Pricing Your House Right In Ventura, CA Still Matters Today

Pricing Your House Right In Ventura, CA Still Matters Today

While this isn’t the frenzied market we saw during the ‘unicorn’ years, homes that are priced right are still selling quickly and seeing multiple offers right now. That’s because the number of homes for sale is still so low. Data from the National Association of Realtors (NAR) shows 76% of homes sold within a month and the average saw 3.5 offers in June.

To set yourself up to see advantages like these, you need to rely on an agent. Only an agent has the expertise needed to find the right asking price for your house. Here’s what’s at stake if that price isn’t accurate for today’s market value.

The price you set for your house sends a message to potential buyers.

Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with it. Not to mention, if you undervalue your house, you could leave money on the table, which decreases your future buying power.

On the other hand, price it too high and you run the risk of deterring buyers from ever touring it in the first place. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

A recent article from NerdWallet sums it up like this:

“Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house.”

Think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value.

Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see multiple offers too. Plus, when homes are priced right, they still tend to sell quickly.

To get a high-level look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:

Lean on a Professional’s Expertise to Price Your House Right

So why is an agent essential in finding the right price? Your local agent has the skill and the insight necessary to find the market value of your home. They’ll use their expertise to determine a realistic listing price by assessing:

  • The prices of recently sold homes
  • The current market conditions
  • The size and condition of your house
  • The location of your house

Bottom Line

Pricing your house at market value is critical, so don’t rely on guesswork. Let’s connect to make sure your house is priced right for today’s market.

Owning Your Home Helps You Build Wealth In Prescott, AZ

Owning Your Home Helps You Build Wealth In Prescott, AZ

You may have heard some people say it’s better to rent than buy a home right now. But, even today, there are lots of good reasons to become a homeowner. One of them is that owning a home is typically viewed as a good long-term investment that helps your net worth grow over time.

Homeownership Builds Wealth Regardless of Income Level

You may be surprised to learn homeowners across various income levels have a much higher net worth than renters who make the same amount. Data from First American helps illustrate this point (see graph below):

What makes wealth so much higher for homeowners? A recent article from Realtor.com says:

“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, owning a home allows you to build home equity. And over time, equity can turn your mortgage debt into a sizeable asset.”

Basically, the wealth you accumulate when you own a home has a lot to do with equity. As a homeowner, equity is built up as you pay down your loan and as home prices appreciate over time. Mark Fleming, Chief Economist at First American, explains how this same benefit isn’t true for renters in a recent podcast:

“Renters as non-homeowners gain no wealth benefit as home prices rise. That wealth actually accrues to the landlord.”

Before you decide to sign another rental agreement, now is a good time to think about whether it would be better for you to buy a home instead. The best way to figure out what makes sense for you is to have a conversation with a real estate expert you trust. That professional can talk you through the benefits that come with owning to determine if that’s the right next step for you.

Bottom Line

If you’re not sure whether to keep renting or to buy a home, know that owning a home, no matter how much money you make, can help build your wealth. Let’s connect now to get started on the path to homeownership.

Low Housing Inventory Is a Sweet Spot for Sellers 

Some Highlights

  • Today’s housing inventory is still well below more normal years.
  • This low inventory is why homes that are priced right are still selling quickly and seeing multiple offers.
  • If you want to sell your house, now is a great time because inventory is still low. Let’s connect to start the process.

Home Prices Are Rebounding In Thousand Oaks, CA

Home Prices Are Rebounding In Thousand Oaks, CA

If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. If we take a year-over-year view, home prices did drop some, but that’s because we’re comparing to a ‘unicorn’ year when prices peaked well beyond the norm.

To avoid an unfair comparison to that previous peak, we need to look at monthly data. And that tells a very different and much more positive story. While local home price trends still vary by market, here’s what the national data tells us.

The graphs below use recent monthly reports from three sources to show the worst home price declines are already behind us, and prices are appreciating nationally.

Looking at this monthly view, we can see the past year in the housing market can be divided into two parts. In the first half of 2022, home prices were going up, and fast. However, starting in July, prices began to go down (shown in red in the graphs above). By around August or September, the trend started to stabilize. But, looking at the most recent data for early 2023, these graphs also show that prices are going up again.

The fact that all three reports show prices have been going up for three or more straight months is an encouraging sign for the housing market. The month-over-month data indicates a national shift is happening – home prices are rising again.

Craig J. Lazzara, Managing Director at S&P Dow Jones Indices, says this about home price trends:

“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.”

Experts believe one of the reasons prices didn’t crash like some expected is because there aren’t enough available homes for the number of people who want to buy them. Even with today’s mortgage rates, there are more people looking to buy than there are homes available for sale.

Mark Fleming, Chief Economist at First American, explains how more demand than supply keeps upward pressure on prices:

“History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices.”

Doug Duncan, Senior VP and Chief Economist at Fannie Mae, states home price growth is exceeding expectations thanks to that high demand:

“. . . housing prices continue to show stronger growth than what was previously expected . . . Housing’s performance is a testimony to the strength of demographic-related demand . . .”

Here’s How This Affects You

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices have bounced back should bring you some relief. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, it might be a good idea to team up with a real estate agent to list your house. You don’t have to wait any longer because the latest data suggests things are turning in your favor.

Bottom Line

If you delayed your moving plans because you were concerned about home prices dropping, the latest data reveals the worst is already over, and prices are appreciating nationally. Let’s get in touch so you know what’s happening with home prices in our area.

Two Questions To Ask Yourself If You’re Considering Buying a Home In Phoenix, AZ

Two Questions To Ask Yourself if You’re Considering Buying a Home In Phoenix, AZ

 

If you’re thinking of buying a home, chances are you’re paying attention to just about everything you hear about the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, overhearing someone chatting at the local supermarket, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot.

To help cut through the noise and give you the information you need most, take a look at what the data says. Here are the top two questions you need to ask yourself about home prices and mortgage rates as you make your decision:

1. Where Do I Think Home Prices Are Heading?

One reliable place you can turn to for that information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists.

According to the latest release, the experts surveyed are projecting slight depreciation this year (see the red in the graph below). But here’s the context you need most. The worst home price declines are already behind us, and prices are actually appreciating again in many markets. Not to mention, the small 0.37% depreciation HPES is showing for 2023 is far from the crash some people originally said would happen.

Now, let’s look to the future. The green in the graph below shows prices have turned a corner and are expected to appreciate in 2024 and beyond. After this year, the HPES is forecasting home price appreciation returning to more normal levels for the next several years.

So, why does this matter to you? It means your home will likely grow in value and you should gain home equity in the years ahead, but only if you buy now. If you wait, based on these forecasts, the home will only cost you more later on.

2. Where Do I Think Mortgage Rates Are Heading?

Over the past year, mortgage rates have risen in response to economic uncertainty, inflation, and more. We know based on the latest reports that inflation, while still high, has moderated from its peak. This is an encouraging sign for the market and for mortgage rates. Here’s why.

When inflation cools, mortgage rates generally fall in response. This may be why some experts are saying mortgage rates will pull back slightly over the next few quarters and settle somewhere around roughly 5.5 and 6% on average.

But, not even the experts can say with absolute certainty where mortgage rates will be next year, or even next month. That’s because there are so many factors that can impact what happens. So, to give you a lens into the various possible outcomes, here’s what you should consider:

  • If you buy now and mortgage rates don’t change: You made a good move since home prices are projected to grow with time, so at least you beat rising prices.
  • If you buy now and mortgage rates fall (as projected): You probably still made a good decision because you got the house before home prices appreciated more. And, you can always refinance your home later on if rates are lower.
  • If you buy now and mortgage rates rise: If this happens, you made a great decision because you bought before both the price of the home and the mortgage rate went up.

Bottom Line

If you’re thinking about buying a home, you need to know the facts on what’s happening with home prices and mortgage rates. While no one can say for certain where they’ll go, expert projections can give you powerful information to keep you informed. Let’s connect so you have a professional to add in an expert opinion on our local market.

Americans Still View Homeownership as the American Dream in Ventura, CA

Americans Still View Homeownership as the American Dream In Ventura, CA

 

Everyone’s interpretation of the American Dream is unique and personal. But, for many people, it’s tied to a sense of success, freedom, and prosperity. These are all things that owning a home can help provide.

A recent survey from Bankrate asked respondents which achievements they feel most embody the American Dream. The responses prove owning a home is still important to so many Americans today (see graph below):

As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree.

A recent report from MYND helps shed light on why so many people value homeownership. It finds:

“. . . nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”

That’s because, when you own a home, your equity (and net worth) grows over time as you pay down your home loan and as home prices appreciate. This can be a key factor in building intergenerational wealth and long-term financial stability.

To further drive home the difference homeownership can make in your life, a report from Fannie Mae says:

“Most consumers (87%) believe owning a home is important to ‘live the good life.’ . . . Notably, significantly more see ‘having less stress’ as a benefit achieved by owning than renting.”

Especially today, this could be because, when you own a home with a fixed-rate mortgage, you stabilize what’s likely your largest monthly expense (your housing cost), and that helps combat the impact of rising costs from inflation.

What Does This Mean for You?

While it may feel challenging to buy a home today with higher mortgage rates and home prices, if the time is right for you, know that when you buy a home, incredible benefits are waiting for you at the end of your journey.

Bottom Line

Buying a home is a significant and powerful choice, embodying the foundation of the American Dream. If you plan to make your homeownership dream a reality this year, let’s connect to start the process.

Why the Median Home Price Is Meaningless in Today’s Market In Camarillo, CA

Why the Median Home Price Is Meaningless in Today’s Market IN CAMARILLO, CA

 

The National Association of Realtors (NAR) will release its latest Existing Home Sales (EHS) report later this week. This monthly report provides information on the sales volume and price trend for previously owned homes. In the upcoming release, it’ll likely say home prices are down. This may feel a bit confusing, especially if you’ve been following along and seeing the blogs saying that home prices have bottomed out and turned a corner.

So, why will this likely say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each report. NAR reports on the median sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.

The Center for Real Estate Studies at Wichita State University explains median prices like this:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”

Investopedia helps define what a repeat sales approach means:

“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”

The Challenge with the Median Sales Price Today

As the quotes above say, the approaches can tell different stories. That’s why median price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again.

Bill McBride, Author of the Calculated Risk blog, sums the difference up like this:

“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”

To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.

That’s why using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But, most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. A greater number of ‘less-expensive’ houses are selling right now for this exact reason, and that’s causing the median price to decline. But that doesn’t mean any single house lost value.

When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates.

Bottom Line

For a more in-depth understanding of home price trends and reports, let’s connect.

The Main Reason Mortgage Rates Are So High

The Main Reason Mortgage Rates Are So High

Today’s mortgage rates are top-of-mind for many homebuyers right now. As a result, if you’re thinking about buying for the first time or selling your current house to move into a home that better fits your needs, you may be asking yourself these two questions:

  1. Why Are Mortgage Rates So High?
  2. When Will Rates Go Back Down?

Here’s context you need to help answer those questions.

1. Why Are Mortgage Rates So High?

The 30-year fixed-rate mortgage is largely influenced by the supply and demand for mortgage-backed securities (MBS). According to Investopedia:

“Mortgage-backed securities (MBS) are investment products similar to bonds. Each MBS consists of a bundle of home loans and other real estate debt bought from the banks that issued them . . . The investor who buys a mortgage-backed security is essentially lending money to home buyers.”

Demand for MBS helps determine the spread between the 10-Year Treasury Yield and the 30-year fixed mortgage rate. Historically, the average spread between the two is 1.72 (see chart below):

Last Friday morning, the mortgage rate was 6.85%. That means the spread was 3.2%, which is almost 1.5% over the norm. If the spread was at its historical average, mortgage rates would be 5.37% (3.65% 10-Year Treasury Yield + 1.72 spread).

This large spread is very unusual. As George Ratiu, Chief Economist at Keeping Current Matters (KCM), explains:

“The only times the spread approached or exceeded 300 basis points were during periods of high inflation or economic volatility, like those seen in the early 1980s or the Great Financial Crisis of 2008-09.”

The graph below uses historical data to help illustrate this point by showing the few times the spread has increased to 300 basis points or more:

The graph shows how the spread has come down after each peak. The good news is, that means there’s room for mortgage rates to improve today.

So, what’s causing the larger spread and making mortgage rates so high today?

The demand for MBS is heavily influenced by the risks associated with investing in them. Today, that risk is impacted by broader market conditions like inflation and fear of a potential recession, the Fed’s interest rate hikes to try to bring down inflation, headlines that create unnecessarily negative narratives about home prices, and more.

Simply put: when there’s less risk, demand for MBS is high, so mortgage rates will be lower. On the other hand, if there’s more risk with MBS, demand for MBS will be low, and we’ll see higher mortgage rates as a result. Currently, demand for MBS is low, so mortgage rates are high.

2. When Will Rates Go Back Down?

Odeta Kushi, Deputy Chief Economist at First American, answers that question in a recent blog:

“It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal and provides investors with more certainty. However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.”

Bottom Line

The spread will shrink when the fear investors feel is eased. That’ll mean we should see mortgage rates moderate as the year goes on. However, when it comes to forecasting mortgage rates, no one can know for sure exactly what will happen.

Real Estate Is Still Considered the Best Long-Term Investment In Ventura, CA

Real Estate Is Still Considered the Best Long-Term Investment In Ventura, CA

 

With all the headlines circulating about home prices and rising mortgage rates, you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11th consecutive year, consistently beating other investment types like gold, stocks, and bonds (see graph below):

If you’re thinking about purchasing a home, let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision.

Why Do Americans Still Feel So Positive About the Value of Investing in a Home?

Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:

“. . . homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”

That’s because owning a home grows your net worth over time as your home appreciates in value and as you pay down your mortgage. And, since building that wealth takes time, it may make sense to start as soon as you can. If you wait to buy and keep renting, you’ll miss out on those monthly housing payments going toward your home equity.

Bottom Line

Buying a home is a powerful decision. So, it’s no wonder so many people view real estate as the best long-term investment. If you’re ready to start on your own journey toward homeownership, let’s connect today.