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2020 VISION FOR REAL ESTATE IS LOOKING GOOD

Lower than expected interest rates kept real estate strong in 2019 and many experts predict 2020 will keep rolling in the same direction. According to a recent article in Forbes, Odeta Kushi, deputy chief economist at First American, shared that mortgage rates will remain low next year, between 3.7 and 3.9%, fueling a healthy real estate market.

PRICES TO KEEP RISING

Tight inventory and increased demand will keep pushing prices higher. In fact, with mortgage rates either staying the same or actually dropping, competition will increase for buyers which may result in bidding wars. Redfin predicts one in four homes will result in a bidding war which is great news for home sellers who may have been holding out when most homes prices dropped slightly on the Central Coast over the past year. The Forbes article shared data from CoreLogic, stating home prices should tick up by 5.6% by next September which is more than 3.5% from this year.

ECONOMIC GROWTH, NOT A RECESSION

Although many economists have predicted a mild recession in 2020, a housingwire.- com report states, “Current conditions point to a recipe for continued economic growth, not a recession. Growth itself may be slower than the strong pace we’ve seen at times throughout the recovery, but growth will still occur for at least the next year.” Reasons cited for the economic growth are a healthy consumer confidence and job growth.

HOME SIZES WILL SHRINK, BUT AMENITIES ARE KING

Inventory will continue to be tight as Millennials and Generation Z enter the market, but Baby Boomers are not budging from their long-time homes. Zillow predicts that new home sizes will shrink for the fourth time of five years due to younger buyers having less money and can’t afford to purchase larger homes. To make up for square footage, many new homes are offering upgraded amenities to attract buyers.

Whether you are looking to buy or sell in the new year, experts agree you should enter the real estate market early in 2020 to take full advantage of the growing market. As the #1 broker on the Central Coast, C21 Hometown Realty’s Agents have the most homes listed and the most homes sold! Visit one of the ten local offices throughout the Central Coast or click on c21home.com.

About CENTURY 21 Hometown Realty – Hometown Realty is the leading real estate firm on the Central Coast of California with offices spanning Santa Barbara County and San Luis Obispo county offering expert agents and convenient locations.

FALL IS THE BEST TIME TO MOVE

Central Coast locals often boast that Fall is one of the best times of year to enjoy all our area has to offer. The season brings smaller crowds at the beach, warm sunny days, a plethora of fun Festivals and the long-awaited harvest seasons at the wineries. But did you know it marks a great time for buyers and sellers and is actually the best time of year to move?

REASONS TO SELL IN THE FALL

REASON #1: SERIOUS BUYER POOL While there may not be as many buyers looking as in the spring housing market, serious buyers are looking to move before the holiday season. With fewer houses on the market, serious buyers will be motivated to make offers.

REASON #2: DIFFERENT BUYERS Spring and Summer are when families are likely to make moves, but for Millennials and Empty-Nesters Fall is the perfect time for these savvy shoppers. Not only is it less expensive to travel to new relocation destinations, but they also know they can avoid “high season” real-estate rates and moving costs.

REASON #3: LOWER HOME IMPROVEMENT COSTS Before selling, most homes will need some sprucing up and home repairs. Whether you are a do-it-yourself home repairer or you call in the experts, many times supplies go on-sale and Contractors have less work and may be willing to negotiate rates during the Fall months.

REASONS TO BUY IN THE FALL

REASON #1: LESS COMPETITION You will get much more attention from your ‘not as busy’ real estate agent allowing them to be more attentive to your needs. In addition, lenders, home inspectors, painters and movers can get to your needs much quicker.

REASON #2: TAX ADVANTAGES By closing on a new home before the year’s end you will be eligible for beneficial tax deductions. Deductible items can include closing costs, mortgage interest and property taxes. Even closing in December will allow you to deduct property taxes and interest from your entire year’s earnings.

REASON #3: YEAR-END SALES Whether you are redecorating to help sell your home or designing space in your new home, some of the best savings of the year can be found on appliances, electronics, and furniture. Competing retailers offer large discounts during the holiday season and it’s the perfect time to buy necessary items.

If you consider yourself a savvy shopper and the idea of saving time and money appeal to you, then now’s the time to buy or sell your home. Your C21 Hometown Realty, the hometown experts, can help you find your next dream home or get your home sold quickly. As the #1 broker on the Central Coast, C21 Hometown Realty has the most homes listed and the most homes sold! When you’re ready, visit one of the eleven local offices throughout the Central Coast or click on c21home.com.

About CENTURY 21 Hometown Realty – Hometown Realty is the leading real estate firm on the Central Coast of California with offices spanning Santa Barbara County and San Luis Obispo county offering expert agents and convenient locations.

CALIFORNIA DREAMIN’ FOR PROPERTY INVESTORS

The “California Housing Market Report and Predictions” article released by Gord Collins of Manage Casa, explored the key factors that will drive the California market for the years ahead. Below are key excerpts from the article.

CALIFORNIA DREAMIN’

California is a special place to live and rent, and to buy and sell a home. The market diversity is hard to comprehend. And the battle for homeowners hanging onto proposition 13 benefits is very different for young buyers who discover that renting an apartment is better.

It’s this dynamic pull of outrageous wealth and outrageous regulations that makes it hazardous to invest in real estate in this state. Definitely wise to hire a Realtor.

No other economy is as diverse and dynamic. It’s the opportunity that attracts millions of newcomers to live and start businesses here. Most tech startups for instance launch in the Bay Area despite the high cost. Employment and wages have grown and that has put pressure on the California housing market.

WHAT’S HAPPENING AND WHAT MAY HAPPEN

A few pundits believe the California housing market is well past peak. Yet economics, demographics, buyer demand (and last 2 months sales stats) seem to refute that notion. Millions of apartments need to be built in the next decade, a good portion, right here in CA to soothe in insatiable demand (housing crisis).

California’s economy grew 4.7% in the 12 months ended in February compared to the national rate of 2.8%. It could grow at a 2.55% pace in the next six months — faster than the national 1.59 – report from Mercury News.

With interest rates fears gone, and new trade deals with China, any negative economic aspects could disappear. That would mean fast rising prices again for the whole state.

KEY FACTORS IN CALIFORNIA’S HOUSING MARKET GROWTH

1. wages create prices pressure on housing
2. demographics – lots of millennials buying and babyboomers selling
3. interest rates – staying stable
4. migration – slowed to keep prices stable
5. cost of business – extremely high (would you like to see my San Francisco parking fee?)
6. home prices – wickedly high
7. rent vs buy – for most the idea of purchasing is a hopeless dream
8. multifamily new construction – picked up nicely but NIMBY’s still winning
9. taxation and tax savings – much better this year With taxes dropping, interest rates stable, wages rising, prices stable, mortgage requirements reasonable, and rising personal savings, why aren’t people buying? Simple, they’re hoping prices will plummet.

A HEALTHIER CALIFORNIA

There are more homes for sale and more buyers. After a strong lull, the upward march on California homes prices continues.

Zillow gives California an improved 9.6 out of 10 rating and a revised forecast of 7.6% price growth prediction for the next year.

“We’re seeing interest and money shift away from the overheated markets into less expensive secondary markets…Even if we see some markets overheat and demand softens slightly, that doesn’t mean prices will go down” — Javier Vivas, director of economic research at realtor.com.

To read the entire article addressing “California Housing Market Report and Predictions”: https://managecasa.com/articles/california-housing-market-report/

About CENTURY 21 Hometown Realty – Hometown Realty is the leading real estate firm on the central coast of California with offices spanning Santa Barbara County and San Luis Obispo county offering expert agents and convenient locations.

Should you buy a second home? Predictions for the 2019 market.

In view of the healthy economy, you may be thinking of buying a second home as a vacation getaway, as housing for family members or as an investment property.
That could reap great benefits, but you should only proceed with insight into this year’s secondary home market.

A few predictions from real estate specialists:

In general you can expect a buyer’s market, according to Bloomberg.

Costs may be attractive in vacation areas, where prices grew only 14.8 percent in the past three years compared to 25.2 percent in non-vacation areas. Another report notes vacation markets have underperformed the overall market every year but one since 2010 (except in the Midwest, where they’re now slightly overperforming). Factors in the downward slope may include everything from climate change to demographics to Trump’s tax reforms.

Because interest rates may rise this year, buyers may wish to act soon, anticipating slightly higher loan rates for secondary homes.

SLO MILLENNIALS TO TAKE THE BUYING PLUNGE

San Luis Obispo rent is steadily increasing at the highest rates in the state. Central Coast Millennials may soon follow the national trend and take the plunge into home ownership. The National Association of REALTORS® recently reported Millennials hold the highest share of home buying activity out of all other generations for the fifth consecutive year.

Rents in San Luis Obispo have increased an alarming 39.42%. An increase from September 2017 to an average of $1512 for a 1-bedroom and up to $2600-$2800 for 2 to 3-bedrooms, according to Rent Jungle. The tight rental market has forced Millennials into considering home-ownership as an alternative. They are discovering they are getting more bang for their buck.

MORE BANG FOR THE BUCK

A recent rent.com survey indicates that 51 percent of millennials are spending more than 40 percent of their annual income on rent. The factor most important to them is affordability.

But here’s what most Millennials don’t know. Instead of paying $2,500 a month in rent to a landlord, they can purchase a $435,000 home with only 5% down conventional financing, and also have no monthly mortgage insurance “PMI”, for the same total monthly payment.

With very limited supply of rentals and increasing costs, successful realtors are doing well to educate these potential first-time home buyers on the comparative cost of renting and buying.

Other important factors at the top of the millennial renters wish list are size and amenities so Realtors are focusing on the facts that they can get something bigger, with more amenities, if they buy.

FIRST-TIME HOME BUYERS

Because of their age, most millennials qualify as first-timers and usually have less funds for a down payment and might also have student debts, poor credit, or financial worries that make it hard to finance a purchase. Realtors at Century 21 Home can guide potential buyers by knowing the best programs out there to deal with their unique financial situations.

MOST LIKELY GENERATION TO USE REALTORS

Millennials are the most likely generation to use a real estate agent. 90% of Millennials are purchasing through an agent. Among the trends Realtors are seeing in the younger home-buying generation, they are more likely to live closer to friends and family, rather than in select areas of the city or certain schools. They are also buying condos in the city at a very low rate. Millennials answered that the top benefit their agent provided was understanding the buying process.

About CENTURY 21 Hometown Realty – Hometown Realty is the leading real estate firm on the central coast of California with offices spanning Santa Barbara County and San Luis Obispo county offering expert agents and convenient locations.

REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics. C21 Hometown Realty is proud to have all their agents as members of REALTOR.

SEASONS CHANGE…AND SO HAS THE MARKET

You can feel it in the air! The season has changed and Fall has arrived. Historically, fall is the time when the real estate market slows down after the summer rush as families settle into a new school year. And this year is no different…or is it?

In the last few weeks, we have seen a flurry of price reductions and listings are now taking longer to sell. Could this slow down be more than seasonal cyclical changes or is it the market correction certain economists have been predicting for real estate?

Fortunately, today’s market lacks the key indicators of a a true market correction such as:

Creative Lending – as real estate professionals, we know lenders are diligent in ensuring today’s buyers can properly qualify for home loans.

Unemployment – “Help Wanted” signs are everywhere and the national unemployment rate is 3.7% and decreasing.

Economic Expansion – Since June of 2009, the US has experienced ongoing economic expansion making this the country’s second longest on record. In fact, if growth continues as expected by July of 2019 this expansion will become the longest in history.

Foreclosures – According to ATTOM Data Solutions, in the first six months of 2018 showed foreclosures down 15% from a year ago and 78% from 2010.

What does this mean for Central Coast Buyers? Buyers are in a great position, especially renters and first-time home buyers. Lenders have great incentives and programs for first-time home buyers and bidding wars over a desired property are no longer the norm. Also, the $650 tax credit allotted to renters pale in comparison to the thousands of dollars in mortgage interest deductions making purchasing home financially prudent.

Should Central Coast Sellers be worried? Not at all! In fact, here at C21 we encourage sellers to take part in “Fall Ball” vs. “Spring Fling”. During the Fall, buyers have less inventory to compare and choose from rather than the multitude of properties during the “Spring Fling.” Sellers that do not have unique selling features such as ocean views and stellar locations can find selling a home easier.

Real estate is still in full swing here on the Central Coast! So enjoy the change in the weather and look for the opportunities that the new season brings!

About CENTURY 21 Hometown Realty – Hometown Realty is the leading real estate firm on the central coast of California with offices spanning Santa Barbara County and San Luis Obispo county offering expert agents and convenient locations.

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