So yes, more Adylina. She is now officially ONE and we got to celebrate with our friends in San Diego and with our families on the east coast in Cochranton, PA. ( there is one stop light in the whole town so that should give you a clue about what Cochranton is like. ). And if you were wondering what we were wearing, well, the theme that my wife, Alycia came up with is "One in a Melon", get it, One in a Million! ;)
Now let's get into some important updates from the last few months.....
If you own a house or a rental or know someone that does:
California Housing Finance Agency is still providing grants up to $40,000 for ADU build-outs for homeowners. ADU GRANT.
If you are planning on selling or know someone that does:
The market was favoring the seller still in April and most of May despite the climbing interest rates, but that started to cool off quite a bit in June. Interest rates crossed over 6% mid-June and that along with inflation, stock market and crypto market taking a massive hit, and you got yourself a perfect recipe to create a very, very low consumer confidence.
The median price went up in quarter 2 but then came down to $850,000 as of the week of June 20th. It was also at $850,000 in early April. That has not happened in about two years, as we've seen consistent increases every quarter. However, that is no surprise due to everything that I mentioned in the first bullet point.
Total Active Inventory jumped from 2,439 in 3rd week of April to 4,575 at the last week of June as more listings continue to hit the market weekly now and less buyers are out looking. However, total active inventory number is still very low compared to a "normal" market that would usually range between 7,000 to 8,000 properties available on the market at any given time.
So, if you have been or are thinking about selling, as long as you price your home right, you will get 2-3 offers, unless you have some major negatives that can't be addressed. Either way, expect longer days on market. We are seeing 15%-25% of homes on the market in most neighborhoods are doing price drops, but this could also be due to the fact that the seller and agent listed the home way too high from the start.
One strategy that we are doing with our sellers is offering an interest rate buy down for anyone considering submitting an offer on our client's home. It makes more financial sense for a seller to buy down the rate for the buyer by half a percent than to reduce the list price. It's too much math to explain it in an email so please reach out if you want me to break this down for you based on your specific scenario.
The image below shows you the movement of interest rates for different types of loans in Quarter 2.
Mortgage Rates from April 1st to June 30th
If you are planning on buying or know someone that is:
The interest rates and current home values continue to affect buyer's affordability and many buyers are just not able to buy currently based on their budget
Offers below list price are becoming more of the standard now, so you can consider asking the seller to buy down your interest rate or cover some of your closings costs.
Every now and then, there might still be 3-4 offers on a property but that just means that it's the perfect home and it's priced below the other Actives on the market.
Continue focusing on your monthly budget that you feel comfortable with and base your offer price with that in mind. This way, you will not be disappointed if interest rates go up or down, or if prices go up or down, as it somewhat becomes irrelevant.
You can consider different loan programs, such as ARMS, which are adjustable rate mortgages. These loans will start at a lower interest rate overall and will be fixed for 5 years, as an example, then, the rate will fluctuate. This could be a great option for some buyers. Please talk to your lender about these programs as they are becoming quite popular right now.
Another lending option to consider is an Interest Only loan. You won't be paying down any principal with this loan program, however, your monthly payment will be much, much lower and some buyers only focus on that. You will have to start paying principal but that could be 3, 5 or 7 years later so the payment will go up eventually.
And as always, If you are planning on relocating to another state even though I would be sad to see you leave, let me know and I can help locate a great agent in whatever city that you are planning to move to. I will actually identify a couple great agents there, interview them on your behalf and connect you to that agent once I feel like he or she can serve you as I would here. (Bonus: I would stay involved over-seeing your purchase transaction on top of it for you and consult you along the way. That's if you value my opinion, of course.)
Have a memorable quarter three, stay positive, and let me know if you have anything specific that you want to discuss with me. I am here to help you navigate through it all.