It seems lately as if everyone I talk to keeps saying that the real estate market is headed for an "absolute crash". However when I ask why they feel this way, the answer is always the same...."Because of high interest rates". It's at that time I try and remind them that high interest rates by themselves have never caused a market crash. You have to look at the entire picture and take into account all the moving parts. This current market differs with those of the past in several key ways.
First, Unlike the last market downturn which was driven by the mortgage industries lack of quality control, homeowners are not facing the kinds of foreclosure numbers like before. Long gone are the bad stated income and interest only loans. Those loans have been refinanced over the years into more stable products and therefore don't raise the chance for a wave of foreclosures and bank repos.
Secondly, homeowners have TONS of Equity this time around. Unlike last time where homeowners had no way out, they now can use the equity (built over time) to pay off any existing loan debt and/or downsize with the money from the current home.
Thirdly, We recently saw four months ago that as soon as the home prices took even a small dip, buyers who had put their searches on pause, jumped BACK into the market at the same time trying to get a piece of that same discount.....Well, you know what that did. Yep, it caused the prices in some areas to continue climbing and brought back a few bidding wars.
Lastly (and most importantly), Southern California has NOT met it's required housing units which have been mandated by the state. We are STILL neck deep in a lack of housing crisis. We still don't have enough units available to accommodate those who are currently here. So how is it working now?? It's not. In many cases you have families living with other families, pooling their funds together to have a place to live. But as we all know, that can't last for long and there's a family who then must go out into the market place only to find there's not enough inventory available to rent.....Or what about the young couple just starting out who have been living with the in-laws for years to save up and are "more than ready" to get out and into their own place. Do you think they plan on living there forever?? Nope. I've seen it too many times. Therefore, until Southern California can satisfy it's amount of housing units or decrease it's population by, say....10 million people, then there's no crash in sight. Will it at least cool down a bit?? Yes. Even with the items listed, interest rates and job rates are projected to bring the market down no more than 10% on the year. I would refer to this as a market correction and nothing more. Don't let the media or anyone try and convince you that prices are going down 40%-50%. There are too many outstanding circumstances (population, foreclosure correction, hedge fund investors, new generation of first time buyers, etc.) that will not allow the Southern California real estate market crash...even for those pessimistic people who are hoping it will cash because they still haven't bought into the market. Don't be that person.
National Association of Realtors® Chief Executive Officer Bob Goldberg joined White House officials and industry representatives Wednesday to discuss the Biden administration’s response to housing supply and affordability constraints affecting the country. NAR President Kenny Parcell followed up the meeting with a letter to White House officials(link is external) outlining numerous priorities the trade association believes would help address these ongoing challenges.
“When it comes to affordability, the administration has several tools it can use now to reduce costs, especially in higher-cost markets where housing options continue to diminish,” said Parcell, a Realtor® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “Reducing fees for first time homebuyers, providing more Housing Choice Vouchers, and providing incentives for more housing providers to participate in that program would provide direct and immediate support for renters and aspiring homeowners.
“NAR continues to stress that government must invest in boosting our nation’s housing supply if we are to make housing affordable in the long run. We need to invest in new construction, make zoning reforms, and provide tax incentives to spur more housing investment and conversion of unused commercial space into residential units.”
On Capitol Hill, NAR is working to advance the Neighborhood Homes Investment Act and the Affordable Housing Credit Improvement Act, two pieces of legislation it argues would increase affordable housing options. The former would mobilize private investment to build and rehabilitate 500,000 affordable homes over the next decade, and the latter would improve the Low-Income Housing Tax Credit.
On Wednesday, administration officials and representatives from various real estate groups specifically discussed several measures to promote housing opportunity: reductions in the Federal Housing Administration’s Mortgage Interest Premium and the Government Sponsored Enterprises’ (GSE’s) guarantee fees; efforts to expand and improve the Section 8 Housing Choice Voucher Program to assist tenants; and support for the Department of Housing and Urban Development’s affirmative fair housing initiatives NAR has advocated on behalf of each proposal. In the meeting, NAR stressed its continued opposition to proposals that some have advanced to place rent caps on GSE-backed rental properties, which it contends would be detrimental for renters, small businesses and housing providers. In the letter to administration officials, Parcell wrote that proposals to place control or stabilization measures on rental properties backed by Fannie Mae and Freddie Mac – which represent a significant share of the market – would cause considerable harm to the rental housing sector in America.
“Such policies would drive housing providers from the market – especially smaller, ‘mom-and-pop’ landlords who own just a few units and are unable to absorb rising costs that increase at a rate higher than rents do,” Parcell said.
Did you know that the United States just reached a record number of residential properties sold to International Buyers. In addition, they also set a record high with the amounts they are paying for these properties. According to current National Association of Realtors statistics, the average price paid was $598,200 with a median price of $366,100. Of these record high sales and prices , would you believe that 44% of these purchases were done without any financing. That's right, ALL CASH! In addition, 46% of these properties were vacation homes, rentals and in some cases both! I'm sure you're wondering which counties are doing the most buying?? Here are the Top 5 countries who are doing the most buying starting with number 5...Brazil with $1.6 Billion spent. Coming in at number 4....Mexico with $2.9 Billion spent. Next at number 3 is....India with $3.6 Billion spent. With the number 2 spot....Canada with $5.5 Billion spent. And the country with the most money spent on buying residential property is......China (no surprise) with $6.1 Billion. You're also probably asking yourself, Where did they spend the majority of this money? In other words, where did they buy the most?? The Top 5 places with the most International purchases might surprise you... Starting our list at number 5 is........New York which had 4% purchased. At number 4 is.....Arizona with 7% purchased. Next up at number 3 is....Texas with 8% purchased. Coming in at number 2 is.....California (bet you thought this was #1) at 11% purchased. Finally at number 1 with a WHOPPING 24% market purchase was......the Sunshine State, Florida.
Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years. Furthermore, rents are accelerating to higher figures with each passing month. In January, rents rose by 3.6%, and now the annualized rate is 10.6% (i.e., the monthly change times 12 months). The housing shortage was present years ago, yet America underbuilt homes in relation to population growth. The consequences are evident in rent growth and high home prices. Even with an anticipated fall in home prices in some markets, principally in California, homes will continue to be unaffordable while rents are squeezing non-owners. Energy prices are moderating but are still up 45% above pre-pandemic conditions.
Even with an economic recession looming, the Federal Reserve is unlikely to let up in its aggressive monetary policy of raising interest rates. The 10-year Treasury yield broke past 4% last week and mortgage rates will be fighting to hold at a 7% average rate in the upcoming weeks. People’s IRA and 401K retirement accounts are quickly vanishing.
The Federal Reserve is trying to cut demand to reduce inflationary pressure, but inflation can also come down by increasing supply. America has to produce more of everything, from building more homes and industrial spaces to drilling for more energy and manufacturing more electric cars. The 3 million Americans who left the workforce since the pandemic need to be incentivized to get back to work.
Decorating your home for Halloween is a popular tradition followed by people all across the world. Buying readymade Halloween decorations is easy, but it's not real fun. When you are building something yourself, you are not only saving money but you are also adding a personal touch to it. No matter a homemade decoration is small or cheap, it will be perfect to show off your creativity and save big bucks.
When decorating a home for Halloween, you must consider the outdoors sections carefully. From front door and windows to patio and backyard, all the places are perfect to display inexpensive Halloween decorations. It is the space you can freely display your talent on.
There are endless ideas out there, but for your help, we have compiled a list of a few DIY decorations that are sure to impress your guests and passerbys.
Pumpkins on the Porch:
There are many different ways you can use pumpkins to dress up your home. We'd like to start off with the always popular method of Carving your pumpkin. You can also paint your pumpkins if you aren't a fan of messy pumpkin insides and sharp tools. In addition, you can get white or storybook pumpkins and put succulents inside the tops of them allowing them to flow out providing a great look.
Chicken Wire Ghost:
If you have unused chicken wire lying at home, it can be used to make a ghost figure in your backyard. Cover with cheesecloth or paint black for a horrifying look.
Wicked Witch Legs:
For this one, old stockings can be stuffed in a manner to form legs. All you will need is a pair of black and white stripped stockings, red shoes, newspaper (for stuffing legs) and two 4ft sticks with a point on one end.
Floating Ghosts:
These are easy to make and look great day or night. You will need either round foam balls or if you want to spend a few more bucks you can get foam heads (for an even more terrifying look). Then you will need cheesecloth and string. That's all you'll need!
Concrete Tombstones and Hands:
Have a bag of concrete laying around outside or in the garage?? This can be a fun way to make realistic-looking cast concrete tombstones and hands to give your garden a haunted makeover. Including concrete hands can add that eerie feeling to your outdoor Halloween decorations.
These are just some of the creative and inexpensive ways to help make your home the Halloween gem of the neighborhood. If you have any tips you'd like to share please feel free to do so in the comments below. We'd love to hear what you have to say.
If you asked most people if they would be happy in retirement without a mortgage, the answer would probably be a resounding YES!! However, you have to look at the overall picture and what costs would be related to such an undertaking. Now, retiring with a mortgage poses no financial risk and at times can be a sound financial decision. Of course it's ideal to not have to have the worry of a mortgage, but you have to look a little deeper into what kind of lifestyle you envision for yourself in retirement. Do you plan to travel? Do you have hobbies? or how about plans to help with the grandkids tuition? With the ever rising costs of goods and services in this country, we can not forecast how much these same goods and services will be in the future, where as if you have a current mortgage with a fixed rate you are assured that the monthly mortgage payment amount will continue to remain the same. A few other factors to consider are age, heath and market conditions. Do you believe that based on your age and heath that you'll be able to enjoy enough of those years there mortgage-free? Do you have variable mortgage? If not, making more of a payment or adding to the payment will not change the monthly payment.
Emotional reasons usually fuel a persons decision to pre-pay a mortgage. Peace of mind can help you sleep at night, but it won't fund a decades long retirement. So before using that extra cash you got from a windfall to payoff your mortgage early consider the value of future flexibility. After all, goals often change over time.
Black and Latino home buyers are finally getting assistance from one of the largest lending institutions in this newly revived real estate market. Bank of America's new "Community Affordable Loan Solution" will be available in certain cities for Black and Latino neighborhoods.
Why is this a big deal you ask? Well currently, Black homeownership is at 45% compared to white homeowners at 72%!In addition, homes in Black neighborhoods are selling at a whooping 50% less than homes in White neighborhoods. CultureBanx reported that Black and Latino households are not reaping the real estate gains felt by the other demographics, due to home prices appreciating so much that families of Color are being out-priced of their very own neighborhoods. This is why the "Community Affordable Loan Solution" can be a game changer since there's no minimum credit score or mortgage insurance required and home buyer eligibility is based on income along with location.
A recent report from Lending Tree found the mortgage denial rate for Black borrowers is twice that of the overall population. One of the biggest culprits is Wells Fargo. A Bloomberg analysis discovered that Wells Fargo's approval rates of 47% for Black & Latino borrowers is the worst among major lenders. In addition, it was discovered that Black and Latino applications for refinances were also approved at a disproportionate rate of 25% to 75% for their White counterparts. When questioned, Wells did not deny the claims, but state that it takes the same approach to all potential borrowers.
This round of the Banking Wars goes to Bank Of America. I don't want to give more praise than necessary since after all we're talking about banks here. I will be following this much more closely and having some discussion with BofA lenders so stay tuned for more on this.
If you have ever tried to get a building permit of some kind you know that depending on where you live this process can vary. Usually it's just a matter of days different, but imagine months?? That sounds crazy, but this is happening in several county zoned areas of Los Angeles. Projects which would ordinarily take 1 to 2 months are now taking 5-6 months. Why you ask..?? Lack of inspectors and change in procedure ! Currently the district which serves south Whittier as well as parts of East Los Angeles is down to 2 inspectors! Prior to Covid, they had 6 full time inspectors to handle that entire zone efficiently. The county has stated that since the pandemic 3 inspectors went on to retire and 1 went on medical leave and never returned. The county has stated that at this point they are trying to hire new inspectors, but there just aren't any qualified applicants available. In addition, all satellite offices have been closed to the public. The county has decided to make all requests for permits done through their online system. They have instituted this in order to try and compensate for the lack of staffing. All of this does absolutely nothing to assist with Southern California's push for more housing solutions. In fact, it does quite the opposite as it makes improvements or additions less attractive to construct for homeowners or investors due to the time and hurdles involved. If things weren't already difficult, some counties now require solar panels to be installed on any new structures including ADU's.....AND YES, the county of Los Angeles is one who is enforcing it. Riverside county has already said they will be doing away with it by the end of this year. They fully understand the need California is in for more housing solutions and are responding.
My point to this is just to make everyone aware of what is currently going on within the building department which governs specifically south Whittier. Go online and make some phone calls before you decide to undergo a construction project.
Can you believe that summer is almost over..?? It seems that summer comes and goes too fast, but of course that means Fall is right around the corner. As the heat decreases and the season changes, it's a good time to look at items around the home that could be affected by the change in season. Let's take a quick look at a few things that homeowners should pay close attention to for the coming months:
1) Plumbing- Making sure your water supply lines (pipes) are insulated is a great way to improve your energy efficiency.
2) Electrical- With the greater chance of rain in the upcoming months we want to make sure that any exterior outlets are properly covered to prevent any chance for a dangerous surge.
3) Exterior- Make sure to close any vents or crawlspaces during the upcoming months and then open them back up in Spring. In addition, if you have a fireplace make sure the damper closes tight. There's no reason to heat the whole neighborhood. Also, keep any soil from stacking against the home as this could cause unneeded damage in the event of a heavy rain.
4) Doors & Windows- Check the caulking and weather stripping on each and every door and window to make sure they are sealing properly. If not, adjust accordingly. This can be the #1 source for heat loss.
5)Heat & A/C- Change or clean any/all air filters. Also, make sure your system is clear of any debris. This will help the system function longer and more efficiently.
6)Yard- Make sure you cut any trees back that are growing over your home or growing into a powerline, but if the growth is already in contact with a line then notify a professional to handle the job. In addition, cut back any bushes which have grown against the home as bushes become a haven for rodents when the weather becomes colder.
7) Roof & Gutters- Make sure you check for loose or missing shingles. Over time they may become loose or fall off depending on the conditions. Also, check all roof flashings to make sure they are sealed properly. One small open gap and water will find and cause a lot of damage. Make sure all gutters are cleaned out and free from any leaves or trash. This could cause rain water to fill, pond and cause considerable damage. Make sure all gutters drain properly. Lastly, make sure the downspouts from the gutters empty away from the house with at least 3 feet between the exit point and the foundation of the home.
Due to the fact that our profession allows us to view many different homes, we are constantly asked for popular trends which we are seeing in these various homes. Of course, this is something that we love to talk about so I found it fitting to just touch on a few trends which we see making an appearance this year and into the beginning of next year. Lets' start...
1) The 70's Revival- The laidback styling, natural materials and earthy tones of the 70's have found new life in 2022. This decor style is relaxed and fun. It evokes the free-spiritedness of the 70's. People are adding that 70's groove and energy into their homes by incorporating earthy browns, terracotta reds and oranges and opting for lower lighting fixtures.
2) Bare Essentials- Look for clean and simple accent pieces that can stand in isolation. When it comes to accessories, don't overcrowd your space. If the goal is to create a calm environment, you don't want clutter. Think carefully about the decoration and choose items which add substance to the room, such as lamps, rugs, cushions which bring bright light and texture. Vases, mirrors and frames also work great for adding visual elements.
3)Open Shelving- Clever storage solutions will never lose favor in the kitchen, however open shelving has become increasingly popular due to it's clean look and functionality. In addition, it can save you thousands in the event of a kitchen remodel. It is also a favorite for Chef's who find it much easier to navigate in a kitchen where most everything is visible and doesn't require the Chef to dig in cabinets.
4) Creative Tiling- Tiles have long been used to introduce color and patterns to areas of the home with higher traffic, but uses for tile are expanding in 2022. We are now seeing tiles adorning headboards and feature walls with creative motifs and laying patterns. If you're looking to experiment with bold colors, decors, inspired layouts and patterns then tiles are the perfect way to make a distinctive design statement that is uniquely individual.
5) DIY Wall Paneling- Wall paneling has become the go-to DIY project of 2022. The DIY project has gained tons of traction on-line as 23.8 million TicTok users have clicked to see how much difference the addition of wall paneling can have on a room. By adding wood panels to a feature wall before adding an ounce of paint, the high-end appearance adds an instant touch of luxury, helping you to achieve a premium feel on a budget.
By continuing to use this site, you consent to our use of
technologies that
analyze and monitor activity on our website, may record your activity on this site, and sometimes provide you with
tailored advertising. You also consent to our Privacy
Policy
and Terms & Conditions