Time to lace up your walking shoes. The outdoor season is afoot, and the greater Sacramento region is rich with hiking opportunities. To help you get going, here is a sampler of 12 hikes to enjoy courtesy of Sacramento Magazine. The article begins on page 28. See you on the trails!
More of the same was delivered in the U.S. housing market last month, with March 2022 being the hottest market on record. That’s according to Seattle-based Redfin Corp. (NASDAQ: RDFN), which found homes sold at their fastest pace, and for more above list price, than any other March on record. Nationally, the median home-sale price rose 6.2% in March, to an all-time high of $412,700.
Another month, another record-breaker. But there were some early signs of a potential letting up in the housing market later in March, and so far in April, although buyers — especially in hot Sun Belt markets — likely won’t feel many ripple effects for months to come.
Daryl Fairweather, chief economist at Redfin, said a slowdown has so far primarily been observed in U.S. coastal markets. But if a buyer is outpriced in a market like Los Angeles, they may instead try their luck in a more affordable market like Phoenix or Las Vegas, she added.
That’s bolstering a pandemic-increased migration out of higher-cost cities to more affordable Southeastern and Southwestern states, which have generally seen the largest gains in home-price appreciation since March 2020.
Nationally, typical home values grew 20.6% from March 2021 to March 2022, according to Zillow Group Inc. (NASDAQ: ZG) data. Among markets tracked by Redfin, the largest annual price increases were in Tampa, Florida, at 29%; Phoenix, at 27%; and McAllen, Texas, also at 27%. Both pending and actual home sales fell in March, at an annual rate of 6.1% and 8.1%, respectively. Those metrics dropped 3.6% and 3.7% from a month prior.
The spring months, the traditional kickoff to prime homebuying months, usually see an uptick in inventory. That’s not been the case so far in 2022.
Seasonally adjusted listing activity dipped in March, at a decrease of 1.1% from February and 6.2% from March 2021, Redfin found.
It’s possible some sellers aren’t motivated to list their homes if they refinanced their mortgages during the recent historic lows, Fairweather said. With mortgage rates spiking in recent weeks and months, that’s still expected to have a chilling effect on the overall housing market, but major metrics like the rate of home-price appreciation won’t be observed for months yet, as inventory remains constrained and buyer demand high.
What might start to burn off are the ultra-intense bidding wars that’ve been hallmarks of the pandemic housing market, or scenarios like waiving contingencies on a deal, she added. Higher mortgage rates are eroding how much a household can afford to pay for a home.
Twelve percent of homes listed on the market had a price drop during the four-week period ending April 3, up from 9% a year earlier and the highest share since early December, Redfin found more recently.
This article by Ashley Fahey – Editor, The National Observer: Real Estate Edition, 04.18.22
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When evaluating the current real estate market in Sacramento, Placer, and El Dorado counties there are a few highlights to acknowledge. First of all, inventory for January 2022 is slightly higher than it was last month. But from there, we’re seeing a decline in the homes listed, sold, and pending. Average days on market is 22 days which is an upward trends indicating perhaps a move towards a Buyer’s market (a downward trend indicates a move towards a Seller’s market) — it’s still too early in the year to predict.
This report was published January 2022, based on data available at the end of December 2021, except for the today’s stats (January 13, 2022). All reports presented are based on data supplied by the MetroList MLS. The MetroList MLS does not guarantee or is not in anyway responsible for its accuracy. Data maintained by the MetroList MLS may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
As told by 7 leading forecast models
A perfect storm. That’s the best way to describe the red-hot housing market we’ve seen from coast-to-coast during the pandemic. It was spurred by a combination of recession-induced low mortgage rates, remote work allowing buyers to sprawl further away from their workplace, and a demographic wave of first-time millennial homebuyers entering into the market. Of course, years of under-building means there simply aren’t enough homes available to meet this demand. Cue record price growth.
But how much longer will this run last? After all, home price appreciation of 19.9%—a 12-month record set between Aug. 2020 and Aug. 2021—can’t be sustained forever.
Already, there are signs the housing boom is losing some steam. We’re seeing seasonality—a cooling period that happens like clockwork most years—return to the market after it was absent during the holiday and vacation stretch last year. That’s not all: More homebuyers are finally beginning to push back against surging prices. Indeed, in October 60.3% of sales involved a bidding war, which is down from the all-time high in April (74.5%). There’s also the increased likelihood the Federal Reserve will raise rates to tamp down inflation. Rising mortgage rates would price out some buyers altogether.
What does this mean for home price growth in 2022? To find out, Fortune reviewed seven industry forecast models. But buyers and sellers alike won’t get much peace of mind from these forecasts: The economic models don’t produce anything close to a consensus. Some of these forecast models predict price growth next year will go down as one of the highest on record. Others are forecasting a rate of appreciation that would be the slowest in more than a decade.
Let’s take a look at these models—and also look at why there’s so much uncertainty heading into next year.
On the high end of the spectrum are Zillow and Goldman Sachs. Zillow projects home prices will rise 13.6% between Oct. 2021 and Oct. 2022. Meanwhile, Goldman Sachs forecasts a 16% uptick between Oct. 2021 and Dec. 2022 (or 13.5% on an annualized basis). For perspective, the largest 12-month uptick in the lead up to the 2008 housing crash was 14.1%. Simply put: Researchers at both Zillow and Goldman Sachs see priced out buyers falling further behind next year.
“The supply-demand picture that has been the basis for our call for a multiyear boom in home prices remains intact…Of all the shortages afflicting the U.S. economy, the housing shortage might last the longest,” wrote Goldman Sachs in its 2022 outlook.
What’s going on? Well, neither Zillow nor Goldman Sachs foresees the demographic wave of first-time millennial homebuyers letting up. We’re in the midst of the five-year period (between 2019 and 2023) in which the five largest millennial birth years (between 1989 and 1993) are hitting the all-important first-time home buying age of 30. According to their forecasts, there won’t be enough homes to satisfy all of that demand next year.
Since 1980, Fortune calculates home prices on average have climbed 4.6% per year. Over the past year, price growth (19.9%) is four times that level.
The good news for would-be home buyers? Among the seven forecast models Fortune examined, four predict we’ll see price growth in 2022 fall back closer to the historical average. That includes Fannie Mae and Freddie Mac, which are predicting U.S. home price growth of 7.9% and 7%. That’s slightly higher than the historical norm, however, it’s hardly the eye-popping numbers we’ve seen during the pandemic. Meanwhile, models released by Redfin and CoreLogic foresee 12-month price growth falling to 3% and 1.9%, respectively.
What do the models predicting substantial price deceleration have in common? They foresee price growth getting chopped down by rising mortgage rates. As of Monday, the average 30-year fixed mortgage rate stands at just 3.1%. By the end of 2022, Fannie Mae projects it’ll hit 3.4% while Redfin’s model says 3.6%. Those jumps are bigger than they might appear at first glance. Let’s say a borrower took on a $500,000 mortgage. At a 3.1% mortgage rate, they’d see a $2,135 monthly payment (not factoring in any taxes or insurance). But if that rate were the 3.6% as projected by Redfin, that payment would rise to $2,273—or nearly an additional $50,000 over the course of the 30-year mortgage.
Another unknown: Will corporate America begin pushing harder next year to bring staffers back into the office? If the workplace is less WFH friendly next year, that could translate into fewer buyers in both second home markets (like the Hamptons) and in the exurbs. That concern is shared by Frank Martell, CEO of CoreLogic, who wrote in the real estate data firm’s latest forecast that “as we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes.”
But there is one outlook that is relatively bearish on price growth.
The Mortgage Bankers Association, an industry trade group, is predicting that the median price of existing homes will decrease by 2.5% between the fourth quarter of 2021 and the fourth quarter of 2022. When you look closely at its model, it’s easy to see why: The Mortgage Bankers Association is forecasting that the average 30-year fixed mortgage rate will hit 4% by the end of 2022. Over the course of 30 years, that’d add an additional $90,000 in cost to a $500,000 fixed rate mortgage That said, even if the Mortgage Bankers Association’s price drop comes to fruition, it’d hardly be a housing crash. In fact, in that scenario, U.S. home prices would still be up over 20% from pre-pandemic levels.
Source: FORTUNE Magazine | 11.29.21 | By Lance Lambert
The holiday season is typically not peak listing time for real estate. But the current situation, namely a super-low supply of homes coupled with great demand, is not typical. Usually, there are fewer buyers than, say, in May or June, meaning that homes tend to take longer to sell during the holidays. So sellers often wait to list until spring. But this year is one like no other.
It might be time to list your home this holiday season. Here are four reasons why.
1. A low supply of homes
Usually there are fewer homes for sale during the winter months anyway, but in our current market, inventory is already at historic lows. So homeowners who want or need to sell during the 2021 holiday season probably won’t have too much competition, which puts them in the driver’s seat.
2. Homebuyers are more serious
Although there are also typically fewer buyers during the holidays, it’s still very much a seller’s market right now. And of the buyers who are looking during the holiday season, many are serious about making an offer and not just looking, particularly those who’ve been trying to purchase for months and have lost out in the bidding wars that often break out when new properties come on the market.
Buying a home unmarried? What to know before signing the deed
There’s a growing number of unmarried couples buying homes together, and without proper planning the move may create future problems.
Indeed, 9% of home buyers were unmarried in 2020, according to the National Association of Realtors. While younger millennials, ages 22 to 30 years old, represent 20% of unmarried purchasers, acquiring property as partners is a cross-generational trend.
“It’s happening across the board, and everybody needs to be careful,” said Sheryl Dennis, estate planning attorney at law firm Fields and Dennis LLP in Wellesley, Massachusetts.
That’s because co-buyers have fewer protections and may face legal issues if the relationship sours or one partner dies unexpectedly, experts say.
Applying for a mortgage
For most buyers, financing is the cornerstone of purchasing a home, and the process is more complicated for unmarried couples.
“For anyone buying a home, the first step is always pre-approval,” said Melissa Cohn, regional vice president at William Raveis Mortgage in New York, explaining how the step prompts couples to discuss applying for a joint mortgage, property titling and other critical decisions.
While combining high incomes, excellent credit and low debt may boost the chances of mortgage approval, a less creditworthy borrower can hurt the application, she said.
“Banks will always take the lower of the middle [credit] scores for the unmarried couple,” Cohn said. “So if one has a score below the optimal number required for the loan they are seeking, it could impact the rate and how much they can borrow.”
Another big decision is how to title the property, which stipulates each partner’s legal rights and ownership, and determines what happens to the home if one partner dies.
“The first question I ask is, ‘what happens when everything falls apart?’” said Matthew Erskine, a Worcester, Massachusetts-based estate-planning attorney at Erskine & Erskine.
While sole ownership grants rights to one person, joint tenancy with rights of survivorship is equal ownership, automatically passing to the other owner when one partner dies.
The third choice, tenancy in common, may be appealing when one partner contributes more because it represents an unequal interest in the property, Dennis said.
However, partners won’t inherit each other’s portion of the property by default, and they may need to specify preferences in a will to determine who receives their share.
Other solutions for additional control may be putting the home into a trust or creating a business, such as a limited liability corporation, Erskine said.
Of course, property laws vary by state, so it’s essential to speak with a local estate planning attorney before making a titling decision.
Regardless of the titling, experts also suggest a property agreement, outlining how much each partner paid for the down payment, home repairs and other expenses.
The contract should also cover how to divvy the property in a break-up, including buy-out provisions, depending on what the couple wants, Dennis said.
“It’s very much a business relationship,” Erskine added.
Plan for the ‘worst-case scenario’
As partners consider a joint home purchase, they may wonder if the decision is a good move, and the answer varies based on each situation.
“It’s really up to the individuals and no one else,” said Douglas Boneparth, certified financial planner and president of Bone Fide Wealth in New York, explaining the choice may or may not make sense, depending on the couple’s goals.
While buying property unmarried requires extra steps — such as planning for the “worst-case scenario” — partners need to weigh the pros and cons like any other financial decision, he said.
“It’s perhaps a little bit more involved, but none of this is weird or odd or abnormal,” Boneparth said, and the trend may continue as couples’ stances on marriage evolve.
Article from Advisor Insight |CNBC. Written by Kate Dore, CFP published online November 5, 2021.
In our hot Seller’s Market, we’re seeing a lot of Non-Contingent Offers from Buyers. What does that mean? Well it means that Buyers are at risk for losing their deposits or even paying damages if they decide not to purchase after an offer is accepted. Even Sellers should be cautioned about this strategy which leaves Buyers feeling powerless during the purchase process and may be more likely to become disgruntled after the sale. Here is a link to the California Association of REALTORS that will provide you with more information about the risks and rights with non-contingent offers. You can also download this QUICK GUIDE.