Gold Country CA Real Estate Blog and News

93% of Americans Believe a Home Is a Better Investment Than Stocks

93% of Americans Believe a
Home Is a Better Investment Than Stocks | MyKCM

A recent Survey of Consumer Finances study released by the Federal Reserve reveals the net worth of homeowners is forty times greater than that of renters. If you're wondering if homeownership is a good investment, the study clearly answers that question, and the answer is yes.

Do Americans believe a home is a better investment than stocks?

In a post on the Liberty Street Economics blog, the Federal Reserve Bank of New York notes that 93.3% of Americans believe buying a home is definitely or probably a better investment than buying stocks.

Here's how the results break down:93%
of Americans Believe a Home Is a Better Investment Than Stocks | MyKCMThe survey also shows a wide range of reasons why Americans feel that way (respondents were able to pick more than one answer):...

Homeownership Is Full of Financial Benefits

Homeownership Is Full of
Financial Benefits | MyKCM

A Fannie Mae survey recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in today's power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:

  • 88% – a better chance of saving for retirement
  • 87% – the best investment plan
  • 85% – the chance to be better off financially
  • 85% – the chance to build up wealth

Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.

Does homeownership actually give you a better chance to build wealth?

No one can question a person's unique feelings about the importance of homeownership. However, it's fair to ask if the numbers justify homeownership as a financial asset.

Last fall, the Federal Reserve released the Survey of Consumer Finances, a report done every three years, with...

Don't Sell on Your Own Just Because It's a Sellers' Market

Don't Sell on Your Own Just
Because It's a Sellers' Market | MyKCM

In a sellers' market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today's market as an opportunity to FSBO. Let's unpack why that's a big mistake and may actually cost you more in the long run.

According to the ...

How a Change in Mortgage Rate Impacts Your Homebuying Budget

How a Change in Mortgage Rate
Impacts Your Homebuying Budget | MyKCM

Mortgage rates are on the rise this year, but they're still incredibly low compared to the historic average. However, anytime there's a change in the mortgage rate, it affects what you can afford to borrow when you're buying a home. As Sam Khater, Chief Economist at Freddie Mac, shares:

Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power. (See graph below):

How
a Change in Mortgage Rate Impacts Your Homebuying Budget | MyKCMWhen buying a home, it's important to determine a monthly budget so you can plan for and understand what you can ...

What It Means To Be in a Sellers' Market

What It Means To Be in a
Sellers' Market | MyKCM

If you've given even a casual thought to selling your house in the near future, this is the time to really think seriously about making a move. Here's why this season is the ultimate sellers' market and the optimal time to make sure your house is available for buyers who are looking for homes to purchase.

The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale is still astonishingly low, sitting at just a 2-month supply at the current sales pace.

Historically, a 6-month supply is necessary for a ‘normal' or ‘neutral' market in which there are enough homes available for active buyers (See graph below):What
It Means To Be in a Sellers' Market | MyKCM...

To Renovate or Not To Renovate Before You Sell

To Renovate or Not To
Renovate Before You Sell | MyKCM

When thinking about selling, homeowners often feel they need to get their house ready with some remodeling to make it more appealing to buyers. However, with so many buyers competing for available homes right now, renovations may not be as vital as they would be in a more normal market. Here are two things to keep in mind if you're thinking of selling this season.

1. There aren't enough homes for sale right now.

A normal market has a 6-month supply of houses for sale, but today's housing inventory sits far below that benchmark. According to the National Association of Realtors (NAR), there's only a 1.9-month supply of homes available today. As a result, buyer competition is high and homes are only on the market for about 21 days, during which time many receive multiple offers from hopeful buyers.

In a competitive market that's moving so quickly, it makes sense to sell your house when buyers are scooping homes up as fast as they're being listed. Spending costly time and money on renovations before you sell might just mean...

What Is the #1 Financial Benefit of Homeownership?

What Is the #1 Financial
Benefit of Homeownership? | MyKCM

There are many financial and non-financial benefits of homeownership, and the greatest financial one is wealth creation. Homeownership has always been the first rung on the ladder that leads to forming household wealth. As Freddie Mac explains:

Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth' is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.

Odeta Kushi, Deputy Chief Economist at First American, also notes:

“The wealth-building power of homeownership shows that home is not only where your heart is, but also where your wealth...

Helping Amador County: Interfaith Food Bank

How you can help give back to those that give the most.

amador county food bankFor the Interfaith Food Bank of Amador County, the year 2020 was a year of many struggles, and thanks to support from our community, even more triumphs. Despite taking on an almost 20% increase in the number of clients they serve, they also had to persevere with a lack in staff. Normally, Interfaith logs about 20,000 volunteer hours annually. But for obvious reasons, 2020 saw only 6,400 volunteer hours logged. So, how did this local food bank manage to provide to over 14% of the population of Amador County last year? Because those are the results of people who care:

“We’re serving clients as we always have for the last twenty years, but we’re doing it a lot differently now,” said Beth Stanton, the Executive Director of the Interfaith Council of Amador, who has been running the food bank for over four years. “We used to have our clients come in to our lobby and sit down, have coffee, maybe a cookie, and we would talk with them—in addition to giving them groceries.” Now, their only focus is making sure that food gets to the people that need it. And that’s no easy feat when you have a staff of 4, only 4-5 national guards helping out, and a handful of volunteers that have only just begun to trickle back in due to the pandemic.

During 2020, Interfaith provided over 1,450,000 pounds of food to 2,140 families (that’s 5,238 individuals), bringing them food multiple times a month. Over half of those helped were children and seniors. However, when it comes to helping the children in our county, Interfaith could always use more assistance: “We are...

How Smart Is It to Buy a Home Today?

How Smart Is It to Buy a Home
Today? | MyKCM

Whether you're buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.

However, there's one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

From a purely financial standpoint, if the answer is ‘yes' to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,' you should definitely buy now.

Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.' Mortgage rates are expected to rise and home values are expected to appreciate rather nicely.

What does this mean to you?

Let's look at how waiting would impact your financial situation....

Home Prices: What Happened in 2020? What Will Happen This Year?

Home Prices: What Happened in
2020? What Will Happen This Year? | MyKCM

The real estate market was on fire during the second half of 2020. Buyer demand was way up, and the supply of homes available for sale hit record lows. The price of anything is determined by the supply and demand ratio, so home prices skyrocketed last year. Dr. Lynn Fisher, Deputy Director of the Federal Housing Finance Agency (FHFA) Division of Research and Statistics, explains:

House prices nationwide recorded the largest annual and quarterly increase in the history of the FHFA Home Price Index. Low mortgage rates, pent up demand from homebuyers, and a limited housing supply propelled every region of the country to experience faster growth in 2020 compared to a year ago despite the pandemic.

Here are the year-end home price appreciation numbers from the FHFA and two other prominent pricing indexes:

47% of New Buyers Surprised by How Affordable Homes Are Today

47% of New Buyers Surprised
by How Affordable Homes Are Today | MyKCM

Headlines matter. Right now, it's hard to read about real estate without seeing a headline that suggests homes have become unaffordable for most Americans. In reality, there's hard evidence that shows how owning a home is more affordable than renting in most parts of the country, as record-low interest rates are keeping monthly mortgage payments about 23% lower than the typical payment of 20 years ago. Despite the facts, misleading headlines persist, and they impact how hopeful homebuyers perceive the market.

In a recent survey by realtor.com, home shoppers indicated they were surprised by what they could actually afford when buying their first home. In fact, 47% discovered their budget was larger than they expected. George Ratiu, Senior Economist at realtor.com, explains:

“For first-time buyers, especially, the drop in the 30-year mortgage rate…has provided unexpected leverage. Lower rates allowed many buyers...

6 Foundational Benefits of Homeownership Today

6 Foundational Benefits of
Homeownership Today | MyKCM

Over the past year, our homes have become an integral part of our lives more than ever. They're much more than the houses we live in. They're our workplaces, virtual schools, and safe havens that provide shelter, stability, and protection through the evolving health crisis. Today, 65.8% of Americans are fortunate enough to call their homes their own.

As we continue to think about the future, our goals for the year, and what we want to achieve well beyond 2021, it's a great time to look at the benefits of owning a home. Below are some highlights and quotes on the benefits of homeownership shared by the National Association of Realtors (NAR). From feel-good motivations to economic and social impacts on the local community, these items may give you reason to believe homeownership stretches well beyond your financial investment.

Non-Financial Benefits

Owning a home brings a sense of happiness, satisfaction, and pride.

  • Pride of Ownership: It feels good to have a place that's truly your own, especially since you can customize it to your liking. The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness and well-being for homeowners and those around them.
  • ...

AMADOR COUNTY REAL ESTATE MARKET BOOMS AMID CORONAVIRUS PANDEMIC

SURPRISE: AMADOR COUNTY REAL ESTATE MARKET BOOMS AMID CORONAVIRUS PANDEMIC

AVERAGE HOME PRICES SKYROCKET 13% IN AMADOR COUNTY.  QUEST FOR HOMEOWNERSHIP STRONGER THAN EVER, ESPECIALLY AMONGST URBAN BUYERS SEEKING RURAL, GOLD COUNTRY LIVING.

2020 will always be remembered as an incredibly challenging year in which COVID-19 seemed to shut down the world. However, you may be surprised to learn that our local residential real estate market boomed in 2020.

Despite the challenges presented by the pandemic, the Amador County housing market was a shining star in 2020 as average home prices skyrocketed 13%. While few people would have expected this (especially during the first few months of the pandemic when the real estate market and economy came to a grinding halt) the Gold Country real estate market came roaring back in late Spring and early Summer and hasn’t shown any signs of slowing down. 

WHY IS THE GOLD COUNTRY REAL ESTATE MARKET SO STRONG?

From our perspective, the biggest driver has been the state and county’s requirement to “shelter in place” which has forced people everywhere to spend a lot more time at home. As days turned to weeks, and weeks turned to months, that extended time at home caused many people to re-evaluate their living situation and priorities. During this time of self-reflection, consumers seemingly placed a significantly greater value on the importance of a home and its new meaning as a place to live, love, relax and work. Additionally, as people were going through this period of self-reflection, employers (especially those in the San Francisco Bay Area) were also adapting to the pandemic and allowing their employees to work from home — many on a permanent basis.

As a result, people felt more liberated...

Want to Build Wealth? Buy a Home This Year.

Want to Build Wealth? Buy a
Home This Year. | MyKCM

Every year, households across the country make the decision to rent for another year or take the leap into homeownership. They look at their earnings and savings and then decide what makes the most financial sense. That equation will most likely take into consideration monthly housing costs, tax advantages, and other incremental expenses. Using these measurements, recent studies show that it's still more affordable to own than rent in most of the country.

There is, however, another financial advantage to owning a home that's often forgotten in the analysis – the wealth built through equity when you own a home.

Odeta Kushi, Deputy Chief Economist for First American, discusses this point in a recent blog post. She explains:

Once you include the equity benefit of price appreciation, owning made more financial sense than renting in 48 out of the 50 top markets, with the only exceptions being San Francisco and San Jose, Calif.

...

Motivate Fitness, Amador County - Gold Country Small Business Profile

motivate amador county fitness

Gold Country would be nothing without its small businesses, and we would personally like to shine the spotlight on a small business that is a big part of our community. This month, that spotlight goes to Motivate Personal Fitness Academy (“Motivate”), a Premier Affiliate TRX™ facility located in Sutter Creek. Owner Dominic Vicari’s roots run deep in the Gold Country, raised by a multi-generational Amador County family. Since he opened Motivate in 2014, his small business has stood out as one of the Gold Country’s best.

Vicari discovered his passion for the industry during his own personal fitness journey. After learning the benefits of a physically and mentally healthy lifestyle, he became inspired to help others do the same. At the age of 19 he became a personal trainer, and now maintains a “Level 3 Certification” in personal training with TRX Company, an achievement held by only 1% of fitness trainers in the nation.

After working for a private training studio locally, Vicari had garnered enough experience to set out on his own. In 2014, he opened Motivate Personal Fitness Academy. Vicari and his team just refer to the studio as “Motivate” – because that’s what it’s all about.

“I’ve made it a point to get well-connected throughout the country and further my education from the best in the industry,” Vicari said. “With that came an understanding of where our industry is moving. At the time, we [personal fitness trainers] just worked out the apparently healthy and helped them feel better. Where our industry is going, we are actually more a part of the healthcare team.” Vicari works to create...

What Happens When Homeowners Leave Their Forbearance Plans?

According to the latest report from Black Knight, Inc., a well-respected provider of data and analytics for mortgage companies, 6.48 million households have entered a forbearance plan as a result of financial concerns brought on by the COVID-19 pandemic. Here's where these homeowners stand right now:

  • 2,543,000 (39%) are current on their payments and have left the program
  • 625,000 (9%) have paid off their mortgages
  • 434,000 (7%) have negotiated a repayment plan and have left the program
  • 2,254,000 (35%) have extended their original forbearance plan
  • 512,000 (8%) are still in their original forbearance plan
  • 116,000 (2%) have left the program and are still behind on payments

This shows that of the almost 3.72 million homeowners who have left the program, only 116,000 (2%) exited while they were still behind on their payments. There are still 2.77 million borrowers in a forbearance program. No one knows for sure how many of those will become foreclosures. There are, however, three major reasons why most experts believe there will not be a tsunami of foreclosures as we saw during the housing crash over a decade ago:

  1. Almost 30% of borrowers in forbearance are still current on their mortgage payments.
  2. Banks likely don't want to repeat the ...

Gold Country Homeowners - Prop 19 is BIG News

gold country prop 19 moving homes

Proposition 19 was approved by voters in November of last year, but it will soon take effect. Many Gold Country homeowners have expressed interest in this new proposition since they could be eligible for fairly significantly property tax savings when they move, especially if they have lived in their home for some time and the value of their home has increased substantially since it was originally purchased.

A PRACTICAL EXAMPLE OF PROPOSITION 19 

Before Proposition 19, if Barry Buyer bought a home in 1975 for $200,000 and the property was now worth $1 million, Barry may have resisted selling even if the house was too large and climbing the stairs in his multi-story home had become too much for his knees. To sell and downsize to a smaller home worth $500,000, Barry would wind up paying more than twice the property taxes he was paying, and he’d be taxed on the $500,000 tax base rather the $200,000 base in his current home. For this costly reason, Barry stayed in his home despite really wanting to sell. Under the newly passed Prop. 19, Barry is now free to sell his home and buy another home anywhere in California that is valued at $1 million or less and have his same tax base ($200,000). This represents a tremendous savings and removes one of the major barriers that prevented Barry (and many long-time homeowners in California) from selling his home and moving.

While the final details of this proposition are still coming together, we wanted to share the latest information with you which we recently received from the California Association of Realtors.

...

Should I Wait for Lower Mortgage Interest Rates?

Should I Wait for Lower
Mortgage Interest Rates? | MyKCM

Historically low mortgage rates are a big motivator for homebuyers right now. In 2020 alone, rates hit new record-lows 16 times, and the trend continued into the early part of this year. Many hopeful homebuyers are now wondering if they should put their plans on hold and wait for the lowest rates imaginable. However, the reality is, acting sooner rather than later may be the actual win if you're ready to buy a home.

According to Greg McBride, Chief Financial Analyst for Bankrate:

As vaccines become more widely available and a return to normal starts to come into view, we'll see mortgage rates bounce off the record lows.

While only a slight increase in mortgage rates is projected for 2021, some experts believe they will start to rise. Over the past week, for example, the average mortgage rate ticked up slightly, reaching 2.79%. This is still incredibly low compared to the trends we've seen over time. According to Freddie Mac:

Borrowers are smart to take advantage...

Why Right Now May Be the Time to Sell Your House

Why Right Now May Be the Time
to Sell Your House | MyKCM

The housing market made an incredible recovery in 2020 and is now positioned for an even stronger year in 2021. Record-low mortgage interest rates are a driving factor in this continued momentum, with average rates hovering at historic all-time lows.

According to the latest Realtors Confidence Index Survey from the National Association of Realtors (NAR), buyer demand across the country is incredibly strong. That's not the case, however, on the supply side. Seller traffic is simply not keeping up. Here's a breakdown by state:Why
Right Now May Be the Time to Sell Your House | MyKCMAs the maps show, buyer traffic is high, but seller traffic is low. With so few homes for sale right now, record-low inventory is creating a mismatch between supply and demand.

NAR also just reported that the actual number of homes currently for sale stands at 1.28...

4 Reasons People Are Buying Homes in 2021

4 Reasons People Are Buying
Homes in 2021 | MyKCM

According to many experts, the real estate market is expected to continue growing in 2021, and it's largely driven by the lasting impact the pandemic is having on our lifestyles. As many of us spend extra time at home, we're reevaluating what home means and what we may need in one going forward.

Here are 4 reasons people are reconsidering where they live and why they're expecting to buy a home this year.

1. Record-Low Mortgage Interest Rates

In 2020, the average interest rate for a 30-year fixed mortgage hit a record low 16 times, continuing to fall further below 3%. According to Freddie Mac, the average 30-year fixed interest rate today is 2.65%. Many wonder how low these rates will go and how long they'll last. Len Keifer, Deputy Chief Economist for Freddie Mac, advises:

If you've found a home that fits your needs at a...