2017 was certainly an interesting year! We had more buyers, and looser mortgage guidelines, qualifying more people for a home loan. We still maintained incredibly low interest rates with noisy politics and uncertainty contributing a great deal to that. As supply and demand would have it, we saw an increase in demand for home ownership but a shortage of supply as low inventory was the only thing holding the housing market back from a sure explosion. That led to home values increasing and a shift from a buyers- market; to a sellers- market.
So here we are its 2018 and we are seeing incredible economic growth. The Dow Jones Industrial average is soaring to record levels, unemployment rates are at a 17-year low and job growth predictions are all leading to signs of a very healthy America in 2018; from an economic perspective.
So what does all of this mean to you? Well it’s always important to know what is going on in the real estate market because if you are a home owner, you should always know the current market value of your home. If you are considering selling, you of course want to know how much cash you can get out of your sale. And if you’re looking to own a home, you want to know what the interest rates are, what they are projecting to be and what the inventory situation looks like to make better, more informed decision.
It’s expected that historically low interest rates, still baffling to even the most seasoned analysts, will gradually rise to an average of 4.5% percent over the next 12 months. Inventory is expected to increase, but moderately; making 2018 thus far, a sellers- market.
“This will be the first of many years to come in which it’s all about the millennial first-time homebuyer,” said Mark Flemming, chief economist at First American Financial Corp, a title insurance company. “ Find ways to appeal to those buyers, and it’s likely to be a successful year.”
Millennials, first time home buyers and self-employed individuals finally have access to options they really didn’t have after the mortgage meltdown. Let’s face it, most rentals today aren’t as desirable and they are more expensive as sellers of nicer properties have opted to “cash out” and sell once the market recovered. What I have recommended to interested buyers in our community is define where you are at financially and what your credit score is; then learn what products exist today that will get you qualified. For my sellers or potential sellers, get a free market analysis and know the market value of your home; you might be pleasantly surprised.
Groundhog Day is celebrated on Feb. 2 — when people all over the country focus on a small furry animal and whether it will predict an early spring or another six weeks of cold winter weather.
If PUNXSUTAWNEY Phil comes out of its burrow at sunrise and sees its shadow, winter will be around for 6 weeks longer. However, if the groundhog doesn’t see its shadow, spring weather is on its way!
If meteorologists are right, spring is on its way and may be covered in a dusting of snow this year. Since Pennsylvania’s first official celebration of Groundhog Day in Punxsutawney on 1886, the little guy has only seen his shadow 18 times.
Groundhog Day celebrations span centuries, with the earliest mentions of the unique holiday in the United States in the 1700s when German settlers arrived in Pennsylvania and brought the tradition of Candlemas Day. Those who celebrated Candlemas, an early Christian holiday where candles were blessed and distributed, decided that clear skies on the holiday meant a longer winter.
Initially, Germans used a hedgehog to predict when winter would end, but the animal was quickly replaced by the groundhog in Pennsylvania due to its bustling population and likeness to the European hedgehog.
Millennials, meet Baby Boomers.
Lucky for Millennials, their foray into home ownership coincides with the retirement of their parents’ generation, Baby Boomers.
Three-out-of-four individuals over the age of 65 are homeowners in California as of 2016, according to the U.S. Census. Most of these retirees will want to remain homeowners in retirement, minus the upkeep required by their suburban estates. Some will move out of state to low-cost areas like Arizona, Nevada and even Florida. Others will make the savvy decision to forego their suburban dwellings for low-maintenance condos closer to city centers and services — condos previously inhabited by Millennials, before they went looking for more space in the suburbs.
In some sense, retirees will simply swap housing with Millennials in what will be the Great Convergence. This demographic-fueled wave of home sales is expected to peak around 2020-2021.
Every part of the state is different. Continue to check my blog as I keep close track of housing data and forecast trends in the Bay Area.
I’m always looking for ways to improve the lives of my friends & clients. So, with that in mind, I want to share with you my recent
experience at a seminar presented by Gayler Design Build for ADU’s. What is an ADU? An ADU or accessory dwelling unit is
a really simple and old Idea. You may have heard them called in-law units or pool houses. People are building ADU’s for many
reasons. With California’s growing housing prices and limited inventory, Bay Area homeowners are building ADU’s in their
backyard to rent out for extra income or to family members, such as their adult children or their aging parents. For
young couples who cannot afford buy in the bay area and don’t want to move out of state, this is a great option! Another popular
trend we are seeing is empty nesters renting out their large houses and moving into ADU’s. This may be an old concept, but
these units by Gayler are contemporary, spacious, and gorgeous! Each ADU is designed and built to compliment the main house
and backyard. If you are outgrowing your current home and need more space, or if you have more space than you currently need,
an ADU may be a great option for you! Visit Gayler Design Build at gaylerdesignbuild.com so you can see yourself
If you are interested in learning more or you have questions regarding financing for these little gems please give a call.
Early action in Europe from the European Central Bank was good for bonds, which makes it good for pricing. The big news comes from Europe, as the ECB (European Central Bank) opted to keep its stimulus settings unchanged for now, and even left the door open for increasing bond purchases. There was concern heading into this meeting that the ECB might formally signal its intent to taper back the economic stimulus, which would have been bad for pricing. Instead, the ECB statement made it clear that it was ready to increase the program in size or duration if the outlook becomes less favorable. Fed Deputy Chairman Stanley Fischer has come out and said he will step down in October, adding to uncertainty about leadership at the central bank as the end of Fed Chair Janet Yellen’s term approaches. Not sure yet how this will affect the outlook of a Fed rate increase this year, but it will have no effect on the September’s Fed meeting. So, the mid-to-longer term outlook remains good for rates and pricing, as it has for quite a while now.