12 Great Hikes around Sacramento

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!

March 2022 U.S. Housing Market Update

March 2022 Blog

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.

SEE GRAPH of  ANNUAL CHANGE IN HOME VALUES

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.

SEE GRAPH of HOMES SOLD, MARCH 2022

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.

SEE GRAPH of 30-YEAR FIXED MORTGAGE RATE

This article by Ashley Fahey – Editor, The National Observer: Real Estate Edition, 04.18.22

Pre Sale Renovations with Curbio

Does your home need some repairs or renovations in order to sell it for top dollar?  I’ve recently partnered with Curbio!

Curbio is the pre-sale home renovation company that helps you make significantly more money on the sale of your home, without the hassle or upfront costs of working with a traditional home improvement company. Curbio will transform your property into the move-in-ready listing buyers are looking for, and you don’t pay them until you sell your home.

Where the housing market is going in 2022?

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.

Fortune US Home Growth

On the high end of the spectrum are Zillow and Goldman SachsZillow 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.

Fortune US Price Growth

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.”

Fortune US Price Growth Mortgage Bankers Forecast

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

Is it a good idea to list your home during the holidays?

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.

Holiday Listing

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.

Credit Scores for Homebuying

Minimum Credit Scores

Credit scores are crucial to the homebuying process. Not only does your FICO score determine if you can qualify for a loan in the first place, it will also have an impact on your mortgage terms. Your credit will affect getting the type of loan that will fit your family budget. You should also plan ahead in getting credit card debt paid down and correcting any inaccuracies in your credit report.
What credit score is needed to buy a house? Learn more at: https://bit.ly/CreditScore2Buy

2020 Home Value Predictions

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As recession fears mount, I wanted to share some information on why home prices are predicted to stay level (from MarketWatch). The last, “great recession” of 2008 was fueled by a series of events happening in sequence that in hindsight were avoidable:

  • An explosion in both home-building activity and mortgage credit to home buyers with no income documentation or down payment + 0% introductory loans that allowed them to be over-leveraged.
  •  Add to that rampant unemployment.
  • Very little home equity as it had been leveraged through home equity loans (often to purchase rental properties).
  • An unexpected downturn in the housing market as it was flooded with “upside down” rental properties.
  • A foreclosure crisis that could not be absorbed by the market, banking institutions, or loan service companies.

 

With this combination of events you begin to understand how this period of economic downward spiral was fueled by the perfect storm. Unlike the 2008 recession, the current housing market today is not driven by homeowners who are highly leveraged. In fact, the household debt-to-income ratio is at a four-decade low.

 

Since 1980, the U.S. Housing market has weathered all other recessions. Deputy Chief Economist Odeta Kushi with First America in a recent report is quoted as saying, “In 2020, we argue the housing market is more likely poised to help stave off recession than fall victim to it.” Kushi goes onto share, “With the exception of the Great Recession, house price appreciation hardly skipped a beat and year-over-year existing-home sales growth barely declined in all the other previous recessions in the last 40 years.

 

The recent growth in home prices is fueled by: Supply & Demand. While this is making the possibility of homeownership unaffordable for millions of Americans, it also means that countless more homeowners have seen their home equity grow substantially in recent years. This equity decreases the likelihood that they will be underwater on their loan if home prices were to dip and thus serves as a shelter during a downturn.

In terms of the corona virus’ effect on the housing market, Mark Fleming, Chief Economist of First America, states, “This time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.” In his recent post, he charts the differences between the pre-Great Recession housing market and the one at the cusp of the coronavirus outbreak.

 

ThisTimeItsDifferent

 

“Today, house-buying power is nearly twice as high as the median sale price of home, implying that housing is not overvalued, and is in fact in a much better position entering this potential recession than it was ahead of the last,” continues Fleming.

But homeowners should stay alert for potential red flags! Be cautious of scenarios where:

  1. A significant number of homeowners begin to take cash-out or home equity loans that will result in a whittling away of their equity and this “safety net” against economic downturn.
  2. A ripple effect of foreclosures in our region which would cause your home to drop in value.

THERE’S REASON TO BE ENCOURAGED:

“Many expect the housing market to follow a similar trajectory in response to the corona virus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it, ”
Mark Fleming, Chief Economist of First America

In closing, we can all take heart that our leaders, scientists, and healthcare providers are doing everything possible to minimize the economic effects of the corona virus. And, we can all do our part as well. #stayhome #staysafe

Be sure to get a chimney inspection

If you’re considering a home that has a fireplace and chimney showing some wear-and-tear or deferred maintenance, be sure to call in an expert. A Chimney/Fireplace inspector will provide a 13-point inspection, make repair recommendation, and ensure that it’s safe to use.

Verification of Property Condition

It’s one of the last steps in purchasing a home and an important one — Verification of Property Condition. Don’t skip or waive this opportunity to see the condition of your soon-to-be home prior to the close of escrow. #realestate #whosnext