Unexpected Benefits of Owning a Home (That are Nonfinancial)
There's no doubt about it, having your own home has a lot of perks! You can do renovations without restrictions from your landlord, you can invite anyone over without any curfew restrictions, and you'll have a great sense of permanence in your life. But there are still several benefits you wouldn't expect that come with owning your home! Benefit 1: You'll discover yourself more (as you transform your house as truly your own)! Since the home is definitely yours, you'll be able to transform it any way you want. You can experiment with the style, and the color palette and make any change to your home to your heart's content. Eventually, you'll be able to discover whether you are a minimalist, maximalist, or maybe somewhere in between! You'll know the style and colors that make you truly happy hence find out who you really are. Benefit 2: Gives you a great sense of fulfillment as a person! Owning a house is a big responsibility and something that almost everyone dreams of doing. When you get to this stage, you know you've made it. It will give you that extra boost of confidence that what you're currently pursuing is right for you and will affect everything in your life. Your perspective will change in many ways. If you are paying the house with your partner, your relationship with them will also improve as you navigate the highs and lows of owning a home. Weird as it may sound, it will make you an over-all better and inevitably, a more mature person! Benefit 3: Allows greater community engagement that actually leads to longer life! This is going to be the most surprising of all. Who knows that owning a home lengthens your life and not in the way you thought it would be? Yes, having your own home gives a strong sense of security but it's not the reason why it can add years to your life. Having a permanent home allows you to become more engaged in your community and build lifetime relationships in your neighborhood. The 80-year long study of Harvard found that people with strong and meaningful relationships live longer and happier. If you've been distancing yourself from your community because of the uncertainty of your stay, it might be the perfect time to decide on the place you want to call home so you can start building meaningful relationships in the community. You'll live longer and happier! Who doesn't want that? Getting excited to be a home owner? We're excited as you are. If you need a realtor whom you can trust wholeheartedly, we're here for you! Call 925-415-0835 today! Sign up to our weekly newsletter to get the latest market update and listings available!
September 2022 Market Update
The Big Story Housing market recession? Depends on who you ask. Quick Take: Home prices fell for the first time this year, declining 2.4% month-over-month, according to the National Association of Realtors. The number of home sales continued to slow for the sixth month in a row, helping inventory climb higher. The housing market is trending more meaningfully toward balance, although we are still in a sellers’ market. Home prices fell for the first time this year We knew the end of the streak was coming. Higher mortgage rates + summer sales slowdown + higher inventory = price decline month over month The all-time high was reached last June 2022. Data from National Association of Realtors (NAR) show a decline of 2.4% of the median home price in the United States and Realtor.com even showed a decline of 0.43% of median price per square foot. These numbers are not even that great as compared to the decline of sales by 5.9% month-over-month and 20.2% year-over-year. Number of home sales continued to slow down As we've seen, home sales were the highest last 2020 and 2021 since the 2006 housing bubble burst. Since the 2006 incident led to a financial crisis last 2008, many are anxiously waiting for what's in store this year. As we look at the pre-pandemic seasonal trends, home prices and inventory increased in the first half of the year and declined in the back half. The trend is essentially two steps forward and one step back over and over, so even when the second half of the year sees some price decline, year-over-year prices tend to be higher. In July, we reached the longest-running streak of year-over-year home price increases on record, with 125 consecutive months. This year, inventory may peak later than usual if sales continue to decline through what are typically the strongest sales months (May-August). From January 2020 to June 2022, the median price per square foot rose 54%, so there is definitely room for some price declines in the back half of this year. The monster price gains in 2020-2022 were, of course, pandemic related, and the already tight housing supply dropped to shockingly low levels. However, with fewer sales than expected and more new inventory coming to market, active listings have nearly doubled from the all-time low reached in February 2022. More inventory can only benefit the market, as we are still 44% below July 2019 (pre-pandemic) levels. Housing starts have declined since this past April as the cost of building has gone up. The National Association of Homebuilders’ Housing Market Index, which measures homebuilder sentiment for the single-family home market, has declined every month of 2022. These declines in sales and home building have led NAR Chief Economist Lawrence Yun to use the term “housing recession” with some caveats. We believe, however, that the word “recession” is too dark a picture for the current market. Housing market is becoming more balanced Although the market still favors sellers over buyers, we are moving toward a more balanced market, which feels like quite a switch given how deeply we dove into a sellers’ market since mid-2020. The market is getting healthier and a little less hot, which is ultimately beneficial to everyone participating when we look at the big picture. Buyers are facing less competition, but they still must compete, and sellers are still generally getting at least asking price. The U.S. housing market has become more nuanced over the past several months, depending on the region. Some parts of the country are trending closer to balance, while some are moving deeper into a seller’s market. Take a look below at the Local Lowdown for in-depth coverage of your area. As always, we will continue to monitor the housing and economic markets to best guide you in buying or selling your home. The Local Update Quick Take: The East Bay’s housing market remains one of the strongest in the country despite some price declines over the summer months. Sales rose in August as new listings declined, dropping inventory for the first time this year and likely marking July’s peak inventory as one of the lowest on record. Months of Supply Inventory fell, halting the trend toward a more balanced market between buyers and sellers. East Bay's housing market remains strong Prices tend to stagnate or decline slightly this time of year, which is exactly the case in the East Bay. The median single-family home prices declined month-over-month, continuing the downward trend from their May peaks. Since May, single-family home prices have contracted by 20% in Alameda and 14% in Contra Costa. Alameda condo prices declined by 11%, while Contra Costa condo prices actually rose to all-time highs in August. The price movements aren’t unexpected, as we are returning to more normal seasonal trends of price growth in the first half of the year and slight contraction in the second half. This is, of course, exacerbated by rising mortgage rates. Although the current average 30-year mortgage rate of 5.66% is still historically low, the hyper-low rates we experienced in 2020 and 2021 allowed many more buyers to enter the market. We saw firsthand what happens when demand booms in an already undersupplied market: Home prices skyrocketed. Since August 2020, single-family home prices have increased 18% in Alameda and 10% in Contra Costa, while condo prices increased 4% in Alameda and 14% in Contra Costa. When we link the price increases and seasonal trends with the 2.5% increase in 30-year mortgage rates, which increase the monthly mortgage payment by about 35%, we get a better picture of why sales have slowed and prices declined. Sales increase in August, July inventory as lowest on record Single-family home and condo sales increased month-over-month, while new listings declined, dropping inventory for the first time this year. The number of homes for sale has trended lower over the past three years and settled at lower levels, which is likely the new normal for housing inventory in the country. Generally, smaller supply equates to fewer sales. For example, if 500 homes sold last year, but there are only 300 homes for sale on the market this year, it’s awfully difficult to hit more than 300 sales. Although inventory grew higher than the record lows of 2021, 2022 has had one of the lowest inventories on record, so we were pleased to see that inventory is following historical seasonal trends. With the drop in inventory in August, the peak inventory level for 2022 will undoubtedly be one of the lowest on record. Additionally, the huge number of sales in 2021 implies a sales slowdown in the future, and the future is now. On average, people move about 12 times in their lifetime in the United States, meaning if a million more people than average buy a home one year, there’s a decent chance about a million fewer people will buy a home the next. Homes are generally not something people continuously buy year after year. Months of Supply Inventory fell Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). From May to July, single-family home and condo MSI climbed higher (toward balance), but MSI fell in August, indicating we are still firmly in a sellers’ market. Summary The market keeps on shifting and there's a need to always be updated with the changes to make well-informed money decisions. If you want to talk to our team about the market and what you can do in terms of buying or selling a home, call 925-415-0835 today!
Tips for Selling Your Home During a Recession
For the past 2 years, the market has been in the favor of the sellers. Prices shot through the roof and buyers are making offers more than the listing price. However, there's been recent talk about the possibility of a recession and things are already changing in the market. The prices of homes are being reduced, more listings are becoming available and yet, less buyers are taking the leap in buying a home. As someone who's been thinking about selling your home soon, what are the important things you should note? Here are 3 of the most important ones. 1. Know the perfect timing. The recession is looming but it;s not yet here. While that is still the case, take advantage of the current pool of buyers who are grabbing the current interest rates before they even go up. The earlier you sell, the better. However, there would be "glitches" in the market along the way, so make sure that your realtor is someone who is on your side who will tell you the perfect time to make a move. 2. DO NOT overprice your property Gone are the days when homes are selling way above their asking prices. Although that indeed happened the past year (some listings even selling above 20%), the times are changing. Currently, buyers are becoming more cautious in choosing, and with the increasing number of listings available, an overpriced home with only result in having it sit in the market for a longer period of time. To know the best pricing for your home, talk to your agent and discuss your options and be realistic. Set aside the emotional value to you of your home and allow your agent to assess its current value in the market using their latest tech to give you a satisfying and justified price. 3. Choose upgrades that will definitely appeal to your buyer. If your budget is tight and could not afford to upgrade everything in your home before having it listed, choose the most important features that would capture the hearts of your potential buyers. Look at what made you buy your home in the first place and improve on that. Consult your agent on the best upgrades to make in your home. Better yet, allow your agent, who is most likely in a great relationship with the best builders in the area, to make the expert decision in making the necessary upgrades to your home. It's necessary to be flexible in the ever-changing real estate market. It's even more necessary to have an expert and experienced realtor on your side who knows how to navigate the market. If you want to work with our team, call us at 925.415.0835 today! Read some of the 350+ 5-star reviews we received on Zillow here! Sign up to our weekly newsletter to get the latest market update and listings available!
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