Monterey Peninsula Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

May 28, 2020

Economists Forecast Recovery to Begin in the Second Half of 2020

current real estate

With the U.S. economy on everyone’s minds right now, questions about the country’s financial outlook continue to come up daily. The one that seems to keep rising to the top is: when will the economy begin to recover? While no one knows exactly how a rebound will play out, expert economists around the country are becoming more aligned on when the recovery will begin.

According to the latest Wall Street Journal Economic Forecasting Survey, which polls more than 60 economists on a monthly basis, 85.3% believe a recovery will begin in the second half of 2020 (see graph below):

current real estate

There seems to be a growing consensus among these experts that the second half of this year will be the start of a turnaround in this country.

Chris Hyzy, Chief Investment Officer for Merrill notes:

“We fully expect the economy could begin to pick up in late June and July with a strong recovery in the fourth quarter.”

In addition, five of the major financial institutions are also forecasting positive GDP in the second half of the year. Today, four of the five expect a recovery to begin in the third quarter of 2020, and all five agree a recovery should start by the fourth quarter (see graph below):

current real estate

Bottom Line

The vast majority of economists, analysts, and financial institutions are in unison, indicating an economic recovery should begin in the second half of 2020. Agreement among these leading experts is stronger than ever.

Source: keepingcurrentmatters.com

May 27, 2020

Why This Summer Is the 2020 Real Estate Season

current real estate

With stay-at-home orders starting to gradually lift throughout parts of the country, data indicates homebuyers are jumping back into the market. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the busy spring real estate season is shifting into the summer. In 2020, summer is the new spring for real estate.

Joel Kan, Economist at The Mortgage Bankers Association (MBA) notes:

“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks…Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”

Additionally, according to Google Trends, which scores search terms online, searches for real estate increased from 68 points the week of March 15th to 92 points last week. As we can see, more potential homebuyers are looking for homes virtually.

What’s the Opportunity for Buyers?

Another reason buyers are coming back to the market, even with forced unemployment and stay-at-home orders, is historically low mortgage rates. Sam Khater, Chief Economist at Freddie Mac indicates:

“For the fourth consecutive week, the 30-year fixed-rate mortgage has been below 3.30 percent, giving potential buyers a good reason to continue shopping even amid the pandemic…As states reopen, we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.”

With mortgage rates at such low levels and states gradually beginning to reopen, there’s more incentive than ever to buy a home this summer.

What’s the Opportunity for Sellers?

Finding a home to buy, however, is still a challenge, as this spring sellers removed many listings from the market. Though more people are now putting their houses up for sale this month as compared to last month, current inventory is still well below last year’s level.

According to last week’s Weekly Economic and Housing Market Update from realtor.com:

“Weekly Housing Inventory showed continued tightening. New Listings declined 28% compared with a year ago, as sellers grappled with uncertainty and hesitated bringing homes to market. Total Listings dropped 20% YoY, a faster rate than in prior weeks, leaving very few homes available for sale. As Time on Market was 15 days slower YoY, asking prices moved up 1.5% YoY.”

If you’re thinking of selling your house this summer, now may be your best opportunity. With so few homes on the market for buyers to purchase, this season may be the time for your house to stand out from the crowd. Trusted real estate professionals can help you list safely and effectively, keeping your family’s needs top of mind. Buyers are looking, and your house may be at the top of their list.

Bottom Line

If you’re thinking of selling, many buyers may be eager to find a home just like yours. Reach out to a local real estate professional today to make sure you can get your house in on the action this summer.

Source: keepingcurrentmatters.com

May 26, 2020

6 Reasons Why Selling Your House on Your Own Is a Mistake

current real estate

There are many benefits to working with a real estate professional when selling your house. During challenging times like the one we face today, it becomes even more important to have an expert help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale By Owner or FSBO, please consider the following:

1. Your Safety Is a Priority

During this pandemic, your family’s safety comes first. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings, but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, agents are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.

2. A Powerful Online Strategy Is a Must to Attract a Buyer

Recent studies have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumped to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?

3. There Are Too Many Negotiations

Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The inspection companies, which work for the buyer and will almost always find challenges with the house
  • The appraiser, if there is a question of value

As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.

4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage

Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress that’s being made toward a purchaser’s mortgage commitment.

Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was there yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.

5. FSBOing Has Become More Difficult from a Legal Standpoint

The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

6. You Net More Money When Using an Agent

Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance a bidding war will take place.

Bottom Line

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, speak with a real estate professional to discuss your options.

Source: keepingcurrentmatters.com

May 22, 2020

Experts Predict Economic Recovery Should Begin in the Second Half of the Year

current real estate

One of the biggest questions we all seem to be asking these days is: When are we going to start to see an economic recovery? As the country begins to slowly reopen, moving forward in strategic phases, business activity will help bring our nation back to life. Many economists indicate a recovery should begin to happen in the second half of this year. Here’s a look at what some of the experts have to say.

Jerome Powell, Federal Reserve Chairman

“I think there’s a good chance that there’ll be positive growth in the third quarter. And I think it’s a reasonable expectation that there’ll be growth in the second half of the year… So, in the long run, I would say the U.S. economy will recover. We’ll get back to the place we were in February; we’ll get to an even better place than that. I’m highly confident of that. And it won’t take that long to get there.”

Nonpartisan Analysis for the U.S Congress

“The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures. The labor market is projected to materially improve after the third quarter; hiring will rebound and job losses will drop significantly as the degree of social distancing diminishes.”

Neel Kashkari, President, Minneapolis Federal Reserve Bank

“I think we need to prepare for a more gradual recovery while we hope for that quicker rebound.”

We’re certainly not out of the woods yet, but clearly many experts anticipate we’ll see a recovery starting this year. It may be a bumpy ride for the next few months, but most agree that a turnaround will begin sooner rather than later.

During the planned shutdown, as the economic slowdown pressed pause on the nation, many potential buyers and sellers put their real estate plans on hold. That time coincided with the traditionally busy spring real estate season. As we look ahead at this economic recovery and we begin to emerge back into our communities over the coming weeks and months, perhaps it’s time to think about putting your real estate plans back into play.

The experts note a turnaround is on the horizon, starting as early as later this year. If you paused your 2020 real estate plans, reach out to a local real estate professional today to determine how you can re-engage in the process as the country reopens and the economy begins a much-anticipated rebound.

Source: keepingcurrentmatters.com

May 21, 2020

#1 Financial Benefit of Homeownership

current real estate

While growing up, we were taught by our parents and grandparents that owning a home is a financially savvy move. They explained how a mortgage is like a “forced savings plan.” When you pay rent, that money is lost forever. When you make a mortgage payment, much of that money accumulates as equity in the home. So, what exactly is equity?

The equity in your home is the amount of money you can sell it for minus what you still owe on the mortgage. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe. That reduction of your mortgage every month increases your equity.

A recent study by CoreLogic explained that homeowners gained substantial equity over the last twelve months, and are essentially sitting on large sums of cash in their homes. In the study, Frank Nothaft, Chief Economist for CoreLogic explained:

“The CoreLogic Home Price Index recorded a quickening of home price gains during the fourth quarter of 2019, helping to boost home equity wealth. The average family with a mortgage had a $7,300 gain in home equity during the past year, and a total of $177,000 in home equity wealth.”

For most families, their home is their largest financial asset. This increase in equity drives the net worth, or family wealth, of the homeowner. Renters are not earning that benefit. Instead, they’re building the net worth of their landlord.

Home price growth will moderate during the pandemic. But once a cure is available, most experts agree that home values will again begin to appreciate at levels similar to what we’ve seen over the last several years. In the long run, our family elders will be proven correct: owning a home is a savvy financial move.

Source: www.keepingcurrentmatters.com

May 8, 2020

What it's like to be an agent in a pandemic

realtors covid-19

Beth Lowe is a real estate agent based in Smithtown, New York, who has been selling houses on Long Island and in parts of New York City for the past 10 years with Exit Realty. She currently serves as chair of the political action committee for the Long Island Board of Realtors, a nonprofit professional organization with over 28,000 members.

New York Gov. Andrew Cuomo initially deemed real estate a nonessential business under the state’s stay-at-home order, PAUSE, but issued new guidance on April 1 categorizing it as essential, with the caveat that showings must be virtual.

Curbed spoke with Lowe—who doesn’t believe real estate agents should be showing homes right now—about the categorization of real estate as essential and what it’s like to work in the industry during the COVID-19 pandemic.

When the state made us essential last week, I was very vocal that I would not be showing homes. I won’t be showing homes until it is safe for everybody. While I am young and healthy, that doesn’t mean I can’t be a carrier. [The state] isn’t testing anyone. I have friends who are sick who can’t even get tested. It’s just too scary. And what’s it going to be? Another couple of weeks? I am not really willing to risk that now to sell a house.

And to sell a house in what capacity, really? Let’s say that I virtually show you a house and you tell me you love it. In four weeks you can go see the house and tell me you hate it. Now what do we do? We all just need to stay calm, stay home, and focus on keeping everyone in your current deals calm and moving forward.

A lot of people have thanked me, openly and privately, for taking the stance that I took, which is that real estate agents are nonessential. There were a few agents who got mad at me and I said, “Well, I don’t really care, to be honest.” I care about the public. Safety is more important.

Right now, I am basically doing whatever I can out of my house and it’s mostly just to keep my clients calm and to keep my pipeline moving forward. I don’t have any active listings right now. I was very fortunate where most of my listings sold the week before this all happened. All I do all day is ask myself, ‘What can we do? What needs to be done?’ We’re still doing appraisals. We’re still trying to get paperwork and stuff we need to close things. We’re still moving things forward, but new business needs to be on hold right now.

I did have one listing where my clients are in their early 70s. Before any stay-at-home order was issued by the state, we decided that we were just going to take the house off the market and put it back on the market when it was safe for them to have people in the house. Right now, they’re not very comfortable with their home being on the market, and frankly I am not either. Those people happen to have known me since I was born. They used to play tennis with my parents, so they’ve known me my whole life. I couldn’t stomach even the slightest risk to them and I couldn’t really do that to anyone, to be honest.

After the state said real estate was nonessential, agents were calling the New York State Association of Realtors complaining that we were not essential because in other states we were essential. Sometimes the squeaky wheel gets the oil. Uncertainty is making people want to call the board and be made essential without really thinking it through. What does that really mean? If we all just chilled out, we could get back to normal business a lot sooner.

The overall consensus of the membership of the Long Island Board was that they don’t want to be essential. We want to do what’s right for the community and the state and our hospitals, which are overrun right now. That same day they made us essential, the news was showing field hospitals in Central Park and in the stadium in Queens where they play the U.S. Open. Now the state’s trying to tell me I should go show houses? Are you out of your mind?

I’ve spoken to agents all over the state and I would say 99 percent of them were horrified on Tuesday night when we got deemed essential. We just don’t feel safe. In order for us to do our jobs properly, we can’t do them in this capacity. I would never want to show a buyer a house over Facetime and then have them start incurring expenses of a home inspection, having them retain an attorney, having them sign contracts, having them put their deposit down, and when then finally see the house, they hate it.

I had a situation a few years ago where the buyer was coming from out of state and they didn’t see the house in person until the final walkthrough. They tried to back out at the final walkthrough. We kept it together, but the buyers ended up relisting the house three months later. Is it really ethically and morally responsible if we all start putting buyers and sellers in these situations?

In order for real estate to truly function, the entire economy has to function. You can’t just call pieces of the real estate market essential and expect the whole market to function. Even if we were allowed to go and show houses—and somebody wanted us to come in and buyers wanted to look—without getting the rest of the pieces open and up and running, you’re just creating more of a backlog than what we already have.

You don’t realize how many people are involved with buying a house. There are probably 25 different people involved in getting a deal closed. So it really doesn’t work if we’re all not working. If you’re a buyer or a seller, as far as you’re concerned, you sign contracts. As far as I am concerned, now my work is actually happening. I have to coordinate the lawyers, the title company, the appraiser, the inspector, the bank, the town. Even the IRS is involved because it has to confirm your taxes. Your employer has to verify your income. So if your employer is closed, that is one more challenge.

Everything is going through slowly because our towns aren’t all open for title searches, certificates of occupancy searches, and that type of thing. I can’t say, “Well, the title search is taking too long. Let me run down to the town office,” because the town is not open. Then you layer in the mortgage changes that are happening on a daily basis.

The only people I know who are buying houses regularly are my investor clients. Because what happened in that market is really all of those fix-and-flip investor type loans got suspended or canceled. So there are guys out there who thought they were getting financing for a fix-and-flip type of loan who now can’t buy the house so my friends who are cash buyers are buying those properties. But they don’t buy them by looking at them. They buy by the numbers, so it’s a completely different market.

Needing to sell for the money right now would actually probably put you in a worse position, because you’re not going to get the price you’re going to get in four to six weeks. You’re going to get a fire-sale price. If that’s what you need, then that’s what you need. I can send an investor to your house and he can probably make a really ridiculous offer, but I don’t know if that’s really helping either party.

If we all had a crystal ball and, now with what we know, could go back two or three weeks ago, I think we’d all agree that we should stay truly quarantined for two to three weeks so we could get this all over with. A lot of the stress is coming from the uncertainty of when we’re really going to be allowed to go back to work.

We had 600 people die in New York last night alone. That’s crazy. That’s so sad. That’s not just a number; that’s somebody’s mom, somebody’s grandma, somebody’s friend. I am 42 years old and I am seeing people my age dying when they said we would be fine. So I think the numbers are one thing, but when you start to humanize it, it’s a no-brainer. Just stay home. You’re not essential. I know it’s like an ego thing, but you are not essential.

Source: www.curbed.com

May 1, 2020

Harry and Meghan hunt for a mansion in the hills

harry and meghan

A few weeks ago there were reports that Prince Harry and Meghan Markle had purchased a home in Los Angeles. They turned out to be unfounded, but the British royals are apparently on the hunt for an L.A. abode.

Harry and Meghan have concentrated their search on tony Westside communities including Beverly Hills and Brentwood, according to the New York Post. A source told the Post they’re shopping for a mansion in the $15 million to $20 million range that “[offer] the privacy they need.

Good news for the royals — the city of L.A. eased restrictions on home showings this week. Open houses are still barred, but property can be shown to as many as two visitors at a time. That should make shopping a bit easier, at least within the bounds of the city.

They’ve shown interest in at least two properties that are both off the market, according to the Post. They’re looking at a home in Brentwood that sits on a half-acre behind a gate and hedges as well as a Beverly Hills mansion on an acre with an infinity pool and views over L.A.

While it’s unclear how L.A.’s residential market could be impacted by the coronavirus pandemic long-term, there seems to be growing optimism among buyers and sellers. Activity picked back up last week, although it didn’t fully recover to usual levels.

source: therealdeal.com

April 30, 2020

How coronavirus is impacting the housing market

covid-19 blog pic

Few homes look their best in the dirty grays of late winter, which is, in part, why homebuying season coincides with the arrival of spring. This year, however, the crocuses that can make a house look that much nicer are showing up alongside the less reassuring news of a virus circling the globe.

The spread of COVID-19—the disease caused by the novel coronavirus—was officially declared a pandemic by the World Health Organization on March 11. It’s already claimed more than 44,000 lives in the United States. Shelter-in-place orders have been issued for cities across the country and 26 million Americans have filed for unemployment since the outbreak of the pandemic.

If you’re already in the market for a house, all the uncertainty might have you worried about the housing market. Will COVID-19 cause housing to collapse, as it did during the financial crisis in 2008?

Historically low inventory and rock-bottom mortgage rates would normally set the stage for a highly competitive homebuying season. While recessions normally have only a minor effect on the housing market, the coronavirus is making life and markets anything but normal.

Zillow conducted a study on housing during previous pandemics and concluded that while home sales dropped dramatically during an outbreak, home prices stayed about the same or suffered a slight decrease. This makes intuitive sense because it’s harder for prices to change when there are few transactions. In short, previous pandemics have simply put the housing market on pause.

The most recent housing market data has already shown signs of this playing out in the United States. Web traffic to real estate portals like Zillow and Redfin dropped by almost 40 percent in the immediate aftermath of the pandemic. New listings of homes for sale initially dropped by as much as 70 percent in some markets like New York and East Bay, California. Weekly mortgage applications dropped 17.9 percent in early April.

The effect will be different in each city depending on local conditions. A report from ATTOM Data Solutions concluded that the Northeast and Florida housing markets are most vulnerable. In New York City, the housing market has come to a near standstill as stay-at-home orders approach their third month. But in Boston, the market has fared relatively better, with single-family home sales holding steady into the pandemic. In Los Angeles, in-person home showings have been totally banned, while much of the real estate industry is flocking to digital solutions to keep the market moving.

Furthermore, the federal government has implemented a moratorium on foreclosures and directed mortgage servicers to offer forbearance or reduced payments on any mortgage backed by Freddie Mac, Fannie Mae, or the Federal Housing Administration (FHA).

These are important measures that are designed to prevent a wave of foreclosures and keep the bottom from falling out of the housing market, as happened in 2008, but it could have the unintended consequence of bankrupting mortgage servicers who would suddenly be on the hook for the missing mortgage payments. It’s hard to know what damage might bring to the mortgage industry and thus the housing market.

 

By Jeff Andrews | www.curbed.com

Posted in Market Updates
July 31, 2017

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