post-thumb

San Diego home prices: annual gains wiped out

, by

If you bought a San Diego home one year ago, there’s a chance it’s now worth less than what you paid.

San Diego County’s median home price was $750,000 in February, said CoreLogic data released Wednesday, down 2.6 percent from the same time last year. It’s the first time in more than three years that the annual price went down. It also marked the ninth month in a row of price declines.

For the full article click here.

post-thumb

Housing market may show signs of cooling

, by

A new report from Zillow says many homes in San Diego County are selling in just under a week, but experts say the housing market is showing a few signs of cooling.

San Diego loan officer Mark Goldman says low supply and high demand are continuing to push home prices up in our region. That’s despite interest rates jumping in the last year to about 5 percent for a 30-year-fixed loan.

For the full article click here.

post-thumb

San Diego home prices continue to grow as Federal Reserve rates rise

, by

The Federal Reserve’s decision to raise interest rates has many wondering if San Diego’s sky-high housing prices will finally come down, but analysts say the Fed’s move can only do so much in our supply-strained county.

“I get text messages, I get emails, I get calls,” said Loan Officer Mark Goldman, of C2 Financial.

“Not only do I get them for my private residence, but I also get calls because my company has the name realty in it.”

For the full article click here.

post-thumb

Mortgage Rates Approach 5% As Fed Tightens And Inflation Rattles Bond Markets

, by

U.S. mortgage rates approached 5% on Friday, the highest daily average in more than four years, as war-worsened inflation fears spooked financial markets and the Federal Reserve ended a two-year emergency program that boosted demand for bonds containing home loans.

The average locked rate for a 30-year fixed mortgage eligible to be backed by Fannie Mae and Freddie Mac – the most common form of home financing – rose to 4.87% on Friday, the highest since late 2018, after rising a third of a percentage point in a week, according to data from Optimal Blue. The average 30-year jumbo rate increased to 4.4%, the highest since 2019.

For the full article click here.

post-thumb

Historically Low Mortgage Rates May Continue

, by

I recently spoke with Kathleen Howley and Forbes about the expectation that rates may remain low, as we have seen over the past year.

Just recently the Federal Reserve Bank of Kansas City canceled their Jackson Hole Economic Policy Symposium due to the rising spread of the delta-variant. How does this point to low rates?

Well, when shutdowns across the country began occurring last year the Fed cut rates and they have remained low throughout this year as well. In January, the average rate for a 30-year fixed mortgage reached 2.65%, an all-time low according to data from Freddie Mac. The recent cancellation of this in-person event may signal to investors that the pandemic is not truly over. Despite the vaccine rollout cases continue to increase in many places across the country.

“The Fed has been reassuring markets since last year that they will keep buying bonds as long as there’s a concern that the pandemic is going to slow the economy,” said Mark Goldman, a mortgage broker with C2 Financial Corp. in San Diego. “Now, we’re hearing every day that hospitals are full, and that’s not a sign that the economy is about to take off.”

For the full article, click here.

post-thumb

Should buyers pay more than the appraised value?

, by

In this aggressive seller’s market, many successful bidders are waiving appraisal contingencies. Agents must be equipped to address their buyer-clients’ concerns about paying more than the appraised value for a property.

An appraised value less than the contract price will increase the loan to value. This can require additional cash down payment and/or mortgage insurance.

Should a buyer pay more than appraised value? Tough question. But, in this market, the answer is often “yes”.  There are many competing buyers willing to waive appraisal contingencies. However, home prices are moving up at a brisk pace. The appreciation in value will likely help home values catch up to price in a year or so.

The strongest buyers prevail – Successful bidders for homes are making cash offers with no contingencies for the appraised value. Move up buyers are confronted with the challenge to buy a new home before selling their departure residence. One concern is to sell first and not get a new home in time for the move. Such buyers may need to qualify for their purchase while carrying their departure residence because sellers may not consider a contingency for the sale of the departure residence.

Do bidding wars create a bubble in prices? I do not believe that the current trend to higher prices will create a bubble that will burst because the buyers are purchasing for their use, not speculation. Price bubbles in stocks, tulips, and real estate are the result of investors simply speculating that some fool will be willing to pay more for an asset in the near term. I have not observed investors buying homes on speculation to flip at a higher price.

Many sectors of the market have prospered during Covid. As we return to normalcy, the economy will improve even more. So, the upward pressure on home pricing will continue. Higher interest rates in the next 6-12 months may moderate the rate of appreciation unless inflation becomes an additional influence to even greater price increases.

Millennials are entering the home market. We will see more millennials become home buyers in the next few years created even stronger demand for the limited housing supply in San Diego. 

Conclusion – This is a tough market for home buyers with prices rising rapidly and fierce completion for limited inventory. I expect pricing to continue upward in the next year. However, I believe the rate of appreciation will slow later this year as the fear of Covid subsides and more home sellers are willing to list their property.

Mark’s Market Update- 2021 Q1

, by

I hope 2021 has been good to all of you so far. The San Diego real estate market has remained strong, but we are already starting to see some changes from last year. San Diego is one of the hottest markets in the nation. We are behind only Phoenix and Seattle for the largest increase in prices during this year. We entered the year with the same low interest rates we continuously saw throughout last year and prices were still high due to strong buyer competition and very limited inventory. Interest rates started to rise slowly in January. March saw rates increase even faster. We are seeing mortgage interest rates close to 3%, compared to 2.5% on New Year’s. I expect rates to continue upward to about 3.5% by the end of the year. 

At the beginning of the year, the median home price was $640,000. That is a 9.4% increase in the last 12 months. This was due mostly to the strong competition for homes and the low inventory we experienced all year. Many potential sellers have waited to sell because of the pandemic, but now that rates are increasing it may be better to sell sooner rather than later.

I do not anticipate price appreciation to slow this year. Although rates are rising, fewer pandemic restrictions, vaccinations, commercial openings and the Stimulus Package will all support strong growth for the balance of 2021. The Fed has committed to try to keep inflation low. But, real estate is always a great asset class in inflationary times. The improving economy will overpower the impact of higher interest rates on real estate prices.

What does this mean for you?

Buyers: 

  • Keep an eye on rising rates
  • Prices are more likely to continue to climb than decline
  • Act fast when you find a home you love, there are many pre-approved buyers competing for the limited inventory of homes.

Sellers:

  • Whether you plan to move to a larger or smaller home, you can get top dollar for your departure residence now and hopefully a better price and interest rate on your next home.
  • Be prepared for a fast closing
  • Take advantage of rates yourself before they rise

Let me know when I can help.

  • Call me to formulate a mortgage plan for your purchase.
  • Let me get your financing approved before you start shopping to make your offer more compelling.
  • We can close FAST.