Lenders Loosen as Prices Rise

Lenders Loosen as Prices Rise

Source: The Los Angeles Times via CAR.org

As prices rise, mortgage lenders are making it easier to buy a house

Some prices are rising across the country and mortgage rates, though still historically low, are up since the presidential election.

Simply put, buying a home isn’t easy, especially in high-cost metropolitan areas such as Los Angeles County, where the median price of a home hit $569,000 in June.

But changes in the mortgage industry are afoot, with the goal of loosening some of the strict standards established after the subprime crisis — rules some blame for impeding sales.

“The reality has sunk in that there are buyers out there who will be able to buy homes and make the mortgage payments,” said William E. Brown, the president of the National Assn. of Realtors. The industry is “trying to give them more options to buy a house.”

Government-controlled mortgage giants Fannie Mae and Freddie Mac are paving the way by rolling out new programs to encourage home ownership.

The companies, with their congressional mandate to promote home ownership, don’t originate loans, but purchase mortgages from lenders to keep the market moving. And any changes they make in the underwriting standards for the loans they buy can have a big effect.

Click here to read the FULL STORY on The Los Angeles Times


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Source: Terra Firma

Fannie Mae to Loosen Mortgage Requirements

Fannie Mae to Loosen Mortgage Requirements

Good news for potential buyers! Some loans will soon allow for a little more wiggle room when it comes to qualifying ratios, allowing buyers to be more competitive in a bidding situation or qualify for a certain purchase price when they were previously not able to!

Need a referral to a trusted mortgage professional? Just email us at info@terrafirmaglobalpartners.com! Happy house shopping!

Source: California Association of REALTORS®

Fannie Mae will ease its loan qualification requirements, raising its debt-to-income ceiling from 45 percent to 50 percent on July 29. The move could make it easier for a larger number of new buyers to qualify for a mortgage, particularly millennials who may be burdened with student loan debt.

The debt-to-income ratio compares a person’s gross monthly income with his or her monthly payment on all debt accounts, including auto loans, credit cards, and student loans. It also factors in the projected payments on the new mortgage. Lenders see applicants with lower debt-to-income ratios as less at risk of defaulting.


Fannie Mae, Freddie Mac, and the Federal Housing Administration have exemptions that allow them to buy or insure loans with higher ratios than the federal rules, which are set at a maximum of 43 percent. The FHA allows debt-to-income ratios of more than 50 percent in some cases. In a recent study, Fannie Mae researchers looked at more than a decade and a half of data from borrowers with debt-to-income ratios in the 45 percent to 50 percent range. They found that a significant number of these borrowers had good credit and were not prone to default.

Not everyone with a debt-to-income ratio of below 50 percent will be approved. Borrowers will still be closely vetted by Fannie’s underwriting system to examine their complete application, including income, down payment, credit scores, and more.


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Source: Terra Firma

Choosing the Best Offer for Your Home

Choosing the Best Offer for Your Home

Source: HouseLogic | REALTOR®

You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers.

6 Tips for Choosing the Best Offer for Your Home

1. Understand the process.

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines.

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process.

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally.

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term.

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures — such as appliances, furniture, or window treatments — to be included in the sale that you plan to take with you?

Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.

Have the buyers attach a prequalification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can’t get a mortgage, and they’ll take their earnest money back, too. Are you comfortable with that uncertainty?

Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?

With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?


6. Be creative.

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.

G.M. Filisko is an attorney and award-winning writer who has survived several closings. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

The moral of the story — even with price being equal, not all offers carry the same weight.  There are quantitative items to evaluate, as well as qualitative. Perhaps the buyer’s lender doesn’t have the best reputation vs. a well-known lender who is known for “getting the job done”. Or you may receive an offer over-asking, however the appraisal contingency is still in place putting you in a position to have to renegotiate price later if the appraisal comes in low. Having a trusted real estate professional representing you, to vet out all of these potential pitfalls is your best tool towards selecting the right offer for your home. If you are considering selling your home, please contact us today so we can match you with a REALTOR®  best suited to help you meet your goals.


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Source: Terra Firma

Got Listings?

Got Listings?

In a recent HousingWire article, “California home sales start year off strong…but will that last?“, low inventory is being cited as a concern for the health of the housing market in 2017, despite being off to a strong start. Data recently released by the California Association of REALTORS® shows California home sales increased from December to January for the first time in five years. February, although posting a decrease in sales of 4.7%  from January, actually saw a near 5% increase in sales from February 2016 to February 2017. A good sign! Right?! However, as any seasoned real estate professional can attest, it’s a marathon not a sprint. Will this momentum carry us through the remainder of the year?

The recent bump in sales activity is being widely contributed to the Fed’s recent decision to raise interest rates [and moreover the expectation that this raise was only to be the first of three over the coming year]. Buyers are deciding to “get off the fence” and get serious about getting into a home before it becomes unaffordable to do so. Even so, buyers are still being selective and haven’t acquiesced that this low inventory market is a seller’s market. “Buyers are still exhausted from the competition in 2016 – too many buyers, and not enough houses to buy. Buyers and sellers have not synced up yet this year on where housing prices are headed: whether sellers will get further increase in prices, or whether buyers will refuse to pay more – or somewhere in between,” observes Rob Jones, Senior Sales Associate/Sonoma office. Even still, the recent bump in sales is expected to be short-lived, as affordability will become an issue for some would-be homebuyers as interest rates continue to rise.

However, the bigger concern for the housing market in 2017 lies with the lack of inventory. According to CAR Senior Vice President and Chief Economist Leslie Appleton-Young, “The number of active listings has been on a downward trend for the past 20 months and has shown no signs of improvement.” Currently, there are 2+/- months of inventory in our North Bay counties of Marin, Sonoma and Napa. A “normal” market bears closer to 6 months. For example, in Sonoma county there are currently 491 active listings for single family homes. From 2/27 to 3/27 there were 292 sales of single family homes, i.e. “current pace of sales”. Given the current pace, the existing supply of homes (if no new listings were introduced to the market) would be absorbed in 1.68 months. We will of course see an up-tick of homes coming to market, especially as the sun continues to shine here in the North Bay. However, a corresponding increase in demand is expected to offset those gains in inventory. “There are a few factors at play keeping the inventory low. When the bottleneck opens up we may see a minor correction in home prices, but the fact is we live in a desirable area and the demand for homes will continue to exceed the supply,” Lani Gullotta, Sales Associate/Sonoma office.

There is definitely a healthy amount of pent up demand from last year, and 2017 could play out to surprise us all — if the listings materialize.

For a peak at our current listings please check out our Featured Listings and for a search of all current listings across the North Bay, visit our Property Search page.



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Source: Terra Firma

4th Qtr Affordability

4th Qtr Affordability

4th Quarter Housing Affordability stats are in. C.A.R. is reporting that higher wages and seasonal price declines are holding California housing affordability in check. For our local markets of Marin, Napa and Sonoma, the same holds true with the exception of Sonoma County.

Sonoma County’s 4th quarter Affordability Index (A.I.) is at 26, which means that 26% of households can afford the median priced home of $589,000. The income required to afford the estimated monthly payment of that median priced home ($2,900) is $116,100. The 3rd quarter A.I. was at 27, and this time last year (4th quarter of 2015) it was at 28. So currently, our affordability index is up slightly. “Due to Sonoma county’s booming economy, quality of life and affordability relative to the rest of the bay area, demand is up and wages are not keeping pace with the rate of appreciation,” commented Bill Facendini, President and Broker of Terra Firma Global Partners.

In Napa county the A.I. is up to 26 from 25 last quarter, and 21 at this time last year. The median home price is $620,000, requiring an annual income of $122,210 to be able to afford the $3,060 estimated monthly payment.

Marin, consistently with the lowest affordability of our three territories, has enjoyed a slight increase in affordability over the last year. 4th quarter A.I. is at 20, compared with 19 last quarter and 17 at this time last year.

The question everyone asks, what will this year’s real estate market bring? Interest rates will likely play a major role. With the Fed expected to raise rates 3 times over the next year, CAR economists expect rates to be around 4.4% by the end of the year. Still extremely low by historical standards, however a big enough increase to affect affordability.  The charts below illustrate the changes to the affordability index if mortgage rates increase. If you have any questions about the real estate market, please feel free to get in touch with us and we will connect you with a REALTOR® in your marketplace.





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Source: Terra Firma

Inside Scoop on the North Bay Market

Inside Scoop on the North Bay Market

Happy New Year, everyone! We hope you all enjoyed a wonderful holiday season with friends and family. We just wanted to give you a quick update on our real estate market here in Marin, Sonoma, and Napa counties. Take a look at the infographics below!

The word on the street — AKA the consensus from our weekly meetings — is that inventory of listings is WAY down. There are 925 active (i.e. available/not in escrow) residential (single family residence or condo) in Marin, Sonoma, and Napa counties COMBINED. A “normal” market in Sonoma County alone is about 2,000 active listings…

If you are considering selling your home this Spring, you may not want to wait to do so. There is pent up demand from last summer/fall and buyers are out there. Fewer houses on the market means less competition for you and your home.

If you are interested in selling your home, contact us today so we can discuss the market, your specific situation, and how we can best help you reach your goals. We look forward to working with you in 2017!

(You will notice the updates are from November, as it takes the California Association of REALTORS® time to gather the data and release it. The same thing with real estate articles you read in the newspaper, the “news” is usually a bit behind what is actually happening.)

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Source: Terra Firma

What Does the Fed Rate Hike Mean to You?

What Does the Fed Rate Hike Mean to You?

“I believe the message is still how low interest rates are compared to the average over the last 10 to 15 years. Affordability is still above 30% in California which means 30% of the families in California can still qualify for a mortgage based on their income.” – Bill Facendini, President & CEO

Source: The Los Angeles Times

The Los Angeles Times advises potential home buyers to “proceed as planned” after the Federal Reserve Board announced Wednesday that it would raise interest rates.

The Fed raised the interest rate by 0.25 percent, and the next step for consumers depends on which side of the saving-borrowing divide they stand. The Times answers pressing questions from homeowners, home shoppers, and investors.

Making sense of the story

  • If you’re all set to buy, don’t let moderately higher mortgage rates worry you. Proceed according to plan. Although the long-term outlook seems to indicate steadily rising interest rates, we’re building on very low ground. You know that whole “historically low mortgage rates” thing you’ve heard for the last few years? Yeah, we’re still there.
  • Yes, your buying power can be affected by higher interest rates, but that can also be offset by the better wages and greater employment opportunities of an improving economy.
  • Thirty-year fixed mortgage rates rose more than half a percentage point in the four weeks after the election of Donald Trump, according to the NerdWallet Mortgage Rate Index. Rates are solidly over 4 percent for the first time this year. On a 30-year fixed-rate mortgage for $300,000, each half-point increase adds close to $100 a month to your payment.
  • With additional Fed rate hikes expected next year, mortgage rates may have as much as another half a percentage point to go. That would put home loan interest rates just under 5 percent by the end of 2017. Refinance activity has already taken a hit because rates have climbed to their highest levels since July 2015.
  • If you have an adjustable-rate mortgage, you’ll probably see your payments increase over the next year, depending on how often your rate resets. Keep an eye on mortgage rates and consider moving to a fixed-rate loan. You may want to begin the mortgage shopping process soon if you intend to stay in your home for a few years.


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Source: Terra Firma

8 Reasons Why December is a Great Time to Sell

8 Reasons Why December is a Great Time to Sell

There’s this myth out there that the real estate market slows or even stops in December. It may seem counterintuitive, but the holidays are actually an excellent time to sell your home!

Here are 8 reasons to buy or sell a home during the holidays:

1. Serious Buyers: People who are looking to buy a home during the holidays are serious about finding their new residence! There may be fewer of these folks out there in general, but the ones who are looking are ready and wanting to buy, and they’re not messing around.

2. Low Supply: Typically, there are fewer homes for buyers to look at around the holiday season, which means there’s less competition for the attention of those buyers! When the holiday season ends and the new year begins, the supply of homes goes up. More inventory can mean more competition, longer days on market and potentially less money for your home.

3. Sell High, Buy Low: If want to buy a home in the 2016 spring market, selling now (and potentially renting short term) gives you the chance to be a non-contingent buyer when you’re ready to purchase in the spring. This is ideal. Since the spring time will bring more buyers into the marketplace for you to compete with, now you are set up as a “great buyer” who can compete with anyone, without a house sale contingency!

White cup of tea and warm woolen things near fireplace on wooden table. Winter and Christmas holiday concept.
4. Holiday Decor: The holidays tend to bring out the best in a home, when it’s all decorated and dressed to the nines! Your home will show beautifully, decked out in wreaths, red bows, and white lights! I particularly love the winter scents of pine, cinnamon and the toasty feel of a fireplace. Plus, the holidays can provide that emotional connection to a home that will help a buyer feel more attached and pay your asking price.

5. More Time: While your first instinct might be that people are too busy during the holidays to look at homes, think again! Many buyers may have less demanding schedules during the holiday season, or time off during Christmas as opposed to a normal work week. This is especially the case for relocation buyers… one of the best opportunities for a seller. They need to purchase and only have a short time to find their next home before the new year. (See #8!)

6. Scheduling Control: Don’t worry—if you’re selling, you can still enjoy the holidays as usual! You can limit home showings to when you’re comfortable. You stay in control!move. lots of cardboard boxes in an empty new apartment

7. Move in the Spring: You can sell during this prime holiday time, but still not have to worry about moving until January through March, well after the holiday season is over. You can negotiate a longer closing period or an extended use and occupancy.

8. Capture the Relocating Buyer: January is often a time when employees begin new jobs. Oftentimes, when someone is transferred to a new position, they need a home, and they need it ASAP! This means they can’t necessarily wait until spring to buy, and that means you need to be on the market during the final months of the year to capture this unique buyer opportunity.

A big thank you to Tracey Reynes from our Sonoma Office for bringing us this great insight!

headshotFor Tracey Reynes, she attributes much of her success as a Realtor to the time she spent in the culinary and event planning fields and her Culinary Arts degree from the acclaimed California Culinary Academy. She spent years learning and fine-tuning organizational, customer relations, and project management skills, as well as the attention to detail and follow-through.

In addition, as a California resident for nearly three decades and a Wine Country home owner for several of those years, she possesses vital, in-depth knowledge of the local real estate market, as well as of schools, services and other aspects of life in the Sonoma and Napa Valleys. She is a Director and Secretary of Sonoma League for Historic Preservation, and is an active volunteer with the Sonoma Community Center and Sonoma Film Festival. She is a Board member of Sonoma Valley High School Boosters Club and Sonoma Little League. When prospective clients choose to work with Tracy Reynes, they are assured it is not only a Realtor who represents them, it is a respected professional who is also a valuable and contributing member of their community.

Tracey works out of our Sonoma office. She can be reached via email at TraceyReynes@gmail.com or via phone at 707-775-7654. Also, check out her website at www.livelovesonoma.com.

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Source: Terra Firma

2017 Residential Real Estate Market Forecast

2017 Residential Real Estate Market Forecast

As published in The Registry on November 22, 2016 and the North Bay Business Journal on November 28, 2016

North Bay Residential Real Estate Market is Decelerating and Showing Signs of Fatigue

The residential real estate market in the North Bay counties of Marin, Napa and Sonoma is decelerating and showing signs of fatigue after five consecutive years of growth, according to a recent survey from Terra Firma Global Partners, a residential real estate services firm with nine North Bay offices.

Using the most common metrics to measure the markets, single-family home and condominium sales in the three North Bay counties seem to have plateaued, and the forecast for 2017 is for home and condo sales to remain flat with a chance to actually decline in some micro-markets.

House for sale with sign

During the first nine months of this year, compared with the first nine months of 2015, 15% fewer homes and condos traded ownership in Marin County, 5.3% fewer in Sonoma and 9.6% fewer sales occurred in Napa counties.

Sales velocity is clearly down in all three counties and for a variety of reasons, some of which are true for each county. The common theme relates to supply and demand, with limited supply in high demand markets driving up pricing in all three counties but particularly in Marin and Sonoma County, where the median price of sold homes increased 9% during the first nine months of 2016 compared with the first nine months of 2015. In Napa County, the median home and condo sale price increased 1.75% during the first nine months this year.

The median sale price means that half of all homes sold above the median figure and half of the homes sold below the median figure. See table below for specific pricing in each county.

Lack of inventory is an issue in each county, with only 2.5 months of supply available in Marin (homes and condos listed for sale) as of Sept. 30 this year, 1.8 months of supply in Sonoma and 2.85 months of supply in Napa counties, according to data compiled from BAREIS® (Bay Area Real Estate Information Services) and NorCal MLS®. The data was mined by Terra Firma Global Partners’ Senior Associate Jaime Pera for Marin County, Senior Associate Trish McLean, CRS and Certified Green Real Estate Professional for Sonoma County and Senior Associate Ellen Politz for Napa County.

Photo Of White Puzzle House On Green Grass

The average price per square foot increased nominally in Marin and Sonoma counties for the reporting periods, largely because home prices have been rising since 2011 with the biggest spikes coming in 2014 and 2015. That left little room for big price increases in 2016 – at least in Marin and Sonoma, which is another sign of a decelerating market. In Marin, the price per foot increase was 3% in 2016 and stood at $662 a foot at the end of September this year compared with $642 per foot at the end of September in 2015. The price per foot was 4.9% more in in Sonoma County ($381 vs. $364) yet in Napa County, the price per foot shot up 19% ($483 vs $391) during the first three quarters of this year.

Days on the market (DOM), while an imperfect measurement because DOM is reported differently by all of the sales agents in the industry, is still a good indicator as to which direction the markets are heading. DOM in Marin declined by 9% in the first three quarters of this year and by 1.5% in Sonoma, yet increased by 4% in Napa County. The 9% median price increase in Marin combined with the shortened DOM has taken the Marin County housing market to unprecedented heights and begs the question – how much higher can it go, if at all? The relatively flat DOM in Sonoma County and modest increase in days on the market in Napa County indicates the markets have stabilized there.

As markets go, Marin County typically lags and follows home sales trends in San Francisco, while Sonoma lags and follows Marin County and Napa lags and follows Sonoma County.

Total Homes and Condos Sold 1Q2016 through 3Q2016
Marin: 1,928
Same Period 2015: 2,264
Percentage Change: -15%

Total Homes and Condos Sold 1Q2016 through 3Q2016
Sonoma: 3,953
Same Period 2015: 4,156
Percentage Change: -5.3%

Total Homes and Condos Sold 1Q2016 through 3Q2016
Napa: 1,242
Same Period 2015: 1,123
Percentage Change: -9.6%

Average Price Per Square Foot 1Q2016 through 3Q2016
Marin: $662
Same Period 2015: $642
Percentage Change: 3%

Average Price Per Square Foot 1Q2016 through 3Q2016
Sonoma: $381
Same Period 2015: $364
Percentage Change: 4.9%

Average Price Per Square Foot 1Q2016 through 3Q2016
Napa: $483
Same Period 2015: $391
Percentage Change: 19%

Median Price September 30, 2016 of 2016 compared with September 30, 2015

Marin: $1,014,817 vs. $930,786
Percentage Change: 9%

Sonoma: $545,000 vs. $500,000
Percentage Change: 9.0%

Napa: $629,000 vs. $618,000
Percentage Change: 1.75%

Average Days on Market First 9 Months of 2016 compared with First 9 Months of 2015:

Marin: 49 vs. 54
Percentage Change: -9%

Sonoma: 62 vs. 63
Percentage Change: -1.5%

Napa: 89 vs. 85.5
Percentage Change: 4%

Shifting Markets

“In Sonoma County, we are seeing more price adjustments and more negotiations for repairs occurring. Repairs and repair credits are hard to quantify, but it is an indicator of a softening market, or at least movement toward a more level market. While this is one indicator of a stabilizing market, we are still seeing strong competition among buyers for available homes. There’s an interesting subset of data in the percentage of agents reporting “Multiple Offers” in MLS. This isn’t a required field, so there may be more sales getting multiple offers than are being reported, but we know at least these number of homes have received offers from more than one buyer. In Sonoma County, through Sept 30 this year, 1,438 homes sold with multiple offers, compared to 1,335 homes during the same period of 2015, or a 7% increase,” reported Trish McLean.

Yet asking rates for homes have not lowered on any wide scale in Marin County, Jaime Pera reported. However, Pera wrote that the lower end of the market is shrinking and so is the middle part of the market, while the high end market is growing. Based on homes and condos listed for Blue button with house on computer keyboardsale, as of 9.30 this year there were 163 homes on the market priced below $1 million, or down 16% compared with Sept. 30 of 2015. There were 252 homes for sale priced below $1.5 million – 11% fewer than a year earlier. Yet 32% of Marin homes for sale were priced at $2 million or more at the close of the third quarter this year, or 7% more than the same period a year ago.


Regarding inventory, McLean wrote that “we’d have to go back to 2011 to find more than two months of inventory…indicating that (at least for now) under two months of inventory is the new normal.”

Ellen Politz attributes the lack of inventory to broader ownership trends with lower turnover, citing a California Association of REALTORS® report that homeowners are staying in their homes for an average of 10 years instead of a range from five-to-seven years.

Hispanic Couple Viewing Potential New Home“Marriage is down, and the millennials aren’t pursuing the American Dream of getting married, buying homes and having kids the way

previous generations have. Instead, they are looking to experience life and travel. So housing is not turning over at the same rate as the households are not changing as they once did,” Politz wrote.

Mortgage rates are likely to rise, making it harder for first-time buyers and move-up buyers to afford to buy their first homes or to trade up. With real wage increases occurring in the U.S. following regular monthly gains in employment, the Federal Reserve appears poised to increase interest rates by a quarter point when it meets in December, and Fed bankers have publicly stated that another rate increase is likely in the first half of 2017.

The Fear Factor

Both McLean and Pera cited fear as a market driver in written comments that they included with their data findings.

“Another factor affecting inventory is fear… sellers who are concerned that they won’t be able to find a replacement property so they don’t want to sell their home,” wrote McLean.

Similarly, “there are a lot of sellers on the fence about downsizing, not knowing where they are going to go plus as a general rule they have fear about downsizing and making a mistake,” Pera wrote.

Looking Ahead

Higher borrowing costs are nearly a certainty and “could feel like a double whammy,” Politz stated, because borrowing rates actually declined by nearly 50 basis points from the end of the third quarter 2015 to the end of September this year. The 30-year fixed rate mortgage average in the United States was 3.9% at the end of the third quarter in 2015 and had fallen to 3.45% by Sept. 30, 2016, according to data compiled by Freddie Mac and reported by the St. Louis Federal Reserve. Even so, Politz noted, “assuming that rates go up, we will only be moving from super low to low, historically speaking.”

“The silver lining in the shifting market is that the move-up / move-down market is gaining strength as more and more agents are willing to broker deals between parties involving contingencies for sbuy house Mortgage calculations, calculator with Magnifier Searchingelling or buying property. I just closed two transactions for a client who was doing a move-up purchase. They were concerned about selling their house and ending up homeless. We got their home “ready” to sell…pest inspection, cleaning, professional photography, etc. so that we could take action the moment they found a house they wanted. We also found a house that had been on the market for two weeks (which can seem like an eternity to the seller). That seller was willing to accept our full price offer and give us time to find a buyer for our house, largely because they also needed time to find a house to move to! So both buyer and seller had the same challenge…wanting to move and needing someone who would be understanding. In the end, this “daisy chain” of escrows closed successfully with a minimum of drama. It’s cooperation like that and trust that keeps the market moving,” McLean wrote.

“Over the last five years we have seen the housing market increase at a rate that significantly outpaces income growth. In 2017, with the (forecasted) increasing interest rate environment, simple economics tell us housing prices have to respond by softening to absorb the rate increases. Well priced, updated homes will continue to be highly sought after as buyers generally are willing to pay more for them, rather than fix up a property themselves. Today’s buyers are weary that we have reached new heights in the real estate market and they are watching and waiting to see if things hold or fold,” Politz wrote.Giving house keys

“I’d say that 2017 is a good year to start taking some chips off the table particularly if the goal is to downsize in the next couple of years. There is no point in waiting. I expect next year to be like this year with relatively low levels of inventory. Properties that are priced correctly, are updated, and are in the right neighborhoods will sell quickly with multiple offers. Homes that are overpriced with inflexible sellers will sit and likely end up selling for less than if they had been priced correctly in the first place. I expect prices to continue to rise, but at a slower pace than 2016 as buyers are starting to resist price increases. Downsizers will continue to ponder the question: Where do I move to? When they finally figure this out we will have more inventory. If they wait too long and sell during a period of rising interest rates, slowing sales, and growing inventory they will pay the price for having waited too long to make a decision,” concluded Pera.

We are here to answer your questions about the future of the real estate market.
Email us anytime at info@terrafirmaglobalpartners.com

Click here for a PDF version of this article

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Source: Terra Firma

Do Elections Shape Housing?

Do Elections Shape Housing?

We are exactly one week from the much anticipated election day, a milestone many Americans are looking forward to. For one reason, some buyers, sellers, and even real estate agents believe an election year plays a part in the housing market. A recent Press Democrat article reads, “Sonoma County’s housing market sees third straight drop in new listings.” The article goes on to speculate why that might be the case, this being an election year included among the reasons, “Sellers this year also seem affected by doubts on such matters as the outcome of the U.S. presidential election…”

So is there any truth to the general consensus that an election year affects housing?

In a recent C.A.R. analysis of home sales dating back to 1990, C.A.R. found that the average change in home sales during an election year does not follow a particular pattern. Notably, sales growth is rarely negative during an election year, and there is no evidence of a systematic negative impact on homes sales or prices stemming from election season. In fact, C.A.R. found that growth in home sales at the end of an election year actually outperforms non-election years by 7.1 percentage points.

On a monthly basis since 1990, California home sales contracted by roughly 2 percent during the last four months of the year. However, during the last 5 election cycles, sales in the final months of the year picked up, rising by 5.3 percent on average compared with 1.8 percent during non-election years.

Source: How Elections Shape Housing, California Real Estate August 2016

how elections shape housing


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Source: Terra Firma