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  • Writer's pictureRealtyNational

3rd Quarter 2022 Edition- update on the real estate market, loans and so much more....

Hey, hey

My little life update before my market update (if you are not interested in my life update, scroll down to the good stuff below).

Every year for my birthday, which is in July, I treat myself to an adventure of some sort, this year it was driving a Nascar car around a real racetrack. It was such a blast and I definitely recommend it. We hit speeds of over 160 miles per hour!

and last month, my wife Alycia, our daughter Adylina, and I flew to New Jersey to celebrate my Dad's 70th Birthday. It was our daughter's first time in New Jersey, which is actually where I lived from 1989 to 2010, before I moved to San Diego.

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:

  • Landlords and tenants: Covid related eviction ban has ended September 30, 2022.

  • Short-Term aka AirBnb rental landscape in San Diego is changing drastically: There is now a license application process taking place until November 30,2022. Then, there will be a lottery for who will actually be able to retain their STR license. Very small percentage of short-term rental operators will be able to continue with their short-term rental business. This is the best website to learn about the application process, different tiers they have, and so much more:

    • If you are going to be impacted by these changes, just know that there is a market for 30 day rentals of fully furnished apartments as well. They might not bring in as much revenue as STR aka AirBnb would, however, it still can be very lucrative.

    • Usually, 30 day rentals of fully furnished units bring in a 1.5 times of what a long term tenant would bring in, compared to about 2 to 2.5 times that a STR aka AirBnb brings in per year.

    • Reach out to me directly if you would like a few websites where you can publish and market your 30 day rentals that are fully furnished.

    • And, of course, if you need to sell your STR property, we can help with that as well.

  • 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 is now fully favoring the buyer. It has shifted completely due to inflation, global events and the much, much higher interest rates, which is the number one reason.

  • The median home price dropped in quarter 3 to $780,000 after its high in Quarter 2 of $865,000.

  • Total Active Inventory got up to over 5,000 units in July, and has since dropped into the mid-4,000's and has been holding steady there for months. That is still half of what we would consider a normal market, however, I would throw this statistic out the window due to other factors taking place mentioned above.

  • So, if you have been or are thinking about selling, it's all about pricing now. You want to price your home below your competition so you can get all the attention. It's an easy formula but rarely practiced by sellers and agents alike: the more people that visit your home, the more offers you will receive, and negotiations sway in your direction. I just applied this strategy for a client selling their estate home in today's so called "buyers" market and we got 38 offers on the property. We only countered the top 7 and got FULL market value for the property with very strong terms that we were able to negotiate in favor of our seller.

  • We are still seeing 15%-25% of homes on the market in most neighborhoods doing price drops, and many are taking their homes off the market completely hence keeping the inventory low

  • We continue this strategy with our sellers where we offer 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.

  • Another thing to strongly consider if you are a seller is to offer seller financing at a much lower rate than the going rate. So, if you are fortunate enough where you have plenty of equity and don't need all the money up front when you sell your home, this is an amazing strategy since the buyer will be able to pay you way more for your home compared to other listings that don't offer seller financing, which is the majority. We can help you structure the seller financing option for buyers and have you become the "bank" essentially.

  • The image below shows you the movement of interest rates for different types of loans for all of 2022.

Mortgage Rates from January 1st to October 28th

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, unless you apply some of the strategies mentioned below.

  • Offers below list price are still the standard, and on top of it, you can consider asking the seller to buy down your interest rate or cover some of your closing costs. This can reduce your monthly payment by quite a bit

  • Loan Programs to Consider: (I can connect you to my preferred lender and she can explain all these in detail and run different scenarios for you)

    • 3-2-1 and 2-1 buy down programs, where you will pay a much lower rate for the first 2 to 3 years. See attachment for more details on this very effective strategy.

    • 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.

    • Interest Only loans. 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.

  • My philosophy is that you Don't Wait to Buy Real Estate, Buy Real Estate and Wait! If you buy now based on the monthly payment you can afford by applying some of the strategies mentioned above, then, you will be glad you did if interest rates go up further. And if interest rates go down, then, you refinance to the lower rate and you will be glad as well. Either way you win!

  • 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 an awesome 4th quarter as we go full blast into the holiday season, 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.


p.s. Bonus Tip: if you want to opt-out from marketers calling you, follow this link to OPT OUT, this is not a scam and it actually works:


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