Buying and Selling, California Real Estate, For Buyers, How's the Market Snapshot, Real estate Market

Sales are Down, but First-Time Buyers are Seeing Opportunity

Are you curious to know how much you qualify for? I always stress to buyers that the first step to buying a home is knowing what your purchasing power is even before we start looking at homes, there are few things more disappointing than finding a home you are totally in love with and then realizing that you can’t qualify for it.

Let’s chat for a few minutes to see what your buying power is, reach out to me via Email/phone/text, here is my contact info: yesenia@newcenturybroker.com / 626-252-0839.

September marked the 79th month in a row of year-over-year home price increases. The median existing-home price climbed 4.2 percent to $258,100. This price increase is partly because of a supply decrease; inventory levels—especially levels for affordable homes—continue to hover near record lows. While price gains are beneficial to homeowners looking to sell, they also affect housing affordability for buyers. Buyers are also seeing their purchasing power decrease due to rising mortgage rates. The impact on the housing market has seen a slump in sales activity in all regions of the country. After a stagnant August, existing-home sales declined again in September to levels not seen since November 2015.

More First-Timers in the Market
Of all the homes sold in September, 32 percent were purchased by first-time buyers, up from 31 percent from a month ago and 29 percent from a year ago. According to the National Association of Realtors’ (NAR) 2017 Profile of Home Buyers and Sellers, first-time buyers made up 34 percent of the home-purchasing public last year. “Rising interest rates coupled with increasing home prices are keeping first-time buyers out of the market, but consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory,” said Lawrence Yun, chief economist for the NAR.

Seasonal Factors Depress Inventory
The latest housing inventory figures do not suggest a steady rise in the supply of homes on the market. Inventory levels fell from 1.91 million available homes in August to 1.88 million. However, year-over-year listings are up, as there were only 1.86 million homes listed on the market in September 2017. At this sales pace, the current housing stock would sell in 4.4 months, up from 4.3 months in August and 4.2 months in September 2017. According to Yun, “There is a clear shift in the market with another month of rising inventory on a year-over-year basis, though seasonal factors are leading to a third straight month of declining inventory.” The average home took 32 days to sell in September; in comparison, properties stayed on the market for an average of 29 days in August and 34 days a year ago. Of all homes sold in September, 47 percent of them were on the market for less than a month. Realtors expect this fast pace to settle down a bit as winter approaches.

Regional Breakdown

Northeast – Existing-home sales annual rate of 680,000; a decrease of 2.9 percent from August and 5.6 percent from September 2017.

Midwest – Existing-home sales annual rate of 1.28 million; unchanged from August but a decrease of 1.5 percent from September 2017.

South – Existing-home sales annual rate of 2.11 million; a decrease of 5.4 percent from August and a slight decrease from the 2.12 million sales posted September 2017.

West – Existing-home sales annual rate of 1.08 million; a decrease of 3.6 percent from August and 12.2 percent from September 2017.

 

 

Photography Credits: © Wipada Wipawin - iStockphoto 

Buying and Selling, California Real Estate, For Buyers, Helpful Info, Home Sellers, Real estate Market, Real Estate Values, Sellers

2018 Real Estate Trends: What You Need to Know

Real estate season is here, and experts are predicting the hot market conditions will continue throughout the summer in many states. Thinking of buying or selling? Here are the 2018 real estate trends you need to know, and what the hot market means for your house.

Real Estate Trend #1: Homes Are Selling Faster Than Last Year

In February 2018, Realtor.com data showed that properties were selling 8% quicker than the same time last year—staying on the market for a median of only 83 days!(1) In March 2018, the data found that homes sold (at least!) a whole week faster than last year in 36% of the largest housing markets in the country—averaging 63 days on the market.(2)

What Faster Sales Mean for Sellers

Clearly, this is great news for home sellers! Not only does it mean your home could sell at a higher price (more on that later), but it also removes a lot of pressure you might be under to sell your home quickly. With plenty of buyers to choose from, you have a lot of negotiating power to sell on a timeline that works best for you. Woohoo!

What Faster Sales Mean for Buyers

This news isn’t as great for buyers. Your biggest challenge will be competition for homes. In their latest report on the 2018 market, Realtor.com said we’ve never experienced a market where so many buyers have to choose from so few houses.(3) To beat the competition and snatch a home this year, you may have to reprioritize what you want in a dream home. So strap in, buckle down, and follow these tips:

    • Prepare finances. If you haven’t saved 100% in cash for the home you want, at least get preapproved for a 30-year fixed-rate mortgage and save up a 3.5 to 20% down payment. (A 20% down payment is better—you’ll avoid having to pay private mortgage insurance.) This will show sellers that you’re a serious buyer because you’ve already started the mortgage process—which isn’t common among all buyers placing offers.

 

    • Know what you want. You’ll be able to beat competitors to the punch and make an offer faster if you already know exactly what you want in a home. If you’re married and house hunting, you and your spouse need to agree on must-haves! So first create separate lists of what you want most. Then compare and combine those lists for your real estate agent to use as the foundation of your home search.

 

    • Write a letter. Sending a personal story to your seller might be just the thing that makes you stand out over similar offers. Covina couple Abby and John B. included a personal letter when they made an offer on their home. They believe it’s the reason their offer beat the heavy competition. “We sent the sellers a personal letter with our offer,” Abby said. “The best thing you can do is to include in the letter things you love about their house. If they have a deck or screened-in porch, tell them how you envision using the space. We did that, and the sellers accepted our offer—out of multiple offers—within 24 hours.”

 

  • Hire an experienced pro. If you don’t operate in the real estate business every day, working through the complex details that go into a home purchase in a hot market could cause costly delays. In such a competitive market, why shouldn’t a seller choose to work with a buyer who’s more prepared? That’s why you want to partner with a seasoned real estate agent who has a great reputation in the community. A good agent is an expert at negotiations and can manage detailed paperwork and closing so you don’t miss your chance on a great home.

Real Estate Trend #2: Home Prices Are Higher Than Last Year

Over the past 30 years, home prices have continued to rise at an average rate of 3–4% per year.(4) But the increase in listing prices from February 2017 to 2018 is a startling 10% jump!(5)

What does this look like in dollars? As of March 2018, the median list price hit $280,000. Most new listings tend to be over $350,000, while the rest remain between $200,000–350,000. Only 1 in 3 homes on the market are priced below $200,000, and half of all buyers are competing for homes in that price range!(6)

What Higher Prices Mean for Sellers

You’ll likely make a nice profit as a seller! Will you use the profits to purchase your next home? Maybe you’re downsizing and using the money to beef up your retirement. Whatever you do, lay out your plan before you sell so your profit doesn’t go to waste.

What Higher Prices Mean for Buyers

If you’re going to buy a home in this expensive market, you absolutely must find out how much house you can really afford. Crunch the numbers yourself with our free mortgage calculator or meet with one of our trusted lenders and figure out how much of a monthly payment your budget can handle.

Commit to staying within that budget amount. Don’t rush into a home purchase that doesn’t make financial sense for you—no matter how much pressure you feel watching competitors pluck good homes off the market. If you get impatient, you’ll screw up your finances!

  • Expand your search. What if the location you’re planning to buy in is what’s really busting your budget? Get connected with Yesenia to learn more about home prices in your area that will fit your budget and lifestyle.

Real Estate Trend #3: CA Holds the Hottest Market

While the hot market is likely to affect the sale or purchase of your home no matter where you live in the country, you can expect the above trends to be at their peak on the West Coast. As of February 2018, California accounted for 13 of the top 20 locations where homes were receiving the most listing views and staying on the market for the shortest amount of days. For a glance at what some of those Californian areas are, below is a list of the top 10 hottest markets:

  1. San Francisco, CA
  2. Midland, TX
  3. Vallejo, CA
  4. San Jose, CA
  5. Sacramento, CA
  6. Denver, CO
  7. Santa Rosa, CA
  8. Colorado Springs, CO
  9. San Diego, CA
  10. Stockton, CA(7)

What If I’m Not Buying or Selling a Home This Year?

Now you know the challenges and benefits of buying or selling a home this year. But what if you decide to hold off and wait longer to buy or sell? Could your home continue to rise in value—and sell for even more? Will the hot market cool down for better buying conditions? Or are we in another housing bubble that’s about to burst?

1. Equity Will Likely Keep Increasing by 2–6% (Until 2020)

With most housing markets at a low risk for a downturn, the 2018 edition of The Housing and Mortgage Market Review estimates that home prices will continue to rise for the next couple of years, with annual increases of 2–6%.(8) So if you sell your house before 2020, you’ll likely still make a great profit. But don’t rely solely on market trends. Continue to monitor how much your home is worth to make sure your equity (how much your home is worth minus how much you owe on it) is going up.

2. Is the Real Estate Market Going to Crash Again?

With such rapid upward trends, some are wondering if the housing market could collapse again. While it’s impossible to know for sure, most experts expect the rising prices to settle down over the next 24 months. For most cities, risk of a crash in the market is low.(9)

3. Despite Your Neighborhood, Buyers Are Interested

Because of the hot market and low inventory, buyers may be willing to consider neighborhoods that don’t have easy-access to highways or close proximity to the city. In other words, if your neighborhood hasn’t been swarmed by home shoppers in a while, this market will likely make it more attractive. Determined buyers are willing to compromise for an unconventional area if it means they can snatch a house. So, even if you think you live in an unpopular neighborhood or that your home isn’t what buyers are looking for, think again. Maybe now is your perfect time to sell.

Take Control of the Trends With a Real Estate Agent

Whether you’re itching to enjoy the benefits of the hot market by selling your home or feeling the challenges of a buyer, you can take advantage of current real estate trends by partnering with the right professional. Find a professional who has earned Dave Ramsey’s seal of trust for practicing what he teaches, giving excellent advice, and providing outstanding customer service. Contact Yesenia today!

Buying and Selling, California Real Estate, Real estate Market, Real Estate Values

First-time Buyers Increase, Home Sales Climb Nationwide

Home Values

1-626-252-0839 Sell While the Market is HOTT!

What’s Your Home Worth? Find out Now!

If you’ve been thinking about selling your home, chances are that you’re excited about the possibility of moving and starting a new chapter of your life. Simply deciding to sell your home isn’t enough, though. The process of putting your home on the market can be overwhelming and time-consuming, so before you try to sell your property, you need to ask yourself a few questions. Being honest with yourself and with the people around you will help you have a more positive selling experience when you’re ready to move.

First-time Buyers Increase, Home Sales Climb Nationwide

First-time buyers represented 32 percent of the market in May, a 2 percent increase from April and a 5 percent increase from a year ago. First-time buyers haven’t had this much of a presence in the housing market since September 2012. Unemployment is down among young adults, and many lenders are lowering their down payment requirements. These factors combined with more affordable mortgage insurance options are enticing many first-time buyers to leave their rentals and purchase homes. Economists with the National Association of Realtors (NAR) believe that the number of first-time buyers in the market will continue to rise. The percentage of these buyers will depend, however, on how fast mortgage rates and home prices climb.

Fewer Investors
While first-time buyers saw opportunity in the improving housing market, investors saw fewer deals. Individual investors purchased just 14 percent of all homes sold in May, a drop of 2 percent from a year ago. For the third month in a row, all-cash transactions accounted for 24 percent of all homes sold, down from 32 percent a year ago.

Demand Exceeding Supply
In May, housing inventory was up slightly because more homeowners put their houses on the market. Total housing inventory rose 3.2 percent to 2.29 million existing homes for sale. The housing supply is 1.8 percent greater than it was a year ago. At the current sales pace, this level of inventory represents a 5.1 month supply. Despite the modest increase in inventory, demand still far exceeds supply. On average, homes in May stayed on the market for 40 days. This is the third shortest time recorded since NAR began tracking this statistic in May 2011. The inventory shortage led to an increase in home prices. So not only was May the 39th month in a row to record year-over-year price gains, but every region in the country saw home prices increase.

Sales Climb Nationwide
In May, all regions of the country experienced sales increases. The Northeast posted the largest gains with existing-home sales jumping 11.3 percent, for a total increase of 11.3 percent from a year earlier. In the Midwest, sales climbed 4.1 percent month-over-month and an impressive 12.4 percent year-over-year. The South and West both saw an increase
of 4.3 percent from April. When compared with May 2014, sales were 6.9 percent higher in the South and 9 percent higher in the West.

What’s Your Home Worth? Find out Now!

Interested in a step-by-step guide on what is involved when buying a home? Send me an email: Yesenia@NewCenturyBroker.com