Today’s housing market vs. 2008’s market

Consultant Bob Schwab has a few interesting thoughts on the difference between the housing market in 2008 and the housing market today. He essentially points out that the landscape of today’s market is radically different than 10 years ago, so comparing the two era’s – even if numbers look similar – is tricky. Here are his thoughts below:

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Some are attempting to compare the current housing market to the market leading up to the “boom and bust” that we experienced a decade ago. They look at price appreciation and conclude that we are on a similar trajectory, speeding toward another housing crisis.

However, there is a major difference between the two markets. Last decade, while demand was being artificially created by extremely loose lending standards, a tremendous amount of inventory was coming to the market to satisfy that demand. Below is a graph of the inventory of homes available for sale leading up to the 2008 crash.

A normal market should have approximately 6 months supply of housing inventory. As we can see, that number jumped to over 11 months supply leading up to the housing crisis. When questionable mortgage practices ceased, and demand dried up, there was a glut of inventory on the market which caused prices to drop as there was too much supply and not enough demand.

Today is radically different!

There are those who believe that low mortgage rates have created an artificial demand in the current market. They fear that if mortgage rates continue to rise, some of the current demand will dry up (which is a possibility).

However, if we look at supply again, we can see that the current supply of homes is well below the norm of 6 months.

Bottom Line

We will not have a glut of inventory like we did back in 2008 and home values won’t come tumbling down. Instead, if demand weakens, we will return to a normal market (approximately a 6-month supply) with historic levels of appreciation (3.6% annually).

Separate from the Schwab blog, NAR Chief Economist Lawrence Yun says, “It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels. Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”

And First American Chief Economist Mark Fleming says, “Millennials’ lifestyle and economic decisions are some of the main reasons we currently have a lower homeownership rate than expected, based on our Homeownership Progress Index. Yet, it is reasonable to expect homeownership rates to grow as millennials continue to make important decisions, including attaining an education and, later in life, getting married and buying a home.”

Glen Bell, a very analytical realtor in Berkeley, shared some charts with us, which also give additional insights into the disparities in the market:

Zillow_June_Numbers

Bell says he predicts a recession in 2019 or 2020, and that the real estate market will be a minor factor in it. Rising interest rates may offset some buying opportunities. It’s also hard to predict how much tax reform will play into this. Prices continue to rise and might be causing more people in the middle class to flee the Bay Area.

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Glen's Numbers pg 1

Glen's Numbers pg 2

10 items every home should have

Thanks to John Solaegui, who sourced this article from Architectural Digest, about 10 items every home should have. It basically is a list of must-have home items that you never knew you needed; the little things you forget about when moving into a new home. I think this is a spot-on look at what every home should have, with a little bit of added input from yours truly! Let me know if there’s anything we missed.

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1. Art that you love

Bare walls are boring. I’m not saying you need to go all JoAnna Gaines on your interior decorating, but finding some art that you love, that has meaning to you, is a huge plus in a new home. Personal photographs, postcards, custom-framed prints, etc. make for great decoration and tell the story of you!

2. Guest linens

This one might make you laugh, but it’s easy to overlook! If you’re planning on having guests over, you shouldn’t have to pull out a sleeping bag or ratty blankets. These people aren’t at summer camp! Stash a few extra sets of sheets and extra towels in a linen closet so you’re ready to host.

3. Entry table

It never hurts to have an aesthetically-pleasing piece of furniture right inside your front door. But it’s also multi-functional: mail, keys, sunglasses, and other necessities you are always misplacing would go neatly into a bowl, tray or box on an entry table.

4. Table linens

There’s nothing like freshly-pressed linens, but you don’t have to overdo it. A bare, white table set with white linen placemats can create a fresh, airy vibe. If you want an eco-friendly bonus, you can get linen sets that are better than paper, too.

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5. Plants

Bring a touch of nature indoors! Houseplants add color and texture to a home. If you are a chef (or pretending to be one), you can also plant some basil, thyme, or other spices inside to create a decorate herb garden. Another pro tip: apparently having a mint plant inside keeps insects on the right side of the walls (outside!).

6. Multiple lighting sources

We do a lot of things in our homes throughout the day. It’s only fitting that we have different lighting options available for sleeping, entertaining, and just relaxing. A single overhead system doesn’t really cut it anymore. Add at least one table, floor, or desk lamp to every room in your home to elevate the mood!

7. A coat rack

You don’t live in the dorms anymore, so tossing your coat on the nearest surface when you walk in is no longer acceptable. If you have a full mudroom, you’re set. If not, a back-of-door coat rack, or even just a section of the nearest closet, can function as a de-cluttering coat rack.

8. A bookshelf

If you can get a vintage cabinet, or utilize built-in shelves for this, you are a true professional. But every home should have some sort of chic shelving set-up to store your favorite books, framed photos, and other meaningful trinkets. You can organize the things on the shelves however you want, and change it often!

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9. A sumptuous throw

Toss a nice-looking throw over the end of a bed or across the back of a sofa. Not only will it make the room prettier, but it will imply that your room is cozy and welcoming. You can go as colorful as you want, or match the throw to the mood of the room.

10. Matching wine glasses

Don’t be that person. The one who scrambles through three different cabinets just to come up with a bunch of different wine glasses to serve the bottle your guests brought over. Invest in a quality, matching set of wine glasses, and upgrade your happy hour game. Brownie points for having a dedicated wine rack piece in your home.

JVM Lending: If appraisal comes in low…

…a buyer is not overpaying! Appraisals and market value can be a tricky math problem for buyers to figure out, but that’s why my friend Jay Vorhees from JVM Lending has put together this handy-dandy blog to explain. Take a look below:

When Appraised Value Does Not Equal Market Value

We have a buyer who was convinced she was “overpaying” for her property because her appraisal came in low. But, there were multiple offers for her property that were very close in price to hers, and there are nearby pending sales that are also similar in price. The entire issue has to do with appraisal guidelines. We repeat this often in this blog because the issue comes up so often: appraised value often does not equal market value.

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If there are multiple buyers willing to pay $850,000 for a property in an open market, then that property’s market value is $850,000. But, appraisers cannot appraise properties (in most cases) above the highest closed comparable sale in the neighborhood. So, if there are no closed sales above $800,000, that property will usually not appraise for over $800,000.

But, again, that does not mean the above property is not “worth” $850,000. Once this was explained to our buyer, she was no longer concerned about her low appraisal. This is something every buyer needs to understand in a fast-appreciating market where contract prices are tough to support in an appraisal.

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This is something I deal with constantly with my own clients. Jay hits the nail on the head here: appraisals may come in lower than expected, but it is not equal to a diminishing value on the property. For more helpful information like this, give me a call! I can talk about real estate all day 😉

Weimaraners & Real Estate

As I’ve expressed here before, my best moments as a realtor come when a client buys their dream home with my help. That happened recently, and the backstory is almost as cool as the moment they shared getting the keys!

I met Wilbur and Aimee through NorCal Weim Rescue, where I got my dog Bodie and occasionally foster dogs for them. At the time, Wilbur was renting and had two Weimaraner puppies (Roxie & Daisy), but the landlord just landscaped the backyard and did not want two big dogs in addition to their small one.

So he surrendered them to NorCal Weim Rescue, who did not want to split the dogs up and I fostered them – see pics below. Roxie was very dominant over her sister and even when they were at a trial run at another home she would growl at the husband, so that didn’t work.  Then Wilbur’s landlord said he could have one dog back, he got Roxie the light Weimaraner pictured here and Daisy found her fur-ever home in Bishop. And they later got Jax, the Blue Weim

They knew I was an agent and I said if you ever decide to buy, let me know.  A few years later, their landlord wanted to sell his house and called me up! They realized they couldn’t buy the house they were renting, so off we went looking in Livermore.  After being in contract and finding the HOA only allowed two dogs, we were back in the hunt. Three offers later, lots of conversations with the lender, and perseverance by all is when Aimee and Wilbur landed a wonderful home and a great place for their fur babies!

Now, Wilbur, Aimee and Roxie (dog) (as well as Jax (dog #2) and Duke (dog #3 smallest with the biggest name) can happily call their Aspenwood house in Livermore home for many years to come!

7 home maintenance tasks sellers must do before listing

It is that time of year when the housing market starts to heat up. If you’re one of the homeowners who plan on selling this summer, there’s a lengthy list of must-dos to complete before you actually list. Take a look at the following ideas from Inman, with input from yours truly, on how to make your home more attractive.

1. Spruce up the exterior

This is the first thing your prospective buyers are going to see. They want something with literal curb appeal, and if you have overgrown bushes, peeling paint, dirty windows, or poor lighting, the first impression won’t be very good.

2. Service the heating/cooling system

Home inspectors have to check this anyway, so you might as well beat them to it. Waiting until a buyer makes an offer to service this system may cause issues, so get ahead on it!

3. Check your lightbulbs

Check every single one of them on both the interior and exterior. Make sure they are clean and bright. It is essential to have the home as bright as possible. In my experience, this is a tiny thing that is very noticeable if not addressed.

4. Check all smoke detectors

We’ve all pulled batteries out of our smoke detectors when cooking, but don’t forget to put them back in. Make sure all your detectors are working. A home inspector will ding you if you don’t.

5. Blue tape it

If there are nicks, chips, scratches, etc. in the walls of your house, blue tape it! No buyer wants wear and tear on the interior walls or molding, so make sure the rough areas are marked for repair before you list. My stager blue tapes what needs to be removed, painted or fixed at the staging consult I provide as part of my services.

6. Deep clean and declutter

And we mean deep. If you can, hire a cleaning crew to get a small army of people cleaning every corner and crevice (think baseboards, light switches, etc.) of the house before it goes on the market. And don’t forget to gather all your extra junk and either store elsewhere or donate.

7. Don’t forget the garage

This is often an overlooked space, but prospective buyers will want to see a clean, organized garage. Consider painting the floor or putting an epoxy down. And don’t forget to repair cracks in the ceiling of the garage!  Side note, in this area most people store all of the noted blue taped items, just make sure if you do a pest inspection, you do it before you store all your items in the garage.

BONUS! 8. Stage the property

This is my personal addition to the list. There are people who stage homes for a living. They are experts at making a house as attractive as possible to buyers. I can’t recommend having your property staged before listing highly enough!  You only get one opportunity to make a first impression!

11 reasons your home isn’t selling

RIS Media shared a story from Charles Muotoh giving 11 reasons your home may not be selling. I found the piece very interesting and have summarized the points below, and added some commentary. Let me know what you think!

You overvalued your property: Overpriced homes will not sell. Simple as that. If you have an experienced real estate agent, they can give you an accurate value of your home.

Your listing is poor: You can’t poorly write the description of your home without any images. It will be skipped. Work with your realtor to make the listing attractive and interesting.

You’re always present at showings: Do not get in your agent’s way at showings. Let them do what they are experts at. Buyers don’t want you hovering over them the whole time anyway.

You’re too attached: If you are too stubborn to refuse to negotiate your price down, then there’s a good chance that you’ve become too attached to your home. That will make selling difficult.

You haven’t had your home professionally cleaned: What kind of buyer in their right mind will want a dirty house? Ask your realtor to recommend a professional cleaner for the carpets and windows before showing your home.

You haven’t staged your home: Never show an empty house, because it’ll make it hard for buyers to picture living in it. Always have it staged. Your realtor should have a stager on speed dial!

You kept up all of your personal décor: If you keep your home personal (with pictures, etc.), buyers will feel uncomfortable in your house. Take those down before showing the home!

Your home improvements are too personalized: If you tailored your kids’ rooms to their specific obsessions, that’s great…until you need to sell the home. Those little touches could scare off buyers.

Your home is too cluttered: Clutter can still be an issue in a clean home. Don’t keep too much furniture in the rooms – it will make your house feel smaller than it is!

Your home is in need of too many repairs: If a buyer knows he or she has to do a bunch of repairs, they are less likely to want to make a move. That’s a lot of extra effort and cost on their parts, even if the repairs are minor.

You choose the wrong real estate agent: You may have noticed a theme throughout many of these previous points. Choosing the right real estate agent is absolutely essential to the selling process. We can make all the difference in selling your home for the right price, in a reasonable amount of time!

Client Appreciation Party

After sending out invites, speaking with past clients and those who have referred me, coordinating with the venue, and designing the event, I am happy to share some pictures of a fun day with my wonderful clients and friends. I also want to give a big shout-out to Prima Ristorante, where we enjoyed appetizers, wine tasting of old and new-world wines, great company and friendship all in the cozy space of their room with a fireplace.

Frank, our sommelier, did a wonderful job of introducing us to the nuances of French vs. California wines, and we finished with a blind tasting of a white and red. We had to guess if it was a French or California wine based on the taste. We also had a seasoned waiter who served us some amazing appetizers of  calamari, shrimp, antipasto platters, rice balls and deep friend olives – yum!

We also gave away some door prizes: two $50 gift cards to Whole Foods donated by Lukasz Wilk of Wolf Construction, a certificate for house cleaning donated by my stager Heather Farry, and two bottles of wine from Prima as part of the day’s event.

Many may think the job of a realtor only involves buying and selling homes with my clients. But being a guide, friend and advocate for my clients is actually the biggest part of the job and celebrating them is my favorite part! I look forward to seeing new and old faces at future events!

Applying for a Home Loan? See JVM Lending’s “Don’t” List!

Once you’re pre-approved, the last thing you want to do is knock yourself out of qualifying range. My friend Jay Vorhees at JVM Lending is a great source on this issue, as he’s seen hundreds of borrowers in this situation. Now, he sends them a list of “actions to avoid” with every pre-approval letter. Heeding his advice will help you at least prevent delays and extra paperwork. Take a look!

1. Do not make large deposits that can’t be explained. When you are trying to qualify, any large deposit – think $500 for a new mattress, or all-cash payments – must be explained. Otherwise, an entire account can become invalid and unusable for qualifying. Always keep a paper trail to make large deposit explanations easier!

2. Do not take on new debt. If you increase your credit card balances, finance a vehicle, or take on debt in another way, your ratios will be impacted and it will reduce your maximum purchase price.

3. Do not take vacation days if you’re paid hourly. A single day off work can push you out of qualifying range if your debt ratios are high and approaching your limit.

4. Do not spend liquid assets. Pre-approval software relies on specific liquid asset levels. So, pre-approval amounts can change if liquid assets are significantly reduced.

5. Do not miss payments on any debts reporting on a credit report. This one is pretty obvious, and you should avoid missing payments anyway, but missing monthly payments that reduce your credit score may also reduce your qualification amount!

6. Do not co-sign for someone else’s debts. That’s a dangerous maneuver anyway, but even if you’re just a co-signer, the debt will show up on your credit report. That makes you responsible for the debt and the payments.

7. Do not file taxes with a tax liability owing, or with less income than in previous years. This mostly applies to self-employed borrowers (especially during tax season). The most recently filed tax returns will be what the qualifying income is based on, and all tax liabilities must be proven paid. JVM recommends that borrowers file an extension when possible if they are making offers during tax season.

Things NOT to do when your house goes on the market

You’ve probably seen endless lists about how to sell your home. Everything from choosing the realtor, to the staging, to the deliberation is under the microscope. But how often do you get told how NOT to do things? RIS Media has put together a good four-step process for how to not get in your own way when selling a home.

First, don’t over-improve the house, the article says. This is good advice. While it’s important to clean up any holes and cracks in the wall, and make sure the lighting is fresh, etc., doing too much can be damaging to your case. But if you go out and make your dream changes to the house right before you sell it, you better hope your potential buyers see it as an awesome improvement, too, and not a large project to fix.

Next, don’t over-decorate. Simple, neutral colors and decorations will be just fine. Similarly to the first point, if you decorate your home with a bunch of lace, lavender and lemon scent because they are things you like, you’ve done too much. What if a buyer walks in and is immediately overwhelmed by it all? Keep it simple. Remember, the buyers are the ones who get to decorate when they move in. This is why I pay for a staging consult; because it tells you what to remove, and then I highly recommend doing some staging as it makes a huge difference in how your home is photographed. The online view of those photos will be the first impression a prospective buyer gets, and will help them decide if they want to see your home in person.

Third, and probably most important: do not BE THERE when the buyers arrive. If your realtor is going to show the house, try to get everyone (pets included) out for a couple hours. Go to a movie. Have lunch at the park. Find a way to get out of the potential buyers’ ways, so they aren’t attacked by a bunch of people upon walking in. Remember, they want to see themselves in the house. Not you!

Lastly, don’t take things too personally. You’ve put a lot of blood, sweat, tears, money and memories into your home. When a buyer lowballs you or requests repairs, don’t be upset. They are trying to afford their newest home, too. And they might tell you the reason they have to offer low is because of something they think needs updating that you disagree with. Bite your tongue, and keep negotiating. Remember, it’s all a business!

Newest must-see boutique: Filthy Gorgeous

Can one city have too many boutique stores? Not when it’s the holiday season, and definitely not when the newest redo boutique store in town is one of the coolest ones I’ve seen!

Filthy Gorgeous took over the space on S. California Blvd. and Botelho Dr. next to the Site for Sore Eyes and Jinny’s. It is a small corner that was previously vacant. It is just a few steps away from Broadway Plaza, where it had a store prior to the Broadway Plaza remodel.

Besides the ideal location, Filthy Gorgeous has some truly stunning home decor in their store. You can get anything from furniture, to art, to lighting to the basic home decor. They also run an interior design business, and you can see pictures of ongoing local projects on the website.

The brother-sister team of Jonathan and Tirzah created Filthy Gorgeous together and have grown it into a massive business that has been featured in multiple national outlets and on TV. And now they are back in Walnut Creek!

When I visited, I was really impressed by the style and choices in the store (my favorite items was a Buddha Goddess Head). Someday, I’d like to redecorate certain parts of my house with items from Filthy Gorgeous. Once you visit, you’ll probably want to do the same!

Filthy Gorgeous gets a perfect 5 out of 5 Mt. Diablo’s from me!

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