California Association of Realtors Market Minute September 25, 2023

I've read it all and instead of taking small tidbits for you....I'm sharing the entire article from our Association.

September 25, 2023 - California Association of REALTORS® forecast improvement in the outlook for sales and prices at the Reimagine! Conference in Anaheim as interest rates will begin to ebb in 2024 and housing inventory and sales pick up. However, recently updated guidance shows that consumers should prepare for interest rates to remain elevated for longer than initially anticipated as the economy, and labor markets in particular, continue to outperform expectations and keep inflation above the target range. Homebuying demand, though still grappling with reduced affordability as rates remain above 7%, saw a modest increase last week, but market trends over the past 2 months suggest that buyers and sellers are beginning to negotiate more with most measures of competitiveness having eased slightly, but consistently, over the past 8 weeks.

Unemployment claims show labor market still tight: In addition to a strong jobs report for August, which showed a net increase of 23,100 new nonfarm jobs, the latest weekly data showed that Californians were filing new claims for unemployment insurance at the lowest rate since October of 2022. Last week, 35,040 new claims were filed with the state’s Employment Development Department—roughly 1,500 fewer claims than were filed the week prior, which is more than 28,000 few UI claims than were filed during the second week in January. Although tightness in the labor market has been a source of upward pressure on inflation, remaining at or near full employment has helped broader macroeconomic growth perform above expectations over the short run.

New C.A.R. forecast shows stronger sales and prices in 2024: Last week, C.A.R. released its housing market and economic forecast for 2024, which predicts a modest increase in both home sales and in home prices next year. Although the state is not expected to return to the elevated levels reached during 2021, existing single-family transactions are expected to rise to nearly 330,000 units. This would represent a 22.9% increase from a projected 266,100 units this year. Home prices, which continue to be driven higher by a dearth of available inventory, will continue to rise in 2024, with the median price expected to reach $866,300 on an annual basis—a 6.2% increase from 2023 and slightly higher than the original projection for last year. The recovery is likely to remain subdued, but both inventory and sales should pick up in the second half of the year as rates begin to dip slightly.

Mortgage applications rise slightly after 8 consecutive declines: Demand for homes continues to come in well below the 15-year highs reached over the past two years, but new mortgage purchase applications perked up slightly last week despite rates trending higher. The overall index rose 12% last week, bucking the 8-week slide that began in July. Despite this modest bump, September as a whole is coming in 12% below August and more than 25% lower than September 2022. There remains growing interest from investors, second/vacation home sales, and from international buyers, but first-time buyers remained challenged by decreasing affordability while repeat sales are locked into their current homes by low rates on their existing mortgages and an increasing number of long-time homeowners facing potential capital gains if they were to sell their existing residence.

Fed signals higher for longer strategy at latest FOMC meeting: The Federal Reserve’s Federal Open Market Committee (FOMC) met last week and voted to keep their target interest rate the same at 5.5%. Although this was the expected outcome by oddsmakers, policymakers did signal that they may have to keep rates higher for longer in order to ensure that inflation is tamed. The ‘dot plot,’ which is an estimation of where policymakers think rates need to be in order to achieve their dual mandate of full employment and price stability, showed that rates will need to remain elevated longer than was anticipated when they made their last set of projections at the end of June. Three months ago, consensus expectations amongst voting members called for a 4.5% Fed Funds Rate in 2024, which equated to a 100 basis-point reduction. The new average for 2024 of 5% means the Fed Funds Rate is currently scheduled to come down roughly half as much next year as originally signaled.

California market softens slightly ahead of winter amidst rising rates: The latest on California’s housing market shows that sales have not dipped back to the lows reached during the winter of 2022, which rates initially rose above 7%. However, transactions did dip below 260,000 units for the first time since January. Additionally, pending sales suggest a sluggish next few months as new escrows dipped by more than 23% from 2022’s relatively lackluster pace in August. In addition, competition has eased slightly as we approach the winter months as the number of homes being reduced has been rising in recent weeks while the percentage of homes selling above their listing price on the MLS has been falling. The rebalancing has been slight, with homes sold above asking price down from 52% in June to 46% last week, but it has been consistent for the past 3 months. The market remained characterized by too little inventory, but as the typical homebuying season has ebbed, homes are taking slightly longer to go pending and buyers and sellers are beginning to negotiate more.

Sooooo, what chat think? Might this 'forecast' be correct? 😏

Balconies & Fire Pits? Yes!!

So many people are living in condos, apartments, townhouses with no actual backyard. But, hey, that doesn't mean they can't have a lovely fire by the light of the moon, right?

Now, best to check with your HOA before you spend too much money on a gas-piped in fire pit, but if it's an AOK, then there are so many different ideas.

Regardless of your view, city, woods, water, a cool evening is begging for sitting outside with a warm drink, a fuzzy blanket, and taking the further chill off with a fire-pit!

This one probably is just lit by sterno type inserts. 

I've actually seen a gal make something like this from dollar store items!

Based on that view, I'm betting this was a pricey option. 

But, it goes perfect with the lines of the buildings in the distance, right?

Yeah, that's my kinda view all right. 

And, the firepit may not be gas piped in, 

but it does seem to match the shape of the mountain in the distance fairly well too!

Which one would you pick? 

Well, I suppose it would depend on which view you had from your deck or balcony, right?

Santa Clarita Home Sales Activity September 2023

Just keeping you informed. All things Real Estate. Particularly revolving around my home town of Santa Clarita Valley!!

Today it's about home sales. All of SCV, including the outskirts. Those areas are important too.

We currently have:

Coming Soon - 11 / Active - 304 / In Escrow - 293 / Sold in Last 30 Days - 203

Interest rates are high, inventory is low. Home insurance is high too. But, guess what? Homes are still selling amazingly. Ya need to buy now, you do. Ya need to sell now, you do.

My team currently has 3 homes in the MLS. All 3 are under contract. And, all 3 moved into contract in less than a couple weeks. Buyers? We've got one that we are working with right now. But, we do whatever people need. Buy, Sell, you need it, we help.

Where do we think the market is going? It's probably going to do a seasonal slow down over the next few months. But, if mortgage rates trickle down, we will likely see a bit of a surge of buyers. So, as usual, it's us wishing we had a crystal ball to help your decision making easier. Doubtful that we'll see an influx of sellers coming on market unless the same thing happens. Or, we wait til February and see if the onset of Spring brings them out. 

See, a crystal ball would come in so darn handy right now!

If we can help in any way, just give me a jingle.

I'll get you to the best team member we've got to handle whatever your needs are.

Why You Should Definitely Have A Trust

If you own property, have monetary assets, and have a family, you should have a Trust. YES, you should. Do we? Ugh, hate to admit it, but we still haven't put ours in order. Next on the To-Do list!

My mums passed away last year, she was so organized. Everything was in her Trust. Bank accounts, house, everything. She had given my siblings and I copies of the Trust well before she passed. It was from 20+ years prior. But, she kept it current.

When she passed, it was very simple how things were to be divided. My Big Bro was the executer. Due to the Trust, there was not a single dispute as to how things were to be handled. AND, the taxes for us were completely different from what they would have been if not in a Trust.

The Brief Benefits of Having a Trust:

* Protecting and preserving your assets.

* Customizing and controlling how your wealth is distributed.

* Minimizing federal or state taxes.

* Addressing family dynamics; for example, divorce or blended families.

* Helping a parent or other relative manage their financial affairs.

As a 20+ year Realtor, I've had my fair share of selling properties with and without a Trust in place after the owner passes. Take my word for it, a WILL does not suffice. And, without a Trust, there will be Probate involved, and more taxes to the beneficiaries. 

Family, Money, Death..... there are high emotions and, unfortunately, there can be lots of different opinions. Families can fall apart after a death. But, if you have a Trust in place, it will go a lot smoother. And, yes, I'm saying it again, a lot less costly. 

If you care about your family after death, put your home and assets in a Trust....Now.