Your Goals For The Housing Market?

If buying or selling a home is part of your dream for 2023, it’s essential for you to understand today’s housing market, define your goals, and work with industry experts to bring your homeownership vision for the year into focus. In the last year, high inflation had a big impact on the economy, the housing market, and your wallet (most likely). That’s why it’s critical to have a clear understanding of not just the market today, but what you want out of it when you buy or sell.

Here are three questions to consider:

What is motivating you? You’re dreaming about making a move for a reason – what is it? No matter what’s happening in the market, there are still many compelling reasons to buy a home today. Your needs may have changed in a way your current house can’t address, or you could be ready to step into homeownership for the first time and have a space that’s truly your own.

What does your next home look like? You know you want to move, but how would you describe your dream home? The available supply of homes for sale has grown, and that could mean more options to choose from when you buy. The better you understand what’s essential and where you can be flexible, the easier it can be to find the home that’s right for you.

How ready are you to buy? Getting clear on your budget and savings is essential before you get too far into the process. Working with an experienced lender early is the best way to make sure you’re in a good position to buy. This could include planning how much to save for a down payment, getting pre-approved for a home loan, and assessing your current home equity if your move involves selling your existing house.

Buying or selling a home is a process that takes expertise to navigate. If that feels a bit overwhelming, know you aren’t alone. I can bridge that gap and give you the best advice and information about today’s market and guide you through every step of the way!

A New Listing On Sutcliffe

Explore the possibilities at 433 Sutcliffe Place in Walnut Creek! This meticulous traditional Northgate home is meant to be enjoyed and to entertain. Step down into a formal living room with vaulted wood ceilings, and a formal dining area with a large, light-filled window to gaze into the backyard.

The eat-in kitchen was updated in 2006 with stone countertops, a bay window, a sub-zero refrigerator, and a gas cooktop. The kitchen is next to the family room with french doors to the back patio. A bedroom or office, full bathroom, and laundry room complete the downstairs.

Four bedrooms are upstairs with a spacious and updated primary bathroom that includes a walk-in closet. The backyard highlights include a putting green, pool, pond with waterfall, and spacious patio seating with a built-in grill (natural gas is piped in).

The home includes owned solar, too. There is a large potting shed on the side yard with electricity, and garden boxes in which you can grow a bountiful vegetable garden. During the spring and summer, the backyard is blooming with flowers. Imagine all the gatherings you can have and the memories you can make!

Rent Vs. Buy Analyses – Misleading!

My friend Jay Vorhees at JVM Lending wrote a blog about rent vs. buy analyses last fall that I think is still applicable to this current market. I’ve shared a shortened version of Jay’s post below, with my own two cents at the end. Let me know what you think!

Rent vs. buy analyses are often ridiculously misleading. A typical rent vs. buy calculator like Freddie Mac’s will look at the total cost of renting (including renter’s insurance) over a period of time against the total cost of owning a home over the same period of time (and accounting for closing costs, payments, appreciation, maintenance, etc.).

The analyses, however, are too “financial” and objective, and here are just a few of the things they miss:

  1. Forced Savings/Housing = Nest Egg! Housing payments are very effective “forced savings plans” because missed payments will destroy credit. Each payment is both paying down a loan and paying off an asset that will appreciate over time.
  2. Refinance Opportunities. There is a high chance of being able to refi into a lower rate, which rent vs. buy analyses never account for.
  3. Stable Housing Payment. Rents always go up, but housing payments are fixed. This is important especially now with rent skyrocketing in many places.
  4. Equity for Emergencies. Homeowners eventually build up equity (no matter what happens in the market) that can be tapped into for emergency needs like tuition, home repairs, medical bills, or temporary help if there is a job loss.
  5. Pride of Ownership. Young people who have recently bought homes love their homes and turn them into showplaces for their own enjoyment and for entertaining friends and family.
  6. Freedom. This is the most significant missed item. Homeowners really appreciate the freedom to renovate their homes or just do whatever the heck they want, really.

Kristin’s take: I am a firm believer in paying yourself instead of paying “the man” (like, somebody else’s mortgage for example). Of course, there are people who might move in a couple of years, just starting out, etc. where renting makes more sense. However, if you are young and start buying real estate and continue to buy investments over time, it will set you up 30 years from now!

No, It Is Not 2008 Again

The news these days is all about doom and gloom. There is a saying in journalism, “if it bleeds, it leads.” That means the drama, the controversy, the doom and gloom…it sells clicks, papers, and TV audiences. As a result, these are the statistics that most people believe.

However, our current market is nothing like the 2008 meltdown. Despite current tech layoffs, there is still a robust job market and a housing shortage. After many Fed rate increases (and possibly a few more to come), rates are starting to drop.

Many economists believe we are headed for a recession, even though, by the definition of a recession (two months of a decline in GDP), we were already in one. Because of the strong job market and being in an election year, the Fed said we were not in a recession, despite the GDP decline.

Typically, in a recession, mortgage rates drop. If we start to see lower rates, buyers will be back in the housing market and the likelihood of multiple offers and prices rising becomes high. So, for those buyers currently on the fence, it might be a wise move to get into a home now and negotiate a seller credit for a 2/1 or 3/2/1 rate buy-down. If rates drop in the next 2-3 years, homeowners can refinance into a fixed lower rate and not be in a bidding war trying to buy a home.

I just got a buyer into a home with the 2/1 buy-down, giving them a first-year rate in the 4% range. It will go up a bit more in the second year, but still lower than current rates. If they choose to do a refinance before those two years are up, the remaining unused buy-down money can be used towards their mortgage or refinance. As a final side note, many mortgage companies are offering free refinancing in the next 2-3 years!

A Closing To Start The Year

Terri, aka Theresa, moved up from Southern California with an IKEA job transfer. We connected on a call and she wanted to know if I was from New York, because I talk kind of fast. She is from New York, but I am born in San Francisco, and raised in Nevada – what a funny way to start our time together!

Terri knew she wanted to be in The Keys in Walnut Creek. She wanted a safe environment as her top priority, which that area provides. However, there was very little on the market as we started our hunt during the holiday season. I asked if she was interested in Rossmoor, but she said she was not interested in a senior community.

Then, a long-time friend came out to visit while she was house-hunting. She coaxed Terri into checking out Rossmoor, and she ended up loving the outdoor space and how peaceful and safe it felt there. We ended up looking at a handful of places in the area, but many needed work. Then, 1708 Golden Rain, Unit 1, dropped its price.

The minute we walked in, Terri said, “This is it.” It is a beautiful 2-bedroom, 2-bathroom upper Monterrey unit with views of the hills, lots of greenery, and light from the enclosed balcony. She is very happy – and so is her cat, who has a nice view perched from his cat condo! A happy start to the year!

Holiday Trivia Time!

With Hanukkah starting this past Sunday and Christmas, Kwanzaa, and New Year’s all approaching, I thought it would be fun to test your knowledge of these holidays with a bit of trivia! Scroll to the bottom of this blog to read the answers and see how you did!

  1. Which year did the ball first drop for New Year’s Eve in Times Square?
  2. When was the first Tournament of Roses Parade on New Year’s Day?
  3. In “Home Alone,” where are the McAllisters going on Christmas when they leave Kevin behind?
  4. Which country did eggnog come from?
  5. Which fairy tale was the first gingerbread house inspired by?
  6. Three of Santa’s reindeer’s names begin with the letter “D.” What are those names?
  7. How many candles are there on a menorah?
  8. Who was the first U.S. President to celebrate Hanukkah at the White House?
  9. How many days does the Kwanzaa celebration last?
  10. Which type of food is considered a symbol of Kwanzaa?

ANSWERS:

  1. 1907
  2. 1890
  3. Paris
  4. England
  5. Hansel and Gretel
  6. Dancer, Dasher, Donner
  7. Nine (remember: one for each of the 8 days of Hanukkah, plus the Shamash used to light the others)
  8. Harry Truman
  9. Seven
  10. Corn

Hopefully, some of these were tough! I know I learned a few things. I hope you all have a safe, warm, and happy holiday season, no matter which ones you celebrate!