, meaning many homeowners are living in their houses even longer (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231220/20231227-Homeowners-Are-Living-In-Their-Homes-Longer-In-Recent-Years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231220/20231227-Homeowners-Are-Living-In-Their-Homes-Longer-In-Recent-Years.png" /></a>
When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. As those <a href="https://www.mykcm.com/2023/11/13/life-changing-events-that-move-the-housing-market/" rel="noopener noreferrer" target="_blank">life changes</a> and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you.
How Much Equity You’ve Gained
Additionally, if you’ve been in your house for more than a few years, you’ve likely built-up significant equity that can fuel your next move. That’s because the longer you’ve been in your house, the more likely it’s grown in value due to <a href="https://www.mykcm.com/2023/12/04/experts-project-home-prices-will-rise-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">home price appreciation</a>. Data from the Federal Housing Finance Agency (FHFA) <a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" rel="noopener noreferrer" target="_blank">illustrates</a> that point (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231220/20231227-How-Home-Prices-Have-Grown-over-Time.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231220/20231227-How-Home-Prices-Have-Grown-over-Time.png" /></a>
While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by nearly 60%. And the average homeowner who’s owned their home since 1991 saw it more than triple in value over that time.
Consider Your Retirement Goals
Whether you're looking to downsize, relocate to a dream destination, or simply be closer to loved ones, your home equity can be a key to realizing your homeownership goals. NAR <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">shares</a> that for recent home sellers, the primary reason to move was to be closer to loved ones.
Whatever your home goals are, a trusted <a href="https://www.mykcm.com/2023/12/07/why-you-need-to-use-a-real-estate-agent-when-you-buy-a-home/" rel="noopener noreferrer" target="_blank">real estate agent</a> can work with you to find the best option. They’ll help you <a href="https://www.mykcm.com/2023/10/18/what-are-the-real-reasons-you-want-to-move-right-now/" rel="noopener noreferrer" target="_blank">sell</a> your current house and <a href="https://www.mykcm.com/2023/12/08/your-homebuying-adventure-infographic/" rel="noopener noreferrer" target="_blank">guide you</a> through buying the home that’s right for your lifestyle today.
Bottom Line
Retirement can bring about major changes in your life, including what you need from your home. Let’s connect to explore the available homes in our area.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2023-12-29T19:26:48-07:002023-12-29T19:31:43-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:31854If Your House Hasn’t Sold Yet, It May Be Overpriced<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231205/20231214-If-Your-House-Hasn-t-Sold-Yet-It-May-Be-Overpriced.png" alt="" class="img-thumbnail mx-auto d-block" />
Has your house been sitting on <a href="https://www.mykcm.com/2023/11/15/the-latest-2024-housing-market-forecast/" rel="noopener noreferrer" target="_blank">the market</a> a while without <a href="https://www.mykcm.com/2023/11/20/is-your-house-the-top-thing-on-a-buyers-wish-list-this-holiday-season/" rel="noopener noreferrer" target="_blank">selling</a>? If so, you should know that’s pretty unusual, especially right now. That’s because the <a href="https://www.mykcm.com/2023/11/21/are-there-actually-more-homes-for-sale-right-now/" rel="noopener noreferrer" target="_blank">supply of homes</a> available for sale is still far lower than what we’d see in a normal year. That means buyers have fewer options than they usually would, so your house should be an oasis in an <a href="https://www.mykcm.com/2023/10/24/the-perks-of-selling-your-house-when-inventory-is-low/" rel="noopener noreferrer" target="_blank">inventory</a> desert.
So, if homebuyers have limited choices and your house still hasn’t sold, there’s a reason why. Let’s break one potential sticking point that may be turning buyers away: your asking price.
Especially with today’s higher mortgage rates already putting a stretch on their budget, <a href="https://www.mykcm.com/2023/11/16/people-are-still-moving-even-with-todays-affordability-challenges/" rel="noopener noreferrer" target="_blank">buyers</a> are being a bit more sensitive about price. As a recent article from the Wall Street Journal (WSJ) <a href="https://www.wsj.com/articles/is-now-a-good-time-to-sell-your-home-ac27dc9b" rel="noopener noreferrer" target="_blank">says</a>:
“If you are serious about selling your home now, don’t get greedy with the asking price. This is still a seller’s home market as there simply aren’t enough affordable homes for sale in many parts of the country. But with average 30-year mortgage rates above 6%, buyers are much more price-sensitive than they were a year ago.”
Why Setting the Right Price Matters
While you want to maximize the return on your investment when you <a href="https://www.mykcm.com/2023/10/19/the-risks-of-selling-your-house-on-your-own/" rel="noopener noreferrer" target="_blank">sell your house</a>, you also need to be realistic based on current market conditions. The simple truth is your house is only going to sell for what people are willing to pay right now.
This can be a hard thing to accept. Especially since emotions can run high during the selling process, which only complicates matters more. After all, you may have lived in this house for years, so it’s only natural you’re emotionally tied to it – and those heartstrings can make it harder to be objective.
But it’s important to acknowledge that a bigger-than-expected price tag deters buyers and may make them dismiss your house as a possibility before even seeing it. And if no one’s looking at it, how will it sell?
If you want to get your house sold, you’ll need to do something to spark interest in your home again. That’s where a local <a href="https://www.mykcm.com/2023/10/30/a-real-estate-agent-helps-take-the-fear-out-of-the-market/" rel="noopener noreferrer" target="_blank">real estate agent</a> comes in. They’ll help use data to find out if it’s priced too high for your local market. They balance the value of homes in your neighborhood, current market trends and buyer demand, the condition of your house, and more to find the right price for your house, so you can close this chapter and start your next one.
Bottom Line
While it’s true there aren’t that many homes available for sale right now, your home’s asking price still matters. And, if it’s not selling, it may be priced too high.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2023-12-14T15:16:44-07:002023-12-14T15:20:05-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:31699When You Sell Your House, Where Do You Plan To Go?<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231128/20231204-When-You-Sell-Your-House-Where-Do-You-Plan-To-Go.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re thinking about selling your house, you may have heard the <a href="https://www.mykcm.com/2023/11/21/are-there-actually-more-homes-for-sale-right-now/" rel="noopener noreferrer" target="_blank">supply of homes</a> for sale is still low, and that means your house should stand out to buyers who are <a href="https://www.mykcm.com/2023/11/06/reasons-to-sell-your-house-before-the-new-year/" rel="noopener noreferrer" target="_blank">craving more options</a>. But you may also be wondering, once you sell, how does the current supply impact your own move? And, will you be able to find a home you want to buy with inventory this low?
One thing that can help you find your next home is exploring all your options, including both homes that have been lived in before as well as newly built ones. Let’s look at the benefits of each one.
The Pros of Newly Built Homes
First, let’s look at the advantages of purchasing a newly constructed home. With a brand-new home, you’ll be able to:
Create your perfect home. If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more.
Cash-in on energy efficiency. When building a home, you can choose energy-efficient options to help lower your utility costs and reduce your carbon footprint.
Minimize the need for repairs. Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little projects to tackle.
Have brand new everything. Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.
The Pros of Existing Homes
Now, let’s compare that to the perks that come with buying an existing home. With a pre-existing home, you can:
Explore a wider variety of home styles and floorplans. With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.
Join an established neighborhood. Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit.
Enjoy mature trees and landscaping. Established neighborhoods also have more developed landscaping and trees, which can give you additional privacy and curb appeal.
Appreciate that lived-in charm. The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.
The choice is yours. When you start your search for the perfect home, remember that you can go either route – you just need to decide which features and benefits are most important to you. As an article from The Mortgage Reports <a href="https://themortgagereports.com/107938/new-home-construction-process" rel="noopener noreferrer" target="_blank">says</a>:
“When building, you gain more freedom to tailor the design, materials, and features, but it demands more time and involvement. Conversely, buying an established home offers immediate occupancy . . . yet may require compromises. Your choice should align with your budget, timeline, customization preferences, and the local real estate landscape.”
Either way, working with a local <a href="https://www.mykcm.com/2023/10/30/a-real-estate-agent-helps-take-the-fear-out-of-the-market/" rel="noopener noreferrer" target="_blank">real estate agent</a> throughout the process is mission-critical to your success. They'll help you explore all of your options based on what matters most to you in your next home. Together, you can find the home that’s right for you.
Bottom Line
If you have questions about the options in our area, let’s discuss what's available and what's right for you. That way you’ll be ready to make your next move with confidence.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2023-12-05T19:01:50-07:002023-12-06T10:28:50-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:31698Top 7 Reasons Why People Move from San Francisco to Marin County<img src="https://assets.site-static.com/userfiles/601/image/Marin_County_Photo.jpg" width="1600" height="600" alt="top reasons to move to Marin" title="relocating to beautiful marin county" />
Are you considering a move from the bustling streets of San Francisco to the serene beauty of <a href="https://www.bayareamodern.com/marin-county-real-estate/" title="marin county real estate">Marin County</a>, California? You're not alone. It's a common transition for many (including my own family which moved from SF to Marin in 2004) and homebuyers are finding their slice of paradise just a short drive across the iconic Golden Gate Bridge.
Why Move to Marin from SF
While the reasons for moving from SF to Marin County will vary, there are some reoccuring themes that we often see as Realtors. Below are some of the main reasons we see others make the transition from the city to Marin:
1. Marin's Natural Beauty and Outdoor Recreation
One of the primary attractions of Marin County is its breathtaking natural beauty. Nestled against the Pacific Ocean and bordered by the San Francisco Bay to the South and Wine Country to the North, Marin County boasts stunning landscapes, including majestic redwood forests, rolling hills, and pristine beaches. Nature lovers can enjoy hiking, biking, and exploring the countless parks and trails that the region has to offer. From Mount Tamalpais to Point Reyes National Seashore, the outdoor opportunities are endless.
Best of all, much of Marin's natural beauty is protected with nearly 85 percent of its land safeguarded from development, thanks to initiatives such as open space acquisitions, federal parkland designations, watershed preservation, and stringent agricultural zoning regulations.
2. A Healthier Lifestyle
Marin County consistently ranks among the <a href="https://www.marincounty.org/main/county-press-releases/press-releases/2023/hhs-healthiest-county-040423" target="_blank">healthiest counties in California</a>, thanks to its emphasis on physical fitness and access to organic and locally-sourced foods. Residents enjoy a wide range of fitness activities, from yoga on the beach to kayaking in the bay (with lots of hiking and cycling enjoyed by many!). The abundance of <a href="https://www.marincounty.org/depts/ag/farmers-markets" target="_blank">farmer's markets in Marin County</a> ensures access to fresh, organic produce, making it easy to maintain a healthy lifestyle.
3. Excellent Schools and Educational Opportunities
For families moving to Marin County, the educational opportunities are exceptional. The county boasts highly-rated public and private schools, as well as access to well respected colleges and universities. The emphasis on education and community involvement ensures that children receive a well-rounded and enriching experience.
4. Commutable to San Francisco
Despite its rural charm, Marin County is just a short commute away from San Francisco by either 🚗roadways or ⛴waterways. Highway 101 and the Golden Gate Bridge provides easy access to the city, making it a perfect option for those who want to work in the city while enjoying the peace and tranquility of Marin County. If you'd prefer to travel by waterways, Golden Gate Ferry operates convenient public ferry service between San Francisco and Marin County (Sausalito, Larkspur and Tiburon Ferry Terminals).
5. Vibrant Cultural Scene
Marin County is not just about natural beauty; it also has a thriving cultural scene. From art galleries to music festivals and theaters, there are ample opportunities to enjoy the arts and culture right in your backyard. The Marin Symphony, Marin Theatre Company, and the Marin Museum of Contemporary Art are just a few of the cultural gems you'll find here.
6. The Weather
The weather in Marin County is simply sublime, making it an alluring destination for those seeking a perfect climate. With its Mediterranean-like climate, Marin County enjoys mild, sunny summers that are perfect for outdoor adventures and leisurely beach days along the picturesque coastline. Winters are pleasantly cool and relatively dry, allowing for year-round exploration of its lush, natural landscapes. The region's unique geography provides a natural shield from the fog that often blankets nearby San Francisco, ensuring more clear and sunny days. This idyllic climate, marked by gentle breezes and comfortable temperatures, creates an inviting atmosphere that beckons residents and visitors alike to bask in its year-round charm.
7. Abundant Outdoor Festivals
Marin County hosts a plethora of outdoor festivals year-round, offering a diverse array of cultural and recreational experiences. Highlights include the annual Marin County Fair in San Rafael, featuring live music, carnival rides, food vendors, and a dazzling fireworks show. Music enthusiasts can groove to the Marin County Jazz Festival, showcasing regional jazz talents, while art lovers can explore local studios during the Marin Open Studios event. Wine enthusiasts will savor the Marin County Wine Country Weekend with vineyard tastings, and foodies won't want to miss the Off The Grid Food Truck events at Larkspur Landing. The Mill Valley Film Festival, a prestigious cinematic event, attracts filmmakers and cinephiles. These festivals foster a strong sense of community, enhancing Marin County's cultural vibrancy amid its stunning natural backdrop. <br /><br />Marin County, California, offers a compelling alternative for those looking to escape the hustle and bustle of San Francisco while still enjoying easy access to the city's amenities. With its natural beauty, healthy lifestyle, excellent education, cultural scene, sublime weather, culinary delights, and outdoor festivals, it's no wonder that more and more people are falling in love with the idea of moving to this picturesque destination.
Relocate to Marin from San Francisco: Let Bay Area Modern Real Estate Assist!
If you're a homebuyer considering a change of scenery, Marin County might just be the perfect place to call home. Call or email Bay Area Modern Real Estate if our team can assist you with your relocation from San Francisco to Marin!2023-12-05T18:12:59-07:002023-12-06T13:46:42-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:31617Why the Economy Won’t Tank the Housing Market<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Why-the-Economy-Wont-crash-the-housing-market.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re worried about a coming recession, you’re not alone. Over the past couple of years, there’s been a lot of recession talk. And many people worry, if we do have one, it would cause the unemployment rate to skyrocket. Some even fear that a spike in unemployment would lead to a rash of <a href="https://www.mykcm.com/2023/10/31/foreclosures-and-bankruptcies-wont-crash-the-housing-market/" rel="noopener noreferrer" target="_blank">foreclosures</a> similar to what happened 15 years ago.
However, the latest <a href="https://www.wsj.com/economy/a-recession-is-no-longer-the-consensus-3ad0c3a3" rel="noopener noreferrer" target="_blank">Economic Forecasting Survey</a> from the Wall Street Journal (WSJ) reveals that, for the first time in over a year, less than half (48%) of economists believe a recession will actually occur within the next year:
“Economists are turning optimistic on the U.S. economy . . . economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.”
If over half of the experts no longer expect a recession within the next year, you might naturally think those same experts also don’t expect the unemployment rate to jump way up – and you’d be right. The graph below uses <a href="https://www.wsj.com/economy/economic-forecasting-survey-archive-11617814998" rel="noopener noreferrer" target="_blank">data</a> from that same WSJ survey to show exactly what the economists project for the unemployment rate over the next three years (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Projections-for-the-next-3-Years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Projections-for-the-next-3-Years.png" /></a>
If those expert projections are correct, more people will lose their jobs in the upcoming year. And job losses of any kind are devastating for those people and their loved ones.
However, the question here is: will there be enough job losses to cause a wave of foreclosures that will crash the housing market? Based on historical context from <a href="https://www.macrotrends.net/countries/USA/united-states/unemployment-rate" rel="noopener noreferrer" target="_blank">Macrotrends</a> and the <a href="https://www.bls.gov/news.release/pdf/empsit.pdf" rel="noopener noreferrer" target="_blank">Bureau of Labor Statistics</a> (BLS), the answer is no. That’s because the unemployment rate is currently near all-time lows (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Rate-Near-All-Time-Lows.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Rate-Near-All-Time-Lows.png" /></a>
As the orange bar in the graph shows, the average unemployment rate dating back to 1948 is 5.7%. The red bar shows, the last time the housing market crashed, in the immediate aftermath of the 2008 financial crisis, the average unemployment rate was up to 8.3%. Both of those bars are much higher than the unemployment rate today (shown in the blue bar).
Moving forward, projections show the unemployment rate is likely to stay beneath the 75-year average. And that means we won’t see a wave of foreclosures that would severely impact the housing market.
Bottom Line
Most economists no longer expect a recession to occur in the next 12 months. That’s why they also don’t expect a dramatic rise in the unemployment rate that would lead to a rash of foreclosures and another <a href="https://www.mykcm.com/2023/09/27/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon/" rel="noopener noreferrer" target="_blank">housing market crash</a>. If you have questions about unemployment and its impact on the housing market, <a href="https://www.mykcm.com/2023/10/30/a-real-estate-agent-helps-take-the-fear-out-of-the-market/" rel="noopener noreferrer" target="_blank">let’s connect</a>.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-linkindex="6" data-ogsc="">property in the Bay Area</a>.
2023-11-29T13:17:59-07:002023-11-29T13:25:38-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:31125Foreclosures and Bankruptcies Won’t Crash the Housing Market<img src="https://files.keepingcurrentmatters.com/content/images/20231030/20231031-Foreclosures-and-Bankruptcies-Won-t-Crash-the-Housing-Market.png" alt="" class="img-thumbnail mx-auto d-block" />
If you've been following the news recently, you might have seen articles about an increase in foreclosures and bankruptcies. That could be making you feel uneasy, especially if you're thinking about <a href="https://www.mykcm.com/2023/10/17/how-buying-a-multi-generational-home-helps-with-affordability-today/" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.mykcm.com/2023/10/18/what-are-the-real-reasons-you-want-to-move-right-now/" rel="noopener noreferrer" target="_blank">selling</a> a house.
But the truth is, even though the numbers are going up, the <a href="https://www.mykcm.com/2023/09/27/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon/" rel="noopener noreferrer" target="_blank">data shows</a> the housing market isn’t headed for a crisis.
Foreclosure Activity Rising, but Less Than Headlines Suggest
In recent years, the number of foreclosures has been very low. That’s because, in 2020 and 2021, the forbearance program and other relief options were put in place to help many homeowners stay in their homes during that tough time.
When the moratorium ended, there was an expected rise in foreclosures. But just because they’re up, that doesn't mean the housing market is in trouble.
To help you see how much things have changed since the housing crash in 2008, check out the graph below using research from ATTOM, a property data provider. It looks at properties with a foreclosure filing going all the way back to 2005 to <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-q3-and-september-2023-u-s-foreclosure-market-report/" rel="noopener noreferrer" target="_blank">show</a> that there have been fewer foreclosures since the crash.
<a href="https://www.mykcm.com/content/images/20231030/20231031-Foreclosure-Activity-Rose-In-Third-Quarter.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231030/20231031-Foreclosure-Activity-Rose-In-Third-Quarter.png" /></a>
As you can see, foreclosure filings are inching back up to pre-pandemic numbers, but they're still way lower than when the housing market crashed in 2008. And today, the tremendous amount of <a href="https://www.mykcm.com/2023/10/12/growing-your-net-worth-with-homeownership/" rel="noopener noreferrer" target="_blank">equity</a> American homeowners have in their homes can help people sell and avoid foreclosure.
The Increase in Bankruptcies Isn’t Dramatic Either
As you can see <a href="https://www.uscourts.gov/news/2023/07/31/bankruptcy-filings-rise-10-percent" rel="noopener noreferrer" target="_blank">below</a>, the financial trouble many industries and small businesses felt during the pandemic didn’t cause a dramatic increase in bankruptcies. Still, the number of bankruptcies has gone up slightly since last year, nearly returning to 2021 levels. But that isn’t cause for alarm.
<a href="https://www.mykcm.com/content/images/20231030/20231031-Bankruptcies-Below-Pre-Pandemic-Levels.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231030/20231031-Bankruptcies-Below-Pre-Pandemic-Levels.png" /></a>
The numbers for 2021 and 2022 were lower than more typical years. That’s in part because the government provided trillions of dollars in aid to individuals and businesses during the pandemic. So, let’s instead focus on the bar for this year and compare it to the bar on the far left (2019). It shows the number of bankruptcies today is still nowhere near where it was before the pandemic. Both of these two factors are reasons why the housing market isn't in danger of crashing.
Bottom Line
Right now, it's crucial to understand the data. Foreclosures and bankruptcies are rising, but these leading indicators aren’t signaling trouble that would cause another crash.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="3">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-10-31T16:07:31-07:002023-10-31T16:09:20-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30952Why Home Prices Keep Going Up<img src="https://files.keepingcurrentmatters.com/content/images/20231018/20231023-Why-Home-Prices-Keep-Going-Up.png" alt="" class="img-thumbnail mx-auto d-block" />
If you've ever dreamed of buying your own place, or selling your current house to upgrade, you're no stranger to the rollercoaster of emotions changing <a href="https://www.mykcm.com/2023/10/11/the-latest-expert-forecasts-for-home-prices-in-2023/" rel="noopener noreferrer" target="_blank">home prices</a> can stir up. It's a tale of financial goals, doubts, and a dash of anxiety that many have been through.
But if you put off moving because you’re worried home prices might drop, make no mistake, they’re not going down. In fact, it's just the opposite. National <a href="https://www.blackknightinc.com/data-reports/" rel="noopener noreferrer" target="_blank">data</a> from several <a href="https://www.zillow.com/research/data/" rel="noopener noreferrer" target="_blank">sources</a> says they’ve been <a href="https://www.freddiemac.com/research/indices/house-price-index" rel="noopener noreferrer" target="_blank">going up</a> consistently this year (see graph below):
<a href="https://www.mykcm.com/content/images/20231018/20231023-Percent-Change-In-Home-Values.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231018/20231023-Percent-Change-In-Home-Values.png" /></a>
Here’s what this graph shows. In the first half of 2022, home prices rose significantly (the green bars on the left side of the graphs above). Those increases were dramatic and unsustainable.
So, in the second half of the year, prices went through a correction and started dipping a bit (shown in red). But those slight declines were shallow and short-lived. Still, the media really focused on those drops in their headlines – and that created a lot of fear and uncertainty among consumers.
But here’s what hasn’t been covered fully. So far in 2023, prices are going up once more, but this time at a more normal pace (the green bars on the right side of the graphs above). And after price gains that were too high and then the corrections that followed in 2022, the fact that all three reports show more normal or typical price appreciation this year is good news for the housing market.
Orphe Divounguy, Senior Economist at Zillow, <a href="https://www.zillow.com/research/total-market-value-2023-33031/" rel="noopener noreferrer" target="_blank">explains</a> changing home prices over the past 12 months this way:
“The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short lived as housing has rebounded impressively so far in 2023. . .”
Looking ahead, home price appreciation typically starts to ease up <a href="https://www.mykcm.com/2023/09/26/the-return-of-normal-seasonality-for-home-price-appreciation/" rel="noopener noreferrer" target="_blank">this time of year</a>. As that happens, there’s some risk the media will confuse slowing price growth (deceleration of appreciation) with home prices falling (depreciation). Don’t be fooled. Slower price growth is still growth.
Why Are Home Prices Increasing Now?
One reason why home prices are going back up is because there still <a href="https://www.mykcm.com/2023/09/29/explaining-todays-low-housing-supply-infographic/" rel="noopener noreferrer" target="_blank">aren't enough homes</a> for sale for all the people who want to buy them.
Even though higher <a href="https://www.mykcm.com/2023/10/16/are-higher-mortgage-rates-here-to-stay/" rel="noopener noreferrer" target="_blank">mortgage rates</a> cause <a href="https://www.mykcm.com/2023/09/15/plenty-of-buyers-are-still-active-today-infographic/" rel="noopener noreferrer" target="_blank">buyer demand</a> to moderate, they also cause the <a href="https://www.mykcm.com/2023/09/27/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon/" rel="noopener noreferrer" target="_blank">supply of available homes</a> to go down. That’s because of the mortgage rate lock-in effect. When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rate just to take on a higher one for their next home.
So, with higher mortgage rates impacting both buyers and sellers, the supply and demand equation of the housing market has been affected. But since there are still more people who want to purchase homes than there are <a href="https://www.mykcm.com/2023/09/14/why-is-housing-inventory-so-low/" rel="noopener noreferrer" target="_blank">homes available to buy</a>, prices continue to rise. As Freddie Mac <a href="https://www.freddiemac.com/research/forecast/20230921-overall-economic-growth-has-been-resilient" rel="noopener noreferrer" target="_blank">states</a>:
“While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .”
Here’s How This Impacts You
Buyers: If you've been waiting to <a href="https://www.mykcm.com/2023/10/04/understanding-the-benefits-of-owning-your-first-home/" rel="noopener noreferrer" target="_blank">buy a home</a> because you were afraid its value might drop, knowing that home prices have gone back up should make you feel better. <a href="https://www.mykcm.com/2023/10/06/how-homeowner-net-worth-grows-with-time-infographic/" rel="noopener noreferrer" target="_blank">Buying a home</a> gives you a chance to own something that usually becomes <a href="https://www.mykcm.com/2023/10/02/unpacking-the-long-term-benefits-of-homeownership/" rel="noopener noreferrer" target="_blank">more valuable over time</a>.
Sellers: If you've been holding off on selling your house because you were worried about how changing home prices would impact its value, it could be a smart move to work with a <a href="https://www.mykcm.com/2023/10/09/key-skills-you-need-your-listing-agent-to-have/" rel="noopener noreferrer" target="_blank">real estate agent</a> and put your house <a href="https://www.mykcm.com/2023/09/15/plenty-of-buyers-are-still-active-today-infographic/" rel="noopener noreferrer" target="_blank">on the market</a>. You don't have to wait any longer because the most recent data indicates home prices have turned in your favor.
Bottom Line
If you put off moving because you were worried that home prices might go down, data shows they’re <a href="https://www.mykcm.com/2023/10/03/home-prices-are-not-falling/" rel="noopener noreferrer" target="_blank">increasing</a> across the country. Let’s connect so you can understand how home prices are changing in our local area.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-10-23T17:32:01-07:002023-10-23T17:34:28-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30776The Latest Expert Forecasts for Home Prices in 2023<img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231011-The-Latest-Expert-Forecasts-for-Home-Prices-in-2023.png" alt="" class="img-thumbnail mx-auto d-block" />
Are you thinking about <a href="https://www.mykcm.com/2023/08/14/where-are-people-moving-today-and-why/" rel="noopener noreferrer" target="_blank">making a move</a>? If so, all the speculation that <a href="https://www.mykcm.com/2023/09/26/the-return-of-normal-seasonality-for-home-price-appreciation/" rel="noopener noreferrer" target="_blank">home prices</a> would crash this year may have you feeling a bit on edge about your decision. Let the data and the experts reassure you. Prices aren’t in a downward spiral and will actually finish the year strong.
Even though you may have heard talk that prices would drop 5, 10, or even 20% this year, that hasn’t happened. The big reason why is the <a href="https://www.mykcm.com/2023/09/27/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon/" rel="noopener noreferrer" target="_blank">supply of homes</a> for sale is too low. There are just <a href="https://www.mykcm.com/2023/09/15/plenty-of-buyers-are-still-active-today-infographic/" rel="noopener noreferrer" target="_blank">more buyers</a> looking to buy than <a href="https://www.mykcm.com/2023/09/14/why-is-housing-inventory-so-low/" rel="noopener noreferrer" target="_blank">homes available</a>, and that’s kept prices from falling.
To prove this year wasn’t a bust for <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">home prices</a>, let’s look at the latest 2023 forecast from a number of experts.
Most Experts Project Home Prices Will Net Positive this Year
The general consensus from industry experts is that home <a href="https://www.mykcm.com/2023/09/05/expert-home-price-forecasts-revised-up-for-2023/" rel="noopener noreferrer" target="_blank">price appreciation</a> will actually be positive for 2023. The graph below shows the latest 2023 year-end forecasts from six different organizations:
<a href="https://www.mykcm.com/content/images/20231005/20231011-2023-Year-End-Home-Price-Forecasts.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231011-2023-Year-End-Home-Price-Forecasts.png" /></a>
As you can see, all but one project nationally prices will net positive this year. That’s significant because it shows the majority are optimistic about home price growth.
If you’re still worried about the one red bar that shows an overall price drop for the year, think about this. The <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-q3-2023-us-economic-outlook-07-27-2023.pdf" rel="noopener noreferrer" target="_blank">projection</a> from the National Association of Realtors (NAR) is for only a slight decline. It’s not the big crash all the headlines called for. Plus, if you average all six forecasts together, the expectation is that prices will net somewhere around 3.3% positive growth for the year.
If these 6 organizations aren’t enough to convince you that prices won’t come tumbling down, here’s something else to consider. One of the six forecasts represented in the graph is the <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">Home Price Expectation Survey</a> (HPES) from Pulsenomics. It combines survey results from over 100 economists, investment strategists, and housing market analysts. The HPES found that the average from all 100 of those experts is 3.3% price growth for the year.
If you look back at the graph above, you’ll notice the blue average for the forecasts in this graph is also 3.3%. While individual forecasts may vary, both the HPES survey and the average of these forecasts provide the same projection. And 3.3% appreciation is a completely different story than prices falling.
Bottom Line
If you’re worried about home prices falling this year, let the experts reassure you. Based on the average of the latest forecasts, home prices will actually show positive growth this year. If you have questions about what’s happening with home prices in our local area, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.
2023-10-11T16:10:37-07:002023-10-11T16:13:33-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30723Home Prices Are Not Falling<img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003-Home-Prices-Are-Not-Falling.png" alt="" class="img-thumbnail mx-auto d-block" />
During the fourth quarter of last year, some housing experts projected <a href="https://www.mykcm.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/" rel="noopener noreferrer" target="_blank">home prices</a> were going to crash in 2023. The media ran with those forecasts and put out headlines calling for doom and gloom in the housing market. All of this negative news coverage made a lot of people have doubts about the strength of the residential real estate market.
If it made you question if you should delay your own <a href="https://www.mykcm.com/2023/09/22/how-remote-work-helps-with-your-house-hunt-infographic/" rel="noopener noreferrer" target="_blank">plans to move</a>, here’s what you really need to know.
Home Prices Never Crashed
Disregard what you saw in the headlines. The actual <a href="https://www.zillow.com/research/data/" rel="noopener noreferrer" target="_blank">data</a> shows home prices were <a href="https://www.mykcm.com/2023/09/05/expert-home-price-forecasts-revised-up-for-2023/" rel="noopener noreferrer" target="_blank">remarkably resilient</a> and performed far better than the media would have you believe (see graph below):
<a href="https://www.mykcm.com/content/images/20230929/20231003-Percent-Change-In-Home-Values.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003-Percent-Change-In-Home-Values.png" /></a>
This graph uses <a href="https://www.blackknightinc.com/data-reports/" rel="noopener noreferrer" target="_blank">reports</a> from three trusted <a href="https://www.freddiemac.com/research/indices/house-price-index" rel="noopener noreferrer" target="_blank">sources</a> to clearly illustrate prices have <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">already rebounded</a> after experiencing only slight declines nationally. That’s a far cry from the crash so many articles called for.
The declines that did happen (shown in red), weren’t drastic but were short-lived. As Nicole Friedman, a reporter at the Wall Street Journal (WSJ), <a href="https://www.wsj.com/economy/housing/the-fall-in-home-prices-may-already-be-over-3496d6bb" rel="noopener noreferrer" target="_blank">says</a>:
“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Even though some media coverage made a big deal about home prices pulling back, the slight correction that happened is already in the rearview mirror. Basically, this data shows you home prices aren’t falling anymore – they’re actually going back up.
What’s Next for Home Prices?
The consensus from experts is that <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">home price growth</a> will continue in the years ahead and is <a href="https://www.mykcm.com/2023/09/26/the-return-of-normal-seasonality-for-home-price-appreciation/" rel="noopener noreferrer" target="_blank">returning to normal</a> levels for the market. That means we’ll still see home prices appreciating, just at a slower pace than the last few years – and that’s a good thing.
Some news sources will see home price growth slowing and put out stories that make you think prices are falling again. The return of misleading headlines like those is already having an impact on how homebuyers are feeling again. You can see how this affects general opinion in the <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey/national-housing-survey-archive" rel="noopener noreferrer" target="_blank">Consumer Confidence Survey</a> from Fannie Mae (see graph below):
<a href="https://www.mykcm.com/content/images/20230929/20231003---of-Americans-Who-Think-Home-Prices-Will-Go-Down-over-the-Next-12-Months.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003---of-Americans-Who-Think-Home-Prices-Will-Go-Down-over-the-Next-12-Months.png" /></a>
While the percentage of Americans who think prices will fall has been slowly declining this year, the latest Consumer Confidence data indicates that’s ticked back up recently (shown in red). This change is surprising especially since the home price data shows prices are going up, not down. It tells you the impact the media still has on public opinion.
Don’t fall for the negative headlines and become part of this statistic. Remember, data from a number of sources shows home prices aren’t falling anymore.
Bottom Line
Even though the media may make things sound doom and gloom, the data shows home prices aren’t falling anymore. So, don’t let the headlines scare you or delay your plans. Let's connect so you have a trusted resource to cut through the noise and tell you what’s really happening in our area.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-10-09T17:38:14-07:002023-10-09T17:43:43-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30490Why Today’s Housing Inventory Shows a Crash Isn’t on the Horizon<img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-Why-Today-s-Housing-Inventory-Shows-a-Crash-Isn-t-on-the-Horizon-KCM.png" alt="" class="img-thumbnail mx-auto d-block" />
You might remember the housing crash in 2008, even if you didn't <a href="https://www.mykcm.com/2023/09/21/the-many-non-financial-benefits-of-homeownership/" rel="noopener noreferrer" target="_blank">own a home</a> at the time. If you’re worried there’s going to be a repeat of what happened back then, there's good news – the housing market now is different from 2008.
One important reason is there aren't enough <a href="https://www.mykcm.com/2023/09/18/are-more-homes-coming-onto-the-market/" rel="noopener noreferrer" target="_blank">homes for sale</a>. That means there’s an undersupply, not an oversupply like the last time. For the market to crash, there would have to be too many houses for sale, but the data doesn't show that happening.
Housing supply comes from three main sources:
Homeowners deciding to sell their houses
Newly built homes
Distressed properties (foreclosures or short sales)
Here’s a closer look at today's <a href="https://www.mykcm.com/2023/09/14/why-is-housing-inventory-so-low/" rel="noopener noreferrer" target="_blank">housing inventory</a> to understand why this isn’t like 2008.
Homeowners Deciding To Sell Their Houses
Although housing supply did grow compared to last year, it’s still low. The current months’ supply is below the norm. The graph below shows this more clearly. If you look at the latest <a href="https://www.nar.realtor/topics/existing-home-sales" rel="noopener noreferrer" target="_blank">data</a> (shown in green), compared to 2008 (shown in red), there’s only about a third of that available <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-2-2-in-july" rel="noopener noreferrer" target="_blank">inventory</a> today.<a href="https://www.mykcm.com/content/images/20230926/20230927-Average-Annual-Inventory-Of-Homes-for-sale.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-Average-Annual-Inventory-Of-Homes-for-sale.png" /></a>
So, what does this mean? There just aren't enough homes available to make home values drop. To have a repeat of 2008, there’d need to be a lot more people selling their houses with very few buyers, and that's not happening right now.
Newly Built Homes
People are also talking a lot about what's going on with <a href="https://www.mykcm.com/2023/09/07/get-ready-for-smaller-more-affordable-homes/" rel="noopener noreferrer" target="_blank">newly built</a> houses these days, and that might make you wonder if homebuilders are overdoing it. The graph below <a href="http://www.census.gov/construction/nrc/xls/co_cust.xls" rel="noopener noreferrer" target="_blank">shows</a> the number of new houses built over the last 52 years:<a href="https://www.mykcm.com/content/images/20230926/20230927-Single-Family-Housing-Units-Completed.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-Single-Family-Housing-Units-Completed.png" /></a>
The 14 years of underbuilding (shown in red) is a big part of the reason why inventory is so low today. Basically, builders haven’t been building enough homes for years now and that’s created a significant deficit in supply.
While the final blue bar on the graph shows that’s ramping up and is on pace to hit the long-term average again, it won’t suddenly create an oversupply. That’s because there’s too much of a gap to make up. Plus, builders are being intentional about not overbuilding homes like they did during the bubble.
Distressed Properties (Foreclosures and Short Sales)
The last place <a href="https://www.mykcm.com/2023/08/25/todays-housing-market-has-only-half-the-usual-inventory-infographic/" rel="noopener noreferrer" target="_blank">inventory</a> can come from is distressed properties, including short sales and foreclosures. Back during the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to get a home loan they couldn’t truly afford.
Today, lending standards are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" rel="noopener noreferrer" target="_blank">data</a> from the Federal Reserve to show how things have changed since the housing crash:<a href="https://www.mykcm.com/content/images/20230926/20230927-The-Number-of-foreclosure-filings-is-near-all-time-lows.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-The-Number-of-foreclosure-filings-is-near-all-time-lows.png" /></a>
This graph illustrates, as lending standards got tighter and buyers were more qualified, the number of foreclosures started to go down. And in 2020 and 2021, the combination of a moratorium on foreclosures and the <a href="https://www.mykcm.com/2022/08/08/why-the-forbearance-program-changed-the-housing-market/" rel="noopener noreferrer" target="_blank">forbearance program</a> helped prevent a repeat of the wave of foreclosures we saw back around 2008.
The forbearance program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And <a href="https://www.mba.org/news-and-research/newsroom/news/2022/08/15/share-of-mortgage-loans-in-forbearance-decreases-to-0.74-in-july" rel="noopener noreferrer" target="_blank">data</a> on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market.
What This Means for You
Inventory levels aren’t anywhere near where they’d need to be for prices to drop significantly and the housing market to crash. <a href="https://www.bankrate.com/real-estate/is-the-housing-market-about-to-crash/#fall" rel="noopener noreferrer" target="_blank">According</a> to Bankrate, that isn’t going to change anytime soon, especially considering buyer demand is still strong:
“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”
Bottom Line
The market doesn’t have enough available <a href="https://www.mykcm.com/2023/09/04/why-its-still-a-sellers-market-today/" rel="noopener noreferrer" target="_blank">homes</a> for a repeat of the 2008 housing crisis – and there’s nothing that suggests that will change anytime soon. That’s why housing inventory tells us there’s no crash on the horizon.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.
2023-09-27T09:37:27-07:002023-09-27T09:40:33-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30345Your Home Equity Can Offset Affordability Challenges<img src="https://files.keepingcurrentmatters.com/content/images/20230914/20230919-Your-Home-Equity-Can-Offset-Affordability-Challenges.png" alt="" class="img-thumbnail mx-auto d-block" />
Are you thinking about <a href="https://www.mykcm.com/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/" rel="noopener noreferrer" target="_blank">selling your house</a>? If so, today’s <a href="https://www.mykcm.com/2023/09/06/mortgage-rates-past-present-and-possible-future/" rel="noopener noreferrer" target="_blank">mortgage rates</a> may be making you wonder if that’s the right decision. Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home. If you’re worried about this too, know that even though rates are high right now, so is <a href="https://www.mykcm.com/2023/09/11/planning-to-retire-your-equity-can-help-you-make-a-move/" rel="noopener noreferrer" target="_blank">home equity</a>. Here’s what you need to know.
Bankrate <a href="https://www.bankrate.com/home-equity/reasons-to-use-home-equity/" rel="noopener noreferrer" target="_blank">explains</a> exactly what equity is and how it grows:
“Home equity is the portion of your home that you’ve paid off and own outright. It’s the difference between what the home is worth and how much is still owed on your mortgage. As your home’s value increases over the long term and you pay down the principal on the mortgage, your equity stake grows.”
In other words, equity is how much your home is worth now, minus what you still owe on your home loan.
How Much Equity Do Homeowners Have Now?
Recently, your equity has been growing faster than you might think. To help contextualize just how much the average homeowner has, CoreLogic <a href="https://www.corelogic.com/press-releases/home-equity-increases-winter-spring-reducing-underwater-properties-q2/" rel="noopener noreferrer" target="_blank">says</a>:
“. . . the average U.S. homeowner now has about $290,000 in equity.”
That’s because, over the past few years, home prices went up significantly – and those rising prices helped your equity to accumulate faster than usual. While the market has started to normalize, there are still more people wanting to <a href="https://www.mykcm.com/2023/08/30/buyer-traffic-is-still-stronger-than-the-norm/" rel="noopener noreferrer" target="_blank">buy homes</a> than there are homes available <a href="https://www.mykcm.com/2023/09/14/why-is-housing-inventory-so-low/" rel="noopener noreferrer" target="_blank">for sale</a>. This high demand is causing <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">home prices</a> to go up again.
According to the <a href="https://www.fhfa.gov/Media/Blog/Pages/Homeowners-Equity-Remains-High.aspx" rel="noopener noreferrer" target="_blank">Federal Housing Finance Agency</a> (FHFA), the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank">Census</a>, and <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q2-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">ATTOM</a>, a property data provider, nearly two-thirds (68.7%) of homeowners have either fully paid off their mortgages or have at least 50% equity (see chart below):
<a href="https://www.mykcm.com/content/images/20230914/20230919-Americans-Sitting-On-Tremendous-Equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230914/20230919-Americans-Sitting-On-Tremendous-Equity.png" /></a>
That means nearly 70% of homeowners have a tremendous amount of equity right now.
How Equity Helps with Your Affordability Concerns
With today’s affordability challenges, your equity can make a big difference when you decide to move. After you <a href="https://www.mykcm.com/2023/09/13/should-baby-boomers-buy-or-rent-after-selling-their-houses/" rel="noopener noreferrer" target="_blank">sell your house</a>, you can use the equity you've built up in your home to help you buy your next one. Here’s how:
Be an all-cash buyer: If you've been living in your current home for a long time, you might have enough equity to buy a new house without having to take out a loan. If that's the case, you won't need to borrow any money or worry about mortgage rates. The National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/cash-rules" rel="noopener noreferrer" target="_blank">states</a>:
“These all-cash home buyers are happily avoiding the higher mortgage interest rates . . .”
Make a larger down payment: Your <a href="https://www.mykcm.com/2023/09/01/homeowners-have-a-lot-of-equity-right-now-infographic/" rel="noopener noreferrer" target="_blank">equity</a> could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won't have to borrow as much money so today’s rates become less of a sticking point. Experian <a href="https://www.experian.com/blogs/ask-experian/does-your-down-payment-affects-your-mortgage/" rel="noopener noreferrer" target="_blank">explains</a>:
“Increasing your down payment lowers your principal loan amount and, consequently, your loan-to-value ratio, which could lead to a lower interest rate offer from your lender.”
Bottom Line
If you're thinking about <a href="https://www.mykcm.com/2023/09/04/why-its-still-a-sellers-market-today/" rel="noopener noreferrer" target="_blank">moving</a>, the equity you've built up can make a big difference, especially today. To find out how much equity you've got in your current house and how you can use it for your next home, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-09-19T17:05:36-07:002023-09-19T17:07:50-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30052Expert Home Price Forecasts Revised Up for 2023<img src="https://files.keepingcurrentmatters.com/content/images/20230825/20230905-expert-home-price-forecasts-revised-up-for-2023.png" alt="" class="img-thumbnail mx-auto d-block" />
Toward the end of last year, there were a number of headlines saying <a href="https://www.mykcm.com/2023/06/12/are-home-prices-going-up-or-down-that-depends/" rel="noopener noreferrer" target="_blank">home prices</a> were going to fall substantially in 2023. That led to a lot of fear and questions about whether there was going to be a repeat of the housing crash that happened back in 2008. But the headlines got it wrong.
While there was a slight home price correction after the sky-high price appreciation during the <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>, nationally, <a href="https://www.mykcm.com/2023/06/05/oops-home-prices-didnt-crash-after-all/" rel="noopener noreferrer" target="_blank">home prices</a> didn’t come crashing down. If anything, <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">prices</a> were a lot more resilient than many people expected.
Let's take a look at some of the expert forecasts from late last year stacked against their most recent <a href="https://www.mykcm.com/2023/08/04/housing-market-forecast-for-the-rest-of-2023-infographic-1/" rel="noopener noreferrer" target="_blank">forecasts</a> to show that even the experts recognize they were overly pessimistic.
Expert Home Price Forecasts: Then and Now
This visual shows the <a href="https://www.zillow.com/research/data/" rel="noopener noreferrer" target="_blank">2023</a> home price <a href="https://www.mba.org/news-and-research/forecasts-and-commentary/mortgage-finance-forecast-archives" rel="noopener noreferrer" target="_blank">forecasts</a> from seven <a href="https://www.fanniemae.com/research-and-insights/forecast/forecast-monthly-archive" rel="noopener noreferrer" target="_blank">organizations</a>. It provides the original 2023 forecasts (released in late <a href="https://ustoday.news/a-20-drop-in-house-prices-7-forecast-models-tend-to-crash-here-the-other-13-models-show-the-housing-market-in-2023/" rel="noopener noreferrer" target="_blank">2022</a>) for what would happen to <a href="https://twitter.com/NewsLambert/status/1671900591113609216" rel="noopener noreferrer" target="_blank">home prices</a> by the end of <a href="https://twitter.com/NewsLambert/status/1671556169712672768" rel="noopener noreferrer" target="_blank">this year</a> and their most recently <a href="https://twitter.com/NewsLambert/status/1686959362563092480" rel="noopener noreferrer" target="_blank">revised</a> 2023 <a href="https://twitter.com/NewsLambert/status/1691799764466008217" rel="noopener noreferrer" target="_blank">forecasts</a> (see chart below):
<a href="https://www.mykcm.com/content/images/20230831/20230905-2023-Year-end-home-price-forecasts.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230831/20230905-2023-Year-end-home-price-forecasts.png" /></a>As the red in the middle column shows, in all instances, their original forecast called for home prices to fall. But, if you look at the right column, you’ll see all experts have updated their projections for the year-end to show they expect prices to either be flat or have positive growth. That’s a significant change from the original negative numbers.
There are a number of reasons why <a href="https://www.mykcm.com/2023/07/17/home-prices-are-rebounding/" rel="noopener noreferrer" target="_blank">home prices</a> are so resilient to falling. As Odeta Kushi, Deputy Chief Economist at First American, <a href="https://blog.firstam.com/economics/the-reconomy-podcast-why-us-homeowners-have-a-big-advantage-in-a-rising-mortgage-rate-environment" rel="noopener noreferrer" target="_blank">says</a>:
“One thing is for sure, having long-term, fixed-rate debt in the U.S. protects homeowners from payment shock, acts as an inflation hedge - your primary household expense doesn't change when inflation rises - and is a reason why home prices in the U.S. are downside sticky.”
A Look Forward To Get Ahead of the Next Headlines
For home prices, you’re going to continue to see misleading media coverage in the months ahead. That’s because there’s <a href="https://www.mykcm.com/2023/07/25/dont-fall-for-the-next-shocking-headlines-about-home-prices/" rel="noopener noreferrer" target="_blank">seasonality</a> to home price appreciation and they’re going to misunderstand that. Here’s what you need to know to get ahead of the next round of negative headlines.
As activity in the housing market slows at the end of this year (as it typically does each year), home price growth will slow too. But, this doesn’t mean prices are falling – it’s just that they’re not increasing as quickly as they were when the market was in the peak homebuying season.
Basically, deceleration of appreciation is not the same thing as home prices depreciating.
Bottom Line
The headlines have an impact, even if they’re not true. While the media said home prices would fall significantly in their coverage at the end of last year, that didn’t happen. Let’s connect so you have a trusted resource to help you separate fact from fiction with reliable data.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-09-05T18:09:05-07:002023-09-05T18:12:05-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:30008Why It’s Still a Seller’s Market Today<img src="https://files.keepingcurrentmatters.com/content/images/20230831/20230904-Why-It-s-still-a-sellers-market-today.png" alt="" class="img-thumbnail mx-auto d-block" />
Even though activity in the housing market has slowed from the frenzy that was the <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>, it’s still a seller’s market because the <a href="https://www.mykcm.com/2023/08/25/todays-housing-market-has-only-half-the-usual-inventory-infographic/" rel="noopener noreferrer" target="_blank">supply of homes</a> for sale is so low. But what does that really mean for you? And why are conditions today so good if you want to <a href="https://www.mykcm.com/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/" rel="noopener noreferrer" target="_blank">sell your house</a>?
The latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-2-2-in-july" rel="noopener noreferrer" target="_blank">Existing Home Sales Report</a> from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Housing inventory is measured by the number of available homes on the market. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. In a balanced market, there’s usually about a six-month supply. Today, we have only about 3 months’ supply of homes at the current sales pace (see graph below):
<a href="https://www.mykcm.com/content/images/20230831/20230904-Months-Inventory-of-homes-for-sale.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230831/20230904-Months-Inventory-of-homes-for-sale.png" /></a>As the visual shows, given the current <a href="https://www.mykcm.com/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/" rel="noopener noreferrer" target="_blank">inventory of homes</a>, it’s still a seller's market.
Today, we’re nowhere near what’s considered a balanced market. In fact, the current months’ supply is half of what’s typical of a normal market. That means there just aren’t enough homes to go around based on today’s <a href="https://www.mykcm.com/2023/08/30/buyer-traffic-is-still-stronger-than-the-norm/" rel="noopener noreferrer" target="_blank">buyer demand</a>.
As Lawrence Yun, Chief Economist for NAR, <a href="https://www.cnn.com/2023/07/20/homes/existing-home-sales-june/index" rel="noopener noreferrer" target="_blank">says</a>:
“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”
How Does Being in a Seller’s Market Benefit You?
Sellers, these conditions give you a real edge. Right now, there are buyers who are ready, willing, and able to purchase a home. And, because there's a shortage of homes up for sale, the ones that do hit the market are like magnets for those buyers.
If you work with a local real estate agent to <a href="https://www.mykcm.com/2023/08/10/about-11000-houses-will-sell-today/" rel="noopener noreferrer" target="_blank">list your house</a> right now, in good condition, and at the <a href="https://www.mykcm.com/2023/07/31/pricing-your-house-right-still-matters-today/" rel="noopener noreferrer" target="_blank">right price</a>, it could get a lot of attention. You might even end up with multiple offers.
Bottom Line
Today’s seller’s market sets you up with a big advantage when you sell your house. Because supply is so low, your house will be in the spotlight for motivated buyers who are craving more options. Let’s connect so you understand what’s happening in our local area as you get ready to enter the market.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-09-04T17:57:01-07:002023-09-04T18:00:53-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29876Why You May Still Want To Sell Your House After All<img src="https://files.keepingcurrentmatters.com/content/images/20230817/20230822-Why-You-May-Still-Want-To-Sell-Your-House-After-All.jpg" alt="" class="img-thumbnail mx-auto d-block" />
Even though you may feel reluctant to <a href="https://www.mykcm.com/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/" rel="noopener noreferrer" target="_blank">sell your house</a> because you don’t want to take on a <a href="https://www.mykcm.com/2023/07/19/explaining-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rate</a> that’s higher than the one you have now, there’s more to consider. While the financial side of things does matter, your personal needs may actually matter just as much. As an article from <a href="https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/#sell-now" rel="noopener noreferrer" target="_blank">Bankrate</a> says:
“Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market.”
So, ask yourself this: why did I want to move in the first place?
Chances are your primary motivation wasn’t just financial in nature. Why you’re really thinking about <a href="https://www.mykcm.com/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/" rel="noopener noreferrer" target="_blank">selling</a> likely has more to do with something changing in your life or a shift in what you need out of your house.
Reasons Homeowners Still Need To Sell Today
Let’s explore some of the most common reasons sellers are <a href="https://www.mykcm.com/2023/07/27/homebuyers-are-still-more-active-than-usual/" rel="noopener noreferrer" target="_blank">moving</a> today. A recent <a href="https://www.builderonline.com/data-analysis/whats-behind-this-years-high-sales-volume-despite-the-lock-in-effect_o" rel="noopener noreferrer" target="_blank">article</a> from Builder Online helps shed light on this. In this research, they identified the following categories:
Marriage – If you just got married, you may find you either need more space than you currently have, or the two of you want to find a new place you picked out together.
Divorce – If you’re getting separated or are divorcing your partner, chances are it’ll be difficult to live under the same roof. Selling the place you have, so you can own get your own spot, may be necessary.
Births – If your household is growing, you may need more square footage, including more bedrooms. If you’re running out of room for everyone, you may not be able to wait to move.
Deaths – If you’ve recently lost a loved one, it can be hard to spend time in that home. You may need to move for financial reasons or because you no longer need all the space.
Retirement – If you’re in the process of retiring, or you just did, you may be looking to downsize to cut costs, relocate to be closer to loved ones, or move to a dream location. In this new phase of life, your current home may not be able to deliver what you need.
You may find you share one of these top motivators. If any of these resonate with you, it may be <a href="https://www.mykcm.com/2023/08/10/about-11000-houses-will-sell-today/" rel="noopener noreferrer" target="_blank">time to move</a> so you can find a house better suited to your changing needs. A survey from Realtor.com finds other sellers are in the same boat. It <a href="https://mediaroom.realtor.com/2023-04-17-Realtor-com-R-Survey-82-of-Those-Looking-to-Buy-and-Sell-a-Home-Feel-Locked-In-by-Low-Mortgage-Rate" rel="noopener noreferrer" target="_blank">says</a>, 1 in 4 sellers are choosing to move for personal reasons, even with current <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a>:
“. . . more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.”
If you need to sell now because something in your own life has changed, don’t let rates hold you back from what you want. You have options to help make that move possible. You can use the <a href="https://www.mykcm.com/2023/08/07/four-ways-you-can-use-your-home-equity/" rel="noopener noreferrer" target="_blank">equity</a> you already have in your current home toward your next purchase. And with <a href="https://www.mykcm.com/2023/08/15/equity-is-a-game-changer-for-homeowners-looking-to-sell/" rel="noopener noreferrer" target="_blank">how much</a> equity homeowners have right now, you may be able to finance less than you’d expect, or pay all cash to avoid borrowing at all.
Bottom Line
When you're ready to prioritize your changing needs, let’s connect. You need an expert on your side to help you list your house and find a home that delivers on everything you're looking for.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-08-29T11:22:16-07:002023-08-29T11:24:23-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29683Why You Don’t Need To Fear the Return of Adjustable-Rate Mortgages<img src="https://files.keepingcurrentmatters.com/content/images/20230821/20230822-Why-You-Don-t-Need-To-Fear-the-Return-of-Adjustable-Rate-Mortgages.jpg" alt="" class="img-thumbnail mx-auto d-block" />
If you remember the housing crash back in 2008, you may recall just how popular adjustable-rate mortgages (ARMs) were back then. And after years of being virtually nonexistent, more people are once again using ARMs when buying a home. Let’s break down why that’s happening and why this isn’t cause for concern.
Why ARMs Have Gained Popularity More Recently
This graph uses <a href="http://www.mba.org/" rel="noopener noreferrer" target="_blank">data</a> from the Mortgage Bankers Association (MBA) to show how the percentage of adjustable-rate mortgages has increased over the past few years:
<a href="https://www.mykcm.com/content/images/20230821/20230822-Percent-of-arms-increased-since-2021.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230821/20230822-Percent-of-arms-increased-since-2021.png" /></a>
As the graph conveys, after hovering around 3% of all mortgages in 2021, many more homeowners turned to adjustable-rate mortgages again last year. There’s a simple explanation for that increase. Last year is when mortgage rates climbed dramatically. With higher borrowing costs, some homeowners decided to take out this type of loan because traditional borrowing costs were high, and an ARM gave them a lower rate.
Why Today’s ARMs Aren’t Like the Ones in 2008
To put things into perspective, let’s remember these aren’t like the ARMs that became popular leading up to 2008. Part of what caused the housing crash was loose lending standards. Back then, when a buyer got an ARM, banks and lenders didn’t require proof of their employment, assets, income, etc. Basically, people were getting loans that they shouldn’t have been awarded. This set many homeowners up for trouble because they couldn’t pay back the loans that they never had to qualify for in the first place.
This time around, lending standards are different. Banks and lenders learned from the crash, and now they verify income, assets, employment, and more. This means today’s buyers actually have to qualify for their loans and show they’ll be able to repay them.
Archana Pradhan, Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/rising-rates-lead-to-increase-in-adjustable-rate-mortgage-arm-activity/" rel="noopener noreferrer" target="_blank">explains</a> the difference between then and now:
“Around 60% of Adjustable-Rate Mortgages (ARM) that were originated in 2007 were low- or no-documentation loans . . . Similarly, in 2005, 29% of ARM borrowers had credit scores below 640 . . . Currently, almost all conventional loans, including both ARMs and Fixed-Rate Mortgages, require full documentation, are amortized, and are made to borrowers with credit scores above 640.”
In simple terms, Laurie Goodman at Urban Institute helps drive this point home by <a href="https://www.urban.org/urban-wire/should-borrowers-be-afraid-adjustable-rate-mortgages" rel="noopener noreferrer" target="_blank">saying</a>:
“Today’s Adjustable-Rate Mortgages are no riskier than other mortgage products and their lower monthly payments could increase access to homeownership for more potential buyers.”
Bottom Line
If you’re worried today’s adjustable-rate mortgages are like the ones from the housing crash, rest assured, things are different this time.
And, if you’re a first-time homebuyer and you’d like to learn more about lending options that could help you overcome today’s affordability challenges, reach out to a trusted lender.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="3">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-08-22T10:14:24-07:002023-08-22T10:16:56-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29528Don’t Expect a Flood of Foreclosures<img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230816-dont-expect-a-flood-of-foreclosures.jpg" alt="" class="img-thumbnail mx-auto d-block" />
The rising cost of just about everything from groceries to gas right now is leading to speculation that more people won’t be able to afford their mortgage payments. And that’s creating concern that a lot of foreclosures are on the horizon. While it’s true that <a href="https://www.mykcm.com/2023/07/24/foreclosure-numbers-today-arent-like-2008/" rel="noopener noreferrer" target="_blank">foreclosure filings</a> have gone up a bit compared to last year, experts say a flood of foreclosures isn’t coming.
Take it from Bill McBride of Calculated Risk. McBride is an expert on the housing market, and after closely following the data and market environment leading up to the crash, he was able to see the foreclosures coming in 2008. With the same careful eye and analysis, he has a different <a href="https://calculatedrisk.substack.com/p/fannie-and-freddie-single-family" rel="noopener noreferrer" target="_blank">take</a> on what’s ahead in the current market:
“There will not be a foreclosure crisis this time.”
Let’s look at why another flood is so unlikely.
There Aren’t Many Homeowners Who Are Seriously Behind on Their Mortgage Payments
One of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even if they couldn't show that they’d be able to pay them back. At that time, lenders weren’t being very strict when assessing applicant credit scores, income levels, employment status, and debt-to-income ratio.
But now, lending standards have tightened, leading to more qualified buyers who can afford to make their mortgage payments. And <a href="https://www.freddiemac.com/investors/financials/pdf/0523mvs.pdf" rel="noopener noreferrer" target="_blank">data</a> from <a href="https://www.freddiemac.com/investors/financials/pdf/0623mvs.pdf" rel="noopener noreferrer" target="_blank">Freddie Mac</a> and <a href="https://www.fanniemae.com/media/48496/display" rel="noopener noreferrer" target="_blank">Fannie Mae</a> shows the number of homeowners who are seriously behind on their mortgage payments is declining (see graph below):
<a href="https://www.mykcm.com/content/images/20230814/20230816-Serious-Delinquencies-on-a-decline.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230816-Serious-Delinquencies-on-a-decline.png" /></a>Molly Boese, Principal Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/loan-performance-insights-july-2023/" rel="noopener noreferrer" target="_blank">explains</a> just how few homeowners are struggling to make their mortgage payments:
“May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit. Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020.”
Before there can be a significant rise in foreclosures, the number of people who can’t make their mortgage payments would need to rise. Since so many buyers are making their payments today, a wave of foreclosures isn’t likely.
Bottom Line
If you’re worried about a potential flood of foreclosures, know there’s nothing in the data today to suggest that’ll happen. In fact, qualified buyers are making their mortgage payments at a very high rate.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.
2023-08-16T15:36:50-07:002023-08-16T15:44:33-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29334There's Only Half the Inventory of a Normal Housing Market Today<img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230808-Theres-Only-Half-the-Inventory-of-a-Normal-Housing-Market-Today.jpg" alt="" class="img-thumbnail mx-auto d-block" />
Wondering if it still makes sense to <a href="https://www.mykcm.com/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/" rel="noopener noreferrer" target="_blank">sell your house</a> right now? The short answer is, yes. Especially if you consider how few homes there are for sale today.
You may have heard <a href="https://www.mykcm.com/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/" rel="noopener noreferrer" target="_blank">inventory</a> is low right now, but you may not fully realize just how low or why that’s a perk when you go to sell your house. This graph from <a href="https://www.calculatedriskblog.com/2023/08/housing-august-7th-weekly-update.html" rel="noopener noreferrer" target="_blank">Calculated Risk</a> can help put that into perspective:
<a href="https://www.mykcm.com/content/images/20230807/20230808-Inventory-Is-Still-Historically-Low.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230808-Inventory-Is-Still-Historically-Low.png" /></a>As the graph shows, while <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">housing inventory</a> did grow slightly week-over-week (shown in the blue bar), overall supply is still low (shown in the red bars). Compared to the same week last year, supply is down roughly 10% – and it was already considered low at that time. But, if you look further back, you’ll see inventory is down even more significantly.
To gauge just how far off from normal today’s inventory is, let’s compare right now to 2019 (the last normal year in the market). When you compare the same week this year with the matching week in 2019, supply is about 50% lower. That means there are half the homes for sale now than there’d usually be.
The key takeaway? We’re still nowhere near what’s considered a balanced market. There’s plenty of <a href="https://www.mykcm.com/2023/07/27/homebuyers-are-still-more-active-than-usual/" rel="noopener noreferrer" target="_blank">demand</a> for your house because there just aren’t enough homes to go around. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/existing-home-sales-retreated-3-3-in-june-monthly-median-sales-price-reached-second-highest-amount" rel="noopener noreferrer" target="_blank">explains</a>:
“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”
So, if you want to <a href="https://www.mykcm.com/2023/07/12/renting-or-selling-your-house-whats-the-best-move/" rel="noopener noreferrer" target="_blank">list your house</a>, know that there’s only about half the inventory there’d usually be in a more normal year. That means your house will be in the spotlight if you <a href="https://www.mykcm.com/2023/07/31/pricing-your-house-right-still-matters-today/" rel="noopener noreferrer" target="_blank">sell now</a> and you may see multiple offers and a fast home sale.
Bottom Line
With the number of homes for sale roughly half of what there’d usually be in a more normal year, you can rest assured there’s demand for your house. If you want to sell, let’s connect now so your house can shine above the rest while inventory is so low.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.
2023-08-09T12:43:50-07:002023-08-09T12:45:16-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29219Sellers: Don’t Let These Two Things Hold You Back
Sellers: Don’t Let These Two Things Hold You Back
<img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230801-Sellers-Don-t-let-these-two-things-hold-you-back.jpg" alt="" class="img-thumbnail mx-auto d-block" />
August 1, 2023
<a href="https://www.mykcm.com/blog?categories=buyers" class="badge bg-light font-size-12 me-2"> For Buyers </a><a href="https://www.mykcm.com/blog?categories=sellers" class="badge bg-light font-size-12 me-2"> For Sellers </a><a href="https://www.mykcm.com/blog?categories=buying-myths" class="badge bg-light font-size-12 me-2"> Buying Myths </a><a href="https://www.mykcm.com/blog?categories=selling-myths" class="badge bg-light font-size-12 me-2"> Selling Myths </a>
Many homeowners thinking about <a href="https://www.mykcm.com/2023/07/07/the-benefits-of-downsizing-for-homeowners-infographic/" rel="noopener noreferrer" target="_blank">selling</a> have two key things holding them back. That’s feeling locked in by today’s higher mortgage rates and worrying they won’t be able to find something to buy while supply is so low. Let’s dive into each challenge and give you some helpful advice on how to overcome these obstacles.
Challenge #1: The Reluctance to Take on a Higher Mortgage Rate
According to the Federal Housing Finance Agency (FHFA), the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">average interest rate</a> for current homeowners with mortgages is less than 4% (see graph below):
<a href="https://www.mykcm.com/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png" /></a>But today, the typical 30-year fixed <a href="https://www.mykcm.com/2023/07/19/explaining-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rate</a> offered to buyers is closer to <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">7%</a>. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as the mortgage rate lock-in effect.
The Advice: Waiting May Not Pay Off
While experts project <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">mortgage rates</a> will gradually fall this year as <a href="https://www.mykcm.com/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/" rel="noopener noreferrer" target="_blank">inflation</a> cools, that doesn’t necessarily mean you should wait to sell. Mortgage rates are notoriously hard to predict. And, right now <a href="https://www.mykcm.com/2023/07/17/home-prices-are-rebounding/" rel="noopener noreferrer" target="_blank">home prices</a> are back on the rise. If you move now, you’ll at least beat rising home prices when you buy your next home. And, if experts are right and rates fall, you can always refinance later if that happens.
Challenge #2: The Fear of Not Finding Something to Buy
When so many homeowners are reluctant to take on a higher rate, fewer homes are going to come onto the market. That’s going to keep <a href="https://www.mykcm.com/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/" rel="noopener noreferrer" target="_blank">inventory</a> low. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://themortgagereports.com/104622/homeowners-become-landlords" rel="noopener noreferrer" target="_blank">explains</a>:
“Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years.”
Even though you know this <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">limited housing supply</a> helps your house stand out to eager buyers, it may also make you feel hesitant <a href="https://www.mykcm.com/2023/06/26/the-true-cost-of-selling-your-house-on-your-own/" rel="noopener noreferrer" target="_blank">to sell</a> because you don’t want to struggle to find something to purchase.
The Advice: Broaden Your Search
If fear you won’t be able to find your next home is the primary thing holding you back, remember to consider all your options. Looking at all housing types including condos, townhouses, and even <a href="https://www.mykcm.com/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/" rel="noopener noreferrer" target="_blank">newly built homes</a> can help give you more to choose from. Plus, if you’re able to work fully <a href="https://www.mykcm.com/2023/07/13/how-remote-work-expands-your-homebuying-horizons/" rel="noopener noreferrer" target="_blank">remote</a> or hybrid, you may be able to consider areas you hadn’t previously searched. If you can look further from your place of work, you may have more affordable options.
Bottom Line
Instead of focusing on the challenges, focus on what you can control. Let’s connect so you’re working with a professional who has the experience to navigate these waters and find the perfect home for you.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-08-04T08:59:41-07:002023-08-04T09:02:36-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29203How Inflation Affects Mortgage Rates<img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230803-How-Inflation-Affects-Mortgage-Rates.jpg" alt="" class="img-thumbnail mx-auto d-block" />
When you read about the housing market in the news, you might see something about a recent decision made by the Federal Reserve (the Fed). But how does this decision affect you and your plans to buy a home? Here's what you need to know.
The Fed is trying hard to reduce <a href="https://www.mykcm.com/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/" rel="noopener noreferrer" target="_blank">inflation</a>. And even though there’s been 12 straight months where inflation has cooled (see graph below), the most recent <a href="https://www.bls.gov/news.release/cpi.nr0.htm" rel="noopener noreferrer" target="_blank">data</a> shows it’s still higher than the Fed’s target of 2%:
<a href="https://www.mykcm.com/content/images/20230731/20230803-Inflation-Continues-Moderating.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230803-Inflation-Continues-Moderating.png" /></a>
While you may have been hoping the Fed would stop their hikes since they’re making progress on their goal of bringing down inflation, they don’t want to stop too soon, and risk inflation climbing back up as a result. Because of this, the Fed decided to increase the Federal Funds Rate again last week. As Jerome Powell, Chairman of the Fed, <a href="https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20230726.pdf" rel="noopener noreferrer" target="_blank">says</a>:
“We remain committed to bringing inflation back to our 2 percent goal and to keeping longer-term inflation expectations well anchored.”
Greg McBride, Senior VP, and Chief Financial Analyst at Bankrate, <a href="https://www.nbcnews.com/business/economy/interest-rate-hike-july-2023-how-much-higher-federal-reserve-rcna96210" rel="noopener noreferrer" target="_blank">explains</a> how high inflation and a strong economy play into the Fed’s recent decision:
“Inflation remains stubbornly high. The economy has been remarkably resilient, the labor market is still robust, but that may be contributing to the stubbornly high inflation. So, Fed has to pump the brakes a bit more.”
Even though a Federal Fund Rate hike by the Fed doesn’t directly dictate what happens with mortgage rates, it does have an impact. As a recent article from Fortune <a href="https://fortune.com/recommends/mortgages/what-fed-rate-hikes-mean-for-mortgage-rates/" rel="noopener noreferrer" target="_blank">says</a>:
“The federal funds rate is an interest rate that banks charge other banks when they lend one another money . . . When inflation is running high, the Fed will increase rates to increase the cost of borrowing and slow down the economy. When it’s too low, they’ll lower rates to stimulate the economy and get things moving again.”
How All of This Affects You
In the simplest sense, when inflation is high, <a href="https://www.mykcm.com/2023/07/19/explaining-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a> are also high. But, if the Fed succeeds in bringing down inflation, it could ultimately lead to lower mortgage rates, making it more affordable for you to buy a home.
This graph helps illustrate that point by showing that when <a href="https://www.bls.gov/cpi/" rel="noopener noreferrer" target="_blank">inflation</a> decreases, <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">mortgage rates</a> typically go down, too (see graph below):
<a href="https://www.mykcm.com/content/images/20230731/20230803-Mortgage-Rates-Follow-Behind-Inflation.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230803-Mortgage-Rates-Follow-Behind-Inflation.png" /></a>
As the data above shows, inflation (shown in the blue trend line) is slowly coming down and, based on historical trends, mortgage rates (shown in the green trend line) are <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">likely to follow</a>. McBride <a href="https://www.cnet.com/personal-finance/mortgages/mortgage-refinance-rates-for-july-26-2023-rates-advance/" rel="noopener noreferrer" target="_blank">says</a> this about the future of mortgage rates:
“With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably.”
Bottom Line
What happens to mortgage rates depends on inflation. If inflation cools down, mortgage rates should go down too. Let's talk so you can get expert advice on housing market changes and what they mean for you.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-08-03T13:39:08-07:002023-08-03T13:40:45-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:29124Pricing Your House Right Still Matters Today<img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230731-Pricing-your-house-right-still-matters-today.jpg" alt="" class="img-thumbnail mx-auto d-block" />
While this isn’t the frenzied market we saw during the <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>, homes that are priced right are still selling quickly and seeing multiple offers right now. That’s because the number of <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">homes for sale</a> is still so low. <a href="https://cdn.nar.realtor/sites/default/files/documents/2023-06-realtors-confidence-index-07-20-2023.pdf" rel="noopener noreferrer" target="_blank">Data</a> from the National Association of Realtors (NAR) shows 76% of homes sold within a month and the average saw 3.5 offers in June.
To set yourself up to see advantages like these, you need to rely on an agent. Only an agent has the expertise needed to find the right asking price for your house. Here’s what’s at stake if that price isn’t accurate for today’s market value.
The price you set for your house sends a message to potential buyers.
Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with it. Not to mention, if you undervalue your house, you could leave money on the table, which decreases your future buying power.
On the other hand, price it too high and you run the risk of deterring buyers from ever touring it in the first place. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it <a href="https://www.mykcm.com/2023/07/10/reasons-your-home-may-not-be-selling/" rel="noopener noreferrer" target="_blank">sits on the market</a> for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.
A <a href="https://www.nerdwallet.com/article/mortgages/price-home-sell" rel="noopener noreferrer" target="_blank">recent article</a> from NerdWallet sums it up like this:
"Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house."
Think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value.
Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see multiple offers too. Plus, when homes are priced right, they still tend to sell quickly.
To get a high-level look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:
<a href="https://www.mykcm.com/content/images/20230727/20230731-Underpriced-Market-Value-Overpriced.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230731-Underpriced-Market-Value-Overpriced.png" /></a>
Lean on a Professional’s Expertise to Price Your House Right
So why is an agent essential in finding the right price? Your local agent has the skill and the insight necessary to find the market value of your home. They’ll use their expertise to determine a realistic listing price by assessing:
The prices of recently sold homes
The current market conditions
The size and condition of your house
The location of your house
Bottom Line
Pricing your house at market value is critical, so don’t rely on guesswork. Let’s connect to make sure your house is priced right for today’s market.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.
2023-08-01T16:30:32-07:002023-08-01T16:32:19-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:28637How Remote Work Expands Your Homebuying Horizons<img src="https://files.keepingcurrentmatters.com/content/images/20230711/20230713-How-Remote-work-expands-your-homebuying-horizons.jpg" alt="" class="img-thumbnail mx-auto d-block" />
Even as some companies transition back into the office, remote work remains a popular choice for many professionals. So, if you currently enjoy working from home or hope to be able to soon, you’re not alone. According to a recent <a href="https://www.flexjobs.com/blog/post/exploring-the-impact-of-remote-work-on-mental-health-and-the-workplace/" rel="noopener noreferrer" target="_blank">survey</a>, most working professionals want to work either fully remote or hybrid (see below):
<a href="https://www.mykcm.com/content/images/20230711/20230713-Ideal-work-environment.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230711/20230713-Ideal-work-environment.png" /></a>
This trend is good news if you’re looking to <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">buy</a> a home because a remote or hybrid work setup can help you overcome some of today’s affordability and <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">housing inventory</a> challenges.
More Work Flexibility Equals More Home Options
Remote or hybrid work opens up a world of opportunities. That’s because it allows you to broaden your search for your next <a href="https://www.mykcm.com/2023/06/27/why-homeownership-wins-in-the-long-run/" rel="noopener noreferrer" target="_blank">home</a> since you’re no longer limited to living close to your workplace. With the freedom to work from anywhere, you can explore more affordable areas that may be located farther away from bustling city centers or your office. This flexibility can be a game changer while higher mortgage rates are making it difficult for some homebuyers to afford a home.
An <a href="https://www.nytimes.com/interactive/2023/06/17/upshot/17migration-patterns-movers.html" rel="noopener noreferrer" target="_blank">article</a> from the New York Times (NYT) highlights how remote work can greatly assist you in overcoming that challenge:
“. . . take advantage of the opportunity remote work has presented to move to more affordable communities (either farther out in the suburbs, or in another part of the country).”
And, since the supply of homes for sale is still so low, another key challenge for you today may be finding something with all of the features you want and need. Because remote work allows you to broaden your search radius to include additional areas, you may actually have less trouble finding a home with the features you want the most because you’ll have a bigger pool of options to pick from.
Working remotely gives you the flexibility to find an affordable home with the features you <a href="https://www.mykcm.com/2023/07/03/evaluating-your-wants-and-needs-as-a-homebuyer-matters-more-today/" rel="noopener noreferrer" target="_blank">want</a>. In other words, you have a better chance of getting what you need without blowing your budget.
Bottom Line
Working remotely not only gives you more flexibility in your job but also presents a great chance to broaden your search for a <a href="https://www.mykcm.com/2023/07/04/americans-still-view-homeownership-as-the-american-dream/" rel="noopener noreferrer" target="_blank">home</a>. Since you're not limited to a specific location, you have the opportunity to explore more options. Let's get in touch to discuss how this can expand your choices and help you find the perfect home.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="3">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-07-13T16:41:45-07:002023-07-13T16:47:52-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:28602Renting or Selling Your House: What's the Best Move?<img src="https://files.keepingcurrentmatters.com/content/images/20230710/20230712-renting-or-selling-your-house-whats-the-best-move.jpg" alt="" class="img-thumbnail mx-auto d-block" />
If you’re a homeowner ready to make a move, you may be thinking about using your current house as a short-term rental property instead of <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">selling</a> it. A short-term rental (STR) is typically offered as an alternative to a hotel, and they’re an investment that’s gained popularity in recent years.
While a short-term rental can be a tempting idea, you may find the reality of being responsible for one difficult to take on. Here are some of the challenges you could face if you rent out your house instead of <a href="https://www.mykcm.com/2023/05/25/the-benefits-of-selling-now-according-to-experts/" rel="noopener noreferrer" target="_blank">selling</a> it.
A Short-Term Rental Comes with Responsibilities
Successfully managing your house as a short-term rental takes a lot of time and effort. You’ll have to juggle tasks like dealing with reservations, organizing check-ins, and tackling cleaning, landscape, and maintenance duties. Any one of those can feel demanding, but all together it’s a lot to handle.
Short-term rentals experience high turnover rates, as new guests check in and out frequently. This home traffic can lead to increased wear and tear on your property—meaning you may need to make more frequent repairs or replace your furniture, fixtures, and appliances more often.
Think through your ability to make that level of commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts must meet. An article from Bankrate <a href="https://www.bankrate.com/real-estate/should-i-sell-or-rent-my-house/" rel="noopener noreferrer" target="_blank">explains</a>:
"Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead."
There’s a lot to consider before taking the leap and converting your house into a short-term rental. If you aren’t ready for the work it takes, it could be wise to <a href="https://www.mykcm.com/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/" rel="noopener noreferrer" target="_blank">sell</a> instead.
Short-Term Rental Regulations
As the short-term rental industry continues to grow, regulations have increased. Legal restrictions commonly include limits on the number of vacation rentals in a particular location. This is especially true in larger cities and tourist destinations where there may be concerns about overcrowding or housing shortages for permanent residents. Restrictions may also apply to the type of property that can be used for short-term rentals.
Many cities also require homeowners to obtain a license or permit before renting out their properties. Nick Del Pego, CEO at Deckard Technologies, <a href="https://www.nar.realtor/magazine/broker-news/network/what-your-clients-need-to-know-about-short-term-rentals" rel="noopener noreferrer" target="_blank">explains</a>:
“Renting short-term rentals is considered a business by most local governments, and owners must comply with specific workplace regulations and business licensing rules established in their local communities.”
It is important to thoroughly check whether short-term rentals are regulated or prohibited by the local government and your homeowners association (HOA) before even considering renting out your home.
Bottom Line
Converting your home into a short-term rental isn’t a decision you should make without doing your research. To decide if selling your house is a better alternative, let’s connect today.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-07-12T14:48:35-07:002023-07-12T17:47:15-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:28524Reasons Your Home May Not Be Selling<img src="https://files.keepingcurrentmatters.com/content/images/20230707/20230710-reasons-your-home-may-not-be-selling.jpg" alt="" class="img-thumbnail mx-auto d-block" />
When it comes to selling your house, you want three things: to sell it for the most money you can, to do it in a certain amount of time, and to do all of that with the fewest hassles. And, while the current housing market is generally favorable to sellers due to today’s <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">limited housing supply</a>, there are still factors that can cause delays or even prevent a house from selling.
If you're having trouble getting <a href="https://www.mykcm.com/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">your house to sell</a> in today's sellers’ market, here are a few things to think about.
Limited Access – If You Can’t Show It, You Can’t Sell It.
One of the biggest mistakes you can make as a seller is limiting the days and times when buyers can view your home. In any market, if you want to <a href="https://www.mykcm.com/2023/06/30/key-reasons-to-use-a-real-estate-agent-when-you-sell-infographic/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">maximize the sale</a> of your house, you can’t limit potential buyers’ ability to view it. Remember, minimal access equals minimal exposure.
In some cases, some of the most motivated buyers may come from outside of your local area. Because they’re traveling, they might not have the luxury to adjust their schedules when faced with limited options to tour your house, so make it available as much as possible.
Priced Too High – Price It To Sell, Not To Sit.
<a href="https://www.mykcm.com/2023/06/12/are-home-prices-going-up-or-down-that-depends/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Pricing</a> is a critical factor that can significantly impact your home sale. While it's tempting to push the price higher to try to maximize your profit, overpricing can deter potential buyers and lead to your home sitting on the market longer.
Jeff Tucker, Senior Economist at Zillow, <a href="https://www.forbes.com/sites/brendarichardson/2023/02/16/expect-the-spring-housing-market-to-be-calm-but-competitive/?sh=bf3b22457bd7" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">notes</a>:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
Not to mention, buyers today have access to a number of tools and resources to view available homes in your area. If your house is priced unreasonably high compared to similar homes, it may drive potential buyers away. Listen to the feedback your agent is getting at open houses and showings. If the feedback is consistent, it may be time to re-evaluate and potentially lower the price.
Not Freshened Up Before Listing – If It Looks Good, It’ll Make a Good Impression.
When selling your house, the old saying “you never get a second chance to make a first impression” matters. Putting in the work on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from Investopedia <a href="https://www.investopedia.com/investing/types-home-renovation-which-ones-boost-value/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">says</a>:
“Curb-appeal projects make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster—and you can do a lot of the work yourself to save money and time.”
But don’t let that stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.
For all of these things, lean on your real estate agent for expert advice based on your unique situation and feedback you get from buyers throughout the process.
Bottom Line
If your house isn’t getting the attention you feel it deserves and isn’t selling in the timeframe you wanted, it’s time to ask your trusted real estate agent for advice on what you may need to revisit or change in your approach. To get those expert insights, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-07-10T17:56:31-07:002023-07-10T18:00:07-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:28445Today’s Housing Inventory Is a Sweet Spot for Sellers<img src="https://files.keepingcurrentmatters.com/content/images/20230705/20230706-todays-housing-inventory-is-a-sweet-spot-for-sellers.jpg" alt="" class="img-thumbnail mx-auto d-block" />
One of the biggest challenges in the housing market right now is how <a href="https://www.mykcm.com/2023/05/11/the-best-time-to-sell-your-house-is-when-others-arent-selling/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">few homes</a> there are for sale compared to the number of people who want to buy them. To help emphasize just how limited housing inventory still is, let’s take a look at the latest information on active listings, or homes for sale in a given month, as it compares to more normal levels.
According to a recent report from <a href="https://news.move.com/2023-06-29-Realtor-com-R-June-Housing-Report-Home-Prices-Post-Their-First-Annual-Decline-Since-Before-2017" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Realtor.com</a>:
“On average, active inventory in June was 50.6% below pre-pandemic 2017–2019 levels.”
The <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">graph</a> below helps illustrate this point. It uses historical data to provide a more concrete look at how much the numbers are still lagging behind the level of inventory typical of a more normal market (see graph below):
<a href="https://www.mykcm.com/content/images/20230705/20230706-the-supply-of-homes-for-sale-is-still-low.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230705/20230706-the-supply-of-homes-for-sale-is-still-low.png" /></a>
It’s worth noting that 2020-2022 are not included in this graph. That’s because they were truly <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">abnormal years</a> for the housing market. To make the comparison fair, those have been omitted so they don’t distort the data.
When you compare the orange bars for 2023 with the last normal years for the housing market (2017-2019), you can see the count of active listings is still far below the norm.
What Does This Mean for You?
If you’re thinking about <a href="https://www.mykcm.com/2023/06/26/the-true-cost-of-selling-your-house-on-your-own/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">selling your house</a>, that low inventory is why this is a <a href="https://www.mykcm.com/2023/05/25/the-benefits-of-selling-now-according-to-experts/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">great time</a> to do so. Buyers have fewer choices now than they did in more normal years, and that’s continuing to impact some key statistics in the housing market. For example, sellers will be happy to see the following data from the latest <a href="https://cdn.nar.realtor/sites/default/files/documents/2023-05-realtors-confidence-index-06-22-2023.pdf" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Confidence Index</a> from the National Association of Realtors (NAR):
The percent of homes that sold in less than a month ticked up slightly to 74%.
The median days on market went down to 18 days, showing homes are still selling fast when priced right.
The average number of offers on recently sold homes went up to 3.3 offers.
Bottom Line
When supply is so low, your house is going to be in the spotlight. That’s why sellers are seeing their homes sell a little faster and get more offers right now. If you’ve thought about <a href="https://www.mykcm.com/2023/06/13/your-needs-matter-more-than-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">selling</a>, now’s the time to <a href="https://www.mykcm.com/2023/05/26/moving-now-can-give-your-house-its-day-in-the-sun-infographic/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">make a move</a>. Let’s connect to get the process started.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-07-06T11:47:17-07:002023-07-06T11:51:00-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:27937The True Cost of Selling Your House on Your Own<img src="https://files.keepingcurrentmatters.com/content/images/20230621/20230626-the-true-cost-of-selling-your-house-on-your-own.jpg" alt="" class="img-thumbnail mx-auto d-block" />
<a href="https://www.mykcm.com/2023/05/11/the-best-time-to-sell-your-house-is-when-others-arent-selling/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Selling your house</a> is no simple task. While some homeowners opt to sell their homes on their own, known as a FSBO (For Sale by Owner), they often encounter various challenges without the guidance of a real estate agent. If you’re currently considering selling your house on your own, here’s what you should know.
The most recent <a href="https://www.nar.realtor/sites/default/files/documents/2022-highlights-from-the-profile-of-home-buyers-and-sellers-report-11-03-2022_0.pdf" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Profile of Home Buyers and Sellers</a> from the National Association of Realtors (NAR) surveyed homeowners who’d recently sold their own homes and asked what difficulties they faced. Those <a href="https://www.mykcm.com/2023/05/25/the-benefits-of-selling-now-according-to-experts/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">sellers</a> say some of the greatest challenges were prepping their home for sale, pricing it right, and properly managing the required paperwork, just to name a few.
When it comes to selling your most <a href="https://www.mykcm.com/2023/06/06/real-estate-is-still-considered-the-best-long-term-investment-1/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">valuable asset</a>, consider the invaluable support that a real estate agent can provide. By partnering with an agent, you can navigate the complexities of the selling process with confidence. Here are just a few of the many ways an agent is essential to your home sale:
1. Marketing and Exposure
Effective marketing is a key piece of attracting qualified buyers to your property. Real estate agents have access to various marketing tools and platforms, including MLS listings, professional photography, virtual tours, and extensive professional networks. They can create a compelling listing that highlights your home's best features and reaches a wider audience.
If you sell on your own, you may struggle to match the reach of agents, resulting in limited exposure and, ultimately, fewer potential buyers.
2. Managing Liability and Legal Considerations
Today, more disclosures and regulations are mandatory when selling a house. And all that paperwork and all the legal aspects of selling a home can be a lot to manage. Selling a house without professional guidance exposes homeowners to potential liability risks and legal complications.
Real estate agents are well-versed in the contracts, disclosures, and regulations necessary during a sale. Their expertise helps minimize the risk of errors or omissions that could lead to legal disputes or delays.
3. Negotiations and Contracts
Negotiating the terms of a home sale can be challenging, especially when emotions are involved. You may find it overwhelming to navigate these negotiations alone. Without an agent, you assume this responsibility on your own. This means you’ll have full accountability for working and negotiating with:
The buyer, who wants the best deal possible.
The buyer’s agent, who will use their expertise to advocate for the buyer.
The home inspection company, who works for the buyer.
The home appraiser, who assesses the property’s value to protect the lender.
Rather than going toe-to-toe with all these parties alone, lean on an expert. Real estate agents act as intermediaries, skillfully negotiating on your behalf and ensuring that your best interests are protected. They have experience in handling tough negotiations, counteroffers, and contingencies. When you sell your house yourself, you’ll need to be prepared to manage these vendors on your own.
4. Pricing and Housing Market Knowledge
Determining the right asking <a href="https://www.mykcm.com/2023/06/12/are-home-prices-going-up-or-down-that-depends/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">price</a> for your property is crucial. It requires in-depth knowledge of the local real estate market, including recent sales data, neighborhood trends, and the current demand for properties. Real estate agents have access to comprehensive <a href="https://www.mykcm.com/2023/05/16/the-worst-home-price-declines-are-behind-us/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">market data</a> and the expertise to analyze it accurately.
When you sell your house on your own without this comprehensive information, you risk overpricing or underpricing your home. This can result in an extended time on the market and also the risk of leaving money on the table - which decreases your future buying power. An agent is a key piece of the <a href="https://www.mykcm.com/2023/06/05/oops-home-prices-didnt-crash-after-all/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">pricing</a> puzzle.
Bottom Line
While selling a home on your own might seem appealing at first, the challenges that come with it can quickly become overwhelming. The expertise that a real estate agent brings to the table is vital for a successful sale. Instead of tackling it alone, let’s connect to make sure you have an expert on your side.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-06-26T15:56:30-07:002023-06-26T16:02:36-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:27516Your Needs Matter More Than Today’s Mortgage Rates<img src="https://files.keepingcurrentmatters.com/content/images/20230612/20230613-your-needs-matter-more-than-todays-mortgage-rates.jpg" alt="" class="img-thumbnail mx-auto d-block" />
If you’re thinking about <a href="https://www.mykcm.com/2023/05/25/the-benefits-of-selling-now-according-to-experts/" rel="noopener noreferrer" target="_blank" style="color: blue;">selling your house</a> right now, chances are it’s because something in your life has changed. And, while things like <a href="https://www.mykcm.com/2023/06/07/the-main-reason-mortgage-rates-are-so-high/" rel="noopener noreferrer" target="_blank" style="color: blue;">mortgage rates</a> are a key part of your decision on what you’ll buy next, it’s important to not lose sight of the reason you want to make a change in the first place.
It’s true <a href="https://www.mykcm.com/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/" rel="noopener noreferrer" target="_blank" style="color: blue;">mortgage rates</a> have climbed from the record lows we saw in recent years, and that has an impact on <a href="https://www.mykcm.com/2023/04/26/the-three-factors-affecting-home-affordability-today/" rel="noopener noreferrer" target="_blank" style="color: blue;">affordability</a>. With rates where they are right now, some homeowners are deciding they’ll wait to sell because they don’t want to move and have a higher mortgage rate on their next home. As Danielle Hale, Chief Economist at Realtor.com, <a href="https://news.move.com/2023-04-17-Realtor-com-R-Survey-82-of-Those-Looking-to-Buy-and-Sell-a-Home-Feel-Locked-In-by-Low-Mortgage-Rate" rel="noopener noreferrer" target="_blank" style="color: blue;">explains</a>:
“. . . homeowners who locked in a 30-year fixed rate in the 2-3% range don't necessarily want to give that up in exchange for a rate in the 6-7% range.”
But your lifestyle and your changing needs should matter more. Here are a few of the most common reasons people <a href="https://www.mykcm.com/2023/04/04/two-reasons-you-should-sell-your-house/" rel="noopener noreferrer" target="_blank" style="color: blue;">choose to sell</a> today. Any one of these may be more important than keeping your current mortgage rate.
As Ali Wolf, Chief Economist at Zonda, says in a <a href="https://twitter.com/AliWolfEcon/status/1664356987683893248?cxt=HHwWgMCz5Zb3_ZguAAAA" rel="noopener noreferrer" target="_blank" style="color: blue;">recent tweet</a>:
“First-time and move-up buyers are both active . . . the latter driven by life changes. Divorce, marriage, new higher paid job, and existing home unsuitable all referenced.”
Relocation
Some of the things that can motivate a move to a new area include changing jobs, a desire to be closer to friends and loved ones, wanting to live in a dream location, or just looking for a change in scenery.
For example, if you live in suburbia and just landed your dream job in NYC, you may be thinking about selling your current home and moving to the city for work.
Upgrading
Many homeowners decide to sell to move into a larger home. This is especially common when there’s a need for more room to entertain, a home office or gym, or additional bedrooms to accommodate a growing number of loved ones.
For example, if you’re living in a condo and decide it’s time to seek out a home with more space, or if your household is growing, it may be time to find a home that better fits those needs.
Downsizing
With <a href="https://www.mykcm.com/2023/05/24/owning-a-home-helps-protect-against-inflation/" rel="noopener noreferrer" target="_blank" style="color: blue;">inflation</a> driving up everyday expenses, homeowners may also decide to sell to reduce maintenance and costs. Or, they may sell because someone’s moved out of the home recently and there’s now more space than needed. It could also be that they’ve recently retired or are ready for a change.
For example, you’ve just kicked off your retirement and you want to move to somewhere you can enjoy the warm weather and have less house to maintain. Your new lifestyle may be better suited for a different home.
Change in Relationship Status
Divorce, separation, or marriage are other common reasons individuals sell to buy different homes.
For example, if you’ve recently separated, it may be difficult to still live under one roof. Selling and downsizing may be better options.
Health Concerns
If a homeowner faces mobility challenges or health issues that require specific living arrangements or modifications, they might sell their current home to find one that works better for them.
For example, you may be looking to sell your home and use the proceeds to help pay for a unit in an assisted-living facility.
With higher mortgage rates, there are some affordability challenges right now – but your needs and your lifestyle matter too. As a recent article from Bankrate <a href="https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/#sell-now" rel="noopener noreferrer" target="_blank" style="color: blue;">says</a>:
“Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. . . . Your future plans and goals should be a significant part of the equation . . .”
Bottom Line
If you’re ready to sell your house so you can make a move, let’s connect so you have an expert on your side to help you navigate the process and find a home that can deliver on what you’re looking for.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-06-13T18:26:34-07:002023-06-13T18:28:24-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:27386This Real Estate Market Is the Strongest of Our Lifetime
This Real Estate Market Is the Strongest of Our Lifetime
<img src="https://files.keepingcurrentmatters.com/content/images/20230608/20230608-this-real-estate-market-is-the-strongest-of-our-lifetime.jpg" alt="" class="img-thumbnail mx-auto d-block" />
June 8, 2023
<a href="https://www.mykcm.com/blog?categories=buyers" class="badge bg-light font-size-12 me-2"> For Buyers </a><a href="https://www.mykcm.com/blog?categories=sellers" class="badge bg-light font-size-12 me-2"> For Sellers </a><a href="https://www.mykcm.com/blog?categories=housing-market-updates" class="badge bg-light font-size-12 me-2"> Housing Market Updates </a>
When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.
1. The Current Mortgage Rate on Existing Mortgages
First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (<a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank" style="color: blue;">FHFA</a>), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" /></a>
Now, there’s a lot of talk in the media about a potential <a href="https://www.mykcm.com/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/" rel="noopener noreferrer" target="_blank" style="color: blue;">foreclosure</a> crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they <a href="https://www.mykcm.com/2023/05/04/how-homeowners-win-when-they-downsize/" rel="noopener noreferrer" target="_blank" style="color: blue;">downsize</a>, with today’s higher mortgage rates, it could cost more.
Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.
2. The Amount of Homeowner Equity
Second, Americans are sitting on tremendous equity right now. According to the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank" style="color: blue;">Census</a> and <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q1-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank" style="color: blue;">ATTOM</a>, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" /></a>
In the industry, the term for this is <a href="https://www.mykcm.com/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/" rel="noopener noreferrer" target="_blank" style="color: blue;">equity</a> rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.
But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.
Bottom Line
We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.2023-06-08T12:02:22-07:002023-06-08T12:05:55-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:27146Today’s Real Estate Market: The ‘Unicorns’ Have Galloped Off<img src="https://files.keepingcurrentmatters.com/content/images/20230529/20230530-todays-real-estate-market-the-unicorns-have-galloped-off.jpg" alt="" class="img-thumbnail mx-auto d-block" />
Comparing real estate metrics from one year to another can be challenging in a normal housing market. That’s due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared.
Comparing this year’s numbers to the two ‘unicorn’ years we just experienced is almost worthless. By ‘unicorn,’ this is the less common definition of the word:
“Something that is greatly desired but difficult or impossible to find.”
The pandemic profoundly changed real estate over the last few years. The demand for a home of our own skyrocketed, and people needed a home office and big backyard.
Waves of first-time and second-home buyers entered the market.
Already low mortgage rates were driven to historic lows.
The forbearance plan all but eliminated foreclosures.
Home values reached appreciation levels never seen before.
It was a market that forever had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ year.
Now, things are getting back to normal. The ‘unicorns’ have galloped off.
Comparing today’s market to those years makes no sense. Here are three examples:
Buyer Demand
If you look at the headlines, you’d think there aren’t any buyers out there. We still sell over 10,000 houses a day in the United States. Of course, buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below):
<img src="https://files.keepingcurrentmatters.com/content/images/20230529/20230530-showing-traffic-above-pre-unicorn-years.png" />
Home Prices
We can’t compare today’s home price increases to the last couple of years. According to Freddie Mac, 2020 and 2021 each had historic appreciation numbers. Here’s a graph also showing the more normal years (2017-2019):
<img src="https://files.keepingcurrentmatters.com/content/images/20230529/20230530-percent-of-annual-home-appreciation-returning-to-more-normal-pre-unicorn-years.png" />
We can see that we’re returning to more normal home value increases. There were several months of minimal depreciation in the second half of 2022. However, according to Fannie Mae, the market has returned to more normal appreciation in the first quarter of this year.
Foreclosures
There have already been some startling headlines about the percentage increases in foreclosure filings. Of course, the percentages will be up. They are increases over historically low foreclosure rates. Here’s a graph with information from ATTOM, a property data provider:
<img src="https://files.keepingcurrentmatters.com/content/images/20230529/20230530-1m-fewer-foreclosures-during-unicorn-years.png" />
There will be an increase over the numbers of the last three years now that the moratorium on foreclosures has ended. There are homeowners who lose their home to foreclosure every year, and it’s heartbreaking for those families. But, if we put the current numbers into perspective, we’ll realize that we’re actually going back to the normal filings from 2017-2019.
Bottom Line
There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="3">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-05-30T10:50:47-07:002023-05-30T10:53:39-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:27046Owning a Home Helps Protect Against Inflation<img src="https://files.keepingcurrentmatters.com/content/images/20230523/20230524-owning-a-home-protects-against-inflation.jpg" alt="" class="img-thumbnail mx-auto d-block" />
You’re probably feeling the impact of high inflation every day as prices have gone up on groceries, gas, and more. If you’re a renter, you’re likely experiencing it a lot as your rent continues to <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank" style="color: blue;">rise</a>. Between all of those elevated costs and uncertainty about a potential <a href="https://www.mykcm.com/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/" rel="noopener noreferrer" target="_blank" style="color: blue;">recession</a>, you may be wondering if it still makes sense to buy a home today. The short answer is – it does. Here’s why.
Homeownership actually shields you from the rising costs inflation brings.
Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/should-inflation-change-your-homebuying-plans" rel="noopener noreferrer" target="_blank" style="color: blue;">explains</a> how:
“Not only will buying today help you begin to build equity, a fixed-rate mortgage can stabilize your monthly housing costs for the long-term even while other life expenses continue to rise – as has been the case the past few years.”
Unlike rents, which tend to rise with time, a fixed-rate mortgage payment is predictable over the life of the mortgage (typically 15 to 30 years). And, when the cost of most everything else is rising, keeping your housing payment stable is especially important.
The alternative to homeownership is <a href="https://www.mykcm.com/2023/05/01/why-buying-a-home-makes-more-sense-than-renting-today/" rel="noopener noreferrer" target="_blank" style="color: blue;">renting</a> – and rents tend to <a href="https://fred.stlouisfed.org/series/CUUR0000SEHA#0" rel="noopener noreferrer" target="_blank" style="color: blue;">move</a> alongside <a href="https://www.usinflationcalculator.com/inflation/united-states-core-inflation-rates/" rel="noopener noreferrer" target="_blank" style="color: blue;">inflation</a>. That means as inflation goes up, your monthly rent payments tend to go up, too (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230523/20230524-rents-increase-with-inflation-most-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230523/20230524-rents-increase-with-inflation-most-years.png" /></a>
A fixed-rate mortgage allows you to protect yourself from future rent hikes. With inflation still high, when your rental agreement comes up for renewal, your property manager may decide to increase your payments to offset the impact of inflation. Maybe that’s why, <a href="https://www.buildiumstaging.com/resource/2023-property-management-industry-report/" rel="noopener noreferrer" target="_blank" style="color: blue;">according</a> to a recent survey, 73% of property managers plan to raise rents over the next two years.
Having your largest monthly expense remain stable in a time of <a href="https://www.mykcm.com/2023/05/09/why-todays-housing-market-is-not-about-to-crash/" rel="noopener noreferrer" target="_blank" style="color: blue;">economic uncertainty</a> is a major perk of homeownership. If you continue to rent, you don’t have that same benefit and aren’t as protected from rising costs.
Bottom Line
A stable housing payment is especially important in times of high inflation. Let’s connect so you can learn more and start your journey to homeownership today.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="6">property in the Bay Area</a>.
2023-05-24T11:54:54-07:002023-05-24T12:20:12-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26914Powerful Job Market Fuels Homebuyer Demand<img src="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-powerful-job-market-fuels-homebuyer-demand.jpg" alt="" class="img-thumbnail mx-auto d-block" />
The spring housing market has been surprisingly active this year. Even with <a href="https://www.mykcm.com/2023/04/26/the-three-factors-affecting-home-affordability-today/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">affordability</a> challenges and a limited number of <a href="https://www.mykcm.com/2023/05/11/the-best-time-to-sell-your-house-is-when-others-arent-selling/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">homes</a> for sale, buyer demand is strong, and getting stronger.
One way we know there are interested buyers right now is because showing traffic is up. <a href="https://www.showingtime.com/showingtime-showing-index/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Data</a> from the latest ShowingTime Showing Index, which is a measure of buyers actively touring homes, makes it clear more people are out looking at homes than there were prior to the pandemic (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-showing-traffic-above-pre-pandemic-levels.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-showing-traffic-above-pre-pandemic-levels.png" /></a>
And though there’s less traffic than the buyer frenzy of the past couple of years, we’re not far off that pace. There are a lot of interested buyers checking out available homes right now.
But why are buyers so active at a time when <a href="https://www.mykcm.com/2023/05/10/the-impact-of-inflation-on-mortgage-rates/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">mortgage rates</a> are <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">higher</a> than they were just last year?
The Job Market Is Growing at a Stronger-Than-Expected Pace
With inflation still high, the Federal Reserve (the Fed) repeatedly hiking the Federal Funds Rate, and a lot of chatter in the media about a <a href="https://www.mykcm.com/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">recession</a>, it might surprise you just how strong today’s job market is. What might be even more surprising is the fact that it appears to be getting stronger (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-job-market-continues-growing.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-job-market-continues-growing.png" /></a>
Each month, the Bureau of Labor Statistics (BLS) <a href="https://www.bls.gov/news.release/empsit.nr0.htm" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">reports</a> how many new jobs were added to the U.S. job market. The graph above shows 88,000 more jobs were created in April than in March. In fact, the April numbers beat expert <a href="https://www.cnn.com/2023/05/05/business/april-jobs-report-final/index.html" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">projections</a>. That’s a solid indicator the job market is growing.
Unemployment Is at a Near All-Time Low
Ever since the Fed began fighting inflation, many people expected the low unemployment rate we’ve seen over the past couple of years to rise – but that hasn’t happened.
In fact, what has happened is the unemployment rate has <a href="https://www.bls.gov/news.release/empsit.nr0.htm" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">dropped</a> to 3.4% – a 50-year low (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-unemployment-rate-drops-to-50-year-low.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230517/20230518-unemployment-rate-drops-to-50-year-low.png" /></a>
With so many people steadily employed and financially stable right now, they’re still able to seriously consider buying a home.
What This Means for You
If you’re thinking about selling your house this year, a market with active buyers is music to your ears. That’s because there’ll be increased interest in your home when you put it on the market, especially at a time when the number of homes for sale is so low.
To get started, your best resource is an experienced real estate agent. They can help you price your house appropriately, navigate the offers you’ll receive, negotiate effectively, and minimize your stress and hassle.
Bottom Line
There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-05-18T11:21:09-07:002023-05-18T11:48:02-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26853The Worst Home Price Declines Are Behind Us<img src="https://files.keepingcurrentmatters.com/content/images/20230515/20230516-the-worst-home-price-declines-are-behind-us.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re following the news today, you may feel a bit unsure about what’s happening with <a href="https://www.mykcm.com/2023/04/17/think-twice-before-waiting-for-lower-home-prices/" rel="noopener noreferrer" target="_blank" style="color: blue;">home prices</a> and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an <a href="https://www.mykcm.com/2023/05/09/why-todays-housing-market-is-not-about-to-crash/" rel="noopener noreferrer" target="_blank" style="color: blue;">unnecessarily negative</a> picture. Contrary to those headlines, <a href="https://www.mykcm.com/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/" rel="noopener noreferrer" target="_blank" style="color: blue;">home prices</a> aren’t in a freefall. The latest data tells a very different and much more positive story. Local home price trends still vary by market, but here’s what the national data tells us.
If we take a <a href="https://www.corelogic.com/intelligence/us-home-price-insights-may-2023/" rel="noopener noreferrer" target="_blank" style="color: blue;">year-over-year</a> view, home prices stayed positive – they just appreciated more slowly than they did at the peak of the pandemic. To get a more detailed picture of some of the trends in the market, we need to look at monthly data.
The monthly graphs below use <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#news-research" rel="noopener noreferrer" target="_blank" style="color: blue;">recent reports</a> from three <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx" rel="noopener noreferrer" target="_blank" style="color: blue;">sources</a> to show that the worst <a href="https://www.corelogic.com/intelligence/us-home-price-insights-may-2023/" rel="noopener noreferrer" target="_blank" style="color: blue;">home price</a> declines are already behind us, and prices are on their way back up nationally.
<a href="https://files.keepingcurrentmatters.com/content/images/20230515/20250516-home-prices-are-stabilizing.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230515/20250516-home-prices-are-stabilizing.png" /></a>
The story this more detailed monthly view tells us is that the last year has been a tale of two halves in the housing market. In the first half of 2022, home prices were climbing, and they peaked in June. Then, in July, home prices started to decline (shown in red in the graphs above). And by roughly August or September, the trend began to stabilize. As we look at the most recent data for the early part of 2023, these graphs also show a recent rebound in momentum with prices ticking back up. Monthly changes in home prices are gaining steam as we move into the busier spring season.
While one to two months doesn’t make a trend, the fact that all three reports show prices have stabilized is an encouraging sign for the housing market. The month-over-month data conveys a clear, but early, consensus that a national shift is taking place today. In essence, home prices are starting to tick back up.
Andy Walden, Vice President of Enterprise Research at Black Knight, <a href="https://www.prnewswire.com/news-releases/black-knight-home-prices-up-again-in-march-on-worsening-inventory-shortages-and-modest-rise-in-demand-301814349.html" rel="noopener noreferrer" target="_blank" style="color: blue;">says</a> this about home price trends:
“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”
Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-may-2023/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">explains</a> the limited supply of homes available for sale is contributing to this positive turn:
“ . . . prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains. . . . The monthly rebound in home prices underscores the lack of inventory in this housing cycle.”
Here’s What This Means for You
Sellers: If you’ve been holding off on selling because you’re worried about what was happening with <a href="https://www.mykcm.com/2023/04/05/why-arent-home-prices-crashing/" rel="noopener noreferrer" target="_blank" style="color: blue;">home prices</a> and how it would impact the value of your home, it may be time to jump back in and partner with an agent to list your house. You don’t have to put your needs on hold any longer because the latest data shows a turn in your favor.
Buyers: If you’ve been waiting to buy because you didn’t want to purchase something that would decrease in value, you now have the peace of mind things are looking up. Buying now lets you make your move before home prices climb more and gives you the chance to own an asset that typically grows in value over time.
Bottom Line
If you put off your plans to move because you were worried about home prices falling, data shows the worst is already behind us and prices are actually rising nationally. Let’s connect so you have an expert on the local market to explain what we’re seeing with home prices in our area.
Looking for experienced real estate representation in the Bay Area? Let the Bay Area Modern Team help you with your <a href="https://www.bayareamodern.com/marin-county-real-estate/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">Marin real estate</a> and <a href="https://www.bayareamodern.com/east-bay-real-estate/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">East Bay real estate</a> needs. Call us at 415-233-6821.
2023-05-16T11:28:50-07:002023-05-16T11:35:57-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26696Why Today’s Housing Market Is Not About To Crash
Why Today’s Housing Market Is Not About To Crash
<img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-why-todays-housing-market-is-not-about-to-crash.jpg" alt="" class="img-thumbnail mx-auto d-block" />
There’s been some concern lately that the housing market is headed for a crash. And given some of the <a href="https://www.mykcm.com/2023/04/26/the-three-factors-affecting-home-affordability-today/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">affordability</a> challenges in the housing market, along with a lot of <a href="https://www.mykcm.com/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">recession</a> talk in the media, it’s easy enough to understand why that worry has come up.
But the data clearly shows today’s market is very different than it was before the housing crash in 2008. Rest assured, this isn’t a repeat of what happened back then. Here’s why.
It’s Harder To Get a Loan Now
It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one. As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.
Things are different today as purchasers face increasingly higher standards from mortgage companies. The graph below uses <a href="https://www.mba.org/news-and-research/newsroom/news/2023/04/11/mortgage-credit-availability-increased-in-march" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">data</a> from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is.
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" /></a>Unemployment Recovered Faster This Time
While the pandemic caused unemployment to spike over the last couple of years, the jobless rate has already recovered back to pre-pandemic levels (see the blue line in the graph below). Things were different during the Great Recession as a large number of people stayed <a href="https://fred.stlouisfed.org/series/UNRATE" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">unemployed</a> for a much longer period of time (see the red in the graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-length-of-crisis-different-than-last-time.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-length-of-crisis-different-than-last-time.png" /></a>
Here’s how the quick job recovery this time helps the housing market. Because so many people are employed today, there’s less risk of homeowners facing hardship and defaulting on their loans. This helps put today’s housing market on stronger footing and reduces the risk of more foreclosures coming onto the market.
There Are Far Fewer Homes for Sale Today
There were also too many homes for sale during the housing crisis (many of which were short sales and <a href="https://www.mykcm.com/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">foreclosures</a>), and that caused prices to fall dramatically. Today, there’s a shortage of inventory available overall, primarily due to years of underbuilding homes.
The graph below uses data from the <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">National Association of Realtors</a> (NAR) and the <a href="https://fred.stlouisfed.org/series/HOSSUPUSM673N" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Federal Reserve</a> to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.6-months’ supply. There just isn’t enough inventory on the market for home prices to come crashing down like they did in 2008.
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-housing-supply-is-lower-than-before.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-housing-supply-is-lower-than-before.png" /></a>
Equity Levels Are Near Record Highs
That low inventory of homes for sale helped keep upward pressure on home prices over the course of the pandemic. As a result, homeowners today have near-record amounts of equity (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-americans-have-record-amounts-of-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-americans-have-record-amounts-of-equity.png" /></a>
And, that equity puts them in a much stronger position <a href="https://fred.stlouisfed.org/series/OEHRENWBSHNO#0" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">compared</a> to the Great Recession. Molly Boesel, Principal Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/loan-performance-insights-january-2023/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">explains</a>:
“Most homeowners are well positioned to weather a shallow recession. More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.”
Bottom Line
The graphs above should ease any fears you may have that today’s housing market is headed for a crash. The most current data clearly shows that today’s market is nothing like it was last time.
Contact the Bay Area Modern Team, your <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="" data-linkindex="0">Bay Area real estate</a> connection, for assistance buying or selling a home in the Gold Country.
2023-05-09T15:53:58-07:002023-05-09T16:00:34-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26608How Homeowners Win When They Downsize<img src="https://files.keepingcurrentmatters.com/content-images-20230503-20230504-how-homeowners-win-when-they-downsize.jpg" alt="" class="img-thumbnail mx-auto d-block" />
Downsizing has long been a popular option when homeowners reach <a href="https://www.mykcm.com/2023/02/22/a-smaller-home-could-be-your-best-option/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">retirement</a> age. But there are plenty of other life changes that could make downsizing worthwhile. Homeowners who have experienced a <a href="https://www.mykcm.com/2023/03/28/how-homeownership-is-life-changing-for-many-women/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">change</a> in their lives or no longer feel like their <a href="https://www.mykcm.com/2023/04/19/falling-out-of-love-with-your-house-it-may-be-time-to-move/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">house</a> fits their needs may benefit from downsizing too. U.S. News <a href="https://realestate.usnews.com/real-estate/articles/dos-and-donts-of-downsizing-your-home" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">explains</a>:
“Downsizing is somewhat common among older people and retirees who no longer have children living at home. But these days, younger people are also looking to downsize to save money on housing . . .”
And when inflation has made most things significantly more expensive, saving money where you can has a lot of appeal. So, if you’re thinking about ways to budget differently, it could be worthwhile to take your home into consideration.
When you think about cutting down on your spending, odds are you think of frequent purchases, like groceries and other goods. But when you downsize your house, you often end up downsizing the bills that come with it, like your mortgage payment, energy costs, and maintenance requirements. Realtor.com <a href="https://www.realtor.com/advice/move/how-to-downsize-your-home-with-zero-regrets/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">shares</a>:
“A smaller home typically means lower bills and less upkeep. Then there’s the potential windfall that comes from selling your larger home and buying something smaller.”
That windfall is thanks to your <a href="https://www.mykcm.com/2023/03/13/leverage-your-equity-when-you-sell-your-house/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">home equity</a>. If you’ve been in your house for a while, odds are you’ve developed a considerable amount of equity. Your home equity is an asset you can use to help you <a href="https://www.mykcm.com/2023/04/28/ways-to-overcome-affordability-challenges-in-todays-housing-market-infographic/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">buy a home</a> that better suits your needs today.
And when you’re ready to make a move, your team of real estate experts will be your guides through every step of the process. That includes setting the right price for your house when you sell, finding the best location and size for your next home, and understanding what you can <a href="https://www.mykcm.com/2023/04/26/the-three-factors-affecting-home-affordability-today/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">afford</a> at today’s mortgage rate.
What This Means for You
If you’re thinking about downsizing, ask yourself these questions:
Do the original reasons I bought my current house still stand, or have my needs changed since then?
Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
What are my housing expenses right now, and how much do I want to try to save by downsizing?
Once you know the answers to these questions, meet with a real estate advisor to get an answer to this one: What are my options in the <a href="https://www.mykcm.com/2023/04/04/two-reasons-you-should-sell-your-house/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">market</a> right now? A local housing market professional can walk you through how much equity you have in your house and how it positions you to win when you downsize.
Bottom Line
If you’re looking to save money, downsizing your home could be a great help toward your goal. Let’s connect to talk about your goals in the housing market this year.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.2023-05-04T13:21:17-07:002023-05-09T09:05:24-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26585Buyer Activity Is Up Despite Higher Mortgage Rates<img src="https://files.keepingcurrentmatters.com/content-images-20230502-20230503-buyer-activity-is-up-despite-higher-mortgage-rates.jpg" alt="" class="img-thumbnail mx-auto d-block" />
If you’re a homeowner thinking about <a href="https://www.mykcm.com/2023/04/19/falling-out-of-love-with-your-house-it-may-be-time-to-move/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">making a move</a>, you may wonder if it’s still a <a href="https://www.mykcm.com/2023/04/25/what-are-the-experts-saying-about-the-spring-housing-market/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">good time</a> to sell your house. Here’s the good news. Even with higher mortgage rates, buyer traffic is actually <a href="https://www.mykcm.com/2023/04/11/the-big-advantage-if-you-sell-this-spring/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">picking up speed</a>.
Data from the latest <a href="https://www.showingtime.com/blog/february-2023-showing-index-results-buyer-activity-continues-to-normalize/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">ShowingTime Showing Index</a>, which is a measure of buyers actively touring homes, helps paint the picture of how much buyer demand has increased in recent months (see graph below):
<a href="https://files.keepingcurrentmatters.com/content-images-20230502-20230503-showing-traffic-up-again-in-february.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230502-20230503-showing-traffic-up-again-in-february.png" /></a>
As the graph shows, the first two months of 2023 saw a noticeable increase in buyer traffic. That’s likely because the limited number of homes for sale kept shoppers looking for homes even during colder months.
To help tell the story of why the latest report is significant, let’s compare foot traffic this February with each February for the last six years (see graph below). It shows this was one of the best Februarys for buyer activity we’ve seen in recent memory.
<a href="https://files.keepingcurrentmatters.com/content-images-20230502-20230503-showing-traffic-is-still-higher-than-pre-pandemic-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230502-20230503-showing-traffic-is-still-higher-than-pre-pandemic-years.png" /></a>
In the last six years, we saw the most February buyer traffic in 2021 and 2022 (shown in green above), but those years were highly unusual for the housing market. So, if we compare February 2023 with the more normal, pre-pandemic years, data shows this year still marks a clear rise in buyer activity.
The uptick in buyer traffic is even more noteworthy considering the increase in mortgage rates this February. The <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Freddie Mac</a> 30-year fixed mortgage rate rose from 6.09% during the week of February 2nd to 6.50% in the week of February 23rd. But even with higher rates, more buyers were looking for a home.
Jeff Tucker, Senior Economist at Zillow, <a href="https://www.marketwatch.com/picks/after-seven-straight-months-of-home-price-declines-heres-what-6-economists-and-real-estate-pros-say-to-expect-from-the-housing-market-this-spring-df79d2c3" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">says</a> the increased buyer activity could continue:
“More buyers will keep coming out of the woodwork. We always see a seasonal uptick in home shoppers in March and April . . .”
If you’re looking to sell your house, seeing buyers still active in the market this year should be encouraging. It’s a sign buyers are out there and could be looking for a home just like yours. Working with a real estate professional to list your house now will help you get your home in front of eager buyers today.
Bottom Line
Rising foot traffic is a bright spot for this year’s housing market and indicates that buyers are looking to purchase this year, even with higher mortgage rates. If you’re ready to sell your house, let’s connect.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-ogsc="">property in the Bay Area</a>.
2023-05-03T11:05:36-07:002023-05-03T11:08:37-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26394What Are the Experts Saying About the Spring Housing Market?<img src="https://files.keepingcurrentmatters.com/content/images/20230424/20230425-what-are-the-experts-saying-about-the-spring-housing-market.jpg" alt="" class="img-thumbnail mx-auto d-block" />
The housing market’s been going through a lot of change lately, and there’s been uncertainty surrounding what will happen this spring. You may be wondering if more homes will go on the market, what’s next with <a href="https://www.mykcm.com/2023/04/05/why-arent-home-prices-crashing/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">home prices</a> and <a href="https://www.mykcm.com/2023/04/03/how-changing-mortgage-rates-can-affect-you/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">mortgage rates</a>, or what the best advice is for someone in your position right now.
Here’s what industry experts are saying right now about the spring housing market and what it means for you:
<a href="https://www.bankrate.com/real-estate/housing-market-predictions/#updates" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Selma Hepp</a>, Chief Economist, CoreLogic:
“We see more competition among buyers . . . Housing supply also tends to grow during the spring months. And this is also the time of year when relatively more migration happens, as people graduate and move elsewhere looking for jobs.”
<a href="https://www.marketwatch.com/picks/after-seven-straight-months-of-home-price-declines-heres-what-6-economists-and-real-estate-pros-say-to-expect-from-the-housing-market-this-spring-df79d2c3" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Greg McBride</a>, Chief Financial Analyst, Bankrate:
“I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices.”
<a href="https://www.bankrate.com/real-estate/housing-trends/#differ" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Rick Sharga</a>, Founder and CEO, CJ Patrick Company:
“If you can find a home you love and can afford at today’s prices, don’t wait. Home prices in most of the country are unlikely to crash, and mortgage rates will only come down very gradually if they decline at all this year.”
<a href="https://www.marketwatch.com/picks/after-seven-straight-months-of-home-price-declines-heres-what-6-economists-and-real-estate-pros-say-to-expect-from-the-housing-market-this-spring-df79d2c3" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">Jeff Tucker</a>, Senior Economist, Zillow:
“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual.”
Bottom Line
If you’re thinking about <a href="https://www.mykcm.com/2023/04/13/want-to-sell-your-house-this-spring-price-it-right/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">selling</a> your house, this spring’s a great time to do so while <a href="https://www.mykcm.com/2023/04/11/the-big-advantage-if-you-sell-this-spring/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">inventory</a> is still so low. And if you’re in a good position to buy, lean on your team of expert advisors for the best advice. Whatever your plans, let’s connect to make sure you’re able to navigate the spring housing market with confidence.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-safelink="true" data-ogsc="">property in the Bay Area</a>.
2023-04-25T18:02:27-07:002023-04-25T18:04:12-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26219Think Twice Before Waiting for Lower Home Prices<img src="https://files.keepingcurrentmatters.com/content/images/20230414/20230417-think-twice-before-waiting-for-lower-home-prices-KCM.jpg" alt="" class="img-thumbnail mx-auto d-block" />
As the housing market continues to change, you may be wondering where it’ll go from here. One factor you’re probably thinking about is home prices, which have come down a bit since they peaked last June. And you’ve likely heard something in the news or on social media about a price crash on the horizon. As a result, you may be holding off on <a href="https://www.mykcm.com/2023/04/06/trying-to-buy-a-home-hang-in-there/" rel="noopener noreferrer" target="_blank">buying a home</a> until prices drop significantly. But that’s not the best strategy.
A recent <a href="https://www.builderonline.com/data-analysis/what-is-the-millennial-mindset-on-owning-vs-renting_o" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">survey</a> from Zonda shows 53% of millennials are still renting right now because they’re waiting for home prices to come down. But here’s the thing: the most recent data shows that home prices appear to have bottomed out and are now on the rise again. Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-april-2023/" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">reports</a>:
“U.S. home prices rose by 0.8% in February . . . indicating that prices in most markets have already bottomed out.”
And the latest data from Black Knight shows the same shift. The graph below <a href="https://www.blackknightinc.com/wp-content/uploads/2023/04/BKI_MM_FEB2023_Report.pdf" rel="noopener noreferrer" target="_blank" style="color: #0563c1;">compares</a> home price trends in November to those in February:
<a href="https://files.keepingcurrentmatters.com/content/images/20230414/20230417-home-prices-up-in-majority-of-country-KCM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230414/20230417-home-prices-up-in-majority-of-country-KCM.png" /></a>
So, should you keep waiting to buy a home until prices come down? If you factor in what the experts are saying, you probably shouldn’t. The <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">data</a> shows prices are increasing in much of the country, not decreasing. And the latest data from the Home Price Expectation Survey indicates that experts project home prices will rise steadily and return to more normal levels of appreciation after 2023. The best way to understand what home values are doing in your area is to work with a local real estate professional who can give you the latest insights and expert advice.
Bottom Line
If you’re waiting to buy a home until prices come down, you may want to reconsider. Let’s connect to make sure you understand what’s happening in our local housing market.
Contact Bay Area Modern Real Estate, experienced <a href="https://www.bayareamodern.com/about/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-safelink="true" data-ogsc="">Realtors in the San Francisco Bay Area</a>, for help purchasing or selling a home in Amador County, California.
2023-04-17T16:42:32-07:002023-04-17T16:44:12-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26204Floating Homes in The Last Thing He Told Me with Jennifer Garner<img src="https://assets.site-static.com/userfiles/601/image/floating_home_community.jpg" width="1500" height="623" alt="floating homes in The Last Thing He Told Me" />
Famed author Laura Dave's mystery thriller novel The Last Thing He Told Me finally made its way from print to the big screen and AppleTV subscribers are enjoying watching the series which features actress Jennifer Garner (who plays Hannah Hall). <br /><br />While the acting and series is first-rate, what seems to be getting the most coverage right now is the unique setting where the series was filmed. In fact, one of the most commonly asked questions we are hearing is:
Where did they film The Last Thing He Told Me?
Well we've got the answer since the series was filmed in our area (Marin County, California)! Specifically, in the movie Hannah and her husband Owen live in a <a href="https://www.marincounty.com/sausalito/floating-homes/" title="floating home community in marin county">floating home community in Sausalito California</a>.
Floating Homes in the San Francisco Bay Area
The largest community of floating homes in the Bay Area are located in <a href="https://www.marincounty.com/sausalito/">Sausalito,</a> a vibrant seaside community located on just the other side of the Golden Gate Bridge in Marin County. <br /><br /> <img src="https://assets.site-static.com/userfiles/601/image/floating%20home%20in%20sausalito%20views.jpg" width="400" height="400" alt="floating home view" style="float: right; border: 3px solid black;" />Approximately 425 floating homes can be found in Sausalito and they are spread across a variety of waterfront docks, piers and marinas. These unique homes are nestled right on the water, giving you stunning views of the bay and the city skyline. They're not your typical houses – they're actually floating on the water!
Owners love living in these floating homes because of the laid-back and peaceful lifestyle they offer. Imagine waking up to the gentle lapping of the waves against your home and enjoying the tranquility of being surrounded by water. Plus, the close-knit community of neighbors creates a warm and welcoming atmosphere, making it a perfect place to call home for those who appreciate a one-of-a-kind living experience.
Below you'll find a list of floating homes currently for sale in Marin County:<br /><br />Buying a Floating Home: it's different!
You should know that buying a floating home IS different than purchasing a traditional home. While there are a number of differences, the most important one that prospective buyers need to understand is that if you plan to buy a floating home, you'll either need to pay cash or obtain a floating home loan (your "mortage pre-approval" for a regular home simply won't work). Instead, you'll need to work with a floating home lender - <a href="https://www.marincounty.com/contact/">contact us</a> if you'd like a recommendation since there are only a few.
Floating Home Fees
While condos and townhomes have homeowner association (HOA) dues -- and some floating homes do also, the biggest monthly fee you are likely to incur as a floating homeowner are berthing fees. <br /><br />The costs for berthage or slip fees are determined based on factors such as the size of the berth, the size of the floating home, and the location of the dock or marina. These fees can vary significantly, but typically fall in the range of around $1,200 - $1,500 per month. The fees generally cover various amenities such as potable water, natural gas, garbage, sewage, parking, and common area maintenance.
Inspecting a Floating Home (pre-purchase inspection)
Inspections are critically important when buying any home however it takes a whole different skill set and level of knowledge and expertise when inspecting a floating home. Very few inspectors are familiar with floating homes and it's critically important that you are working with a Realtor who is not just familiar with floating homes, but also knows the trusted resources you'll want to assist you along the way.
Floating Home Realtors in the Bay Area
If the floating home lifestyle seems like its right for you, we'd love to connect you with a Bay Area Modern Realtor who can assist you along the wall. <a href="https://www.marincounty.com/contact/">Contact us</a> and let's get started!2023-04-16T17:29:58-07:002023-04-17T08:49:04-07:00Barry Adelmanntag:bayareamodern.com,2012-09-20:26162Want To Sell Your House This Spring? Price It Right.<img src="https://files.keepingcurrentmatters.com/content/images/20230412/20230413-want-to-sell-your-house-this-spring-price-it-right-KCM.jpg" alt="" class="img-thumbnail mx-auto d-block" />
Over the last year, the housing market’s gone through significant change. While it’s still a <a href="https://www.mykcm.com/2023/03/30/were-in-a-sellers-market-what-does-that-mean/" rel="noopener noreferrer" target="_blank">sellers’ market</a>, homes that are priced right are selling, and they get the most attention from buyers right now. If you’re thinking of selling your house this spring, it’s important to lean on your expert real estate advisor when it comes to setting a list price. As Realtor.com <a href="https://www.realtor.com/advice/sell/what-first-time-home-sellers-need-to-know-to-be-successful-this-spring/" rel="noopener noreferrer" target="_blank">explains</a>:
“Move-in-ready homes with curb appeal and in desirable areas—and that are priced to sell—are especially likely to move quickly this spring.”
In today’s market, how you price your house will not only make a big difference to your bottom line, but to how quickly your house will sell.
Why Pricing Your House Right Matters
Your asking price sends a message to potential buyers, especially today.
If it’s priced too low, you may leave money on the table or discourage buyers who may see a lower-than-expected price tag and wonder if that means something is wrong with the home.
If it’s priced too high, you run the risk of deterring buyers. When that happens, you may have to lower the price to drive interest when your house sits on the market for a while. But be aware that a price drop can be seen as a red flag by some buyers who will wonder what it means about the home.
To avoid either headache, price it right from the start. A <a href="https://www.mykcm.com/2022/12/29/planning-to-sell-your-house-its-critical-to-hire-a-pro/" rel="noopener noreferrer" target="_blank">real estate professional</a> knows how to determine the ideal asking price. They balance the value of homes in your neighborhood, current market trends, buyer demand, the condition of your house, and more to find the right price. This helps lead to stronger offers and a greater likelihood your house will sell quickly.
The visual below helps summarize the impact your asking price can have:
<a href="https://files.keepingcurrentmatters.com/content/images/20230412/20230412-price-it-right-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230412/20230412-price-it-right-MEM.png" /></a>
Bottom Line
Homes priced at the current market value are selling faster and at a better price right now. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassles, let’s connect today.
Contact us for experienced representation when buying or selling <a href="https://www.bayareamodern.com/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-safelink="true" data-ogsc="">property in the Bay Area</a>.
2023-04-13T11:22:27-07:002023-04-13T11:25:07-07:00Renee Adelmann, Bay Area Moderntag:bayareamodern.com,2012-09-20:26089Homebuyer Activity Shows Signs of Warming Up for Spring<img src="https://files.keepingcurrentmatters.com/content/images/20230407/20230410-homebuyer-activity-shows-signsof-warming-up-for-spring-KCM.jpg" alt="" class="img-thumbnail mx-auto d-block" />
The spring season appears to be warming up in housing as more and more buyers enter the market. And after <a href="https://www.mykcm.com/2023/04/03/how-changing-mortgage-rates-can-affect-you/" rel="noopener noreferrer" target="_blank">rising</a> mortgage rates sidelined so many buyers last year, that’s a good sign for <a href="https://www.mykcm.com/2023/03/13/leverage-your-equity-when-you-sell-your-house/" rel="noopener noreferrer" target="_blank">sellers</a>. Realtor.com <a href="https://news.move.com/2023-03-30-Realtor-com-R-March-Housing-Report-Spring-Thaw-Lures-Buyers-Back-into-the-Housing-Market" rel="noopener noreferrer" target="_blank">has</a> the latest:
“Spring is officially here, and like green shoots emerging from the bleak winter, new data suggests that more buyers are back in the market, although more subdued compared to a year ago.”
We know buyer activity is trending up because of mortgage purchase application data. <a href="https://www.investopedia.com/terms/m/mortgage-application.asp" rel="noopener noreferrer" target="_blank">According</a> to Investopedia:
“A mortgage application is a document submitted to a lender when you apply for a mortgage to purchase real estate.”
That means the number of mortgage applications shows how many buyers are applying for mortgages. Put another way, an increase in mortgage applications means an increase in buyer demand – and as Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), <a href="https://www.mba.org/news-and-research/newsroom/news/2023/03/29/mortgage-applications-increase-in-latest-mba-weekly-survey" rel="noopener noreferrer" target="_blank">explains</a>, application activity started ramping up as mortgage rates fell steadily in March:
“Application activity increased as mortgage rates declined . . . recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”
In fact, we can see how mortgage rates have a direct impact on applications over time. As rates rose dramatically last year, applications fell in response (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230407/20230410-mortgage-demand-rises-when-rates-fall-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230407/20230410-mortgage-demand-rises-when-rates-fall-MEM.png" /></a>
The recent uptick in mortgage applications, as well as the decline in mortgage rates, is good news for <a href="https://www.mykcm.com/2023/03/29/4-key-tips-for-selling-your-house-this-spring/" rel="noopener noreferrer" target="_blank">sellers</a> because it means more buyers are actively looking for homes.
What This Means for You
Buyers are coming this spring, which is typically the busiest time of the year in real estate. And as Realtor.com <a href="https://news.move.com/2023-03-30-Realtor-com-R-March-Housing-Report-Spring-Thaw-Lures-Buyers-Back-into-the-Housing-Market" rel="noopener noreferrer" target="_blank">tells</a> us, if you’re a <a href="https://www.mykcm.com/2023/03/24/have-you-thought-about-why-you-might-want-to-sell-your-house-infographic/" rel="noopener noreferrer" target="_blank">seller</a>, you need to prepare:
“If homeowners are planning to sell in 2023, now is the time to get ready.”
The means working with a local real estate agent to maximize your home’s appeal and get it listed at the ideal price for your area.
Bottom Line
The housing market is <a href="https://www.mykcm.com/2023/03/16/what-buyer-activity-tells-us-about-the-housing-market/" rel="noopener noreferrer" target="_blank">warming</a> up for spring. If you’re thinking about <a href="https://www.mykcm.com/2023/04/04/two-reasons-you-should-sell-your-house/" rel="noopener noreferrer" target="_blank">selling</a> your house and taking advantage of this recent uptick in buyer activity, let’s connect.
Looking for experienced real estate representation in the Bay Area? Let the Bay Area Modern Team help you with your <a href="https://www.bayareamodern.com/marin-county-real-estate/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-safelink="true" data-ogsc="" data-linkindex="1">Marin real estate</a> and <a href="https://www.bayareamodern.com/east-bay-real-estate/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable" data-safelink="true" data-ogsc="" data-linkindex="2">East Bay real estate</a> needs. Call us at 415-233-6821.
2023-04-10T14:05:50-07:002023-04-10T14:08:21-07:00Renee Adelmann, Bay Area Modern