There's something unusual happening with California's home values right now

 

There's something unusual happening with California’s home values right now

    Interest rates have been in a holding pattern around the 7% range, and property values are not dropping.  In fact, they are increasing in some areas. Why, and more importantly, do we think this will continue to be the pattern into the second half of the year?  Let’s look at some of the data.

    Predicting that home values will drop due to soaring interest rates seems reasonable, but the opposite is happening in the Golden State. And they aren't just holding steady; they're going up. Why is California's market defying gravity when higher borrowing costs typically cool down home appreciation? There are some unique factors keeping the state’s property values up that we’ve never experienced as the cost of borrowing ticks up.

    Buyers expected increased housing costs to add pressure to home values, potentially bringing prices down. ‘If enough buyers can’t afford to borrow, homes won’t sell, forcing sellers to lower prices’.  Right?  Unfortunately, this hasn't been the case. There are still plenty of buyers.

    Higher interest rates haven’t decreased the pool of buyers in a state with, among other factors, decades of pent-up demand (people want to buy but don't have a home to buy) and an undersupply of homes. After 2009, new home construction stopped entirely in California.  During this time, homeowners were defaulting on mortgages. 40% of our homes on the market were in default, grinding new construction to a halt. Even before 2009, California hadn’t built enough homes to meet the housing demand for decades. This long-term undersupply of residential construction created a bottleneck that squeezed the housing market, resulting in supply issues.

    Add in the impact of 2020 when the state, the country, and the world was facing one unprecedented crisis after another. Each crisis negatively impacted residential construction in some way, further compounding the supply issue. Pandemic-related job losses made it tougher to build homes, while building material shortages made it more expensive to build what homes they could.  We’re just now starting to see builders coming back.

    An unexpected impact of the high rates on home prices comes from a simple reluctance to move. Homeowners who might have sold their homes to upgrade for a growing family or downsize as empty nesters are choosing to stay put, further limiting the supply of homes for sale.  Typically people sell every 7 to 10 years – but not anymore.  It’s an understandable reluctance as the financial burden of a new, more expensive mortgage doesn’t make sense. Even if you’re downsizing, because of the high cost of money, you may not be saving any money.  If a homeowner has the option, the decision to stay put, with their current low mortgage rate, is easy.

    It’s not as if no homes are being sold in our current market. I’m having one of my best years so far… No matter what the market conditions are, people will always need to move. Some need to sell and relocate for jobs or sell due to divorce, sickness, death or a change in their finances. This group of sellers are moving due to life circumstances, regardless of current home values or interest rates. When that happens, I’m here to help you.

    In our region, the relationship between interest rates, housing supply, and home values is complex and full of unexpected twists and turns. Despite high interest rates, home values are holding steady, if not increasing, thanks to low supply. Remember, the market is always evolving. External economic factors, policy changes, or shifts in consumer sentiment could all play a role in reshaping the current landscape. Staying informed is key to navigating the housing market for both buyers and sellers; especially if you’re planning to make a move in 2024.

If you have questions, I have answers. Let’s talk – call me anytime!

I appreciate YOU and the referrals you send my way

HAPPY SPRING

 

Happy Spring

As we wrap up the first three months of 2024, I’m reminded of how beautiful spring really is. The blooming flowers. The blue skies and warm sunshine. Such a wonderful time of year. Typically our spring real estate market begins to heat up during this time, too. Don’t get me wrong – it may heat up and take us into a fruitful year, but I’m hesitant to make any predictions yet.  The last few years have been a little wild. Let’s face it… when you go from 2.95% interest rates in January of 2021 to 7.95% interest rates in November of 2023, it’s bound to have an adverse effect on the buyer’s ability to purchase and the overall activity in the market. 

There are still plenty of people who are buying (thank goodness), but many are sitting on the sidelines waiting for things to settle down. I wouldn’t say that home sales are crashing – more like ‘stuck in the mud’ would be the analogy that I would use. 

The past few years have been an interesting time in real estate. Between the soaring insurance cost challenges, interest rate hikes and now a settlement with the Realtor association – let’s just call it a ‘crazy time to be a Realtor’ trifecta. I love my job too much to retire, but….. It’s pretty wild. 

The most important issue is this →  I’m very grateful for all of the referral business you’ve sent our way already this year.  That’s what keeps us going.  I love working with friends and family of our past clients!  

             

Thank you

Spring time means…. SPRING CLEANING!!

Here are some ideas to freshen up your space — pick one a week 

1. Declutter: Go through each room and remove items you no longer need or use.  Donate or recycle what you can

2. Deep clean: Scrub floors, walls, and surfaces.  Don’t forget overlooked areas like baseboards, light fixtures, and vents

3. Organize: Invest in storage solutions to keep belongings tidy.  Use bins, baskets, and shelves to maximize space

4. Rotate seasonal items: Pack away winter clothes and bring out spring and summer items

5. Freshen up fabrics: Wash curtains, bedding and upholstery.  Consider steam cleaning carpets and furniture

6. Tackle outdoor spaces: Clean up yard debris, power wash outdoor surfaces, and inspect and repair any damage

7. Clean appliances: Deep clean the oven, refrigerator, dishwasher and washing machine. Don’t forget to replace any filters

8. Refresh decor: Add a pop of color with fresh flowers, new throw pillows, or decorative accents

9. Review and update: Check expiration dates on pantry items, medications, and beauty products. Dispose of expired items

10. Maintain: Establish routines to keep your space organized and clean throughout the year

Anyone thinking of making a move this year?

Helpful hands make the load light.  I’d love to be those helpful hands.

Should I Stay, or Should I Go?

This is a question that some homeowners may ask themselves in 2024  

If that’s you, let’s talk about your options!

Did you know that 10,000 baby boomers are reaching age 65 every day!  This year marks a major demographic and retirement milestone for America. Four million are leaving the workforce every year. Boomers - those born between 1946 and 1964 are the wealthiest generation on the planet. Wealth gives you options. With 80% of this generation owning a home, they may hold the keys to our current lack of inventory issue. They own $19 trillion dollars worth of real estate in the United States. 

Understandably, many are planning to ‘age in place’. Let’s be honest - 65 isn’t what it used to be.  People are living much longer and some are still working.  For others who are opting to move into more suitable and many times more enjoyable retirement-style surroundings, it’s providing fun, entertainment, golf, and the benefit from someone else doing the cooking.  I’m not predicting the ‘Silver Tsunami’ that some economists are, but I do think that it’s important to weigh your options, and if not you - you probably know someone who is of retirement age considering what the future holds.

One positive is California’s Proposition 19.  This allows those over 55 to take their current property tax base to their new home.  You can take advantage of this up to three times and if you purchase a home that costs more than your existing home, you simply pay the difference.  Finally, a tax bill that has a huge benefit.  Just google CA Prop 19 for details.

Another option is saying goodbye to California … here are the most popular cities if you’re considering that – Las Vegas, Phoenix, Tampa, Orlando and Austin.

Remember, if you’re considering that option, as your Realtor, I can help you find a fabulous Realtor anywhere in the world.  Just give me a call.

Whether you’re planning to buy or sell a home this year or not, we appreciate YOU.  For 31 years, our business has been built on people like you who think of us when the topic of real estate comes up.  We love what we do and won’t be retiring anytime soon.  Quite the opposite… we’re looking forward to another great year of helping buyers and sellers achieve their goals in 2024.

So if you or someone you know is trying to navigate the current real estate market, give me a call.  I’m happy to update you on the market conditions, interest rates, potential opportunities to jump into the market and, of course, can always provide you with reliable resources you may need.

I’m here to help you and all of your referrals

And be sure to check out ‘Coffee with Carol’  on Facebook

CALLING ALL SELLERS

It’s not often that we see such significant buyer activity in January like we’re seeing right now.  We’re back to multiple offers and over asking sales when homes are priced right. Why?  In short – the recent reduction in interest rates.  

Buyers sitting on the sidelines watching the rates go up 11 times over the past 18 months has been a challenging experience for those who wanted to invest in our market.  Now that rates are on the decline, with speculation of them going down even further this year, this enables today’s buyers to purchase their home now and refinance into a lower mortgage later. Great News – they’re all in!

To say that last year’s sales were mediocre would be an understatement.  This graph shows sales between 1999 and 2023.  Last year was the lowest on record, with 2007 a close second (the mortgage meltdown years).  With rates approaching 8% in the late fall, we wondered how long it would be before we would return to a ‘normal’ market.  Then January came and we are now seeing rates in the mid-6% range.  It’s a new day.

There’s only one problem

Where are the sellers??  I get it that people most times want their yards to look pristine with flowers blooming and leaves on the trees but I’m here to tell you that your buyer is anxious now!  With very little to choose from, supply vs. demand would definitely play in your favor.  From time to time we see ‘windows of opportunity’ that don’t last long.  Depending on how quickly the spring market hits – that’s how long this opportunity will last.  If you know me, you know that I’m not a scare tactic Realtor. I know that there are life events such as death, divorce, job transfer that cause people to sell homes throughout the year, but I also know that people rely on these types of windows to make a move.  Can I just tell you that IF I were planning to sell my home this spring, I would seriously consider doing it now.  Less competition is always better for a seller.  This ends my public service announcement about the January market.

As we start the New Year, I want to be sure to remind you of a few things 

First, if you own a home, is it in a trust?  It’s so important that your assets and especially your home be held in your trust.  This prevents your loved ones from having to go through the arduous task of probate upon your death.  I’m not saying you’ll pass this year but seriously, it’s important.  If you need a trust attorney referral, call me.

Second, are you aware of Proposition 19?  This is the tax law that allows you to transfer your existing tax base to a new primary residence.  Since 2020, the law has changed regarding how this proposition can benefit you.  Here are the most significant changes:

• There’s no limit to the sales price of the replacement home
• You no longer have to stay in the existing county
• You can take advantage of this rule up to three times
• You have two years from the close of your sale to make your purchase so you can sell, travel then buy!

Here’s the website to find all of the specifics but this can be a huge savings for those over 55 who have lived in their existing primary residence for years and yet, perhaps the home no longer meets their needs. If you buy at a price that’s the same or less, taxes won’t increase!  If you do spend more, you simply pay the difference.  All good news!

https://www.boe.ca.gov/prop19/

For all of your real estate needs, don’t hesitate to call me!

If you’re planning to buy or sell a home in 2024

It wasn’t that long ago that we were
talking about 8% mortgage interest rates.

HOWEVER… we’ve gotten an early Christmas present for 2024. Rates are finally back under 7%, allowing buyers and sellers to start making plans for next year. All indications are that we’ll be seeing multiple rate cuts in the months to come.  It’s been 18 months since the Federal Reserve made the 11 rate hikes faster than anyone expected, but that’s now in our rearview mirror.

So let’s talk about what you should do if
you’re planning to buy or sell a home in 2024

Buyers:

• First things first – Call me to discuss a plan and the steps to buying a home or finding a different home that meets your current needs.
  
  
• Second – Get your financial plans in order.  The preapproval process is something you should do before you start looking at homes. This will tell us what payment you’re comfortable with and determine the home we can be searching for. You’ll know when you find the right home, but if you don’t have your loan ready to go, you could miss out so do it now.  If you need a referral for a lender, I have a great mortgage broker who will guide you through the process.  This is the least exciting part of the process but when you’re done, like paying your taxes, you can breathe a sigh of relief and get on with the fun part of finding a home.
  
  
• And finally – Let’s start looking!  I look at homes every day and would love to help you find exactly what you’re looking for.  Why would you want to wait until the spring market comes and there’s more competition!  Let’s start soon so that you can beat the rush.

Check out my BUYER services at WhyBuyWithCarol.com

Sellers:

• Buyers are just waiting for homes like yours to come on the market.  They’re excited about the recent rate cuts and are searching every day to find your home.  Do you need to have somewhere to go??  We can help you coordinate that, too.
  
  
• When the available homes for sale are sparse, you may think it’s not a good time but actually, that’s the time that you’ll get the most for your home AND be able to sell contingent on finding your next home in the process. We do it all the time!  Most sellers, unless you’re moving out of town, need to have a replacement home but can’t without the sale of their current home.  That’s called ‘selling contingent’.  It simply means that the buyer we find has to be willing to give you time to negotiate your purchase.
  
  
• The best time to sell is when there’s less on the market – less homes on the market can mean more buyer interest in your home.  That time is typically in the first quarter of the year AND with interest rates coming down, buyers are more excited than ever at the prospect of owning a home in 2024.  Be one of the smart sellers who doesn’t wait for spring when everyone else sells.  Get ahead of the game and take advantage of the fact there are many buyers on the sidelines just waiting for a home like yours to come on the market.
  
  
• Not sure what your options are?  Call me to discuss a plan and the steps we can take now to get you ready for the market.

Check out my SELLER services at WhyHireCarol.com

Spring Selling Season is going to be a crazy time.  Get ahead of the curve and be settled into your new home before the rest of the buyers and sellers wake up from their long winter’s nap.

Wishing you a happy, healthy and prosperous 2024

  Carol Kellogg, REALTOR®
   Coldwell Banker Realty

   (916) 390-2437
   CarolKellogg.com
   Cal DRE# 01150953

Season's Greetings

 

As someone who likes to be able to give a clear perspective on the real estate market, this year has been a challenge to predict.  As we began 2023 with mortgage interest rates in the mid-6% range, buyers seemed stunned by the quick rise from the 3.2% we enjoyed at the beginning of 2022, only to watch them skyrocket to a staggering mid-7%  Thankfully over the past weeks we’ve experienced an improvement in rates.  Amid these astronomical changes in the cost of money, we also are experiencing a critically low volume of ‘good’ inventory.  I say good because many of the homes today are overpriced and will languish on the market until sellers become realistic with pricing or take them off the market, turning it into a rental.

While the normal days on market have increased, some homes are clearly not priced according to what buyer demand would dictate.  Buyer demand drives the market and ultimately determines what a home is worth.  Again, this is where the challenge comes when we’re floating in uncharted waters with the high cost of money and few good homes to choose from. Buyers are still fighting to be chosen when they see something they want.  Hence why prices continue to remain stable.  Supply and demand will always be the driving force; that’s the easiest way to describe what’s happening.  If you have something that someone wants and it’s priced right, it will sell.  That’s real estate 101.

Now, if in the spring we see rates come back down to the 6% range, which they’re predicted to do, I think we’ll see more sellers jump into the market creating more supply for the buyers that are sitting on the fence – but someone has to jump first.  Sellers who need to purchase that replacement home are hesitant when they’re not seeing anything they like as a viable option to replace what they have; especially if they’re enjoying a 3% mortgage. The fact that rents have gone up significantly over the past decade also contributes to buyers no longer wanting to make their landlord’s house payment.  For those who haven’t paid attention, the average rent for apartments in Sacramento is between $1,650 and $2,100 a month (for an apartment)!   You can pay upwards of $4,000 a month to rent a large home in Sacramento County.

If you climbed under a rock for a few years and came back out today, you’d be shocked at what has changed about our real estate market.  For years we were the best kept secret but no longer is that the case.  From where I sit, it happened very quickly.  A lot of things contributed to the increases but I don’t think we’re turning back; at least not in a significant way AND there are promising signs for the 2024 market! This is almost completely dependent on mortgage rates and increased inventory.


Here are some interesting facts about today’s market:

• 22% of home purchases in the Sacramento region are cash
• 49.5% of home sales closed below the original list price
• Approximately 500,000 people have left California since 2020
• The top choices to relocate to were Texas, Arizona and Florida

While people are leaving California, they’re not leaving the Sacramento region; hence why we’re not seeing an increase in our homes for sale.  Greater Sacramento has been cited as one of the five "most livable" regions in America and the city was cited by TIME magazine years ago as America's Most Diverse City… all things to be proud of and blessed by.

Nationwide the market is challenging.  Regionally we’re down about 25% year over year.  There are a variety of predictions that I’m reading about next year’s market but as has been the case most of this year, we just have to see what happens.  My suggestion is if you see a home you like and you can afford it, call me.  We’ll help you negotiate a sale that works for you.  And, if you need to sell your home, we’d love to be your Realtor of Choice!  No matter what the market is, people always need to buy and sell real estate.

Whatever the case, my Christmas wish is that you’ll think of us when the discussion turns to Real Estate.  Whether you’re just curious, or have an immediate need, we are here to serve YOU and all of your referrals.  It’s because of YOU that we continue to enjoy success in our profession and love what we do.

Holiday time brings a multitude of reasons to reflect on just how fortunate we are.  May the holiday season find you beginning each day with a grateful heart.

Wishing you a Merry Christmas and a very Happy New Year

Be sure to watch for ‘Coffee with Carol” beginning in January every Thursday morning on Facebook and YouTube for a weekly update on our local market and a look into some beautiful homes for sale.

http://bit.ly/Review_CarolKellogg 
P.S. We LOVE Client Reviews

Will 8% interest rates bring down home prices?

For home prices to adjust, we need an imbalance of supply versus demand, and this market is surprisingly balanced, but we may be starting to see that tide turning with mortgage interest rates hitting 8%.  When mortgage rates go up, we lose more homebuyers who aren’t able to qualify or are concerned about their ability to commit to the payment long term. Since the bottom of 2021 when rates were the lowest, over 60% of potential home buyers in America cannot afford to buy a home in our current market. As rates continue to go up, the buyer pool shrinks. Last year was the craziest market we’ve experienced in a long time but we’ve watched the market diminish as rates continue to do the unthinkable.  As we began 2023, rates at 6% appeared to be stable - nothing gangbusters, but now we have to focus on the weekly data more than ever because it’s been 23 years since we’ve experienced 8% rates.  Does that cause a pause in the market? It’s anyone's guess.

The reality is that it’s not just mortgage rates that are the driving force. We just came off of 40% price increases in a very short amount of time. The pandemic started the craziness.  We have to look at the total housing costs that matter and the one variable is price. When we see increases in inventory (homes for sale) and days on market (homes taking longer to sell), it will become clear that demand has fallen because of the market conditions.  Up until very recently, prices continued to make conservative increases every month because of the continued demand; however, the question remains… Will 8% interest rates bring down home prices?  These are uncharted waters.


Will our market continue to see “seasonality changes”

The volatility of rates will have a larger impact than the change in seasons. Buyers who can’t or didn’t buy when rates were lower are watching for rates to come back down. There are so many variables that predictions of ‘what’s to come’ are practically impossible. I watch the data every day because that’s what determines where we’re headed. Economic reports, retail sales, home builder sentiment, mortgage applications, housing starts, jobless claims, canceled sales… is your head spinning yet?


No predictions – Just the facts

For those watching the market, weekly stats will become critical because monthly data is simply too old.  Markets can change on a dime. By the time the monthly statistics are reported, it’s a new day. When mortgage interest rates go from 7% to 8% in such a short time, it tends to send a wave of uncertainty through the market.  Here are the stats for this week in the four-county region… Pended sales are down 22% from the previous week.  Closed sales are down 44%.  Some may say that it’s the time of year, so let’s compare sales this year to last… Pended sales for this same time are 18% fewer and closed sales are 33% fewer than 2022.

I’ve stopped asking “what next” so instead I’ll just be sharing the weekly data of home sales - available homes for sale, pended sales and closed sales numbers. There are still sales happening every week.  No predictions.  No negativity.  Just the FACTS.

FOUR COUNTY REGION - WEEKLY REPORT

SACRAMENTO COUNTY - WEEKLY REPORT

We're here to help you, no matter what the market is doing.

Every day is a gift

So as I sat down to write this month’s blog, I struggled a little deciding what to talk about.  There’s a lot going on in the market now with interest rates approaching 8%.  With high interest rates comes a challenging market for buyers. For sellers who want to make a move into a more appropriate home, their obvious concern is about finding a replacement property with so few homes on the market.  Every situation is different but through it all… we are grateful for every opportunity to help those who do want (or need) to buy and sell.  That’s why I continue to remind myself that every day is a gift!


How’s the market??

Surprisingly, or maybe I shouldn’t be too surprised, home values continue to increase.  Not because we’re in what would be considered a ‘normal market’, but because the supply of homes is so sparse.  People are still needing to purchase housing and don’t seem to be too phased by the cost.  I may be a little tainted because I remember not that long ago when a normal house payment for a first-time buyer was around $2,000; today it’s almost double that, but rents are high so the benefits of homeownership outweigh the cost.

I’m not one who likes to make predictions because those who do, many times are wrong.  I will say that I’m keeping a close (daily) eye on the real estate market. From what I’m seeing right now, I don’t expect interest rates to come down anytime soon.  If anything, they’re expected to take one more tick up before the end of the year - although there’s a lot of people pleading with the Feds to stop.

Here’s a look at this month’s sales activity in the four-county region.  Notice that there are still a lot of sales!!  September closings were 1,438 - down 23% from this same time last year; however if you look at how many homes buyers had to choose from, we have 34% fewer homes on the market than at this same time last year.  The question is this - If we had more homes on the market, would we have more sales??  Maybe our market isn’t struggling because of the cost of money.  Maybe it’s struggling because sellers aren’t selling!!  Just a thought…



Whatever the market conditions are, we’re here to help you and those you know who are thinking or needing to buy and sell real estate.  We consider it a privilege to be of service to you, your friends and family!  As we approach the holiday season, we want to wish you nothing but the best and appreciate all that you do for us.  Don’t forget… Every day is a gift. 

What’s Happening in the Real Estate Market?

What’s Happening in the Real Estate Market?

Not a lot of change in the market when you compare July and August numbers.  Prices are flat but sales continue to happen. Some sellers are experiencing multiple offers when priced right with the current conditions.  Others may sit on the market a little longer, then adjust the price to meet the market.  Either way - homes are selling even with over 7% interest rates.  Are we seeing a flood of cash coming to our region??  No, not like we were during the pandemic, but what we do see are sellers taking their equity and moving to homes that better serve their current needs.  When a seller is putting a significant down payment because their home’s value has increased significantly over the past decade, those interest rates aren’t quite the bitter pill to swallow.  They’re also taking advantage of Proposition 19 which allows them to transfer their current tax base to the new home.

What we’re not seeing is enough new home construction, except in some areas, but not everyone will want to move to the outskirts of town. This is where the resale homes are needed but not coming to market.  Why?  Why would they?  If and when we see 5% mortgage rates, we expect to see a more normal market again but until then… this is the new normal for our real estate market.  Some thought that we’d see a calming of the rates by the end of this year, but that’s not on the horizon. Rates seldom come down as quickly as they go up.


Let’s get technical for a minute – The FED has ‘maybe’ finally gotten what they wanted.  I won’t bore you with the deep dive details but the guru’s are predicting that we’ve reached some key metrics that are satisfying what they (the Federal Reserve who control interest rates) wanted to accomplish. Look for the high interest rates to begin to show signs of cooling. I didn’t say going down, but perhaps not going much higher. Labor markets, bond markets, job numbers, student loan debt payments, inflation… What does this have to do with the real estate market?  The short answer is if you were waiting for rates to come down, you’re going to be waiting awhile. For those who are waiting for prices to come down, you’re also going to be waiting… It's basic supply and demand.  Fortunately, the demand for housing is stable but we continue to have inventory challenges. The variables have to change for us to see pressure on sellers to lower their price.  Until that happens, it will continue to be a seller’s market.

Here’s a snapshot of what inventory levels have done over the past 5 years.  The dark line are monthly closed sales and the light green was the available inventory.  See a problem?  The right side of the graph is today. We simply don’t have enough homes on the market to supply the need.



Until my crystal ball starts working again, I won’t predict how long we’ll be in this type of market but we continue to sell homes. Most people have no intention of selling their home, but some will. When you hear of those people needing a Realtor – we appreciate you thinking of us. We’ve been through many real estate cycles.  This one isn’t as difficult as some we’ve been through.  It’s a little more unpredictable, but definitely not the worst we’ve ever experienced. Just different.

Are you confused by all of the mixed messages?

Are you confused by all of the mixed messages?

You're not alone.

This has been a challenging year for real estate. The housing market has gone through its share of changes in the past three years. While record-level sales and price appreciation was experienced during the pandemic, questions of “crashes” and “busts” were on the radar.

Fast forward to today…

The latter hasn’t come to pass, but challenges are still present. Home values have remained resilient as the market is trying to find a balance in 2023. While economists initially anticipated a slight price decline at the start of the year, experts have revised their forecasts, predicting a 5.5% price growth by year’s end; some areas are even higher.

Favorable as that may seem, rising prices and surging mortgage rates have not favored buyers. Affordability remains an issue in the market as this year’s mortgage rate increases have doubled the mortgage cost. That’s right – doubled.  A home that you would have purchased three years ago as a first-time buyer is now double the payment it was just three years ago for that same home.

The 30-year fixed-rate mortgage averaged 6.973% this week, up from 6.81% last week.  It wasn’t that long ago that we were enjoying mortgage rates in the two’s. This is the primary reason potential home sellers are sitting on the sidelines.  The thought of a mortgage that’s edging close to 7% is daunting and for some, not optional. Some don’t qualify for the home they live in today.

Bottom line.. Mortgage rates are simply too high to expect any ‘normal’ growth in the housing market.  Even though demand, due to the lack of supply, appears to be strong, most would-be buyers are opting to wait until rates come back down.  Is that a good idea while prices continue to climb?  It depends. We currently have 59% fewer homes on the market right now in the four-county region. Simply put – most people aren’t moving because they can’t afford to replace the home they currently live in at today’s interest rates. If rates come back down to 5%, the housing market could get interesting so buying now and refinance later could get you in at a lower sales price.

Where do we go from here?  As the summer months pass and we head into the fall, I don’t anticipate much change in the demand for homes.  Surprisingly we are still seeing multiple offers and over-asking bidding going on.  This is having an effect on prices. Are we at the ceiling of rate hikes?  I wish I could say a resounding yes, but time will tell.  The negative talk about the results of downgrading of the U.S. credit rating may or may not have an affect on the housing market – how’s that for a prediction.  I, too, could be an economist!!

While it’s been a challenging year, we’ve continued to sell homes thanks to YOU and your continued support. Our business is fueled by repeat and referral business from our past clients and friends.  For this we are very grateful.  After 30+ years of selling real estate in our region, one thing remains the same.  We love what we do and appreciate those of you who, when given the opportunity to recommend our services, will gladly share our name with others.
THANK YOU 

Mid-Year Property Reviews

This month I am working on providing MID-YEAR REVIEWS.  An opportunity for me to show you what’s happening in your neighborhood during the first six months of 2023. Even if you’re not one thinking of selling your home, you are still undoubtedly curious about the current value of your home. While this isn’t an actual appraisal, it does give you some idea of what property values are doing in your area.  One should appear on your porch soon.

While doing this research, I’m often surprised at how many homeowners don’t have their home held in a trust, but instead it’s only in their name. A revocable living trust is something that everyone should consider.  Why?  If your home and frankly all of your assets, are not in a trust, the beneficiary will have to go through probate upon your passing. Probate court is time consuming, costly and will make all of your wealth and assets public record. It can also cause family feuds while trying to determine who you would have wanted to receive your assets. This would make dealing with your disbursement much more complicated than if you would take the time to establish a trust now.

Here’s the definition:  A California revocable living trust is a legal document that allows you to transfer ownership of your assets (such as property, investments, and bank accounts) into a trust (a legal document) during your lifetime, and you can change or revoke it at any time as long as you are mentally competent.

Any assets should be held in a trust. It should be set up by a qualified trust attorney who can guide you through the process and provide you with peace of mind.  A well-written revocable trust leaves no questions about how your wealth and assets are to be distributed upon your passing.  It articulates exactly how things are to be distributed according to your wishes.  You can still benefit from your trust, i.e. you are in control of everything held in the trust.  It’s simply the specific instructions as to who gets what and when. If you need a referral for a trust attorney, please let me know.  It’s an important step that many think they’ll do “some day”.  Let’s work on moving that to the top of your to do list.

Speaking of “to do lists”... if you’re working on projects around the house and find yourself needing a referral for a painter, handyman, electrician or some other service provider, don’t forget that I work with these types of business professionals every day.  I’m always happy to share a recommendation with you.  Just ask!

And finally… a word about the real estate market.  I’m starting to sound like a broken record that just keeps playing the same song over and over, but that’s what we’re seeing.  Not enough inventory for would-be buyers and interest rates that are shockingly high compared to a few years ago.  Will this ever change?  Yes, we think so.  It’ll take a downward shift in interest rates, getting closer to 5% to make homeowners want to give up their three and four percent current mortgage rates to make that move; unless of course you’re one who is moving out of California – taking your equity and running for the border – you can call me anytime you’re ready.  It’s a seller’s market 🙂

Oh The Places You Will Go…

Before you get too excited for me, I didn’t move to the Islands.  I did visit Kauai last month and it was a beautiful vacation but I’m back home now and I’m back to selling real estate in our region.  I did want to be sure you know, however, that I GO WHERE YOU GO when it comes to being able to help you, no matter where that may be. Through our relocation network at Coldwell Banker, I am able to interview and help you select a real estate professional worthy of your business. So that being said, the next time a conversation turns to real estate, or if you’re looking at a sale or purchase outside of our area, I hope you’ll give me a call.

Speaking of the real estate market, let’s talk about how things are going locally.  Did you know that there are 53% fewer homes on the market in Sacramento County than we had this same time last year?  Some zip codes are even more drastic.  At a time when we would typically be seeing sufficient supply of homes for sale to satisfy the demand, 2023 is painting a very different picture. As is typically the case, supply vs demand has a way of driving prices up, which we're experiencing. It also causes homes to stay on the market fewer days; another result of this market. And sellers are getting over asking price in many cases. It’s becoming very apparent that most homeowners over the past few years took advantage of the incredibly low interest rates and have no interest in moving. The pandemic has had a lasting effect on many industries and real estate is no exception.

You might think that the 7% interest rates would be causing buyers to take a step back and wait for money to become more affordable but surprisingly, they’re not.  This graph is an example of sales in Orangevale.  What this graph is showing you is that there were 30 sales in the month of May; leaving only 16 homes available for sale at the end of the month.  If this same trajectory were to continue without new inventory, we would be out of homes for sale in Orangevale in two short weeks. That’s a little crazy but that’s the reality of today’s market.  We keep waiting for sellers to take advantage of this fast paced market but so far, most are sitting tight.



Obviously some people will sell their home in this market.  There are factors that cause people to want or need to sell in every market and when they do, it appears there will be a line at the door.

I continue to be grateful as we’ve been blessed over the years to work with people like YOU who keep us busy, no matter what the market conditions are.  If you have questions about your neighborhood or a neighborhood you’re considering making a move to, don’t forget that I'm here for you.  Let’s talk about real estate.  Call me.