Home Prices Are Climbing in These Top Cities
Home Prices Are Climbing in These Top Cities
Thinking about buying a home or selling your current one to find a better fit? If so, you might be wondering what’s going on with home prices these days. Here’s the scoop.
The latest national data from Case-Shiller and the Federal Housing Finance Agency (FHFA) shows they’re going up (see graphs below):
As you can see, home prices were rising for most of 2023. But over the course of December and January, they were virtually flat – which is pretty normal for that time of year.
But here’s what you need to know now. As of February, when the spring market kicked off, prices were on the rise again.
Home Prices Are Going Up in Most of America’s Top Cities
After seeing a jump in home prices nationally in February, you might be wondering if they’re going up in your area, too. While it depends on where you live, prices are rising in 18 of the top 20 cities Case-Shiller reports on in the monthly price index (see chart below):
Most experts also think home prices will keep rising and end the year on a high note. Forbes explains why:
“Even as mortgage rates have reached their highest level since November, persistent demand coupled with limited housing supply are key drivers pushing home values upward.”
How This Impacts You
- For Buyers: If you’re ready, willing, and able to buy a home, purchasing before prices go up even more might be a smart choice, since home values are expected to keep climbing.
- For Sellers: Prices are going up because there still aren’t enough homes available for sale right now compared to today’s buyer demand. So, if you work with an agent to price your house right, you might receive multiple offers and sell quickly.
Bottom Line
The data shows home prices are increasing nationally. Let’s chat to see exactly what’s going on with prices in our neighborhood.
The Top 2 Reasons To Consider a Newly Built Home in Scottsdale, Arizona
The Top 2 Reasons To Consider a Newly Built Home
When you’re planning a move, it’s normal to wonder where you’ll end up and what your future home is going to look like. Maybe you’ve got a specific picture of that house in your mind. But unless you came into this process knowing you want to buy a newly built home, you may not have pictured new home construction.
A trusted real estate agent can help walk you through these two reasons you may want to reconsider that.
1. Adding Newly Built Homes Could Give You More Options
There are two types of homes on the market: new and existing. A newly built home refers to a house that was just built or is under construction. An existing home is one a previous homeowner has already lived in. Right now, the inventory of existing homes is tight. But there may be options for you on the new home side of things.
Data from the Census and the National Association of Realtors (NAR) shows that newly built homes are a bigger part of today’s housing inventory than the norm (see graph below):
From 1983 to 2019 (the last normal year in the market), newly built homes made up only 13% of the total inventory of homes for sale. But today that number has climbed to over 33%.
Rest assured, after over a decade of underbuilding, builders aren’t overdoing it today. Even with an increase in new construction today, there’s still a significant housing shortage overall. But for you, the uptick in new builds can be a game changer because it gives you more options for your search.
2. Newly Built Homes May Be More Affordable Than You’d Think
You may still be wondering if a new build could really be an option for you. If you’ve previously written them off because you thought they would be out of your budget, consider this. The price gap between a newly built home and an existing house is shrinking. Here’s why.
Builders are going to build what’s in demand. And they know people need more options right now, especially ones that are smaller and potentially more affordable. So, they’re focusing on building smaller homes at lower price points. The graph below shows the price difference between new and existing homes is shrinking as that happens:
As LendingTree explains:
“In the past, newly built homes have been much more expensive than existing homes — but that gap has been getting smaller recently. In some places today, you may find that the cost to build versus buy is roughly the same.”
And an article from CNBC says:
“While new builds are still sold for slightly more than existing homes, the price gap has significantly narrowed . . .”
Not to mention, some builders are even offering price cuts and mortgage rate buy-downs right now to sweeten the deal. Today there are many reasons new builds may be worth considering. Other buyers sure seem to think so. As Freddie Mac says:
“As the supply of existing homes for sale remains low and home prices continue to rise, more buyers are choosing to purchase new homes than in previous years.”
Just know that buying a newly built home isn’t the same as buying an existing one. Builder contracts have different fine print. So, partner with a local agent who knows the market, builder reputations, and what to look for in those contracts so you have an expert on your side to help you explore this option.
Bottom Line
If you want to find out what builders are doing in our area, let’s connect and check it out together. And if you’re willing to cast a wider net to open up your options even more, we can talk about broadening your search to include other towns nearby.
The Top 5 Reasons You Need A Real Estate Agent When Buying A Home in Phoenix, Arizona.
The Top 5 Reasons You Need a Real Estate Agent when Buying a Home
You may have heard headlines in the news lately about agents in the real estate industry and discussions about their commissions. And if you’re following along, it can be pretty confusing. But here’s the thing you really need to know – expert advice from a trusted real estate agent is priceless, now more than ever. And here’s why.
A real estate agent does a lot more than you may realize.
Your agent is the person who will guide you through every step when buying a home and look out for your best interests along the way. They smooth out a complex process and take away the bulk of the stress of what’s likely your largest purchase ever. And that’s exactly what you want and deserve.
This is at least a part of the reason why a recent survey from Bright MLS found an overwhelming majority of people agree an agent is a key part of the homebuying process (see visual below):
To give you a better idea of just a few of the top ways agents add value, check out this list.
1. Deliver Industry Experience
The right agent – the professional – will coach you through everything from start to finish. With professional training and expertise, agents know the ins and outs of the buying process. And in today’s complex market, the way real estate transactions are executed is constantly changing, so having the best advice on your side is essential.
2. Provide Expert Local Knowledge
In a world that’s powered by data, a great agent can clarify what it all means, separate fact from fiction, and help you understand how current market trends apply to your unique search. From how quickly homes are selling to the latest listings you don’t want to miss, they can explain what’s happening in your specific local market so you can make a confident decision.
3. Explain Pricing and Market Value
Agents help you understand the latest pricing trends in your area. What’s a home valued at in your market? What should you think about when you’re making an offer? Is this a house that might have issues you can’t see on the surface? No one wants to overpay, so having an expert who really gets true market value for individual neighborhoods is priceless. An offer that’s both fair and competitive in today’s housing market is essential, and a local expert knows how to help you hit the mark.
4. Review Contracts and Fine Print
In a fast-moving and heavily regulated process, agents help you make sense of the necessary disclosures and documents, so you know what you’re signing. Having a professional that’s trained to explain the details could make or break your transaction, and is certainly something you don’t want to try to figure out on your own.
5. Bring Negotiation Expertise
From offer to counteroffer and inspection to closing, there are a lot of stakeholders involved in a real estate transaction. Having someone on your side who knows you and the process makes a world of difference. An agent will advocate for you as they work with each party. It’s a big deal, and you need a partner at every turn to land the best possible outcome.
Bottom Line
Real estate agents are specialists, educators, and negotiators. They adjust to market changes and keep you informed. And keep in mind, every time you make a big decision in your life, especially a financial one, you need an expert on your side.
Expert advice from a trusted professional is priceless. Let’s connect today.
How Buying or Selling a Home Benefits Your Community in Phoenix, Arizona
How Buying or Selling a Home Benefits Your Community
If you’re thinking of buying or selling a house, it’s important to know it doesn’t just impact you—it helps out the local economy and your community, too.
Every year, the National Association of Realtors (NAR) puts out a report that breaks down the financial impact that comes from people buying and selling homes (see visual below):
When a house is sold, it really boosts the local economy. That’s because of all the people needed to build, fix up, and sell homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains how the housing industry adds jobs to a community:
“. . . housing is a significant job creator. In fact, for every single-family home built, enough economic activity is generated to sustain three full-time jobs for a year . . .”
It makes sense that housing creates a lot of jobs because so many different kinds of work are involved in the industry.
Think about all the people involved with selling a house—city officials, contractors, lawyers, real estate agents, specialists, etc. Everyone has a job to do to make your deal go through. So, each transaction is a big help to those who work and live in your community.
Put simply, when you buy or sell a home, you’re helping out your neighbors. So, when you decide to move, you’re not just meeting your own needs—you’re also doing something good for your community. Just knowing your move helps so many people around you can give you a sense of empowerment as you make your decision this year.
Bottom Line
Every time a home is sold, it really helps out the local economy. If you’re ready to move, let’s get in touch. It won’t just change your life—it’ll also do a lot of good for the whole community.
Equity Can Make Your Move Possible When Affordability Is Tight in Prescott, Arizona [INFOGRAPHIC]
The Best Way To Keep Track Of Mortgage Rate Trends in Oxnard, California.
The Best Way To Keep Track of Mortgage Rate Trends
If you’re thinking about buying a home, chances are you’ve got mortgage rates on your mind. You’ve heard about how they impact how much you can afford in your monthly mortgage payment, and you want to make sure you’re factoring that in as you plan your move.
The problem is, with all the headlines in the news about rates lately, it can be a bit overwhelming to sort through. Here’s a quick rundown of what you really need to know.
The Latest on Mortgage Rates
Rates have been volatile – that means they’re bouncing around a bit. And, you may be wondering, why? The answer is complicated because rates are affected by so many factors.
Things like what’s happening in the broader economy and the job market, the current inflation rate, decisions made by the Federal Reserve, and a whole lot more have an impact. Lately, all of those factors have come into play, and it’s caused the volatility we’ve seen. As Odeta Kushi, Deputy Chief Economist at First American, explains:
“Ongoing inflation deceleration, a slowing economy and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates.”
Professionals Can Help Make Sense of it All
While you could drill down into each of those things to really understand how they impact mortgage rates, that would be a lot of work. And when you’re already busy planning a move, taking on that much reading and research may feel a little overwhelming. Instead of spending your time on that, lean on the pros.
They coach people through market conditions all the time. They’ll focus on giving you a quick summary of any broader trends up or down, what experts say lies ahead, and how all of that impacts you.
Take this chart as an example. It gives you an idea of how mortgage rates impact your monthly payment when you buy a home. Imagine being able to make a payment between $2,500 and $2,600 work for your budget (principal and interest only). The green part in the chart shows payments in that range or lower based on varying mortgage rates (see chart below):
As you can see, even a small shift in rates can impact the loan amount you can afford if you want to stay within that target budget.
It’s tools and visuals like these that take everything that’s happening and show what it actually means for you. And only a pro has the knowledge and expertise needed to guide you through them.
You don’t need to be an expert on real estate or mortgage rates, you just need to have someone who is, by your side.
Bottom Line
Have questions about what’s going on in the housing market? Let’s connect so we can take what’s happening right now and figure out what it really means for you.
Tips for Younger Homebuyers: How to Make Your Dream a Reality in Ventura, California.
Tips for Younger Homebuyers: How To Make Your Dream a Reality
If you’re a member of a younger generation, like Gen Z, you may be asking the question: will I ever be able to buy a home? And chances are, you’re worried that’s not going to be in the cards with inflation, rising home prices, mortgage rates, and more seemingly stacked against you.
While there’s no arguing this housing market is challenging for first-time homebuyers, it is still achievable, especially if you have professionals on your side.
Here are some helpful tips you may get from a pro.
1. Explore Your Options for a Down Payment
If a down payment is your #1 hurdle, you may have options to give your savings a boost. There are over 2,000 down payment assistance programs designed to make homeownership more achievable. And, that’s not the only place you may be able to get a helping hand. While it may not be an option for everyone, 49% of Gen Z homebuyers got money from loved ones that they used toward a down payment, according to LendingTree.
And chances are you won’t need to put 20% down (unless specified by your loan type or lender). So be sure to work with a trusted mortgage professional to explore your options, find out how much you’ll really need, and learn about any guidelines on getting a gift from loved ones.
2. Live with Loved Ones To Boost Your Savings
Another thing a number of Gen Z buyers are doing is ditching their rental and moving back in with friends or family. This can help cut down your housing costs so you can build your savings a whole lot faster. As Bankrate explains:
“. . . many have opted to stop renting and live with family in order to boost their savings. Thirty percent of Gen Z homebuyers move directly from their family member’s home to a home of their own, according to NAR.”
3. Cast a Broad Net for Your Search
When you’ve saved up enough, here’s how a pro will help you approach your search. Since the supply of homes for sale is still low and affordability is tight, they’ll give you strategies and avenues you may not have considered to open up your pool of options.
For example, it’s usually more affordable if you consider a rural or suburban area versus an urban one. So, while the city may be livelier and more energetic, the cost of living may be reason enough to look at something further out. And if you consider smaller homes and condos or townhouses, you’ll give yourself even more ways to break into the market. As Colby Stout, Research Analyst at Bright MLS, explains:
“Being flexible on the types of home (e.g., a condo or townhome versus a single-family home) and exploring more affordable neighborhoods is important for first-time buyers.”
4. Take a Close Look at Your Wants and Needs
And lastly, an agent can help you really think about your must-have’s and nice-to-have’s. Remember, your first home doesn’t have to be your forever home. You just need to get your foot in the door to start building equity. If you want to buy, you may find making some compromises is worth it. As Chase says:
“An open-minded approach to house-hunting may be one way for Gen Z homebuyers to maintain some edge. This could mean buying in areas that are less expensive. Differentiating needs vs. wants may help in this area as well.”
An agent will help you prioritize your list of home features and find houses that can deliver on the top ones. And they’ll be able to explain how equity can benefit you in the long run and make it possible to move into that dream home down the line.
Bottom Line
Real estate professionals have expertise on what’s working for other buyers like you. Lean on them for tips and advice along the way. As Directors Mortgage says, with that support you can make it happen:
“The path to homeownership may not be a straightforward one for Gen Z, but it’s undoubtedly within reach. By adopting the right strategies, like exploring down payment assistance programs and sharing living costs with relatives, you can bring your dream of owning a home closer to reality.”
Let’s connect to get you set up for long-term success.
What’s Motivating Your Move in Camarillo, California?
What’s Motivating Your Move?
Thinking about selling your house? As you make your decision, consider what’s pushing you to think about moving. A recent survey from Realtor.com looked into why people want to sell their homes this year. Here are the top two reasons (see graphic below):
Let’s take a closer look and see if they’re motivating you to make a change too.
1. To Make a Profit
If you’re thinking about selling your house, you probably have a lot of questions on your mind. Well, here’s some good news – the latest data shows most sellers get a great return on their investment when they sell. ATTOM, a property data provider, explains:
“. . . home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5 percent return on investment.”
That’s significant. And here’s one contributing factor. During the pandemic, home prices skyrocketed. There was way more buyer demand than homes available for sale and that combination pushed prices up.
Now, home prices are still rising, just not as fast. That ongoing appreciation is good news for your bottom line. Any profit you make can help offset some of today’s affordability challenges when you buy your next home.
If you want to know how much your house is worth now and what’s going on with prices in your area, talk to a local real estate agent.
2. For Family Reasons
Maybe you want to be near relatives to help take care of older family members or to have more support nearby. Or maybe you’re just eager to spend time together on special occasions like birthdays and holidays.
Selling a house and moving closer to the people who matter the most to you helps keep you connected. If the distance is making you miss out on some big milestones in their lives, it might be time to talk to a local real estate agent to find a place close by. The National Association of Realtors (NAR) says:
“A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget.”
Bottom Line
If you’re thinking about selling your house, there’s probably a good reason for it. Let’s talk so you have help making the right move to reach your goals this year.
What Is Going On With Mortgage Rates in Simi Valley, California?
What Is Going on with Mortgage Rates?
You may have heard mortgage rates are going to stay a bit higher for longer than originally expected. And if you’re wondering why, the answer lies in the latest economic data. Here’s a quick overview of what’s happening with mortgage rates and what experts say is ahead.
Economic Factors That Impact Mortgage Rates
When it comes to mortgage rates, things like the job market, the pace of inflation, consumer spending, geopolitical uncertainty, and more all have an impact. Another factor at play is the Federal Reserve (the Fed) and its decisions on monetary policy. And that’s what you may be hearing a lot about right now. Here’s why.
The Fed decided to start raising the Federal Funds Rate to try to slow down the economy (and inflation) in early 2022. That rate impacts how much it costs banks to borrow money from each other. It doesn’t determine mortgage rates, but mortgage rates do respond when this happens. And that’s when mortgage rates started to really climb.
And while there’s been a ton of headway seeing inflation come down since then, it still isn’t back to where the Fed wants it to be (2%). The graph below shows inflation since the spike in early 2022, and where we are now compared to their target rate:
As the graph shows, we’re much closer to their goal of 2% inflation than we were in 2022 – but we’re not there yet. It’s even inched up a hair over the last 3 months – and that’s having an impact on the Fed’s plans. As Sam Khater, Chief Economist at Freddie Mac, explains:
“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates.”
Basically, long story short, inflation and its impact on the broader economy are going to be key moving forward. As Greg McBride, Chief Financial Analyst at Bankrate, says:
“It’s the longer-term outlook for economic growth and inflation that have the greatest bearing on the level and direction of mortgage rates. Inflation, inflation, inflation — that’s really the hub on the wheel.”
When Will Mortgage Rates Come Down?
Based on current market data, experts think inflation will be more under control and we still may see the Fed lower the Federal Funds Rate this year. It’ll just be later than originally expected. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), said in response to the Federal Open Market Committee (FOMC) decision yesterday:
“The FOMC did not change the federal funds target at its May meeting, as incoming data regarding the strength of the economy and stubbornly high inflation have resulted in a shift in the timing of a first rate cut. We expect mortgage rates to drop later this year, but not as far or as fast as we previously had predicted.”
In the simplest sense, what this says is that mortgage rates should still come down later this year. But timing can shift as new employment and economic data come in, geopolitical uncertainty remains, and more. This is one of the reasons it’s usually not a good strategy to try to time the market. An article in Bankrate gives buyers this advice:
“ . . . trying to time the market is generally a bad idea. If buying a house is the right move for you now, don’t stress about trends or economic outlooks.”
Bottom Line
If you have questions about what’s happening in the housing market and what that means for you, let’s connect.