East San Diego County Real Estate BlogRecently posted or modified blog posts in the category - Generalhttps://www.eastsandiegocounty.com/blog/Copyright EastSanDiegoCounty.com2024-03-01T10:17:34-07:00tag:eastsandiegocounty.com,2012-09-20:33211Suburban Homesteading in East County San Diego 2024If you have been on social media lately, you may have heard of “suburban homesteading.” Suburban homesteading is a sustainable living and self-sufficiency movement that started in the 90s and has been picking up steam in recent years. Today’s suburban homesteaders prove you don’t need acres of land to live a self-sufficient lifestyle. Having your own homestead is completely doable!
If you’re looking for somewhere to start a suburban homestead, East County San Diego is the perfect place. Suburban homesteading has gained popularity in East County San Diego thanks to the favorable climate, available land, and supportive community.
What is suburban homesteading?
Suburban homesteading is all about self-sufficiency and sustainability. It’s perfect for those who want to live self-sufficiently, but lack the acreage for a traditional homestead or farm. Suburban homesteading practices include growing fruits and vegetables, raising livestock, and preserving food. Many suburban homesteaders also use sustainable water and energy practices.
In short, the goal of suburban homesteading is to live a more fulfilling and environmentally friendly lifestyle.
Sustainable Water and Energy Practices in Suburban Homesteading
It isn’t all about growing food. Suburban homesteads use sustainable water and energy practices to save money and for efficiency. Many suburban homesteaders use rainwater harvesting and drip irrigation systems to minimize water usage in their gardens. In the home, grey-water recycling is another great way to limit excess water usage.
As for electricity, homesteaders often invest in solar panels to lower their energy bills.
Benefits and Challenges of Suburban Homesteading
When done right, suburban homesteading can have huge benefits. That said, suburban homesteading isn’t for everyone. It’s important to consider both the benefits and challenges of suburban homesteading.
Benefits of Suburban Homesteading
By growing their own food, homesteaders have fresh produce without relying on grocery stores and industrial agriculture. Some suburban homesteads are completely self-sufficient: growing food, raising small livestock, and generating electricity. Suburban homesteading also promotes environmental sustainability by preserving natural resources.
Suburban Homesteading Challenges
In the long run suburban homesteading can save you money, but the initial investment can be steep. As a new homesteader, you'll have to consider the costs of equipment, infrastructure, plants, and livestock. Depending on where you live, zoning and regulations can also present obstacles as well. Suburban homesteading also has a steep learning curve for those new to the lifestyle.
It’s important to keep these challenges in mind before starting your suburban homestead.
Why East County San Diego is a Suburban Homestead Paradise
It may sound shocking, but East County is the best place to have a suburban homestead in San Diego.
Availability of Land: Compared with other San Diego areas, East County has larger properties and cheaper land. This makes it a lot easier to break into the market and start your homestead. Suburban homesteading is possible on any size plot of land, but having more space does open up more opportunities.
Climate and Growing Conditions: The mild San Diego weather means growing seasons never have to end. As a homesteader in East County, you can take advantage of the climate and grow a wide variety of crops year-round.
Fewer Regulations: Zoning and regulations can be challenges when starting up a suburban homestead. However, East County San Diego typically has lighter restrictions and regulations when compared with other parts of San Diego.
Supportive Community: East County already has a thriving suburban homestead community ready to welcome new members. As a suburban homesteader in East County San Diego, support is always right around the corner.
Conclusion
Suburban homesteading is a lifestyle based on sustainable living and self-sufficiency. As interest in suburban homesteading continues to grow, East County San Diego stands out as a welcoming and supportive environment for future homesteaders. If you’re interested in buying a home in East County San Diego contact Steven Rotsart, your local East County Real Estate Agent.2024-03-01T09:49:08-07:002024-03-01T10:17:34-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21603Why Today’s Housing Inventory Proves the Market Isn’t Headed for a CrashWhether or not you owned a home in 2008, you likely remember the housing crash that took place back then. And news about an <a href="https://www.simplifyingthemarket.com/2022/07/07/what-does-an-economic-slowdown-mean-for-the-housing-market/?a=371365-96f38d4df44d5627725612a3244e4929" target="_blank" title="economic slowdown">economic slowdown</a> happening today may bring all those concerns back to the surface. While those feelings are understandable, data can help reassure you the situation today is nothing like it was in 2008.
One of the key reasons why the market <a href="https://www.simplifyingthemarket.com/2022/08/12/why-experts-say-the-housing-market-wont-crash-infographic/?a=371365-96f38d4df44d5627725612a3244e4929" target="_blank" title="won’t crash">won’t crash</a> this time is the current undersupply of inventory. Housing supply comes from three key places:
Current homeowners putting their homes up for sale
Newly built homes coming onto the market
Distressed properties (short sales or foreclosures)
For the market to crash, you’d have to make a case for an oversupply of inventory headed to the market, and the numbers just don’t support that. So, here’s a deeper look at where inventory is coming from today to help prove why the housing market isn’t headed for a crash.
Current Homeowners Putting Their Homes Up for Sale
Even though <a href="https://www.simplifyingthemarket.com/2022/08/10/is-the-shifting-market-a-challenge-or-an-opportunity-for-homebuyers/?a=371365-96f38d4df44d5627725612a3244e4929" target="_blank" title="housing supply">housing supply</a> is increasing this year, there’s still a limited number of existing homes available. The graph below helps illustrate this point. Based on the latest weekly <a href="https://www.calculatedriskblog.com/2022/08/housing-inventory-august-29th-update.html" target="_blank" title="data">data</a>, inventory is up 27.8% compared to the same week last year (shown in blue). But compared to the same week in 2019 (shown in the larger red bar), it’s still down by 42.6%.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1661379070.jpg" width="960" height="840" />
So, what does this mean? Inventory is still historically low. There simply aren’t enough homes on the market to cause prices to crash. There would need to be a flood of people getting ready to sell their houses in order to tip the scales toward a buyers’ market. And that level of activity simply isn’t there.
Newly Built Homes Coming onto the Market
There’s also a lot of talk about what’s happening with newly built homes today, and that may make you wonder if we’re overbuilding. But home builders are actually slowing down their production right now. Ali Wolf, Chief Economist at Zonda, <a href="https://www.entrepreneur.com/article/433166" target="_blank" title="notes">notes</a>:
“It has become a very competitive market for builders where they are trying to offload any standing inventory.”
To avoid repeating the overbuilding that happened leading up to the <a href="https://www.simplifyingthemarket.com/2022/08/02/3-graphs-to-show-this-isnt-a-housing-bubble/?a=371365-96f38d4df44d5627725612a3244e4929" target="_blank" title="housing crisis">housing crisis</a>, builders are reacting to higher mortgage rates and softening buyer demand by slowing down their work. It’s a sign they’re being intentional about not overbuilding homes like they did during the bubble.
And according to the latest data from the U.S. Census, at today’s current pace, we’re headed to build a seasonally adjusted annual rate of about <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank" title="1.4 million homes">1.4 million homes</a> this year. While this will add more inventory to the market, it’s not on pace to create an oversupply because builders today are more cautious than the last time when they built more homes than the market could absorb.
Distressed Properties (Short Sales or Foreclosures)
The last place inventory can come from is distressed properties, including short sales and foreclosures. Back in the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to secure a home loan they couldn’t truly afford. Today, <a href="https://www.simplifyingthemarket.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/?a=371365-96f38d4df44d5627725612a3244e4929" target="_blank" title="lending standards">lending standards</a> are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2021-u-s-foreclosure-market-report/" target="_blank" title="data">data</a> from ATTOM Data Solutions on properties with foreclosure filings to help paint the picture of how things have changed since the crash:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1661379230.jpg" width="960" height="840" />
This graph shows how in the time around the housing crash there were over one million foreclosure filings per year. As lending standards tightened since then, the activity started to decline. And in 2020 and 2021, the <a href="https://www.simplifyingthemarket.com/2022/08/08/why-the-forbearance-program-changed-the-housing-market/?a=371365-96f38d4df44d5627725612a3244e4929" target="_blank" title="forbearance program">forbearance program</a> was a further aid to help prevent a repeat of the wave of foreclosures we saw back around 2008.
That program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And <a href="https://www.mba.org/news-and-research/newsroom/news/2022/08/15/share-of-mortgage-loans-in-forbearance-decreases-to-0.74-in-july" target="_blank" title="data">data</a> on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market.
Bottom Line
Although housing supply is growing this year, the market certainly isn’t anywhere near the inventory levels that would cause prices to drop significantly. That’s why inventory tells us the housing market won’t crash. Ready to buy or sell in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County? Let’s connect.2022-08-25T06:20:00-07:002023-12-04T10:26:15-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21503Planning To Retire in East County? Your Equity Can Help You Reach Your Goal.Whether you’ve just retired or you’re thinking about retirement, you may be considering your options and trying to picture a whole new stage of your life. And you’re not alone. <a href="https://ritaus.org/2022-retirement-stats-you-should-know/" target="_blank" title="Research">Research</a> from the Retirement Industry Trust Association (RITA) shows 10,000 Baby Boomers reach the typical retirement age (65) every day, and only 47% of the people in that generation have already retired.
If this sounds like you, one thing worth considering is whether or not your current home will suit your new lifestyle. If your home doesn’t have the features or benefits you’re looking for, the good news is, you may be in a better position to move than you realize.
That’s because, if you already own a home, you’ve likely built-up significant <a href="https://www.mykcm.com/2022/07/06/how-your-equity-can-grow-over-time/" title="equity">equity</a>, and that can help you fuel your next move to La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County. <a href="https://www.nar.realtor/blogs/economists-outlook/metro-wealth-reports-as-of-2022-q1" target="_blank" title="According">According</a> to the National Association of Realtors (NAR):
“A homeowner who purchased a typical home five years ago would have gained $125,300 from just price appreciation alone.”
In fact, over the last twelve months, CoreLogic <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="reports">reports</a> the average homeowner in the United States gained roughly $64,000 in equity due to <a href="https://www.mykcm.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/" title="home price appreciation">home price appreciation</a>.
You can use your equity to help you achieve your <a href="https://www.mykcm.com/2022/08/01/why-are-people-moving-today/" title="homeownership goals">homeownership goals</a>. Whether you want to downsize, move closer to loved ones, or buy a home in a dream destination, your <a href="https://www.mykcm.com/2022/07/08/why-growing-home-equity-is-great-news-if-you-plan-to-move-infographic/" title="equity">equity</a> can help get you there. It may be some (if not all) of what you’d need as your down payment on a home that better fits your changing needs.
To find out how much equity to have in your home, reach out to a trusted <a href="https://www.mykcm.com/2022/05/23/work-with-a-real-estate-professional-if-you-want-the-best-advice/" title="real estate professional">real estate professional</a> today.
Bottom Line
Retirement is a big step and so is buying or selling a home. As you move into this new phase of life, let’s connect so you have an expert to guide you through the process as you sell your East County home and give you expert advice as you buy one that’ll better suit your needs.2022-08-19T06:16:00-07:002022-08-18T15:18:27-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21479Experts Increase 2022 Home Price ProjectionsIf you’re wondering if <a href="https://www.mykcm.com/2022/07/21/think-home-prices-are-going-to-fall-think-again/" title="home prices">home prices</a> are going to come down due to the cooldown in the <a href="https://www.mykcm.com/2022/06/14/is-the-housing-market-correcting/" title="housing market">housing market</a> or a <a href="https://www.mykcm.com/2022/08/16/what-would-a-recession-mean-for-the-housing-market/" title="potential recession">potential recession</a>, here’s what you need to know. Not only are experts forecasting home prices will continue to appreciate nationwide this year, but most of them also actually increased their projections for home price appreciation from their original 2022 forecasts (shown in green in the chart below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1660774061.jpg" width="960" height="840" />
As the chart shows, most sources adjusted up, and now call for more appreciation in 2022 than they originally projected this January. But why are experts so confident the housing market will see ongoing appreciation? It’s because of <a href="https://www.mykcm.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/" title="supply and demand">supply and demand</a> in most markets. As Bankrate <a href="https://www.bankrate.com/real-estate/june-2022-fed-housing-comments/" target="_blank" title="says">says</a>:
“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”
Knowing that experts forecast home prices will continue to appreciate in most markets and that they’ve actually increased their original projections for this year should help you answer the question: will home prices fall? According to the latest forecasts, experts are confident prices will <a href="https://www.mykcm.com/2022/08/11/what-does-the-rest-of-the-year-hold-for-home-prices/" title="continue to appreciate">continue to appreciate</a> this year, although at a more moderate rate than they did in 2021.
Bottom Line
If you’re worried home prices are going to decline, rest assured many experts raised their forecasts to say they’ll continue to appreciate in most markets this year. If you have questions about what’s happening with home prices in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County, let’s connect.2022-08-18T06:15:00-07:002022-08-17T15:24:32-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21451What Would a Recession Mean for the Housing Market?According to a <a href="https://www.wsj.com/articles/economic-forecasting-survey-archive-11617814998" target="_blank" title="recent survey">recent survey</a> from the Wall Street Journal, the percentage of economists who believe we’ll see a recession in the next 12 months is growing. When surveyed in July 2021, only 12% of economists consulted thought there’d be a recession by now. But this July, when polled, 49% believe we will see a recession in the coming 12 months.
And as more recession talk fills the air, one concern many people have is: should I delay my homeownership plans if there’s a recession?
Here’s a look at historical data to show what happened in real estate during previous recessions to help prove why you shouldn’t be afraid of what a recession would mean for the housing market today.
A Recession Doesn’t Mean Falling Home Prices
To show that home prices don’t fall every time there’s a <a href="https://www.corelogic.com/blog/2019/03/housing-recessions-and-recoveries.aspx" target="_blank" title="recession">recession</a>, it helps to turn to <a href="https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011" target="_blank" title="historical data">historical data</a>. As the graph below illustrates, looking at the recessions going all the way back to 1980, <a href="https://www.mykcm.com/2022/08/11/what-does-the-rest-of-the-year-hold-for-home-prices/" title="home prices">home prices</a> appreciated in four of the last six recessions. So, historically, when the economy slows down, it doesn’t mean home values will fall.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1660687814.jpg" width="1000" height="870" />
Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession would repeat what happened then. But this housing market <a href="https://www.mykcm.com/2022/08/02/3-graphs-to-show-this-isnt-a-housing-bubble/" title="isn’t about to crash">isn’t about to crash</a>. The <a href="https://www.mykcm.com/2022/07/14/housing-experts-say-this-isnt-a-bubble/" title="fundamentals">fundamentals</a> are very different today than they were in 2008. So, don’t assume we’re heading down the same path.
A Recession Means Falling Mortgage Rates
<a href="https://mtg-specialists.com/2022/05/11/recession-interest-rates-and-real-estate/" target="_blank" title="Research">Research</a> also helps paint the picture of how a recession could impact the cost of financing a home. As the chart below shows, historically, each time the economy slowed down, <a href="https://www.freddiemac.com/pmms/archive" target="_blank" title="mortgage rates">mortgage rates</a> decreased.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1660687871.jpg" width="1000" height="870" />
Fortune <a href="https://fortune.com/2019/06/19/next-recession-assets-mortgage-rates/" target="_blank" title="explains">explains</a> that mortgage rates typically fall during an economic slowdown:
“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”
And while history doesn’t always repeat itself, we can learn from and find comfort in the historical data.
Bottom Line
There’s no doubt everyone remembers what happened in the housing market in 2008. But you don’t need to fear the word recession if you’re planning to buy or sell a home. According to historical data, in most recessions, home price gains have stayed strong, and mortgage rates have declined. Let’s have a chat if you if you to move to La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County and help you WIN!2022-08-17T06:20:00-07:002022-08-16T15:27:11-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21403Why Experts Say the Housing Market Won’t Crash<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1660342368.jpg" width="1046" height="2041" />
Many people remember the housing crash in 2008, but experts say today’s market is <a href="https://www.mykcm.com/2022/08/02/3-graphs-to-show-this-isnt-a-housing-bubble/" title="fundamentally different">fundamentally different</a> in many ways.
First, there isn’t an <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" target="_blank" title="oversupply">oversupply</a> of homes for sale today. Plus, <a href="https://www.forbes.com/advisor/mortgages/real-estate/will-housing-market-crash/" target="_blank" title="lending standards">lending standards</a> are much tighter, and homeowners have <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q1-2022-u-s-home-equity-and-underwater-report/" target="_blank" title="record levels of equity">record levels of equity</a>. That means signs say there won’t be a wave of <a href="https://www.mykcm.com/2022/08/08/why-the-forbearance-program-changed-the-housing-market/" title="foreclosures">foreclosures</a> like the last time.
If you have questions about the East County housing market, let’s connect.2022-08-13T06:19:00-07:002022-08-12T15:30:46-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21372What Does the Rest of the Year Hold for Home Prices?Whether you’re a potential <a href="https://www.mykcm.com/2022/07/29/three-reasons-to-buy-a-home-in-todays-shifting-market-infographic/" title="homebuyer">homebuyer</a>, <a href="https://www.mykcm.com/2022/07/18/wondering-where-youll-move-if-you-sell-your-house-today/" title="seller">seller</a>, or both, you probably want to know: will home prices fall this year? Let’s break down what’s happening with home prices, where experts say they’re headed, and why this matters for your <a href="https://www.mykcm.com/2022/07/05/is-homeownership-still-the-american-dream/" title="homeownership">homeownership</a> goals.
Last Year’s Rapid Home Price Growth Wasn’t the Norm
In 2021, home prices appreciated quickly. One reason why is that record-low mortgage rates motivated more buyers to enter the market. As a result, there were more people looking to make a purchase than there were homes available for sale. That led to competitive bidding wars which drove prices up. CoreLogic helps <a href="https://www.corelogic.com/intelligence/corelogic-hpi-posted-record-year-over-year-growth-in-2021/" target="_blank" title="explain">explain</a> how unusual last year’s appreciation was:
“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”
In other words, the pace of appreciation in 2021 far surpassed the 6% the market saw in 2020. And even that appreciation was greater than the pre-pandemic norm which was typically around 3.8%. This goes to show, 2021 was an anomaly in the housing market spurred by more buyers than homes for sale.
Home Price Appreciation Moderates Today
This year, home price appreciation is slowing (or decelerating) from the feverish pace the market saw over the past two years. According to the latest forecasts, experts say on average, nationwide, prices will still appreciate by roughly 10% in 2022 (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1660255665.jpg" width="960" height="840" />
Why do all of these experts agree prices will continue to rise? It’s simple. Even though <a href="https://www.mykcm.com/2022/07/27/want-to-buy-a-home-now-may-be-the-time/" title="housing supply">housing supply</a> is growing today, it’s still low overall thanks to several factors, including a long period of <a href="https://www.mykcm.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/" title="underbuilding homes">underbuilding homes</a>. And experts say that’s going to help keep upward pressure on <a href="https://www.mykcm.com/2022/07/21/think-home-prices-are-going-to-fall-think-again/" title="home prices">home prices</a> this year. Additionally, since mortgage rates are higher this year than they were last year, buyer demand has slowed.
As the market undergoes this change, it’s true price appreciation this year won’t match the feverish pace in 2021. But the rapid appreciation the market saw last year wasn’t sustainable anyway.
What Does That Mean for You?
Today, the market is beginning to move back toward pre-pandemic levels. But even the forecast for 10% home price growth in 2022 is well beyond the 3.8% that’s more typical for a normal market.
So, despite what you may have heard, experts say home prices won’t fall in most markets. They’ll just appreciate more moderately.
If you’re worried the house you’re trying to sell or the home you want to buy will decrease in value, you should know experts aren’t calling for depreciation in most markets, just <a href="https://www.mykcm.com/2022/06/16/home-price-deceleration-doesnt-mean-home-price-depreciation/" title="deceleration">deceleration</a>. That means your home should still grow in value, just not as fast as it did last year.
Bottom Line
If you’re thinking of making a move in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County, you shouldn’t wait for prices to fall. Experts say nationally, prices will continue to appreciate this year, just at a more moderate pace. When you’re ready to begin the process of buying or selling, let’s connect so you have a local market expert on your side each step of the way.2022-08-12T06:19:00-07:002022-08-11T15:29:43-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21253Housing Market Forecast for the Rest of 2022<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1659737615.jpg" width="1046" height="2065" />
The housing market is <a href="https://www.mykcm.com/2022/07/29/three-reasons-to-buy-a-home-in-todays-shifting-market-infographic/" title="shifting">shifting</a> away from the intensity of the past two years. Here’s what <a href="https://www.fanniemae.com/media/44131/display" target="_blank" title="experts project">experts project</a> for the remainder of 2022.
<a href="https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/" target="_blank" title="Home prices">Home prices</a> are forecast to <a href="https://pulsenomics.com/surveys/#home-price-expectations" target="_blank" title="rise">rise</a> more moderately than last year. <a href="https://www.nar.realtor/newsroom/existing-home-sales-slid-5-4-in-june" target="_blank" title="Mortgage rates">Mortgage rates</a> will respond to inflation, and <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" target="_blank" title="home sales">home sales</a> will be <a href="https://www.freddiemac.com/research/forecast/20220720-quarterly-forecast-market-slowdown-will-continue-high-rates-and-prices-exacerbate" target="_blank" title="more in line">more in line</a> with pre-pandemic years.
Let’s connect so you can make your best move in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County this year.2022-08-06T06:22:00-07:002022-08-05T15:29:25-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:211873 Graphs to Show This Isn’t a Housing BubbleWith all the headlines and buzz in the media, some consumers believe the market is in a <a href="https://www.mykcm.com/2022/07/14/housing-experts-say-this-isnt-a-bubble/" title="housing bubble">housing bubble</a>. As the housing <a href="https://www.mykcm.com/2022/06/14/is-the-housing-market-correcting/" title="market shifts">market shifts</a>, you may be wondering what’ll happen next. It’s only natural for concerns to creep in that it could be a repeat of what took place in 2008. The good news is, there’s concrete data to show why this is nothing like the last time.
There’s a Shortage of Homes on the Market Today, Not a Surplus
The supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will cause prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.
For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to tumble. Today, <a href="https://www.mykcm.com/2022/07/22/great-news-about-housing-inventory-infographic/" title="supply is growing">supply is growing</a>, but there’s still a shortage of inventory available.
The graph below uses <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" target="_blank" title="data">data</a> from the National Association of Realtors (NAR) to show how this time compares to the crash. Today, unsold inventory sits at just a <a href="https://www.nar.realtor/newsroom/existing-home-sales-slid-5-4-in-june" target="_blank" title="3.0-months’ supply">3.0-months’ supply</a> at the current sales pace.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1659478177.jpg" width="1000" height="870" />
One of the reasons inventory is still low is because of <a href="https://www.mykcm.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/" title="sustained underbuilding">sustained underbuilding</a>. When you couple that with ongoing buyer demand as millennials age into their peak homebuying years, it continues to put upward pressure on <a href="https://www.mykcm.com/2022/07/21/think-home-prices-are-going-to-fall-think-again/" title="home prices">home prices</a>. That limited supply compared to buyer demand is why <a href="https://www.mykcm.com/2022/07/12/expert-housing-market-forecasts-for-the-second-half-of-the-year/" title="experts forecast">experts forecast</a> home prices won’t fall this time.
Mortgage Standards Were Much More Relaxed During the Crash
During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. The graph below showcases <a href="https://www.mba.org/news-and-research/newsroom/news/2022/06/09/mortgage-credit-availability-decreased-in-may" target="_blank" title="data">data</a> on the Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers Association (MBA). The higher the number, the easier it is to get a mortgage.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1659478251.jpg" />
Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home. Back then, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.
Today, things are different, and purchasers face much higher standards from mortgage companies. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/how-the-fundamentals-influencing-housing-market-potential-have-changed" target="_blank" title="says">says</a>:
“Credit standards tightened in recent months due to increasing economic uncertainty and monetary policy tightening.”
Stricter standards, like there are today, help prevent a risk of a rash of foreclosures like there was last time.
The Foreclosure Volume Is Nothing Like It Was During the Crash
The most obvious difference is the number of homeowners that were facing foreclosure after the housing bubble burst. Foreclosure activity has been on the way down since the crash because buyers today are more qualified and less likely to default on their loans. The graph below uses <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2021-u-s-foreclosure-market-report/" target="_blank" title="data">data</a> from ATTOM Data Solutions to help tell the story:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1659478288.jpg" width="1000" height="870" />
In addition, homeowners today are <a href="https://www.mykcm.com/2022/06/21/the-average-homeowner-gained-64k-in-equity-over-the-past-year/" title="equity rich">equity rich</a>, not tapped out. In the run-up to the housing bubble, some homeowners were using their homes as personal ATMs. Many immediately withdrew their equity once it built up. When home values began to fall, some homeowners found themselves in a negative equity situation where the amount they owed on their mortgage was greater than the value of their home. Some of those households decided to walk away from their homes, and that led to a wave of distressed property listings (foreclosures and short sales), which sold at considerable discounts that lowered the value of other homes in the area.
Today, prices have risen nicely over the last few years, and that’s given homeowners an <a href="https://www.mykcm.com/2022/07/06/how-your-equity-can-grow-over-time/" title="equity">equity</a> boost. According to <a href="https://www.blackknightinc.com/black-knights-april-2022-mortgage-monitor/" target="_blank" title="Black Knight">Black Knight</a>:
“In total, mortgage holders gained $2.8 trillion in tappable equity over the past 12 months – a 34% increase that equates to more than $207,000 in equity available per borrower. . . .”
With the average home equity now standing at $207,000, homeowners are in a completely different position this time.
Bottom Line
If you’re worried we’re making the same mistakes that led to the housing crash, the graphs above should help alleviate your concerns. Concrete data and expert insights clearly show why this is nothing like the last time. Let’s connect so that I can help you relocate in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County.2022-08-03T06:27:00-07:002022-08-02T15:35:24-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21072A Real Estate Professional Helps You Separate Fact from FictionIf you’re following the news, chances are you’ve seen or heard some headlines about the housing market that don’t give the full picture. The real estate market is shifting, and when that happens, it can be hard to separate fact from fiction. That’s where a trusted real estate professional comes in. I can help debunk the headlines so you can really understand today’s East County market and what it means for you.
Here are three common housing market myths you might be hearing, along with the expert analysis that provides better context.
Myth 1: Home Prices Are Going to Fall
One piece of fiction many buyers may have seen or heard is that <a href="https://www.mykcm.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/" title="home prices">home prices</a> are going to crash. That’s because headlines often use similar, but different, <a href="https://www.mykcm.com/2022/06/16/home-price-deceleration-doesnt-mean-home-price-depreciation/" title="terms">terms</a> to describe what’s happening with prices. A few you might be seeing right now include:
Appreciation, or an increase in home prices.
Depreciation, or a decrease in home prices.
And deceleration, which is an increase in home prices, but at a slower pace.
The fact is, <a href="https://www.mykcm.com/2022/07/12/expert-housing-market-forecasts-for-the-second-half-of-the-year/" title="experts">experts</a> aren’t calling for a decrease in prices. Instead, they forecast <a href="https://www.mykcm.com/2022/07/21/think-home-prices-are-going-to-fall-think-again/" title="appreciation will continue">appreciation will continue</a>, just at a decelerated pace. That means home prices will continue rising and won’t fall. Selma Hepp, Deputy Chief Economist at CoreLogic, <a href="https://www.bankrate.com/real-estate/housing-market-predictions/" target="_blank" title="explains">explains</a>:
“. . . higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
Myth 2: The Housing Market Is in a Correction
Another common myth is that the housing market is in a correction. Again, that’s not the case. Here’s why. According to <a href="https://www.forbes.com/advisor/investing/what-is-market-correction/" target="_blank" title="Forbes">Forbes</a>:
“A correction is a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.”
As mentioned above, home prices are still appreciating, and experts project that will continue, just at a slower pace. That means the housing market <a href="https://www.mykcm.com/2022/06/14/is-the-housing-market-correcting/" title="isn’t in a correction">isn’t in a correction</a> because prices aren’t falling. It’s just moderating compared to the last two years, which were record-breaking in nearly every way.
Myth 3: The Housing Market Is Going to Crash
Some headlines are generating worry that the housing market is a bubble ready to burst. But experts say today is <a href="https://www.mykcm.com/2022/07/14/housing-experts-say-this-isnt-a-bubble/" title="nothing like 2008">nothing like 2008</a>. One of the reasons why is because lending standards are very different today. Logan Mohtashami, Lead Analyst for HousingWire, <a href="https://www.housingwire.com/articles/will-mortgage-lending-get-tighter-in-the-next-recession/" target="_blank" title="explains">explains</a>:
“As recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter. This typically happens in a recession, however, the notion that credit lending in America will collapse as it did from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom in the period between 2008-2022.”
During the last <a href="https://www.mykcm.com/2022/06/27/two-reasons-why-todays-housing-market-isnt-a-bubble/" title="housing bubble">housing bubble</a>, it was much easier to get a mortgage than it is today. Since then, <a href="https://www.mykcm.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/" title="lending standards">lending standards</a> have tightened significantly, and purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash.
Bottom Line
No matter what you’re hearing about the housing market, let’s connect so that I can help you make informed decisions. That way, you’ll have a knowledgeable authority on your side that knows the ins and outs of the East County market, including current trends, historical context, and so much more.2022-07-29T06:20:00-07:002022-07-28T15:21:29-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:21003What’s Causing Ongoing Home Price Appreciation?If you’re thinking about <a href="https://www.mykcm.com/2022/07/13/should-i-buy-a-home-right-now/" title="making a move">making a move</a>, you probably want to know what’s going to happen to <a href="https://www.mykcm.com/2022/06/16/home-price-deceleration-doesnt-mean-home-price-depreciation/" title="home prices">home prices</a> for the rest of the year. While experts say <a href="https://www.mykcm.com/2022/07/21/think-home-prices-are-going-to-fall-think-again/" title="price growth">price growth</a> will moderate due to the shifting market, ongoing appreciation is expected. That means home prices won’t fall. Here’s a look at two key reasons experts forecast continued price growth: supply and demand.
While Growing, Housing Supply Is Still Low
Even though <a href="https://www.mykcm.com/2022/06/28/a-key-opportunity-for-homebuyers/" title="inventory is increasing">inventory is increasing</a> this year as the <a href="https://www.mykcm.com/2022/06/14/is-the-housing-market-correcting/" title="market moderates">market moderates</a>, supply is still low. The graph below helps tell the story of why there still aren’t enough homes on the market today. It uses <a href="http://www.census.gov/construction/nrc/xls/co_cust.xls" target="_blank" title="data">data</a> from the Census to show the number of single-family homes that were built in this country going all the way back to the 1970s.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1658786943.jpg" width="1000" height="870" />
The blue bars represent the years leading up to the housing crisis in 2008. As the graph shows, right before the crash, homebuilding increased significantly. That’s because buyer demand was so high due to loose <a href="https://www.mykcm.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/" title="lending">lending</a> standards that enabled more people to qualify for a home loan.
The resulting oversupply of homes for sale led to prices dropping during the crash and some builders leaving the industry or closing their businesses – and that led to a long period of underbuilding of new homes. And even as more new homes are constructed this year and, in the years, ahead, this isn’t something that can be resolved overnight. It’ll take time to build enough homes to meet the deficit of underbuilding that took place over the past 14 years.
Millennials Will Create Sustained Buyer Demand Moving Forward
The frenzy the market saw during the pandemic is because there was more demand than homes for sale. That drove home prices up as buyers competed with one another for available homes. And while buyer demand has moderated today in response to higher mortgage rates, <a href="https://data.census.gov/cedsci/table?q=United%20States&t=Populations%20and%20People&g=0100000US&tid=ACSST5Y2020.S0101" target="_blank" title="data">data</a> tells us demand will continue to be driven by the large generation of millennials aging into their peak homebuying years (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1658787006.jpg" width="1000" height="870" />
Odeta Kushi, Deputy Chief Economist at First American, <a href="https://blog.firstam.com/economics/millennials-continued-to-drive-homeownership-demand-in-2021" target="_blank" title="explains">explains</a>:
“. . . millennials continue to transition to their prime home-buying age and will remain the driving force in potential homeownership demand in the years ahead.”
That combination of millennial demand and low housing supply continues to put upward pressure on home prices. As Bankrate <a href="https://www.bankrate.com/real-estate/june-2022-fed-housing-comments/" target="_blank" title="says">says</a>:
“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”
What This Means for Home Prices
If you’re worried home values will fall, rest assured that experts forecast ongoing home price appreciation thanks to the lingering imbalance of supply and demand. That means home prices won’t decline.
Bottom Line
Based on today’s factors driving supply and demand, experts project home price appreciation will continue. It’ll just happen at a more moderate pace as the housing market continues its shift back toward pre-pandemic levels. If you’re looking for an expert in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County to guide you buy or sell, let’s connect.2022-07-26T06:19:00-07:002022-07-25T15:22:50-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20805Housing Experts Say This Isn’t a Bubble With so much talk about an <a href="https://www.mykcm.com/2022/06/03/history-proves-recession-doesnt-equal-a-housing-crisis-infographic/" title="economic slowdown">economic slowdown</a>, some people are asking if the housing market is heading for a <a href="https://www.mykcm.com/2022/06/27/two-reasons-why-todays-housing-market-isnt-a-bubble/" title="crash">crash</a> like the one in 2008. To really understand what’s happening with real estate today, it’s important to lean on the experts for reliable information.
Here’s why economists and industry experts say the <a href="https://www.mykcm.com/2022/06/14/is-the-housing-market-correcting/" title="housing market">housing market</a> is not a <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="bubble">bubble</a> ready to pop.
Today Is Nothing Like 2008
The 2008 housing crash is still fresh in the minds of many homebuyers and sellers. But today’s market is different. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://www.businessinsider.com/housing-crash-unlikely-but-correction-is-probable-2022-5" target="_blank" title="says">says</a>:
“This is not the same market of 2008. . . . It’s no secret the housing market played a central role in the Great Recession, but this market is just fundamentally different in so many ways.”
Natalie Campisi, Advisor Staff for Forbes, <a href="https://www.forbes.com/advisor/mortgages/real-estate/will-housing-market-crash/" target="_blank" title="explains">explains</a> how today’s <a href="https://www.mykcm.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/" title="lending standards">lending standards</a> are different than those during the lead-up to the housing market crash:
“Among the differences between today’s housing market and that of the 2008 housing crash is that lending standards are tighter due to lessons learned and new regulations enacted after the last crisis. Essentially, that means those approved for a mortgage nowadays are less likely to default than those who were approved in the pre-crisis lending period.”
Another reason today’s housing market is nothing like 2008 is that the number of people looking to buy a home still outweighs the supply of homes for sale. As realtor.com <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" target="_blank" title="notes">notes</a>:
“. . . experts don’t believe the market is in a bubble or a crash is in the cards, like during the Great Recession. The nation is still suffering from a housing shortage that has reached crisis proportions at a time when many millennials are reaching the age when they start to consider homeownership. That’s likely to keep prices high.”
Bottom Line
Experts say the housing market isn’t a bubble, and we’re not heading for a crash. Let’s connect so you can have a full picture of today’s housing market in East County.2022-07-15T06:19:00-07:002022-07-14T15:20:24-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20747Expert Housing Market Forecasts for the Second Half of the YearThe <a href="https://www.mykcm.com/2022/06/14/is-the-housing-market-correcting/" title="housing market">housing market</a> is at a turning point, and if you’re thinking of buying or selling a home, that may leave you wondering: is it still a good time to buy a home? Should I make a move this year? To help answer those questions, let’s turn to the experts for projections on what the second half of the year holds for residential real estate.
Where Mortgage Rates Will Go Depends on Inflation
While one of the big questions on all buyers’ minds is where will mortgage rates go in the months ahead, no one has a crystal ball to know exactly what’ll happen in the future. What <a href="https://www.mykcm.com/2022/06/27/two-reasons-why-todays-housing-market-isnt-a-bubble/" title="housing market">housing market</a> experts know for sure is that the record-low mortgage rates during the pandemic were an outlier, not the norm.
This year, rates have climbed <a href="https://www.freddiemac.com/pmms/archive" target="_blank" title="over 2%">over 2%</a> due to the Federal Reserve’s response to <a href="https://www.mykcm.com/2022/06/23/homeownership-is-a-great-hedge-against-the-impact-of-rising-inflation/" title="rising inflation">rising inflation</a>. If inflation continues to rise, it’s likely that mortgage rates will respond. Greg McBride, Chief Financial Analyst at Bankrate, <a href="https://www.marketwatch.com/picks/until-inflation-peaks-mortgage-rates-wont-either-we-asked-3-economists-and-real-estate-pros-will-mortgage-rates-climb-higher-this-summer-01655941487" target="_blank" title="explains">explains</a> it well:
“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.”
Whether you’re buying your <a href="https://www.mykcm.com/2022/06/08/what-are-the-best-options-for-todays-first-time-homebuyers/" title="first home">first home</a> or selling your current house to <a href="https://www.mykcm.com/2022/06/07/why-the-growing-number-of-homes-for-sale-is-good-for-your-move-up/" title="make a move">make a move</a>, today’s mortgage rate is an important factor to consider. When rates rise, they impact affordability and your purchasing power. That’s why it’s crucial to work with a team of professionals, so you have expert advice to help you make an informed decision about your best move.
The Supply of Homes for Sale Projected to Continue Increasing
This year, particularly this spring, the <a href="https://www.mykcm.com/2022/06/28/a-key-opportunity-for-homebuyers/" title="number of homes for sale">number of homes for sale</a> has grown. That’s partly due to more homeowners listing their houses, but also because higher mortgage rates have helped ease the intensity of buyer demand. Moderating buyer demand slows down the pace of home sales, which in turn helps <a href="https://www.mykcm.com/2022/06/17/more-listings-are-coming-onto-the-market-infographic/" title="inventory rise">inventory rise</a>.
Experts say that growth will continue. Recently, realtor.com updated their <a href="https://news.move.com/2022-06-13-Realtor-com-R-2022-Forecast-Update-Real-Estate-Gets-a-Refresh-from-the-Frenzy" target="_blank" title="2022 inventory forecast">2022 inventory forecast</a>. In the latest release, they increased their projections for inventory gains dramatically, going from a 0.3% increase at the beginning of the year to a 15.0% jump by the end of 2022 (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1657663804.jpg" width="960" height="840" />
More homes to choose from is great news if you’re craving more options for your home search – just know that there isn’t a sudden surplus of inventory on the horizon. Housing supply is still low, so you’ll need to partner with an agent to stay on top of what’s available in your market and move fast when you find the one. It’s not going to be easy to find a home, but it certainly won’t be as difficult as it has been over the past two years.
Home Price Forecasts Call for Ongoing Appreciation
Due to the imbalance between the number of homes for sale and the number of buyers looking to make a purchase, the pandemic led to record-breaking increases in home prices. According to <a href="https://www.corelogic.com/intelligence/corelogic-hpi-posted-record-year-over-year-growth-in-2021/" target="_blank" title="CoreLogic">CoreLogic</a>, homes appreciated by 15% in 2021, and they’ve continued to rise this year.
Even though housing supply is increasing today, there are still more buyers than there are homes for sale, and that’s maintaining the upward pressure on <a href="https://www.mykcm.com/2022/06/16/home-price-deceleration-doesnt-mean-home-price-depreciation/" title="home prices">home prices</a>. That’s why experts are not calling for prices to decline, rather they’re forecasting they’ll continue to climb, just at a more moderate pace this year. On average, homes are projected to appreciate by about 8.5% in 2022 (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1655419278.jpg" width="1000" height="870" />
Selma Hepp, Deputy Chief Economist at CoreLogic, <a href="https://www.bankrate.com/real-estate/housing-market-predictions/" target="_blank" title="explains">explains</a> why the housing market will see deceleration, but not depreciation, in prices:
“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
For current homeowners looking to sell, know your home’s value isn’t projected to fall, but waiting to make your purchase does mean your next home could cost more as home prices continue to appreciate. That’s why, if you’re thinking about buying your first home or you’re ready to make a move, it may make sense to do so now before prices climb higher. But rest assured, once you buy a home, that price appreciation will help grow the value of your <a href="https://www.mykcm.com/2022/06/13/more-americans-choose-real-estate-as-the-best-investment-than-ever-before/" title="investment">investment</a>.
Bottom Line
Whether you’re a homebuyer or seller, you need to know what’s happening in the East San Diego County housing market, so you can make the most informed decision possible. Let’s connect to discuss your goals and what lies ahead, so you can determine the best plan for your move.2022-07-13T06:38:00-07:002022-07-12T15:43:04-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20669Why Growing Home Equity Is Great News if You Plan to Move in East County<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1657318193.jpg" width="1046" height="1981" />
According to the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="data">data</a> from CoreLogic, the average Californian homeowner gained $141,000 in <a href="https://www.mykcm.com/2022/06/21/the-average-homeowner-gained-64k-in-equity-over-the-past-year/" title="home equity">home equity</a> over the past 12 months.
That much <a href="https://www.mykcm.com/2022/07/06/how-your-equity-can-grow-over-time/" title="equity">equity</a> can be a game-changer when you move in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County. When you sell, it could be some (if not all) of what you need for a down payment on your <a href="https://www.mykcm.com/2022/06/07/why-the-growing-number-of-homes-for-sale-is-good-for-your-move-up/" title="next home">next home</a>.
To find out how much equity you have in your home and how you can use it, let’s connect today.2022-07-09T06:22:00-07:002022-07-08T15:24:01-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20532Real Estate Consistently Voted Best Investment<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1656714427.jpg" />
Based on a recent Gallup <a href="https://news.gallup.com/poll/392330/record-low-say-good-time-buy-house.aspx" target="_blank" title="poll">poll</a>, real estate has been rated the best <a href="https://www.mykcm.com/2022/06/13/more-americans-choose-real-estate-as-the-best-investment-than-ever-before/" title="long-term investment">long-term investment</a> for nine years in a row.
Owning real estate is more than just a place to call home. It’s also an investment in your future. That’s because it’s typically a <a href="https://www.mykcm.com/2022/06/23/homeownership-is-a-great-hedge-against-the-impact-of-rising-inflation/" title="stable">stable</a> and secure asset that can <a href="https://www.mykcm.com/2022/06/21/the-average-homeowner-gained-64k-in-equity-over-the-past-year/" title="grow in value">grow in value</a> over time.
If you’re ready to buy a home in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County and invest in your future, let’s connect.2022-07-02T06:41:00-07:002022-07-01T15:44:21-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20405Two Reasons Why Today’s East County Housing Market Isn’t a BubbleYou may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A <a href="https://pulsenomics.com/surveys/#home-price-expectations" target="_blank" title="recent survey">recent survey</a> from Pulsenomics asked over one hundred housing market experts and real estate economists if they believe the housing market is in a <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="bubble">bubble</a>. The results indicate most experts don’t think that’s the case (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1656367665.jpg" width="960" height="840" />
As the graph shows, a strong majority (60%) said the real estate market is not currently in a bubble. In the same survey, experts give the following reasons why this isn’t like 2008:
The recent growth in <a href="https://www.mykcm.com/2022/06/16/home-price-deceleration-doesnt-mean-home-price-depreciation/" title="home prices">home prices</a> is because of demographics and low inventory
Credit risks are low because underwriting and <a href="https://www.mykcm.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/" title="lending standards">lending standards</a> are sound
If you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns.
1. Low Housing Inventory Is Causing Home Prices to Rise
The supply of homes available for sale needed to sustain a normal real estate market is approximately <a href="https://www.mykcm.com/2022/04/28/what-you-need-to-know-about-selling-in-a-sellers-market/" title="six months">six months</a>. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.
As the graph below shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and <a href="https://www.mykcm.com/2022/05/12/what-you-actually-need-to-know-about-the-number-of-foreclosures-in-todays-housing-market/" title="foreclosures">foreclosures</a>), and that caused prices to tumble. Today, there’s still a <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" target="_blank" title="shortage of inventory">shortage of inventory</a>, which is causing ongoing home price appreciation (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1656367813.jpg" width="960" height="840" />
Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a limited supply of homes for sale. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" target="_blank" title="explains">explains</a>:
“The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”
2. Mortgage Lending Standards Today Are Nothing Like the Last Time
During the housing bubble, it was much easier to get a mortgage than it is today. Here’s a graph showing the <a href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/hhdc_2022q1.pdf" target="_blank" title="mortgage volume">mortgage volume</a> issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the years after:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1656367862.jpg" />
This graph helps show one element of why mortgage standards are nothing like they were the last time. Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash. Realtor.com <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" target="_blank" title="notes">notes</a>:
“. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”
Bottom Line
A majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, let’s connect to discuss why today’s East San Diego County housing market is nothing like 2008.2022-06-28T06:21:00-07:002022-06-27T15:25:05-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20248More Listings Are Coming onto the East County Market<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1655503916.jpg" />
Worried you won’t be able to find your next home after you <a href="https://www.mykcm.com/2022/06/15/a-majority-of-consumers-say-its-a-good-time-to-sell-your-house/" title="sell">sell</a>? You should know <a href="https://www.realtor.com/research/may-2022-data/" target="_blank" title="data">data</a> from realtor.com shows more listings are coming onto the market <a href="https://www.realtor.com/research/data/" target="_blank" title="each month">each month</a> this year.
Having <a href="https://www.mykcm.com/2022/06/07/why-the-growing-number-of-homes-for-sale-is-good-for-your-move-up/" title="additional options">additional options</a> can make the search for your <a href="https://www.mykcm.com/2022/05/27/bright-days-are-ahead-when-you-move-up-this-summer-infographic/" title="next home">next home</a> easier. But inventory is still low overall, which means your house should still stand out when you sell.
If your biggest question is where you’ll go if you sell in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County, take this as encouraging news. Let’s connect to start the process today.2022-06-18T06:27:00-07:002022-06-17T15:30:05-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20215Home Price Deceleration Doesn’t Mean Home Price DepreciationExperts in the real estate industry use a number of terms when they talk about what’s happening with home prices. And some of those words sound a bit similar but mean very different things. To help clarify what’s happening with <a href="https://www.mykcm.com/2022/05/24/sellers-have-an-opportunity-with-todays-home-prices/" title="home prices">home prices</a> and where experts say they’re going, here’s a look at a few terms you may hear:
Appreciation is when home prices increase.
Depreciation is when home prices decrease.
Deceleration is when home prices continue to appreciate, but at a slower pace.
Where Home Prices Have Been in Recent Years
For starters, you’ve probably heard home prices have skyrocketed over the past two years, but homes were actually appreciating long before that. You might be surprised to learn that home prices have climbed for <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index-Datasets.aspx#qpo" target="_blank" title="122">122</a> consecutive months (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1655419206.jpg" width="1000" height="870" />
As the graph shows, houses have gained value consistently over the past 10 consecutive years. But since 2020, the increase has been <a href="https://www.fhfa.gov/Media/PublicAffairs/Pages/US-House-Prices-Rise-18pt7-Percent-over-the-Last-Year-Up-4pt6-Percent-from-the-Fourth-Quarter.aspx" target="_blank" title="more dramatic">more dramatic</a> as home price growth accelerated.
So why did home prices climb so much? It’s because there were more buyers than there were homes for sale. That imbalance put upward pressure on home prices because demand was high and supply was low.
Where Experts Say Home Prices Are Going
While this is helpful context, if you’re a buyer or seller in today’s market, you probably want to know what’s going to happen with home prices moving forward. Will they continue that same growth path or will home prices fall?
Experts are <a href="https://www.mykcm.com/2022/05/31/what-does-the-rest-of-the-year-hold-for-the-housing-market/" title="forecasting">forecasting</a> ongoing appreciation, just at a decelerated pace. In other words, prices will keep climbing, just not as fast as they have been. The graph below shows home price forecasts from seven industry leaders. None are calling for prices to fall (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1655419278.jpg" width="1000" height="870" />
Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/the-housing-market-is-slowing-by-design-but-dont-expect-a-bust" target="_blank" title="identifies">identifies</a> a key reason why home prices won’t depreciate or drop:
“In today’s housing market, demand for homes continues to outpace supply, which is keeping the pressure on house prices, so don’t expect house prices to decline.”
And although <a href="https://www.mykcm.com/2022/05/11/are-there-more-homes-coming-to-the-market/" title="housing supply">housing supply</a> is starting to tick up, it’s not enough to make home prices decline because there’s still a gap between the number of homes available for sale and the volume of buyers looking to make a purchase.
Terry Loebs, Founder of the research firm Pulsenomics, notes that most real estate experts and economists anticipate home prices will continue rising. As he <a href="https://www.forbes.com/sites/brendarichardson/2022/06/07/rising-rates-and-buyer-urgency-keep-home-price-gains-above-20-in-april/?sh=c5446d229ec7" target="_blank" title="puts it">puts it</a>:
“With home values at record-high levels and a vast majority of experts projecting additional price increases this year and beyond, home prices and expectations remain buoyant.”
Bottom Line
Experts forecast price deceleration, not depreciation. That means home prices will continue to rise, just at a slower pace. Let’s connect so you can get the full picture of what’s happening with home prices in La Mesa, El Cajon, Alpine, Descanso, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego County and to discuss your buying and selling goals.2022-06-17T06:51:00-07:002022-06-16T15:55:18-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:20166Is the Housing Market Correcting?If you’re following the news, all of the headlines about conditions in the current <a href="https://www.mykcm.com/2022/05/31/what-does-the-rest-of-the-year-hold-for-the-housing-market/" title="housing market">housing market</a> may leave you with more questions than answers. Is the boom over? Is the market crashing or correcting? Here’s what you need to know.
The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low <a href="https://www.mykcm.com/2022/05/17/why-rising-mortgage-rates-push-buyers-off-the-fence/" title="mortgage rates">mortgage rates</a> and <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" target="_blank" title="millennials">millennials</a> reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis.
This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – not a crash nor a correction. As realtor.com <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" target="_blank" title="says">says</a>:
“The housing market is at a turning point. . . . We’re starting to see signs of a new direction, . . .”
Home Showings Then and Now
The <a href="https://showingindex.stats.showingtime.com/docs/lmu/x/UnitedStates?src=page" target="_blank" title="ShowingTime Showing Index">ShowingTime Showing Index</a> tracks the traffic of home showings according to agents and brokers. It’s a good indication of buyer demand. Here’s a look at that data going back to 2019 (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1655245523.jpg" />
The 2019 numbers give a good baseline of pre-pandemic demand (shown in gray). As the graph indicates, home showings skyrocketed during the pandemic (shown in blue). And while current buyer demand has begun to moderate slightly based on the latest data (shown in green), showings are still above 2019 levels.
And since 2019 was such a strong year for the housing market, this helps show that the market <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="isn’t crashing">isn’t crashing</a> – it’s just at a turning point that’s moving back toward more pre-pandemic levels.
Existing Home Sales Then and Now
Headlines are also talking about how existing home sales are declining, but perspective matters. Here’s a look at <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" target="_blank" title="existing home sales">existing home sales</a> going all the way back to 2019 using data from the National Association of Realtors (NAR) (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1655245623.jpg" width="1000" height="870" />
Again, a similar story emerges. The pandemic numbers (shown in blue) beat the more typical year of 2019 home sales (shown in gray). And according to the latest projections for 2022 (shown in green), the market is on pace to close this year with more home sales than 2019 as well.
It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American <a href="https://blog.firstam.com/economics/the-reconomy-podcast-breaking-down-the-recency-bias-in-housing-market-data" target="_blank" title="sums it up">sums it up</a> like this:
“. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”
Bottom Line
If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Let’s connect if you have any questions about East San Diego County market and what it means for you when you buy or sell this year.2022-06-15T06:32:00-07:002022-06-14T15:36:16-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19843History Proves Recession Doesn’t Equal a Housing Crisis<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1654294220.jpg" />
It’s important to understand history proves an <a href="https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011" target="_blank" title="economic slowdown">economic slowdown</a> does not equal a housing crisis.
In 4 of the last 6 recessions, <a href="https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/" target="_blank" title="home prices">home prices</a> actually <a href="https://www.corelogic.com/blog/2019/03/housing-recessions-and-recoveries.aspx" target="_blank" title="appreciated">appreciated</a>. Home prices only fell twice – minimally in the early 90s and then by nearly 20% during the housing crash in 2008.
If you have questions, let’s connect to discuss why today’s East San Diego housing market is <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="nothing like 2008">nothing like 2008</a>.2022-06-04T06:35:00-07:002022-06-03T15:42:48-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19781Why Home Loans Today Aren’t What They Were in the PastIn today’s housing market, many are beginning to wonder if we’re returning to the riskier lending habits and borrowing options that led to the <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="housing crash">housing crash</a> 15 years ago. Let’s ease those concerns.
Several times a year, the Mortgage Bankers Association (MBA) releases an index titled the <a href="https://www.mba.org/news-and-research/newsroom/news/2022/05/10/mortgage-credit-availability-decreased-in-april" target="_blank" title="Mortgage Credit Availability Index">Mortgage Credit Availability Index</a> (MCAI). According to their website:
“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is . . . a summary measure which indicates the availability of mortgage credit at a point in time.”
Basically, the index determines how easy it is to get a mortgage. The higher the index, the more available mortgage credit becomes. Here’s a graph of the MCAI dating back to 2004, when the data first became available:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1654123295.jpg" width="960" height="840" />
As the graph shows, the index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI as mortgage money became almost impossible to secure. Thankfully, lending standards have eased somewhat since then, but the index is still low. In April, the index was at 121, which is about one-seventh of what it was in 2006.
Why Did the Index Get out of Control During the Housing Bubble?
The main reason was the availability of loans with extremely weak lending standards. To keep up with demand in 2006, many mortgage lenders offered loans that put little emphasis on the eligibility of the borrower. Lenders were approving loans without always going through a verification process to confirm if the borrower would likely be able to repay the loan.
An example of the relaxed lending standards leading up to the housing crash is the FICO® credit score associated with a loan. What’s a FICO® score? The website myFICO <a href="https://www.myfico.com/credit-education/credit-scores" target="_blank" title="explains">explains</a>:
“A credit score tells lenders about your creditworthiness (how likely you are to pay back a loan based on your credit history). It is calculated using the information in your credit reports. FICO® Scores are the standard for credit scores—used by 90% of top lenders.”
During the housing boom, many mortgages were written for borrowers with a FICO score under 620. While there are still some loan programs that allow for a 620 score, today’s lending standards are much tighter. Lending institutions overall are much more attentive about measuring risk when approving loans. According to the latest <a href="https://www.newyorkfed.org/microeconomics/hhdc" target="_blank" title="Household Debt and Credit Report">Household Debt and Credit Report</a> from the New York Federal Reserve, the median credit score on all mortgage loans originated in the first quarter of 2022 was 776.
The graph below shows the billions of dollars in mortgage money given annually to borrowers with a credit score under 620.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1654123417.jpg" width="960" height="840" />
In 2006, buyers with a score under 620 received $376 billion dollars in loans. In 2021, that number was only $80 billion, and it’s only $20 billion in the first quarter of 2022.
Bottom Line
In 2006, lending standards were much more relaxed with little evaluation done to measure a borrower’s potential to repay their loan. Today, standards are tighter, and the risk is reduced for both lenders and borrowers. These are two very different housing markets, and today is nothing like the last time. Let’s connect so I could assist you how to prepare you in buying or selling in East San Diego now.2022-06-02T06:50:00-07:002022-06-01T15:57:34-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19759What Does the Rest of the Year Hold for the East San Diego Housing Market?If you’re thinking of <a href="https://www.mykcm.com/2022/05/05/three-tips-for-first-time-homebuyers/" title="buying">buying</a> or <a href="https://www.mykcm.com/2022/05/16/if-youre-a-homeowner-you-have-incredible-leverage-when-you-sell-today/" title="selling">selling</a> a house in La Mesa, El Cajon, Jamul, Santee, Lakeside, Lemon Grove or Spring Valley, you’re at an exciting decision point. And anytime you make a big decision like that, one thing you should always consider is timing. So, what does the rest of the year hold for the housing market? Here’s what experts have to say.
The Number of Homes Available for Sale Is Likely to Grow
There are early signs <a href="https://www.mykcm.com/2022/05/11/are-there-more-homes-coming-to-the-market/" title="housing inventory">housing inventory</a> is starting to grow and experts say that should continue in the months ahead. <a href="https://www.realtor.com/research/weekly-housing-trends-view-data-week-apr-23-2022/" target="_blank" title="According">According</a> to Danielle Hale, Chief Economist at realtor.com:
“The gap between this year’s homes for sale and last year’s is one-fifth the size that it was at the beginning of the year. The catch up is likely to continue, . . . This growth will mean more options for shoppers than they’ve had in a while, even though inventory continues to lag pre-pandemic normal.”
As a buyer, having more options is welcome news. Just remember, housing supply is still low, so be ready to act fast and put in your <a href="https://www.mykcm.com/2022/05/03/things-that-could-help-you-win-a-bidding-war-on-a-home/" title="best offer">best offer</a> up front.
As a seller, your house may soon face more competition when other sellers list their homes. But the good news is, if you’re also buying your next home, having more options to choose from should make that move-up process easier.
Mortgage Rates Will Likely Continue to Respond to Inflationary Pressures
Experts also agree <a href="https://www.mykcm.com/2022/04/26/how-homeownership-can-help-shield-you-from-inflation/" title="inflation">inflation</a> should continue to drive up mortgage rates, albeit more moderately. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://www.marketwatch.com/story/the-pandemic-boom-in-home-sales-is-over-mortgage-rates-soar-to-highest-level-since-2009-as-the-fed-pressures-the-housing-market-11651760108" target="_blank" title="says">says</a>:
“… ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”
As a buyer, work with trusted real estate professionals, including your lender, so you can learn how rising mortgage rate environments impact your <a href="https://www.mykcm.com/2022/05/09/how-todays-mortgage-rates-impact-your-home-purchase/" title="purchasing power">purchasing power</a>. It may make sense to buy now before it costs more to do so, if you’re ready.
As a seller, rising <a href="https://www.mykcm.com/2022/05/17/why-rising-mortgage-rates-push-buyers-off-the-fence/" title="mortgage rates">mortgage rates</a> are motivating some homeowners to make a move up sooner rather than later. If you’re planning to buy your next home, talk to a trusted real estate advisor to decide how to time your move.
Home Prices Are Projected to Continue to Climb
<a href="https://www.mykcm.com/2022/05/02/todays-home-price-appreciation-is-great-news-for-existing-homeowners/" title="Home prices">Home prices</a> are forecast to keep appreciating because there are still fewer homes for sale than there are buyers in the market. That said, experts agree the pace of that appreciation should moderate – but <a href="https://www.mykcm.com/2022/05/10/will-home-prices-fall-this-year-heres-what-experts-say/" title="home prices">home prices</a> won’t fall. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/first-quarter-of-2022-brings-double-digit-price-appreciation-for-70-of-metros" target="_blank" title="explains">explains</a>:
“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022. . . Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”
As a buyer, continued home price appreciation means it’ll cost you more to buy the longer you wait. But it also gives you peace of mind that, once you do buy a home, it will likely grow in value. That makes it historically a good investment and a strong hedge against <a href="https://www.mykcm.com/2022/05/20/dont-let-rising-inflation-delay-your-homeownership-plans-infographic/" title="inflation">inflation</a>.
As a seller, price appreciation is great news for the value of your home. Again, lean on a professional to strike the right balance of the best conditions possible for both selling your house and buying your next one.
Bottom Line
Whether you’re a homebuyer or seller, you need to know what’s happening in the housing market, so you can make the most <a href="https://www.mykcm.com/2022/05/23/work-with-a-real-estate-professional-if-you-want-the-best-advice/" title="informed decision">informed decision</a> possible. Let’s connect to discuss your goals and what lies ahead, so you can pick your best time to make a move in East San Diego.2022-06-01T06:05:00-07:002022-05-31T15:23:19-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19718Bright Days Are Ahead When You Move Up in East San Diego This Summer<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1653689460.jpg" />
Warmer weather and longer days mean summer is almost here. Celebrate by upgrading to the home of your dreams so you can enjoy all the season has to offer.
When you <a href="https://www.mykcm.com/2022/05/04/your-house-could-be-closer-to-list-ready-than-you-think/" title="list your house">list your house</a>, you can capitalize on today’s <a href="https://www.mykcm.com/2022/04/28/what-you-need-to-know-about-selling-in-a-sellers-market/" title="sellers’ market">sellers’ market</a> to fuel your upgrade. Then, you can <a href="https://www.mykcm.com/2022/05/11/are-there-more-homes-coming-to-the-market/" title="move">move</a> to a home in La Mesa, El Cajon, Jamul, Santee, Lakeside, Lemon Grove or Spring Valley with the features you want, like space to entertain or rooms for work and play.
If you’re ready to upgrade to a home in East San Diego that matches your changing needs, <a href="https://www.mykcm.com/2022/05/23/work-with-a-real-estate-professional-if-you-want-the-best-advice/" title="let’s connect">let’s connect</a>.2022-05-28T06:18:00-07:002022-05-27T15:26:37-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19655How Buying or Selling a Home Benefits the Economy and Your Community If you’re thinking of <a href="https://www.mykcm.com/2022/05/17/why-rising-mortgage-rates-push-buyers-off-the-fence/" title="buying">buying</a> or <a href="https://www.mykcm.com/2022/04/14/on-the-fence-of-whether-or-not-to-move-this-spring-consider-this/" title="selling">selling</a> your East San Diego home, chances are you’re focusing on the many extraordinary ways it’ll change your life. But do you know it has a large impact on your community too?
To measure that impact, the National Association of Realtors (NAR) releases a <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-state-economic-impact-report-us-04-28-2022.pdf" target="_blank" title="report">report</a> each year to highlight just how much economic activity a home sale generates. The chart below shows how the sale of both a newly built home and an existing home impact the economy:
<img src="https://assets.site-static.com/userfiles/1763/image/20220525-MEM-Eng-1.jpg" width="960" height="720" />As the visual shows, a single home sale can have a significant effect on the overall economy. To dive a level deeper, NAR also provides a detailed look at how that varies state-by-state for newly built homes. As you can see in the map below, the state of California is second across all states with the highest contribution of gross product averaging $247K, and that’s just from newly built homes.
<img src="https://assets.site-static.com/userfiles/1763/image/20220525-MEM-Eng-2.jpg" width="960" height="720" />You may be wondering: how can a single home sale have such a major effect on the economy?
For starters, there are multiple industries that play a role in the process. Numerous contractors, specialists, lawyers, town and city officials, and so many other professionals are all necessary at various stages during the transaction. Every individual you work with, like your trusted <a href="https://www.mykcm.com/2022/04/12/why-a-real-estate-professional-is-key-when-selling-your-house/" title="real estate advisor">real estate advisor</a>, has a team of <a href="https://www.mykcm.com/2022/03/01/an-expert-advisor-will-give-you-the-best-advice-in-todays-market/" title="professionals">professionals</a> involved behind the scenes.
That means when you <a href="https://www.mykcm.com/2022/05/11/are-there-more-homes-coming-to-the-market/" title="buy">buy</a> or <a href="https://www.mykcm.com/2022/05/04/your-house-could-be-closer-to-list-ready-than-you-think/" title="sell">sell</a> a home, you’re leaving a lasting impression on the community at large. Let the knowledge that you’re contributing to those around you while also meeting your own needs help you feel even more empowered when you decide to make your move this year.
Bottom Line
Homebuyers and sellers are economic drivers in their community and beyond. Let’s connect so you have a trusted real estate advisor on your side if you’re ready to get started. It won’t just change your life; it’ll make a powerful impact on your entire community.2022-05-26T06:28:00-07:002022-05-25T15:33:23-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19616Work With a Real Estate Professional if You Want the Best AdviceBecause <a href="https://www.mykcm.com/2022/05/17/why-rising-mortgage-rates-push-buyers-off-the-fence/" title="buying">buying</a> or <a href="https://www.mykcm.com/2022/04/28/what-you-need-to-know-about-selling-in-a-sellers-market/" title="selling">selling</a> a home is such a <a href="https://www.mykcm.com/2022/04/27/the-dream-of-homeownership-is-worth-the-effort/" title="big decision">big decision</a> in our lives, the need for clear, trustworthy information and guidance is crucial. And while no one can give you perfect advice, when you align yourself with an expert, you’ll get the best advice for your situation.
An Expert Will Give You the Best Advice Possible
Let’s say you need an attorney, so you seek out an expert in the type of law required for your case. When you go to their office, they won’t immediately tell you how the case is going to end or how the judge or jury will rule. What a good attorney can do, though, is discuss the most effective strategies you can take. They may recommend one or two approaches they believe will work well for your case.
Then, they’ll leave you to make the decision on which option you want to pursue. Once you decide, they can help you put a plan together based on the facts at hand. They’ll use their expert knowledge to work toward the resolution you want and make whatever modifications in the strategy necessary to try and achieve that outcome.
Similarly, the job of a trusted real estate professional is to give you the <a href="https://www.mykcm.com/2022/04/22/myths-about-todays-housing-market-infographic/" title="best advice">best advice</a> for your situation. Just like you can’t find a lawyer to give you perfect advice, you won’t find a real estate professional who can either. They can’t because it’s impossible to know exactly what’s going to happen throughout your transaction. They also can’t predict exactly what will happen with conditions in today’s <a href="https://www.mykcm.com/2022/03/24/what-you-can-expect-from-the-spring-housing-market/" title="housing market">housing market</a>.
But an expert real estate advisor is knowledgeable about <a href="https://www.mykcm.com/2022/05/06/2022-housing-market-forecast-infographic/" title="market trends">market trends</a> and the ins and outs of the <a href="https://www.mykcm.com/2022/04/20/how-to-approach-rising-mortgage-rates-as-a-buyer/" title="homebuying">homebuying</a> and <a href="https://www.mykcm.com/2022/04/12/why-a-real-estate-professional-is-key-when-selling-your-house/" title="selling">selling</a> process. With that knowledge, they can anticipate what could happen based on your situation and help you put together a solid plan. And they’ll guide you through the process, helping you make decisions along the way.
That’s the very definition of getting the best – not perfect – advice. And that’s the power of working with an expert real estate advisor.
Bottom Line
If you want trustworthy advice when buying or selling your East San Diego home, let’s connect so you have an expert real estate advisor on your side.2022-05-24T06:11:00-07:002022-05-23T15:31:55-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19543The One Thing Every Homeowner Needs to Know About a RecessionA recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.
The National Bureau of Economic Research (NBER) <a href="https://www.nber.org/news/business-cycle-dating-committee-announcement-june-8-2020" target="_blank" title="defines">defines</a> a recession this way:
“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”
To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1652998109.jpg" width="1000" height="870" />
The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="housing market isn’t a bubble">housing market isn’t a bubble</a> that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.
Bottom Line
We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis. Let’s connect so that you can make an informed decision on whether to buy or sell your East San Diego house now.2022-05-20T06:17:00-07:002022-05-19T15:28:05-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19370What You Actually Need to Know About the Number of Foreclosures in Today’s Housing MarketWhile you may have seen recent stories about the volume of foreclosures today, context is important. During the pandemic, many homeowners were able to pause their mortgage payments using the forbearance program. The goal was to help homeowners financially during the uncertainty created by the health crisis.
When the forbearance program began, many experts were concerned it would result in a wave of foreclosures coming to the market, as there was after the <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="housing crash">housing crash</a> in 2008. Here’s a look at why the number of foreclosures we’re seeing today is nothing like the last time.
1. There Are Fewer Homeowners in Trouble
Today’s data shows that most homeowners are exiting their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The graph below depicts those <a href="https://www.mba.org/news-and-research/newsroom/news/2022/04/18/share-of-mortgage-loans-in-forbearance-decreases-to-1.05-in-march" target="_blank" title="findings">findings</a> from the Mortgage Bankers Association (MBA):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1652393562.jpg" width="1000" height="870" />
The same MBA report mentioned above estimates there are approximately 525,000 homeowners who remain in forbearance today. Thankfully, those people still have the chance to work out a suitable repayment plan with the servicing company that represents their lender.
2. Most Homeowners Have Enough Equity to Sell Their Homes
For those who are exiting the forbearance program without a plan in place, many will have enough <a href="https://www.mykcm.com/2022/03/21/the-average-homeowner-gained-more-than-55k-in-equity-over-the-past-year/" title="equity">equity</a> to sell their homes instead of facing foreclosures. Due to rapidly <a href="https://www.mykcm.com/2022/05/02/todays-home-price-appreciation-is-great-news-for-existing-homeowners/" title="rising home prices">rising home prices</a> over the last two years, the average homeowner has gained record amounts of <a href="https://www.mykcm.com/2022/04/08/do-you-know-how-much-equity-you-have-in-your-home-infographic/" title="equity">equity</a> in their home.
Marina Walsh, CMB, Vice President of Industry Analysis at MBA, <a href="https://www.mba.org/news-and-research/newsroom/news/2022/05/05/mortgage-delinquencies-decrease-in-the-first-quarter-of-2022" target="_blank" title="says">says</a>:
“Given the nation’s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, . . . Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.”
3. There Have Been Fewer Foreclosures over the Last Two Years
One of the seldom-reported benefits of the forbearance program was it gave homeowners facing difficulties an extra two years to get their finances in order and work out a plan with their lender. That helped prevent the foreclosures that normally would have come to the market had the new forbearance program not been available.
Even as people leave the forbearance program, there are still fewer foreclosures happening today than before the pandemic. That means, while there are more <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" target="_blank" title="foreclosures">foreclosures</a> now compared to last year (when foreclosures were paused), the number is still well below what the housing market has seen in a more typical year, like 2017-2019 (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1652393753.jpg" width="1000" height="870" />
4. The Current Market Can Easily Absorb New Listings
When the foreclosures in 2008 hit the market, they added to the oversupply of houses that were already for sale. It’s exactly the opposite today. The latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-slip-2-7-in-march" target="_blank" title="Existing Home Sales Report">Existing Home Sales Report</a> from the National Association of Realtors (NAR) reveals:
“Total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.”
A balanced market would have approximately a six-month supply of inventory. At 2.0 months, today’s <a href="https://www.mykcm.com/2022/05/06/2022-housing-market-forecast-infographic/" title="housing market">housing market</a> is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.
Bottom Line
If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years.
If you have questions, let’s connect to talk through the latest East San Diego market conditions and what they mean for you.2022-05-13T06:30:00-07:002022-05-12T15:34:12-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:19327Will Home Prices Fall This Year? Here’s What Experts Say.Many people are wondering: will <a href="https://www.mykcm.com/2022/03/03/are-home-prices-continuing-to-rise/" title="home prices">home prices</a> fall this year? Whether you’re a potential <a href="https://www.mykcm.com/2022/04/25/is-it-enough-to-offer-asking-price-in-todays-housing-market/" title="homebuyer">homebuyer</a>, <a href="https://www.mykcm.com/2022/05/04/your-house-could-be-closer-to-list-ready-than-you-think/" title="seller">seller</a>, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your East San Diego homeownership goals.
What’s Happening with Home Prices?
Home prices have seen <a href="https://www.nar.realtor/newsroom/existing-home-sales-slip-2-7-in-march" target="_blank" title="121 consecutive months">121 consecutive months</a> of year-over-year increases. CoreLogic <a href="https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/" target="_blank" title="says">says</a>:
“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”
So why are prices climbing so much? It’s because there are <a href="https://www.mykcm.com/2022/04/14/on-the-fence-of-whether-or-not-to-move-this-spring-consider-this/" title="more buyers">more buyers</a> than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory <a href="https://www.mykcm.com/2022/04/22/myths-about-todays-housing-market-infographic/" title="housing market">housing market</a>.
Where Do Experts Say Prices Will Go from Here?
Experts say the <a href="https://www.mykcm.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/" title="housing market">housing market</a> isn’t set up for a price decline due to that ongoing imbalance between <a href="https://www.mykcm.com/2022/04/01/its-still-a-sellers-market-infographic/" title="supply and demand">supply and demand</a>. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1652221205.jpg" width="1000" height="870" />
While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First American <a href="https://blog.firstam.com/economics/it-doesnt-take-much-house-price-appreciation-to-make-owning-a-better-choice-than-renting" target="_blank" title="explains">explains</a> it like this:
“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”
What Does That Mean for You?
The biggest takeaway is that none of the experts are projecting depreciation. If you’re a homeowner thinking about selling, the higher <a href="https://www.mykcm.com/2022/05/02/todays-home-price-appreciation-is-great-news-for-existing-homeowners/" title="price appreciation">price appreciation</a> over the last two years has been great for your home’s <a href="https://www.mykcm.com/2022/03/21/the-average-homeowner-gained-more-than-55k-in-equity-over-the-past-year/" title="value">value</a>, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will only cost you more in the long run because climbing <a href="https://www.mykcm.com/2022/04/20/how-to-approach-rising-mortgage-rates-as-a-buyer/" title="mortgage rates">mortgage rates</a> and rising <a href="https://www.mykcm.com/2022/04/07/the-future-of-home-price-appreciation-and-what-it-means-for-you/" title="home prices">home prices</a> will have an impact on your next home purchase. Freddie Mac <a href="https://money.yahoo.com/mortgage-rates-ris-214815105.html" target="_blank" title="says">says</a>:
“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”
Bottom Line
If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. Experts say prices will continue to appreciate this year. That means, if you’re ready, buying your next home in La Mesa, El Cajon, Jamul, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego before prices climb further may make the most financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.2022-05-11T06:44:00-07:002022-05-10T15:48:25-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:192592022 Housing Market Forecast For The Rest of The Year<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1651874881-min.jpg" />
What does the rest of the year hold for the housing market? Here’s what experts have to say about what lies ahead.
Home prices are projected to rise and so are mortgage rates. Experts are also forecasting another strong year for home sales as people move to meet their changing needs.
Let’s connect so you can make your best move in East San Diego this year.2022-05-07T06:38:00-07:002022-05-06T15:42:45-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18947Why This Housing Market Is Not a Bubble Ready to PopHomeownership has become a major element in achieving the American Dream. A recent report from the National Association of Realtors (NAR) finds that over <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-obstacles-to-home-buying-04-12-2022.pdf" target="_blank" title="86%">86%</a> of buyers agree homeownership is still the American Dream.
Prior to the 1950s, less than <a href="https://www2.census.gov/programs-surveys/decennial/tables/time-series/coh-owner/owner-tab.txt" target="_blank" title="half of the country">half of the country</a> owned their own home. However, after World War II, many returning veterans used the benefits afforded by the <a href="https://benefits.va.gov/gibill/" target="_blank" title="GI Bill">GI Bill</a> to purchase a home. Since then, the percentage of homeowners throughout the country has increased to the current rate of <a href="https://fred.stlouisfed.org/series/RHORUSQ156N" target="_blank" title="65.5%">65.5%</a>. That strong desire for homeownership has kept home values appreciating ever since. The graph below tracks <a href="http://www.econ.yale.edu/~shiller/data.htm" target="_blank" title="home price appreciation">home price appreciation</a> since the end of World War II:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1650579273.jpg" width="1000" height="870" />
The graph shows the only time home values dropped significantly was during the housing boom and bust of 2006-2008. If you look at how prices spiked prior to 2006, it looks a bit like the current spike in prices over the past two years. That may lead some people to be concerned we’re about to see a similar fall in home values as we did when the bubble burst. To help alleviate those worries, let’s look at what happened last time and what’s happening today.
What Caused the Housing Crash 15 Years Ago?
Back in 2006, foreclosures flooded the market. That drove down home values dramatically. The two main reasons for the flood of foreclosures were:
1. Many purchasers were not truly qualified for the mortgage they obtained, which led to more homes turning into foreclosures.
2. A number of homeowners cashed in the equity on their homes. When prices dropped, they found themselves in an underwater situation (where the home was worth less than the mortgage on the house). Many of these homeowners walked away from their homes, leading to more foreclosures. This lowered neighboring home values even more.
This cycle continued for years.
Why Today’s Real Estate Market Is Different
Here are two reasons today’s market is nothing like the one we experienced 15 years ago.
1. Today, Demand for Homeownership Is Real (Not Artificially Generated)
Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home. Today, purchasers and those refinancing a home face much higher standards from mortgage companies.
Data from the Urban Institute shows <a href="https://www.urban.org/policy-centers/housing-finance-policy-center/projects/housing-credit-availability-index" target="_blank" title="the amount of risk">the amount of risk</a> banks were willing to take on then as compared to now.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1650579338.jpg" width="1000" height="870" />
There’s always risk when a bank loans money. However, leading up to the housing crash 15 years ago, lending institutions took on much greater risks in both the person and the mortgage product offered. That led to mass defaults, foreclosures, and falling prices.
Today, the demand for homeownership is real. It’s generated by a re-evaluation of the importance of home due to a worldwide pandemic. Additionally, lending standards are much stricter in the current lending environment. Purchasers can afford the mortgage they’re taking on, so there’s little concern about possible defaults.
And if you’re worried about the number of people still in <a href="https://www.mykcm.com/2022/01/06/there-wont-be-a-wave-of-foreclosures-in-the-housing-market/" title="forbearance">forbearance</a>, you should know there’s no risk of that causing an upheaval in the housing market today. There won’t be a flood of foreclosures.
2. People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s
As mentioned above, when prices were rapidly escalating in the early 2000s, many thought it would never end. They started to borrow against the equity in their homes to finance new cars, boats, and vacations. When prices started to fall, many of these homeowners were underwater, leading some to abandon their homes. This increased the number of foreclosures.
Homeowners didn’t forget the lessons of the crash as prices skyrocketed over the last few years. Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has <a href="https://www.blackknightinc.com/wp-content/uploads/2022/02/BKI_MM_Dec2021_Report.pdf" target="_blank" title="more than doubled">more than doubled</a> compared to 2006 ($4.6 trillion to $9.9 trillion).
The latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="Homeowner Equity Insights">Homeowner Equity Insights</a> report from CoreLogic reveals that the average homeowner gained $55,300 in home equity over the past year alone. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://twitter.com/odetakushi/status/1508926031381553164" target="_blank" title="reports">reports</a>:
“Homeowners in Q4 2021 had an average of $307,000 in equity – a historic high.”
ATTOM Data Services also reveals that <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-equity-and-underwater-report/" target="_blank" title="41.9%">41.9%</a> of all mortgaged homes have at least 50% equity. These homeowners will not face an underwater situation even if prices dip slightly. Today, homeowners are much more cautious.
Bottom Line
The major reason for the housing crash 15 years ago was a tsunami of foreclosures. With much stricter mortgage standards and a historic level of homeowner equity, the fear of massive foreclosures impacting today’s East San Diego market is not realistic. Let's connect and I'd love to assist you win at buying or selling real estate.2022-04-22T06:26:00-07:002022-04-21T15:31:30-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18882Is It Time to Buy a Smaller Home?Life events can have a major impact on what you need from your home, and retirement is one of the biggest changes many of us face. This period of your life can mean doing more of the things you enjoy, like traveling, visiting with loved ones, or taking on new hobbies. But what does that mean for your home?
If you’re looking for ways to focus more on the important things in your life, the answer could be downsizing. A <a href="https://www.thebalance.com/home-downsizing-1798313" target="_blank" title="recent article">recent article</a> from The Balance talks about why it could be a great option, saying:
“There are many reasons to buy a smaller home—or to downsize from your present home—but sometimes, the idea that “less is more” is what propels homeowners to buy a smaller home.”
You Can Find the Right Home for Your Needs
The <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-home-buyers-and-sellers-generational-trends-03-23-2022.pdf" target="_blank" title="2022 Home Buyers and Sellers Generational Trends">2022 Home Buyers and Sellers Generational Trends</a> from the National Association of Realtors (NAR) provides more information on why people of retirement age choose to move. It shows the need for a smaller home, the desire to be closer to loved ones, and retirement itself as three of the top reasons homebuyers over the age of 55 make a move.
If you’re in this group, changing priorities may be top of mind for you today, and that could be driving your <a href="https://www.mykcm.com/2022/04/04/balancing-your-wants-and-needs-as-a-homebuyer-today/" title="decision">decision</a> to downsize. After all, as your lifestyle changes, what you need in your home likely changes, too.
Plus, as The Balance <a href="https://www.thebalance.com/home-downsizing-1798313" target="_blank" title="notes">notes</a>, moving into a smaller home can open your schedule up even more. When you downsize, you can spend less time <a href="https://www.mykcm.com/2022/03/31/there-are-several-great-reasons-to-consider-buying-a-condo-today/" title="maintaining">maintaining</a> your home and more time with the people you love or exploring newfound hobbies. That’s a recipe that can lead to less stress and <a href="https://www.mykcm.com/2022/02/01/why-a-move-could-bring-you-more-happiness-this-year/" title="increased happiness">increased happiness</a>.
Your Equity Can Make a Big Impact When You Downsize
<a href="https://www.mykcm.com/2022/03/21/the-average-homeowner-gained-more-than-55k-in-equity-over-the-past-year/" title="Home equity">Home equity</a> plays a big role when you sell your existing house and move. It could be a great tool to use to help you downsize. According to the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="Homeowner Equity Insights">Homeowner Equity Insights</a> report from CoreLogic, the average homeowner gained about $55,300 in equity over the past 12 months. Dr. Frank Nothaft, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/press-releases/number-of-u-s-homeowners-in-negative-equity-dropped-to-lowest-level-in-over-12-years-corelogic-reports/" target="_blank" title="explains">explains</a> how important price appreciation and equity gains are for existing homeowners:
“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth, . . . For low- and moderate-income homeowners, home equity has historically been a major source of wealth.”
As home prices rise, your <a href="https://www.mykcm.com/2022/04/08/do-you-know-how-much-equity-you-have-in-your-home-infographic/" title="equity">equity</a> does, too. So, you may have more equity than you realize because of the record levels of <a href="https://www.mykcm.com/2022/04/07/the-future-of-home-price-appreciation-and-what-it-means-for-you/" title="home price appreciation">home price appreciation</a> over the past year. Those equity gains could allow you to make a <a href="https://www.mykcm.com/2021/12/22/the-perks-of-putting-20-down-on-a-home/" title="larger down payment">larger down payment</a> on your next home. And putting more money down can lead to a smaller monthly mortgage payment, which can give you greater financial freedom. It can also be a significant help in navigating today’s <a href="https://www.mykcm.com/2022/02/23/how-supply-and-demand-can-impact-your-buying-and-selling-goals/" title="competitive">competitive</a> housing market, since offering more money up front could help your offer stand out.
Whatever your homeownership goals are, a trusted <a href="https://www.mykcm.com/2022/03/01/an-expert-advisor-will-give-you-the-best-advice-in-todays-market/" title="real estate advisor">real estate advisor</a> can help you to find the best option for your situation. They’ll help you <a href="https://www.mykcm.com/2022/04/14/on-the-fence-of-whether-or-not-to-move-this-spring-consider-this/" title="sell">sell</a> your current home and guide you as you buy your next one and enter this new phase of life.
Bottom Line
If you’ve recently retired or plan to soon, your needs are likely changing. That means now may be the perfect time to downsize. Let’s connect so we can work together to find a home in La Mesa, El Cajon, Jamul, Santee, Lakeside, Lemon Grove, Spring Valley or anywhere in East San Diego that matches your situation.2022-04-19T06:33:00-07:002022-04-18T15:36:16-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18835On the Fence of Whether or Not to Move in East San Diego This Spring? Consider This.If you’re thinking of <a href="https://www.mykcm.com/2022/03/14/this-spring-presents-sellers-with-a-golden-opportunity/" title="selling">selling</a> your East San Diego house, it may be because you’ve heard <a href="https://www.mykcm.com/2022/04/07/the-future-of-home-price-appreciation-and-what-it-means-for-you/" title="prices are rising">prices are rising</a>, listings are going fast, and sellers are getting <a href="https://www.mykcm.com/2022/03/10/how-to-navigate-a-market-where-multiple-offers-is-the-new-normal/" title="multiple offers">multiple offers</a> on their homes. But why are conditions so good for sellers today? And what can you <a href="https://www.mykcm.com/2022/03/24/what-you-can-expect-from-the-spring-housing-market/" title="expect">expect</a> when you move? To help answer both of those questions, let’s turn to the data.
Today, there are far more buyers looking for homes than sellers listing their houses. Here are the maps of the latest <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-02-realtors-confidence-index-03-18-2022.pdf" target="_blank" title="buyer and seller traffic">buyer and seller traffic</a> from the National Association of Realtors (NAR) to help paint the picture of what this looks like:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1649974417.jpg" width="1000" height="683" />
Notice how much darker the blues are on the left. This shows buyer traffic is strong today. In contrast, the much lighter blues on the right indicate weak or very weak seller traffic. In a nutshell, the demand for homes is significantly greater than what’s available to purchase.
What That Means for You
You have an incredible advantage when you <a href="https://www.mykcm.com/2022/03/18/spring-cleaning-checklist-for-sellers-infographic/" title="sell your house">sell your house</a> under these conditions. Since buyer demand is so high at a time when seller traffic is so low, there’s a good chance buyers will be competing for your house.
According to NAR, in February, the average home sold got <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-02-realtors-confidence-index-03-18-2022.pdf" target="_blank" title="4.8 offers">4.8 offers</a>. When buyers have to compete with one another like this, they’ll do everything they can to make their offer stand out. This could play to your favor and mean you’ll see things like waived <a href="https://www.mykcm.com/2021/10/25/knowledge-is-power-when-it-comes-to-appraisals-and-inspections/" title="contingencies">contingencies</a>, offers over asking price, <a href="https://www.mykcm.com/2022/04/05/what-you-need-to-budget-for-when-buying-a-home/" title="earnest money deposits">earnest money deposits</a>, and more. Selling when demand is high and supply is low sets you up for a big win.
If you’re also looking to buy a house in East San Diego, you may be tempted to focus more on just the seller traffic map and wonder if it means you’ll have trouble finding your <a href="https://www.mykcm.com/2022/04/04/balancing-your-wants-and-needs-as-a-homebuyer-today/" title="next home">next home</a>. But remember this: perspective is key. As Danielle Hale, Chief Economist at realtor.com, <a href="https://www.realtor.com/research/weekly-housing-trends-view-data-week-mar-12-2022/" target="_blank" title="says">says</a>:
“The limited number of homes for sale is a lesson in perspective. This same stat that frustrates would-be homebuyers also means that today’s home sellers enjoy more limited competition than last year’s home sellers.”
If you look at the big picture, the opportunity you have as a seller today is unprecedented. Last year was a hot <a href="https://www.mykcm.com/2022/04/01/its-still-a-sellers-market-infographic/" title="sellers’ market">sellers’ market</a>. This year, inventory is even lower, and that means an even bigger opportunity for you. Even though finding your next home in a market with <a href="https://www.mykcm.com/2022/02/24/the-1-reason-to-sell-your-house-today/" title="low inventory">low inventory</a> can be challenging, is that concern worth passing on some of the best conditions sellers have ever seen?
As added peace of mind, remember <a href="https://www.mykcm.com/2022/03/01/an-expert-advisor-will-give-you-the-best-advice-in-todays-market/" title="real estate professionals">real estate professionals</a> have been juggling this imbalance of supply and demand for nearly two years, and they know how to help both buyers and sellers find success when they move. A skilled agent can help you capitalize on the great opportunity you have as a seller today and guide you through the buying process until you find the perfect place to call your next home.
Bottom Line
If you’re ready to move in East San Diego, you have an incredible opportunity in front of you today. Trust the experts. Let’s connect so you have expertise on your side that can help you win when you sell and when you buy.2022-04-15T06:29:00-07:002022-04-14T15:34:52-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18774Using Your Tax Refund to Achieve Your Homeownership Goals This YearIf you’re buying or selling your East San Diego home this year, you’re likely saving up for a variety of <a href="https://www.mykcm.com/2022/04/05/what-you-need-to-budget-for-when-buying-a-home/" title="expenses">expenses</a>. For buyers, that might include things like your <a href="https://www.mykcm.com/2022/03/02/down-payment-assistance-programs-can-help-you-achieve-homeownership/" title="down payment">down payment</a> and closing costs. And for sellers, you’re probably working on a bit of spring cleaning and maintenance to spruce up your house before you list it.
Either way, any money you get back from your taxes can help you achieve your goals. Using a tax refund is a common tactic for buyers and sellers. According to SmartAsset, the average tax refund that Californians will receive this year is $2,921. Please see map below:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1649715021.jpg" />
If you’re getting a refund this year, here are a few tips to help with your home purchase or sale this season.
How Buyers Can Use Their Tax Refund
According to <a href="https://www.americanfinancing.net/lifestyle/ways-to-use-tax-refund-for-homeownership" target="_blank" title="American Financing">American Financing</a>, there are multiple ways your refund check can help you as a <a href="https://www.mykcm.com/2022/03/16/are-you-wondering-if-this-is-the-year-to-buy-a-home/" title="homebuyer">homebuyer</a>. A few include:
Growing your down payment fund – If you haven’t started saving for your <a href="https://www.mykcm.com/2022/01/03/how-much-do-you-need-for-your-down-payment/" title="down payment">down payment</a>, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your <a href="https://www.mykcm.com/2021/12/22/the-perks-of-putting-20-down-on-a-home/" title="goal">goal</a>.
Paying for your home inspection – Your <a href="https://www.mykcm.com/2022/01/28/why-your-home-inspection-matters-infographic/" title="home inspection">home inspection</a> can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your <a href="https://www.mykcm.com/2021/01/26/whats-the-difference-between-an-appraisal-and-a-home-inspection/" title="inspection">inspection</a>, and it’s definitely worth the investment.
Saving for closing costs – <a href="https://www.mykcm.com/2022/03/15/dont-get-caught-off-guard-by-closing-costs/" title="Closing costs">Closing costs</a> are additional expenses you’ll need to pay once it’s time to close. They <a href="https://myhome.freddiemac.com/buying/understanding-costs" target="_blank" title="average">average</a> anywhere between 2-5% of the purchase price of your home.
This list is a great start, but it isn’t exhaustive of all the costs you may encounter as you set out on your <a href="https://www.mykcm.com/2022/03/22/the-many-benefits-of-homeownership/" title="homebuying journey">homebuying journey</a>. The best way to prepare is to work with a trusted real estate professional to make sure you understand what’s to come in the process.
How Sellers Can Use Their Tax Refund
If you own a home and are planning to <a href="https://www.mykcm.com/2022/03/14/this-spring-presents-sellers-with-a-golden-opportunity/" title="sell this spring">sell this spring</a>, your tax refund can help you make sure your home is <a href="https://www.mykcm.com/2022/03/18/spring-cleaning-checklist-for-sellers-infographic/" title="ready to list">ready to list</a>. Here are a few ways current homeowners can put their tax refund to good use:
Making small upgrades – <a href="https://www.nerdwallet.com/article/taxes/smart-ways-to-spend-your-tax-return" target="_blank" title="NerdWallet">NerdWallet</a> provides a list of great ways to use your tax refund, including tackling small projects or boosting your curb appeal to help your home stand out.
Making repairs – If there’s anything in your house that needs to be fixed, <a href="https://www.americanfinancing.net/lifestyle/ways-to-use-tax-refund-for-homeownership" target="_blank" title="American Financing">American Financing</a> notes that completing repairs is another great use of that money.
Buying your next home – Whether you’re selling to <a href="https://www.mykcm.com/2022/02/28/millennials-do-you-need-a-home-with-more-space/" title="move up">move up</a> or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home.
Of course, it’s important to talk with your trusted real estate advisor before taking on any projects. I’ll make sure you can focus on areas that’ll help you receive the best possible price when you sell.
Bottom Line
Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. Your tax refund can help you reach your goals. Let’s connect to discuss how you can start on your real estate journey here in East San Diego.2022-04-12T06:30:00-07:002022-04-11T15:33:39-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18465What You Can Expect from the Spring Housing MarketAs the spring housing market kicks off, you likely want to know what you can expect this season when it comes to <a href="https://www.mykcm.com/2022/03/16/are-you-wondering-if-this-is-the-year-to-buy-a-home/" title="buying">buying</a> or <a href="https://www.mykcm.com/2022/03/14/this-spring-presents-sellers-with-a-golden-opportunity/" title="selling">selling</a> a house in East San Diego. While there are multiple factors causing some uncertainty, including the conflict overseas, rising <a href="https://www.mykcm.com/2022/01/11/why-inflation-shouldnt-stop-you-from-buying-a-home-in-2022/" title="inflation">inflation</a>, and the first rate increase from the Federal Reserve in <a href="https://www.wsj.com/livecoverage/federal-reserve-meeting-inflation-march-2022" target="_blank" title="over three years">over three years</a> — the housing market seems to be relatively immune.
Here’s a look at what experts say you can expect this spring.
1. Mortgage Rates Will Climb
Freddie Mac <a href="https://freddiemac.gcs-web.com/node/24936/pdf" target="_blank" title="reports">reports</a> the 30-year fixed mortgage rate has increased by more than a full point in the past six months. And despite some mild <a href="https://www.mykcm.com/2022/03/08/how-global-uncertainty-is-impacting-mortgage-rates/" title="fluctuation">fluctuation</a> in recent weeks, experts believe rates will continue to edge up over the next 90 days. As Freddie Mac <a href="https://freddiemac.gcs-web.com/node/25001/pdf" target="_blank" title="says">says</a>:
“The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”
If you’re a first-time buyer or a seller thinking of moving to a home that better fits your needs, realize that waiting will likely mean you’ll pay a higher mortgage rate on your purchase. And that higher rate drives up your monthly payment and can really add up over the life of your loan.
2. Housing Inventory Will Increase
There may be some relief coming for buyers searching for a home to purchase. <a href="https://www.realtor.com/research/data/" target="_blank" title="Realtor.com">Realtor.com</a> recently reported that the number of <a href="https://www.mykcm.com/2022/03/17/did-your-dream-home-just-come-on-the-market/" title="newly listed homes">newly listed homes</a> has grown for each of the last two months. Also, the National Association of Realtors (NAR) just announced the <a href="https://www.nar.realtor/newsroom/existing-home-sales-fade-7-2-in-february" target="_blank" title="months’ supply">months’ supply</a> of inventory increased for the first time in <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-02-2022-overview-2022-03-18.pdf" target="_blank" title="eight months">eight months</a>. The inventory of existing homes usually grows every spring, and it seems, based on recent activity, the next 90 days could bring more listings to the market.
If you’re a buyer who has been frustrated with the limited supply of homes available for sale, it looks like you could find some relief this spring. However, be prepared to act quickly if you find the right home.
If you’re a seller, listing now instead of waiting for this additional competition to hit the market makes sense. Your leverage in any negotiation during the sale will be impacted as additional homes come to market.
3. Home Prices Will Rise
Prices are always determined by supply and demand. Though the number of homes entering the market is increasing, <a href="https://www.showingtime.com/blog/january-2022-showing-index-results" target="_blank" title="buyer demand">buyer demand</a> remains very strong. As realtor.com explains in their most recent <a href="https://news.move.com/2022-03-03-Realtor-com-R-February-Housing-Report-Home-Prices-Hit-All-Time-High-Ahead-of-Spring-Buying-Season" target="_blank" title="Housing Report">Housing Report</a>:
“During the final two weeks of the month, more new sellers entered the market than during the same time last year. . . . However, with 5.8 million new homes missing from the market and millions of millennials at first-time buying ages, housing supply faces a long road to catching up with demand.”
What does that mean for you? With the demand for housing still outpacing supply, <a href="https://www.mykcm.com/2022/03/03/are-home-prices-continuing-to-rise/" title="home prices">home prices</a> will continue to appreciate. Many experts believe the level of appreciation will decelerate from the high double-digit levels we’ve seen over the last two years. That means prices will continue to climb, just at a more moderate pace. Most experts are predicting home prices will not depreciate.
Won’t Increasing Mortgage Rates Cause Home Prices to Fall?
While some people may believe a 1% increase in mortgage rates will impact demand so dramatically that home prices will have to fall, experts say otherwise. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, <a href="https://themreport.com/daily-dose/03-09-2022/expert-insights-inventory-levels-fed-rates-more" target="_blank" title="says">says</a>:
“What I will caution against is making the inference that interest rates have a direct impact on house prices. That is not true.”
Freddie Mac studied the impact that mortgage rates increasing by at least 1% has had on home prices in the past. Here are the results of <a href="http://www.freddiemac.com/research/insight/20180223_increasing_mortgage_rates.page" target="_blank" title="that study">that study</a>:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1648162176.jpg" width="1000" height="870" />
As the chart shows, mortgage rates jumped by at least 1% six times in the last thirty years. In each case, home values increased.
So again, if you’re a first-time buyer or a repeat buyer, waiting to buy likely means you’ll pay more for a home later in the year (as compared to its current value).
Bottom Line
There are three things that seem certain going into the spring housing market:
Mortgage rates will continue to rise
The selection of homes available for sale will modestly improve
Home prices will continue to appreciate, just at a slightly slower pace
If you’re thinking of buying, act now before mortgage rates and home prices increase further. If you’re thinking of selling, your best bet may be to sell soon so you can beat the increase in competition that’s about to come to the East San Diego market. Contact me today so that I can help you make an informed decision before you make your move.2022-03-25T06:55:00-07:002022-03-24T15:59:13-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18192How Global Uncertainty Is Impacting Mortgage RatesIf you’re thinking about <a href="https://www.mykcm.com/2022/02/21/real-estate-voted-the-best-investment-eight-years-in-a-row/" title="buying">buying</a> or <a href="https://www.mykcm.com/2022/02/24/the-1-reason-to-sell-your-house-today/" title="selling">selling</a> a home in East San Diego, you’ll want to keep a pulse on what’s happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year. And just a few weeks ago, the 30-year fixed mortgage rate from <a href="https://www.freddiemac.com/pmms/archive" target="_blank" title="Freddie Mac">Freddie Mac</a> approached 4% for the first time since <a href="https://freddiemac.gcs-web.com/node/24906/pdf" target="_blank" title="May of 2019">May of 2019</a>. But that climb has dropped slightly over the past few weeks (see graph below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1646781550.jpg" width="1000" height="870" />
The recent decline in mortgage rates is primarily due to growing uncertainty around geopolitical tensions surrounding Russia and Ukraine. But experts say it’s to be expected.
Here’s a look at how industry leaders are explaining the impact global uncertainty has on mortgage rates:
Odeta Kushi, Deputy Chief Economist at First American, <a href="https://www.housingwire.com/articles/ukraine-conflict-could-lead-to-lower-mortgage-rates-in-short-term/" target="_blank" title="says">says</a>:
“While mortgage rates trended upward in 2022, one unintended side effect of global uncertainty is that it often results in downward pressure on mortgage rates.”
In <a href="https://nationalmortgageprofessional.com/news/russia-ukraine-conflict-may-dampen-us-mortgage-rates" target="_blank" title="another interview">another interview</a>, Kushi adds:
“Geopolitical events play an important role in impacting the long end of the yield curve and mortgage rates. For example, in the weeks following the ‘Brexit’ vote in 2016, the U.S. Treasury bond yield declined and led to a corresponding decline in mortgage rates.”
Kushi’s insights are a reminder that, historically, economic uncertainty can impact the <a href="https://www.mykcm.com/2022/02/02/the-top-indicator-if-you-want-to-know-where-mortgage-rates-are-heading/" title="10-year treasury yield">10-year treasury yield</a> – which has a long-standing relationship with mortgage rates and is often considered a leading indicator of where rates are headed. Basically, events overseas can have an impact on mortgage rates here, and that’s what we’re seeing today.
Will Mortgage Rates Stay Down?
While no one has a crystal ball to predict exactly what will happen with rates in the future, experts agree this slight decline is temporary. Sam Khater, Chief Economist at Freddie Mac, echoes Kushi’s sentiment, but <a href="https://freddiemac.gcs-web.com/node/24976/pdf" target="_blank" title="adds">adds</a> that the decline in rates won’t last:
“Geopolitical tensions caused U.S. Treasury yields to recede this week . . . leading to a drop in mortgage rates. While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.”
Rates will likely fluctuate in the short-term based on what’s happening globally. But before long, experts project rates will renew their climb. If you’re in the market to buy a home, doing so before rates start to rise again may be your most affordable option.
Bottom Line
Mortgage rates are an important piece of the puzzle because they help determine how much you’ll owe on your monthly mortgage payment in your next home. Let’s connect so you have <a href="https://www.mykcm.com/2022/03/01/an-expert-advisor-will-give-you-the-best-advice-in-todays-market/" title="up-to-date information">up-to-date information</a> on rates and trusted advice on how to time your next move in East San Diego.2022-03-09T08:42:00-07:002022-03-08T16:44:26-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18144Supply and Demand in Today’s East San Diego Market<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1646435476-min.jpg" width="1046" height="2715" />
Today’s East San Diego housing market is the direct result of low supply and high buyer demand. Here’s what that means for you and your plans to buy or sell.
For buyers, expect competition, be ready to move fast, and be prepared to submit your strongest offer. For sellers, know your house will be the center of attention and that it’ll likely sell quickly and get multiple offers.
If you’re ready to move, let’s connect to talk about how you can take advantage of today’s unprecedented housing market.2022-03-05T08:27:00-07:002022-03-04T16:37:21-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18101Are East San Diego Home Prices Continuing to Rise?Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn’t happened. The major price indices are all revealing ongoing double-digit price appreciation. Here’s a look at their reports on year-over-year price appreciation for December:
<a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/HPI_2021Q4.pdf" target="_blank" title="Federal Housing Finance Agency">Federal Housing Finance Agency</a> (FHFA): 17.6%
<a href="http://www.spglobal.com/spdji/en/documents/indexnews/announcements/20220222-1450062/1450062_cshomeprice-release-0222.pdf" target="_blank" title="S&amp;P Case-Shiller">S&P Case-Shiller</a>: 18.8%
<a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" target="_blank" title="CoreLogic">CoreLogic</a>: 18.5%
To show that they’re not seeing signs of softening, here’s a graph that gives the progression of all three indices for each month of 2021.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1646349070.jpg" width="1000" height="870" />
As the graph above reveals, last year, home price appreciation accelerated dramatically from January to July according to all three indices. Then, it began to decelerate in August when prices appreciated at a slower pace, but it didn’t decline. Many thought that would be the beginning of a rapid slowdown in the level of home price appreciation, but as the data shows, that wasn’t the case. Instead, prices began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December.
To clarify, deceleration is not the same as depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month. Deceleration means home values continue to rise but at a slower pace of year-over-year appreciation. Depreciation means prices drop below current values. No one is forecasting that to happen.
In fact, the FHFA revealed that price appreciation accelerated in December in six of the nine regions it tracks. Case Shiller showed that appreciation accelerated in 15 of the 20 metros they report on. As Selma Hepp, Deputy Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/buy-stories/us-sp-corelogic-case-shiller-index-holds-steady-up-18-8-in-december-unchanged-from-november/" target="_blank" title="explains">explains</a>:
“After some signs of slowing home price growth . . . monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel.”
What Does This Mean for You?
Whether you’re a first-time purchaser or someone looking to sell your current East San Diego house and buy a home that better fits your needs, waiting to decide what to do will cost you in two ways:
Mortgage rates are <a href="https://www.nytimes.com/2022/02/18/your-money/home-buying-mortgages.html" target="_blank" title="forecast">forecast</a> to rise this year.
Home prices should continue to appreciate at double-digit levels for some time.
If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your monthly mortgage payment.
Bottom Line
Maybe the best thing to do is listen to the <a href="https://money.yahoo.com/mortgage-rates-ris-214815105.html" target="_blank" title="advice">advice</a> of Len Kiefer, Deputy Chief Economist at Freddie Mac:
“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”2022-03-04T08:17:00-07:002022-03-03T16:20:08-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:18061An Expert Advisor Will Give You the Best Advice in Today’s MarketHaving an experienced guide coaching you through the process of buying or selling a home is important in a normal market – but today’s market is far from normal. As a result, an expert real estate advisor isn’t just good to have by your side, they’re essential.
Today’s East San Diego housing market is full of extremes. Experts project <a href="https://www.mykcm.com/2022/02/02/the-top-indicator-if-you-want-to-know-where-mortgage-rates-are-heading/" title="mortgage rates">mortgage rates</a> will continue to rise this year, and that’s driving <a href="https://www.mykcm.com/2022/02/16/more-people-are-planning-to-buy-a-home-soon/" title="significant demand">significant demand</a> for homes as buyers want to make their purchases before rates climb even higher. At the same time, an absence of sellers is leading to record-low <a href="https://www.mykcm.com/2022/01/20/buyers-want-to-know-why-is-housing-supply-still-so-low/" title="housing inventory">housing inventory</a>. This imbalance in supply and demand is creating bidding wars and driving <a href="https://www.mykcm.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/" title="home price appreciation">home price appreciation</a> as well as considerable gains in <a href="https://www.mykcm.com/2021/12/21/the-average-homeowner-gained-56700-in-equity-over-the-past-year/" title="home equity">home equity</a>.
These market conditions can feel overwhelming, but you don’t have to go at it alone. Having a trusted expert to coach you through the process of buying or selling a home gives you clarity and confidence through each step.
Here are just a few of the ways a real estate expert is invaluable:
Contracts – Agents help with the disclosures and contracts necessary in today’s heavily regulated environment.
Experience – In an unprecedented market, experience is crucial. Real estate professionals know the entire sales process, including how it’s changed over the past two years.
Negotiations – Your real estate advisor acts as a buffer in negotiations with all parties throughout the entire transaction and advocates for your best interests.
Education – Knowledge is power in today’s market, and your advisor will simply and effectively explain market conditions and translate what they mean for you.
Pricing – Finally, a real estate professional understands today’s real estate values when setting the price of your home or helping you make an offer to purchase one.
A real estate agent is a crucial guide through this unprecedented market, but not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding an expert real estate advisor – not just any agent – should be your top priority when you’re ready to buy or sell a home.
What’s the key to choosing the right expert?
It starts with trust. You’ll want to know you can trust the advice they’re giving you, so you need to make sure you’re connected with a true professional. No one can provide perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in today’s unique market. But a true professional can give you the best possible advice based on the information and situation at hand. They’ll help you make the necessary adjustments along the way, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions. That’s exactly what you want and deserve.
Bottom Line
It’s critical to have an expert on your side who’s well versed in navigating today’s rapidly changing market. If you’re planning to buy or sell a home in East San Diego this year, let’s connect so you have a real estate professional on your side to give you the best advice and guide you along the way.
2022-03-02T08:07:00-07:002022-03-01T16:16:17-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:178574 Simple Graphs Showing Why This Is Not a Housing BubbleA <a href="https://magazine.realtor/daily-news/2022/02/03/77-of-consumers-believe-we-re-in-a-housing-bubble" target="_blank" title="recent survey">recent survey</a> revealed that many consumers believe there’s a housing bubble beginning to form. That feeling is understandable, as year-over-year home price appreciation is still in the double digits. However, this market is very different than it was during the housing crash 15 years ago. Here are four key reasons why today is nothing like the last time.
1. Houses Are Not Unaffordable Like They Were During the Housing Boom
The affordability formula has three components: the price of the home, wages earned by the purchaser, and the mortgage rate available at the time. Conventional lending standards say a purchaser should not spend more than <a href="https://myhome.freddiemac.com/buying/what-can-you-afford" target="_blank" title="28%">28%</a> of their gross income on their mortgage payment.
Fifteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased, and the mortgage rate, even after the recent spike, is still well below 6%. That means the average purchaser today pays less of their monthly income toward their mortgage payment than they did back then.
In the latest <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-affordability-report/" target="_blank" title="Affordability Report">Affordability Report</a> by ATTOM Data, Chief Product Officer Todd Teta addresses that exact point:
“The average wage earner can still afford the typical home across the U.S., but the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward.”
Affordability isn’t as strong as it was last year, but it’s much better than it was during the boom. Here’s a chart showing that difference:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1645139419.jpg" width="1000" height="870" />
If costs were so prohibitive, how did so many homes sell during the housing boom?
2. Mortgage Standards Were Much More Relaxed During the Boom
During the housing bubble, it was much easier to get a mortgage than it is today. As an example, let’s review the number of mortgages granted to purchasers with credit scores under 620. According to <a href="https://credit.org/blog/what-is-a-good-credit-score-infographic/" target="_blank" title="credit.org">credit.org</a>, a credit score between 550-619 is considered poor. In defining those with a score below 620, they explain:
“Credit agencies consider consumers with credit delinquencies, account rejections, and little credit history as subprime borrowers due to their high credit risk.”
Buyers can still qualify for a mortgage with a credit score that low, but they’re considered riskier borrowers. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the 14 years since.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1645139479.jpg" width="1000" height="870" />
Mortgage standards are nothing like they were the last time. Purchasers that acquired a mortgage over the last decade are much more qualified. Let’s take a look at what that means going forward.
3. The Foreclosure Situation Is Nothing Like It Was During the Crash
The most obvious difference is the number of homeowners that were facing foreclosure after the housing bubble burst. The Federal Reserve issues a <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" target="_blank" title="report">report</a> showing the number of consumers with a new foreclosure notice. Here are the numbers during the crash compared to today:
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1645139511.jpg" width="1000" height="870" />
There’s no doubt the 2020 and 2021 numbers are impacted by the forbearance program, which was created to help homeowners facing uncertainty during the pandemic. However, there are fewer than 800,000 homeowners left in the program today, and most of those will be able to work out a repayment plan with their banks.
Rick Sharga, Executive Vice President of RealtyTrac, <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-november-2021-u-s-foreclosure-market-report/" target="_blank" title="explains">explains</a>:
“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect.”
Why are there so few foreclosures now? Today, homeowners are equity rich, not tapped out.
In the run-up to the housing bubble, some homeowners were using their homes as personal ATM machines. Many immediately withdrew their equity once it built up. When home values began to fall, some homeowners found themselves in a negative equity situation where the amount they owed on their mortgage was greater than the value of their home. Some of those households decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area.
Homeowners, however, have learned their lessons. Prices have risen nicely over the last few years, leading to <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-equity-and-underwater-report/" target="_blank" title="over 40%">over 40%</a> of homes in the country having more than 50% equity. But owners have not been tapping into it like the last time, as evidenced by the fact that national tappable equity has increased to a record <a href="https://www.blackknightinc.com/wp-content/uploads/2022/02/BKI_MM_Dec2021_Report.pdf" target="_blank" title="$9.9 trillion">$9.9 trillion</a>. With the average home equity now standing at <a href="https://twitter.com/odetakushi/status/1471125050199883783" target="_blank" title="$300,000">$300,000</a>, what happened last time won’t happen today.
As the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="Homeowner Equity Insights">Homeowner Equity Insights</a> report from CoreLogic explains:
“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”
There will be nowhere near the same number of foreclosures as we saw during the crash. So, what does that mean for the housing market?
4. We Don’t Have a Surplus of Homes on the Market – We Have a Shortage
The supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation. As the next graph shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing the acceleration in home values to continue.
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1645139605.jpg" width="1000" height="870" />
Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a shortage of homes for sale.
Bottom Line
If you’re worried that we’re making the same mistakes that led to the housing crash, the graphs above show data and insights to help alleviate your concerns. Let’s connect so that I can help you make an informed decision in making a move in East San Diego.2022-02-18T08:18:00-07:002022-02-17T16:26:27-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:17691How Remote Work Impacts Your Home Search<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1644016168-min.jpg" width="1046" height="2565" />
If your workplace is delaying its return to office plans or is allowing permanent work from home options, that may open up new possibilities for your home search.
Ongoing remote work could give you the chance for a change in scenery, a move to an area with a lower cost of living, or finding a home with more home office space.
If you want to learn more about how remote work can give you more options, let’s connect to discuss your situation and priorities for your home search in East San Diego.2022-02-05T08:22:00-07:002022-02-04T16:28:59-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:17671Millions of Americans Have Discovered the Benefits of Multigenerational HouseholdsIf your needs are changing, you may be thinking about sharing a home with additional loved ones, such as grandparents, adult children, or other extended family members. Whether it’s for financial or health-related circumstances, or simply because you’ve reached a new phase of life, you might be wondering if living with multiple generations under the same roof is a good move for you. Many people have found themselves in a similar situation and they’ve already made the choice to live in a <a href="https://www.mykcm.com/2021/04/09/multigenerational-housing-is-gaining-momentum-infographic/" title="multigenerational home">multigenerational home</a>.
What Is a Multigenerational Home?
The <a href="https://www.pewresearch.org/fact-tank/2018/04/05/a-record-64-million-americans-live-in-multigenerational-households/" target="_blank" title="Pew Research Center">Pew Research Center</a> defines a multigenerational household as a home with two or more adult generations. They include households with grandparents and grandchildren under the age of 25. As you weigh your options and decide if multigenerational living is right for you, here’s some helpful information highlighted by other homeowners living with additional loved ones.
The Benefits of Multigenerational Living
A recent <a href="https://www.gu.org/app/uploads/2021/04/21-MG-Family-Report-WEB.pdf" target="_blank" title="report">report</a> from Generations United surveyed individuals living in a multigenerational setting and asked them about the key benefits of this housing arrangement. It says:
“Nearly all Americans who live in a multigenerational household (98%) feel their household functions successfully, citing various aspects of home design, family relationships and interactions, and supports and services influencing their success.”
The study identifies some of the top benefits of this lifestyle as an improved financial situation, better mental and physical health, strengthened bonds with loved ones, and more (see chart below):
<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1643929759.jpg" width="1000" height="870" />
Those are just some of the reasons why most people who decide to live in this situation find it worthwhile. As Donna Butts, Executive Director at Generations United, says:
“Families may come together from need, but they are staying together by choice. Indeed, more than 7 in 10 (72 percent) of those currently living in a multigenerational household plan to continue doing so long-term.”
With More Adults Living Under One Roof, You May Need More Space
If you decide to look for a multigenerational home, it’s important to understand what everyone will need to make the arrangement work to its fullest. Something that often makes the top of the list for homeowners living with multiple generations is additional <a href="https://www.mykcm.com/2021/12/23/when-a-house-becomes-a-home/" title="space">space</a> for privacy. This could mean more bedrooms and bathrooms or features like an in-law suite or a basement.
If you’re realizing your current house doesn’t provide the room you need for multigenerational living, an expert real estate advisor can help you navigate the process to find the right home that works for you and your loved ones.
Bottom Line
Living in a multigenerational household has real and impactful benefits. If you’re interested in learning more about these options here in East San Diego, let’s connect so you can find a home that fits your changing needs.2022-02-04T08:14:00-07:002022-02-03T16:20:01-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:17411Why a Move in East San Diego Could Bring You More Happiness This YearOver the past two years, we’ve lived through one of the most stressful periods in recent history. Because of the health crisis, many of us have spent more time at home and that’s led us to re-evaluate both what we need in a house and how much we appreciate having a safe space. If you’ve found your current home isn’t filling all your needs, you may be wondering if it’s time to find a new one.
There’s reason to believe a change of scenery could boost your happiness. Catherine Hartley, an Assistant Professor at New York University’s Department of Psychology and co-author of a study on how new experiences impact happiness, <a href="https://www.nyu.edu/about/news-publications/news/2020/may/new-and-diverse-experiences-linked-to-enhanced-happiness--new-st.html" target="_blank" title="says">says</a>:
“Our results suggest that people feel happier when they have more variety in their daily routines—when they go to novel places and have a wider array of experiences.”
A move could be exactly the new experience you’ve been looking for. If that’s something you’re considering to better your lifestyle, here are a few things to keep in mind.
Approach Your Decision Thoughtfully and Explore Your Options
Buying and selling a home is a major life change, and it’s not a decision you should enter lightly. But, if you’re questioning whether or not a move would bring you more happiness, it’s important to explore if it’s the right choice for you.
To find out more and discuss your options, reach out to a local real estate professional. They’ll explain the process – including how to list your existing house and search for a new one – in clear and simple terms.
You should also think about your lifestyle and what you’re hoping to get out of your move. What needs aren’t being met in your current home? What features would bring you more joy and make your life easier? For example, are you now working remotely and need a home office? Do you crave more fresh air and open outdoor space to unwind in? Knowing the answers to these questions can help you <a href="https://www.mykcm.com/2022/01/07/how-to-hit-your-homebuying-goals-this-year-infographic/" title="get started">get started</a> and position your real estate advisor to work with you so you can find just the right home.
Consider a Location with Weather That Will Boost Your Mood
Home features aren’t the only thing to consider. You should also weigh your options when it comes to location. Is the weather something that’s important to you? Does it have a tendency to impact your mood? If it does, you may want to factor it into your next move. The World Population Review <a href="https://worldpopulationreview.com/state-rankings/states-with-the-best-weather" target="_blank" title="shares">shares</a>:
“What states have the best weather? When evaluating each state for temperature, rain, and sun, some states stand out. . . . Climate and weather preferences are personal and subjective. . . . “
Better weather can mean different things to different people. Some prefer the heat, others cooler temperatures, and some want to experience all four seasons. Think about what makes you feel happiest and prioritize that in your home search. If you’re moving to a whole new location, your agent is a great resource with a strong network to support you along the way.
Bottom Line
Moving could provide you with a fresh beginning and the chance to find happiness in your new home. Let’s connect today to talk about your goals and options in the current East San Diego market.2022-02-02T08:31:00-07:002022-02-01T16:36:00-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:17309Are You a Homeowner Thinking About Climate Change?Americans are more aware than ever of the effects climate change and natural disasters can have on their homes. According to a <a href="https://www.realtor.com/news/trends/natural-disasters-affecting-homebuyer-decisions/" target="_blank" title="report">report</a> from realtor.com:
“More than 3 in 4 recent buyers, 78%, took [natural disasters] into account when choosing the locations of their homes, . . .”
The <a href="https://www.realtor.com/research/homeowners-concerned-natural-disasters/" target="_blank" title="study">study</a> also found that many existing homeowners (34%) have already considered selling their houses and moving to a new location because of the changing climate. If you’re like those homeowners and are weighing your options about what to do next, here’s some information to keep in mind as you begin the process of selling your existing house and searching for your new home.
Do Your Research and Work with a Real Estate Advisor to Find a Home That Meets Your Needs
As a homeowner, it’s impossible to control what types of weather events your home is exposed to. As Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy for CoreLogic, <a href="https://www.corelogic.com/intelligence/how-is-climate-change-affecting-real-estate/" target="_blank" title="says">says</a>:
“You can’t necessarily remove the location from around you, but there are things you can do to mitigate damage that can happen.”
The first step is understanding how to navigate your home sale and purchase with these specific issues in mind. While that can seem like a difficult undertaking at first, with the appropriate resources and <a href="https://www.mykcm.com/2021/12/30/why-selling-your-house-with-a-real-estate-professional-is-essential/" title="experts">experts</a> on your side, you can simplify the process.
<a href="https://themortgagereports.com/64590/home-buying-during-climate-change-expert-advice-and-climate-change-maps" target="_blank" title="The Mortgage Reports">The Mortgage Reports</a> provides some tips for purchasing your next house, including, but not limited to:
Vetting the location before you buy
Researching Climate Action Plans and learning if the city or state has one
Working with professionals for additional assessments on the home’s ability to withstand natural disasters
Ultimately, your best resource throughout the process is a trusted real estate professional. An agent will help you navigate the sale and required disclosures for your existing home, be your expert advisor on local guidelines and information, and keep your goals and concerns top of mind. Even if your advisor doesn’t have the answers to all your questions about how your next home will stand up to natural disasters, they can help connect you with experts and resources who will.
Bottom Line
If you’re becoming more mindful about the effects of climate change and you’re ready to make a move, you’re not alone. Let’s connect so you have a trusted advisor on your side to help you navigate the sale of your current house and find the perfect spot for your next home.2022-01-27T08:15:00-07:002022-01-26T16:17:39-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:16994There Won’t Be a Wave of Foreclosures in the Housing MarketWhen mortgage forbearance plans were first announced and the pandemic surged through the country in early 2020, many homeowners were allowed to pause their mortgage payments. Some analysts were concerned that once the forbearance program ended, the housing market would experience a wave of foreclosures like what happened after the housing bubble 15 years ago.
Here’s a look at why that isn’t the case.
1. There Are Fewer Homeowners in Trouble This Time
After the last housing crash, <a href="https://economics.cmail20.com/t/ViewEmail/d/6DD5AA0E9F6529292540EF23F30FEDED/5323CD85A2087AFD22947492D9797BBC" target="_blank" title="over nine million">over nine million</a> households lost their homes to a foreclosure, short sale, or because they gave it back to the bank. Many believed millions of homeowners would face the same fate again this time.
However, today’s data shows that most homeowners exited their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The <a href="https://www.mba.org/2021-press-releases/december/mba-loan-monitoring-survey-share-of-mortgage-loans-in-forbearance-decreases-to-167-percent" target="_blank" title="latest data">latest data</a> from the Mortgage Bankers Association (MBA) studies how people exited the forbearance program from June 2020 to November 2021.
Here are those findings:
· 38.6% left the program paid in full
19.9% made their monthly payments during the forbearance period
11.8% made up all past-due payments
6.9% paid off the loan in full
29.1% received a loan deferral
14.1% received a loan modification
0.8% arranged a different repayment plan
· 44% negotiated work-out repayment plans
· 0.6% sold as a <a href="https://www.investopedia.com/terms/r/real-estate-short-sale.asp" target="_blank" title="short sale">short sale</a> or did a <a href="https://www.investopedia.com/terms/d/deed_in_lieu_of_foreclosure.asp" target="_blank" title="deed-in-lieu">deed-in-lieu</a>
· 16.8% left the program still in trouble and without a loss mitigation plan in place
2. Those Left in the Program Can Still Negotiate a Repayment Plan
As of last Friday, the total number of mortgages still in forbearance stood at <a href="https://www.blackknightinc.com/blog-posts/forbearance-plan-exits-slow-enter-year-end-plateau/" target="_blank" title="890,000">890,000</a>. Those who remain in forbearance still have the chance to work out a suitable plan with the servicing company that represents their lender. And the servicing companies are under pressure to do just that by both federal and state agencies.
Rick Sharga, Executive Vice President at RealtyTrac, says in a <a href="https://twitter.com/ricksharga/status/1474138451465289739" target="_blank" title="recent tweet">recent tweet</a>:
“The [Consumer Financial Protection Bureau] and state [Attorneys General] look like they’re adopting a ‘zero tolerance’ approach to mortgage servicing enforcement. Likely that this will limit #foreclosure activity for a good part of 2022, while servicers explore all possible loss [mitigation] options.”
For more information, read the warning <a href="https://ag.ny.gov/press-release/2021/attorney-general-james-again-warns-mortgage-servicers-obligation-assist" target="_blank" title="issued">issued</a> by the Attorney General of New York State.
3. Most Homeowners Have More Than Enough Equity to Sell Their Homes
For those who can’t negotiate a solution and the 16.8% who left the forbearance program without a work-out, many will have enough <a href="https://www.mykcm.com/2021/12/21/the-average-homeowner-gained-56700-in-equity-over-the-past-year/" title="equity">equity</a> to sell their homes and leave the closing with cash instead of facing foreclosures.
Due to rapidly <a href="https://www.mykcm.com/2021/12/15/what-everyone-wants-to-know-will-home-prices-decline-in-2022/" title="rising home prices">rising home prices</a> over the last two years, the average homeowner has gained record amounts of equity in their home. As Frank Martell, President & CEO of CoreLogic, <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="explains">explains</a>:
“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”
4. There Have Been Far Fewer Foreclosures Over the Last Two Years
One of the seldom-reported benefits of the forbearance program was that it allowed households experiencing financial difficulties prior to the pandemic to enter the program. It gave those homeowners an extra two years to get their finances in order and work out a plan with their lender. That prevented over 400,000 foreclosures that normally would have come to the market had the new forbearance program not been available. Otherwise, the real estate market would have had to absorb those foreclosures. Here’s a graph depicting this data:
<img src="https://assets.site-static.com/userfiles/1763/image/20220106-MEM-Eng-1.jpg" width="1000" height="750" />
5. The Current Market Can Easily Absorb Over a Million New Listings
When foreclosures hit the market in 2008, they added to the oversupply of houses that were already for sale. That resulted in over a nine-month supply of listings, and anything over a six-month supply can cause prices to depreciate.
It’s exactly the opposite today. The latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-continue-upward-increasing-1-9-in-november" target="_blank" title="Existing Home Sales Report">Existing Home Sales Report</a> from the National Association of Realtors (NAR) reveals:
“Total housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.”
A balanced market would have approximately a six-month supply of inventory. At 2.1 months, the market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.
Bottom Line
The end of the forbearance plan will not cause any upheaval in the housing market. Sharga <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-november-2021-u-s-foreclosure-market-report/" target="_blank" title="puts it best">puts it best</a>:
“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect. . . .”2022-01-07T08:19:00-07:002022-01-06T16:21:36-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:16905Expert Insights on the 2022 Housing MarketAs we move into 2022, both <a href="https://www.mykcm.com/2021/12/01/how-to-think-strategically-as-a-buyer-in-todays-market/" title="buyers">buyers</a> and <a href="https://www.mykcm.com/2021/11/29/why-now-is-a-great-time-to-sell-your-house/" title="sellers">sellers</a> are wondering, what’s next? Will there be more East San Diego homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, we turn to the experts. Here’s a look at what they say we can expect in 2022.
<a href="https://blog.firstam.com/economics/the-reconomy-podcast-examining-rising-mortgage-rates-housing-supply-student-loan-debt-and-the-future-of-office-space" target="_blank" title="Odeta Kushi">Odeta Kushi</a>, Deputy Chief Economist, First American:
“Consensus forecasts put rates at about 3.7% by the end of next year. So, that’s still historically low, but certainly higher than they are today.”
<a href="https://nationalmortgageprofessional.com/news/2022-offers-mixed-bag-challenges-and-opportunities-home-buyers" target="_blank" title="Danielle Hale">Danielle Hale</a>, Chief Economist, realtor.com:
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
<a href="https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022" target="_blank" title="Lawrence Yun">Lawrence Yun</a>, Chief Economist, National Association of Realtors (NAR):
“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”
<a href="https://www.realtor.com/research/freddie-mac-mortgage-rates-dec-2-2021/" target="_blank" title="George Ratiu">George Ratiu</a>, Manager of Economic Research, realtor.com:
“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”
<a href="https://blog.firstam.com/economics/why-housing-market-potential-keeps-rising" target="_blank" title="Mark Fleming">Mark Fleming</a>, Chief Economist, First American:
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
What Does This Mean for Buyers?
Hope is on the horizon for 2022. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, <a href="https://www.mykcm.com/2021/11/08/two-graphs-that-show-why-you-shouldnt-be-upset-about-3-mortgage-rates/" title="rising rates">rising rates</a> and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s <a href="https://www.mykcm.com/2021/10/21/important-distinction-homes-are-less-affordable-not-unaffordable/" title="affordability">affordability</a> is still in your favor.
What Does This Mean for Sellers?
Make no mistake – this <a href="https://www.mykcm.com/2021/11/09/how-sellers-win-when-housing-inventory-is-low/" title="sellers’ market">sellers’ market</a> will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.
Bottom Line
If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s East San Diego housing market.2021-12-30T08:19:00-07:002021-12-29T16:20:32-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:16834The Average California Homeowner Gained $119K in Equity over the Past YearWhen you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the <a href="https://www.mykcm.com/2021/11/30/home-is-where-the-heart-is-more-than-ever-this-year/" title="non-financial benefits">non-financial benefits</a>, like the security or stability a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters.
For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as <a href="https://www.mykcm.com/2021/11/10/whats-happening-with-home-prices/" title="home&nbsp;values climb">home values climb</a>, your equity does too. That’s exactly what’s happening today. There <a href="https://www.mykcm.com/2021/08/18/real-estate-its-still-a-lack-of-supply-not-a-lack-of-demand/" title="aren’t enough homes">aren’t enough homes</a> on the market to meet buyer demand, so bidding wars and multiple offers are driving <a href="https://www.mykcm.com/2021/08/16/a-look-at-home-price-appreciation-and-what-it-means-for-sellers/" title="prices">prices</a> up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost.
Dr. Frank Nothaft, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="explains">explains</a> it like this:
“Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.”
To find out just how much rising home values have impacted equity, we turn to the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="Homeowner Equity Insights">Homeowner Equity Insights</a> from CoreLogic. According to that report, the average homeowner’s equity in California has grown by $119,000 over the last 12 months.
Check out the map below to find out that California tops the average equity gain across all states.
<img src="https://assets.site-static.com/userfiles/1763/image/Capture_1.jpg" width="1003" height="706" />
How Rising Equity Impacts You
If you’re already a homeowner, equity not only builds your wealth, it also <a href="https://www.mykcm.com/2021/11/22/4-ways-homeowners-can-use-their-equity/" title="opens doors">opens doors</a> for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, especially if you’ve decided your needs have <a href="https://www.mykcm.com/2021/12/06/win-when-you-sell-and-when-you-move/" title="changed">changed</a> and you’re looking for something new.
If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth and gives you peace of mind that your investment is a wise one, not just from a lifestyle perspective, but from a <a href="https://www.mykcm.com/2021/10/07/111285-reasons-you-should-buy-a-home-this-year/" title="financial">financial</a> one too.
Bottom Line
Whether you’re a current East San Diego homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. If this inspires you to make a move, let’s connect to explore your options and find out what steps you need to take next.2021-12-22T08:30:00-07:002021-12-21T16:34:02-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:167752022 Housing Market Forecast<img src="https://assets.site-static.com/userfiles/1763/image/kcm-infographic-1639782956_1.jpg" width="1046" height="2247" />
What does the coming year hold for the housing market? Here’s what experts project for 2022.
Mortgage rates are projected to rise and so are home prices. Experts are forecasting buyer demand will remain strong as people try to capitalize on rates and prices before they climb, creating another strong year for home sales.
Let’s connect so you can make your best move in East San Diego this new year.2021-12-18T08:20:00-07:002021-12-17T16:23:48-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:16747What Everyone Wants to Know: Will Home Prices Decline in 2022?If you’re thinking of buying a home in today’s housing market, you may be wondering how strong your investment will be. You might be asking yourself: if I buy a home now in East San Diego, will it lose value? Or will it continue to appreciate going forward? The good news is, according to the experts, home prices are not projected to decline. Here’s why.
With buyers still outweighing sellers, home prices are forecast to continue climbing in 2022, just at a slower or more <a href="https://www.mykcm.com/2021/11/10/whats-happening-with-home-prices/" title="moderate pace">moderate pace</a>. Why the continued increase? It’s the simple law of supply and demand. When there are fewer items on the market than there are buyers, the competition for that item makes prices naturally rise.
And while the number of homes for sale today is expected to improve with more sellers getting ready to <a href="https://www.mykcm.com/2021/11/18/home-sales-about-to-surge-we-may-see-a-winter-like-never-before/" title="list their houses">list their houses</a> this winter, we’re certainly not out of the inventory woods yet. Thus, the projections show continued appreciation, but at a more moderate rate than what we’ve seen over the past year.
Here’s a look at the latest 2022 expert forecasts on home price appreciation:
<img src="https://assets.site-static.com/userfiles/1763/image/20211216-MEM-Eng_1.jpg" width="960" height="720" />
What’s the biggest takeaway from this graph? None of the major experts are projecting depreciation in 2022. They’re all showing an increase in home prices next year.
And here’s what some of the industry’s experts say about how that will play out in the housing market next year:
Brad Hunter of <a href="https://hunterhousingeconomics.com/" target="_blank" title="Hunter Housing Economics">Hunter Housing Economics</a> explains:
“. . . the recent unsustainable rate of home price appreciation will slow sharply. . . . home prices will not decline. . . but they will simply rise at a more sustainable pace.”
Danielle Hale from realtor.com <a href="https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/" target="_blank" title="agrees">agrees</a>:
“Price growth is expected to move back toward a normal range, but this is on top of recent high prices, . . . So prices will [still] hit new highs. . . . The pace of price growth is going to slow notably . . . ”
What Does This Mean for the Housing Market?
While home price appreciation is expected to continue, it isn’t projected to be the <a href="https://www.mykcm.com/2021/09/09/home-price-appreciation-is-skyrocketing-in-2021-what-about-2022/" title="record-breaking">record-breaking</a> 18 to almost 20% increase the market saw over the past 12 months. Overall, it’s important to note that price increases won’t be as monumental as they were in 2021 – but they certainly won’t decline anytime soon.
What Does That Mean for You?
With motivated buyers in the market and so few homes available to purchase, the imbalance of supply and demand will continue to put upward pressure on <a href="https://www.mykcm.com/2021/10/19/what-does-the-future-hold-for-home-prices/" title="home prices">home prices</a> in 2022. And when home price appreciation is in the forecast, that’s a clear indication your investment in homeownership is a sound one.
Bottom Line
It’s important to know that home prices are not projected to decline in the new year. Instead, they’re forecast to rise, just at more moderate pace. Let’s connect to make sure you’re up to date on what’s happening with home price appreciation in East San Diego market, so you can make an informed decision about your next move.2021-12-16T08:47:00-07:002021-12-15T16:56:44-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:16702If You Think the East San Diego Housing Market Will Slow This Winter, Think AgainFrom the opportunity to take advantage of today’s low <a href="https://www.mykcm.com/2021/11/08/two-graphs-that-show-why-you-shouldnt-be-upset-about-3-mortgage-rates/" title="mortgage rates">mortgage rates</a> to changing <a href="https://www.mykcm.com/2021/11/30/home-is-where-the-heart-is-more-than-ever-this-year/" title="homeowner needs">homeowner needs</a>, Americans have more <a href="https://www.mykcm.com/2021/11/16/sellers-youll-likely-get-multiple-strong-offers-this-season/" title="motivation">motivation</a> than ever to buy a home. According to the experts, buyers are making moves right now, creating an unseasonably strong housing market for this time of year.
As we wrap up the fall season and move into the winter months, here’s a look at what several industry leaders have to say about the continued momentum in the current market, and what it means as we head into the early part of next year.
<a href="https://www.nar.realtor/newsroom/pending-home-sales-jump-7-5-in-october" target="_blank" title="Lawrence Yun, Chief Economist, National Association of Realtors (NAR)">Lawrence Yun, Chief Economist, National Association of Realtors (NAR)</a>
“This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low. The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.”
<a href="https://twitter.com/odetakushi/status/1463521105407266829" target="_blank" title="Odeta Kushi, Deputy Chief Economist, First American">Odeta Kushi, Deputy Chief Economist, First American</a>
“So far in November, purchase applications point to another strong month in sales. Still low rates and demographic demand support this strength, even as affordability and inventory headwinds remain.”
<a href="https://themreport.com/daily-dose/11-19-2021/buyer-peak-levels" target="_blank" title="The M Report">The M Report</a>
“The demand for housing in the United States has reached a fever pitch, a trend that opposes the norm of this time of the year when the market cools as the winter months set in.”
<a href="https://blog.firstam.com/economics/why-housing-market-potential-keeps-rising" target="_blank" title="Mark Fleming, Chief Economist, First American">Mark Fleming, Chief Economist, First American</a>
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
What does this mean for the winter housing market?
Buyers are actively in the market, and they’re competing for homes to purchase. With the momentum coming out of this fall, all signs point to the winter housing market picking up steam, making it much busier than in a more typical year. And as we’ve seen in so many ways, 2020 and 2021 were anything but typical in real estate. It looks like 2022 may be joining that list before we know it.
Bottom Line
If you think the East San Diego housing market will slow down this winter, think again. Whether you’re thinking of buying a home in East San Diego, selling your house, or both – let’s connect to determine if this winter is your best time to make a move too.2021-12-14T08:20:00-07:002021-12-13T16:23:15-07:00Steven Rotsarttag:eastsandiegocounty.com,2012-09-20:16581Win When You Sell (And When You Move)If you’re trying to decide when to sell your East San Diego house, there may not be a better time than this winter. <a href="https://www.mykcm.com/2021/11/16/sellers-youll-likely-get-multiple-strong-offers-this-season/" title="Selling">Selling</a> this season means you can take advantage of today’s strong <a href="https://www.mykcm.com/2021/08/17/what-does-being-in-a-sellers-market-mean/" title="sellers’ market">sellers’ market</a> when you make a move.
Win When You Sell
Right now, conditions are very favorable for current homeowners looking for a change. If you sell now, here’s what you can expect:
Your House Will Stand Out – While recent <a href="https://www.mykcm.com/2021/11/18/home-sales-about-to-surge-we-may-see-a-winter-like-never-before/" title="data">data</a> shows there are more sellers getting ready to list their homes this winter, there are still more buyers in the market than there are homes for sale. If you sell your house now before more houses are listed, it will get more attention from serious buyers who are eager to find a home.
Your House Will Likely Get Multiple Offers – When supply is low and demand is high, buyers have to compete with each other for a limited number of homes. The latest <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" target="_blank" title="Realtors Confidence Index">Realtors Confidence Index</a> from the National Association of Realtors (NAR) shows sellers are getting an average of 3.6 offers in today’s market.
Your House Should Sell Quickly – According to the same report from NAR, homes are selling in an average of just 18 days. As a seller, that’s great news for you if you’re looking for a quick process.
Win When You Move
In addition to these great perks, you’ll also win big on your next move if you sell now. CoreLogic <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" target="_blank" title="reports">reports</a> homeowners gained an average of $51,500 in <a href="https://www.mykcm.com/2021/09/30/as-home-equity-rises-so-does-your-wealth/" title="equity">equity</a> over the past year. This wealth boost is the result of buyer competition driving home prices up. You can leverage that equity to fuel a move, before <a href="https://www.mykcm.com/2021/11/08/two-graphs-that-show-why-you-shouldnt-be-upset-about-3-mortgage-rates/" title="mortgage rates">mortgage rates</a> and <a href="https://www.mykcm.com/2021/11/10/whats-happening-with-home-prices/" title="home prices">home prices</a> climb higher. To get a feel for how rates are projected to rise, see the chart below.
<img src="https://assets.site-static.com/userfiles/1763/image/20211206-MEM-Eng-1.jpg" width="800" height="600" />
The longer you wait to make your move, the more it will <a href="https://www.mykcm.com/2021/10/12/dont-wait-for-a-lower-mortgage-rate-it-could-cost-you/" title="cost">cost</a> you down the road. As mortgage rates rise, even modestly, it will impact your monthly payment when you purchase your next home. Waiting just a few months to make that change could mean a long-term financial impact.
The good news is today’s rates are still hovering in a historically low range. <a href="https://www.fanniemae.com/newsroom/fannie-mae-news/economic-growth-again-revised-downward-due-supply-chain-and-inflation-concerns" target="_blank" title="According">According</a> to Doug Duncan, Senior VP and Chief Economist at Fannie Mae:
“Right now, we forecast mortgage rates to average 3.3 percent in 2022, which, though slightly higher than 2020 and 2021, by historical standards remains extremely low . . .”
Selling before rates climb higher means you can make your move and lock in a low rate on the mortgage for your next home. This helps you get more home for your money and keeps your payments down too.
Bottom Line
As a homeowner, you have a great opportunity to get the best of both worlds this season. You can truly win when you sell and when you buy. If you’re thinking about making a move in East San Diego, let’s connect so you have the information you need to get the process started.2021-12-07T08:06:00-07:002021-12-06T16:18:25-07:00Steven Rotsart