Gold Country CA Real Estate Blog and News

In 1963, Martin Luther King, Jr. led and inspired a powerful movement with his famous I Have a Dream speech. Through his passion and determination, he sparked interest, ambition, and courage in his audience. Today, reflecting on his message encourages many of us to think about our own dreams, goals, beliefs, and aspirations. For many Americans, one of those common goals is owning a home: a piece of land, a roof over our heads, and a place where our families can grow and flourish.

If you're dreaming of buying a home this year, the best way to start the process is to connect with a Real Estate professional to understand what goes into buying a home. Once you have that covered, then you can answer the questions below to make the best decision for you and your family.

1. How Can I Better Understand the Process, and How Much Can I Afford?

The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, school districts you prefer, what kind of commute works for you, and how much you can afford to spend.

Keep in mind, before you start the process to purchase a home, you'll also need to apply for a mortgage. Lenders will evaluate several factors...

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60.

The good news is, our younger generations are strong believers in homeownership.

According to a Freddie Mac survey,

The dream of homeownership is alive and well within Generation Z, the demographic cohort following Millennials.

Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).

...

Which month do you think most people who are considering buying a home actually start their search? If you're like most of us, you probably think the surge happens in the spring, likely in April. Not anymore. According to new research, January 2019 was only 1% behind February for the most monthly views per listing on realtor.com.

So, what does that mean? The busiest season in real estate has just begun.

The same research indicates,

Historically, April launched the kickoff of the home shopping season as buyers would come out of their winter hibernation looking for their new home. However, the spring shopping season now starts in January for many of the nation’s largest markets.

With the reality of fewer homes on the market in the winter, and that supply naturally increases as we head to the spring market, waiting for more competition to list in your neighborhood this year might put you behind the curve. Perhaps now is the time to jump into the market.

George Ratiu, Senior Economist at realtor.com says,

Movies, tv shows, and celebrities often have us dreaming of owning large homes, but the reality for most people is quite different.

Since 2015, the square footage of newly built houses has been shrinking, according to Yahoo Finances. This is not projected to change as we continue into the beginning of the year.

We expect this downsizing trend to continue in 2020, driven by a confluence of economic and demographic trends.

Why are smaller homes trending now?

As noted in the article, there are a few main reasons for this demand:

• Many of today’s younger, millennial home buyers have expressed a preference for denser, more urban homes that are more walkable to shared amenities.
• Today’s older homeowners are expressing a desire for smaller, less maintenance-heavy and more accessible (read: less stairs) homes as they age and move into newer homes.

With these two demographic groups...

Some Highlights

• Winter is a great time to list a house, since inventory is traditionally low, and most sellers are holding off until spring to put their homes on the market.
• Waiting for warmer weather when more competition is on the market will only put your house up against many more choices for buyers.
• Get your house ready to sell now with quick and easy fixes that make a big impact.

Contact us for experienced representation when buying or selling a home in Amador County CA.

Over the past year, mortgage rates have fallen more than a full percentage point. This is a great driver for homeownership, as today's low rates provide consumers with some significant benefits. Here's a look at three of them:

1. Refinance: If you already own a home, you may want to decide if you're going to refinance. It's one way to lock in a lower monthly payment and save substantially over time, but it also means paying upfront closing costs too. You have to answer the question: Should I refinance my home?
2. Move-up or Downsize: Another option is to consider moving into a new home, putting the equity you've likely gained in your current house toward a down payment on a new one that better meets your needs – something that's truly a perfect fit for your family.
3. Become a First-Time Homebuyer: There are many financial and non-financial benefits to owning a home, and the most important thing is to first decide when the time is right for you. You have to determine that on your own, but know that now is a great time to buy if you're considering it. Just take a look at the ...

Saving for a down payment is a key step in the homebuying process, and it's not the only piece you need to include in your budget. Another factor that's important to plan for is the closing costs required to obtain a mortgage.

What Are Closing Costs?

According to Trulia,

When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.

For those who buy a $250,000 home, for example, that amount could be between $5,000 and $12,500 in closing fees. Keep in mind, if you're in the market for a home above this price range, your costs could be significantly greater. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

Trulia gives more great advice, saying,

There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You'll...

At this time of year, many families come together to celebrate the season. It's also the time when many realize their homes are just not quite big enough to host all of their guests and loved ones. Are you one of those homeowners dreaming for a larger space to call home?

You may have enough equity in your current home to move up.

According to the Q3 2019 U.S. Home Equity & Underwater Report by ATTOM Data Solutions,

14.4 million residential properties in the United States were considered equity rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.

This means that one in four of the 54 million mortgaged homes in the U.S. have at least 50% equity. If these homeowners decide to sell, they can use their equity to put toward the purchase of a new home. Maybe you'll be one of them.

NAR recently released their ...

Inventory on the market today is low, especially among existing homes in the entry and middle-level tiers of the market. It is hovering well below the 6-month supply typically found in a more normal market, as shown in the graph below:With inventory being one of the biggest housing market challenges today, finding a starter home right now isn’t easy. According to the Q3 Housing Trends Report from the National Association of Homebuilders (NAHB), 68% of those searching for a home think their search will get harder or stay about the same over the next 12 months.

The same study reveals,

Success is something often worth repeating, and Brent Sutherland, a Certified Financial Planner and Real Estate Investor, has certainly made his way in a momentum-driving direction. Here are 3 tips he shares from a recent piece in Business Insider on the benefits of owning real estate:

1. Real estate diversifies your income

“While it is certainly important to be properly diversified with your investments, it is even more important to be diversified with your income. This is because the largest financial risk for most of you is the loss of your primary source of income, which is typically in the form of a day job.”

The article highlights how having multiple sources of income, such as those derived from real estate investments, can eventually lead to relying less and less on a day job. Sound dreamy? It can be. When done well, real estate investments may eventually open up your time and the financial freedom to explore other things, like travel and other aspirations you may have for the future, particularly in the golden years of retirement.

2. Real estate produces near-immediate results

“You can achieve and feel the results almost immediately....

Some Highlights:

• Historically, the choice between renting and buying a home has been a tough decision.
• Looking at the percentage of income needed to rent a median-priced home today (27.7%) vs. the percentage needed to buy a median-priced home (17.5%), the choice is clear.
• Every market is different. Before you renew your lease, find out if you can put your housing costs to work by buying a home this year.

Contact us for experienced representation when buying or selling a home in Amador County CA.

In the third quarter of 2019, the U.S. homeownership rate rose again, signaling another strong indicator of the current housing market.

The U.S. Census Bureau announced,

“The homeownership rate of 64.8 percent was not statistically different from the rate in the third quarter 2018 (64.4 percent), but was 0.7 percentage points higher than the rate in the second quarter 2019 (64.1 percent).”

Today there is still a lack of inventory, particularly at the entry and middle-level segments of the market, but that is not stopping buyers from making every effort to pursue homeownership. The many ...

Some Highlights:

• The Veterans Administration (VA) Home Loan is a benefit that is available to more than 22 million veterans and 2 million active duty service members to help them achieve the dream of homeownership.
• In 2018, $161 billion was loaned to veterans and their families through the program.
• In the same year, the average loan amount was $264,197 and 610,513 loans were guaranteed.

Contact us for experienced representation when buying or selling a home in Amador County CA.

Home buying activity (demand) is up, and the number of available listings (supply) is down. When demand outpaces supply, prices appreciate. That’s why firms are beginning to increase their projections for home price appreciation going forward. As an example, CoreLogic increased their 12-month projection for home values from 4.5% to 5.6% over the last few months.

The reacceleration of home values will cause some to again voice concerns about affordability. Just last week, however, First American came out with a data analysis that explains how price is not the only market factor that impacts affordability. They studied prices, mortgage rates, and wages from January through August of this year. Here are their findings:

Home Prices

“In January 2019, a family with the median household income in the U.S. could afford to buy a $373,900 house. By August, that home had appreciated to $395,000, an increase of $21,100.”

Mortgage Interest Rates

“The 0.85 percentage point drop in mortgage rates from January 2019 through August 2019 increased affordability by 9.7%. That translates to a $40,200 improvement in house-buying power in just eight months.”

...

Did you know that 1 in 6 Americans currently live in a multigenerational household?

According to Generations United, the number of multigenerational households rose from 42.4 million in 2000 to 64 million in 2016. The 2018 Profile of Home Buyers and Sellers from the National Association of Realtors shows that 12% of all buyers have a multigenerational household.

Why Are Many Americans Choosing to Live in a Multigenerational Household?

The benefits to multigenerational living are significant. According to Toll Brothers,

“In recent years, there’s been a steady rise in the number of multigenerational homes in America. Homeowners and their families are discovering new ways to get the most out of home with...

To understand today’s complex real estate market, it is critical to have a local, trusted advisor on your side – for more reasons than you may think.

In real estate today, there are essentially three different price points in the market: the starter-home market, the middle-home market, and the premium or luxury market. Each one is unique, and depending on the city, the price point in these categories will vary. For example, a starter or lower-end home in San Francisco, California is much more expensive than almost any other part of the country. Let’s explore what you need to know about each of these tiers.

Starter-Home Market: This market varies by price, and these homes are typically purchased by first-time home buyers or investors looking to flip them for a profit. Across the country, homes in this space currently have less than 6 months of inventory for sale. That means there aren’t enough homes on the lower end of the market for the number of people who want to buy them. A low supply like this generally increases competition, drives bidding wars, and sets up an environment where homes sell above the listing price. According to data from the National Association of Realtors (NAR) on realtor.com,

“The desire for affordability continues to push down the inventory for homes listed for less than $200,000.00.”

Middle-Home Market: This segment is often thought of as the move-up market....

Some Highlights:

• The National Association of REALTORS® surveyed their members for the release of their Confidence Index.
• The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices, and market conditions.
• Homes across the country are selling quickly, in an average of just 31 days.
• 49% of homes sold in less than a month.

Contact the Gold Country Modern Team, your Amador County real estate connection, for assistance buying or selling a home in the Gold Country.

No one knows for sure when the next recession will occur. What is known, however, is that the upcoming economic slowdown will not be caused by a housing market crash, as was the case in 2008. There are those who disagree and are comparing today’s real estate market to the market in 2005-2006, which preceded the crash. In many ways, however, the market is very different now. Here are three suppositions being put forward by some, and why they don’t hold up.

SUPPOSITION #1

A critical warning sign last time was the surging gap between the growth in home prices and household income. Today, home values have also outpaced wage gains. As in 2006, a lack of affordability will kill the market.

Counterpoint

The “gap” between wages and home price growth has existed since 2012. If that is a sign of a recession, why didn’t we have one sometime in the last seven years? Also, a buyer’s purchasing power is MUCH GREATER today than it was thirteen years ago. The equation to determine affordability has three elements: home prices, wages, AND MORTGAGE INTEREST RATES. Today, the mortgage rate is about 3.5% versus 6.41% in 2006.

SUPPOSITION #2

In 2018, as in 2005, housing-price growth began slowing, with significant price drops occurring in some major markets. Look at Manhattan where home prices are in a “near free-fall.”

Counterpoint ...

The best time to sell anything is when demand for that item is high and the supply of that item is limited. The latest Existing-Home Sales Report released by the National Association of Realtors (NAR), reveals that demand for housing continues to be strong, but the supply is struggling to keep pace. With this trend likely continuing throughout 2020, now is a great time to sell your house.

THE EXISTING-HOME SALES REPORT

The most important data revealed in this report was not actually sales. In reality, it was the inventory of homes for sale (supply). The report explained:

• Total housing inventory at the end of August decreased 2.6% to 1.86 million homes available for sale.
• Unsold inventory is lower than the 4.3-month figure recorded in August 2018.
• This represents a 1-month supply at the current sales pace.

According to Lawrence Yun, ...