The A,B,C's Oh, and D's of the NAR Settlement for Buyers

 Do You Know the “ABCs” of the ABCD Form?

(Copied in it's entirety from California Association of Realtors....

so none of my opinions are here, well one is at the bottom.)

The Anticipated Broker Compensation Disclosure (“ABCD”) is an excellent way to inform the buyer about the buyer broker’s compensation and can help to confirm the parties’ negotiations and discussions about compensation.  The ABCD form contains three sections that each serve different purposes.  Specifically, the ABCD form will : 1) Inform the buyer that the broker expects to be paid for the broker’s efforts; 2) Identify any compensation offered to the buyer’s broker from the seller’s broker through the MLS, or via a Cooperating Broker Compensation Agreement; and 3) Confirm and provide documentation to the buyer of any payments actually received by the buyer’s broker from third parties, in the event the buyer closes a transaction. 

Recently, C.A.R. has received several questions from members about using buyer representation agreements.  In addition to using the Buyer Representation and Broker Compensation Agreement (“BRBC”) in transactions, the ABCD form is a very good way to disclose the details of buyer broker compensation and to help the buyer become informed about compensation issues.  The ABCD form may also be a useful way to initiate and support the discussions and negotiations conducted between the buyer’s agent and buyer.

The ABCD form was released in December 2022, along with the release of the BRBC.  C.A.R.’s Standard Forms Committee recognized that on the seller’s side, it is normally easier for a listing agent to disclose and confirm the listing agent’s compensation via a listing agreement or single party compensation agreement.  Accordingly, at the beginning of the relationship between a seller and their agent, the seller knows the compensation they are paying their agent and the closing disclosure will show the amount of broker compensation that is a seller expense.  In comparison, on the buyer’s side, there are various ways to structure a buyer broker’s compensation– the buyer’s agent might use a buyer representation agreement, a Cooperating Broker Compensation Agreement, obtain a Single Party Compensation Agreement from the seller, or rely on an offer of compensation in the MLS. Because of the variety of methods in which a buyer’s broker can be compensated, which may include an agreement between the buyer’s broker and someone other than the buyer, the C.A.R. Standard Forms Committee decided to create a document where the buyer is advised of, and acknowledges, key information related to the buyer broker’s compensation.  Here’s a description of the ABCD’s three sections:

Section 1 has information about where the broker’s compensation can come from.  It is intended to be given to the buyer up front (early in the agency relationship) so the buyer can review it, ask questions to attain a better understanding of how their broker might be paid, and acknowledge receiving this information.

Section 2 has a chart to list various properties that are being shown to the buyer and what the expected compensation is and what the source is.  It also has a place for the buyer to initial at the time that property is shown.

Section 3 is a place for the broker to disclose the final amount of compensation earned in the transaction after close of escrow.  It has a place for the buyer to initial to acknowledge receipt of this information.

In conclusion, though there are alternative ways for a real estate licensee to inform their buyer client about expected compensation and the final amount of compensation (e.g., by providing the buyer with the non-confidential print-out from the MLS showing the compensation amount; by providing the buyer with a copy of the buyer broker’s contract with the listing agent or seller; and/or by providing copies of escrow documents showing the buyer’s agent’s compensation on the buyer’s closing document), using the ABCD may be much simpler and more effective in your practice.

Now, it's my turn to opine.... everyone deserves to get paid for what they do. This just puts it in writing for all to see/know. I'm very satisfied with this. Very much so.

Your Monthly Sales Info For Santa Clarita Valley - April 2024

Good Morning & Happy Friday. Well, Happy Birthday to my Hubby today.💓 Fortunately he's gone fishing alllllll day today so I can actually work & bake him a cake before he gets home!

Today I'm sharing the sales infor for Santa Clarita. Acton to the East, Stevenson Ranch to the West, Castaic to the North, Newhall to the South. All the little areas in between.

As of this moment, we have:

Coming Soon - 13 / Available for Sale - 399 (that's actually 10% higher than last month) / Under Contract - 343 / Closed Escrow in the last 30 Days - 251.

So, yes, if you've been watching, the inventory is creeping up a bit. A couple of stories to share. Well, tid-bits of info from the three of us. Homes that are perfect are still flying off the shelf. Homes that are extremely desirable, for whatever reason, selling quickly. Homes that need a bit of updating are taking longer. And, unfortunately, the only way to light a fire under a prospective buyers butt, on a home that is languishing on the market, is to drop the price. Drop The Price. Yep, that's what you gottat do. Buyers are asking why a property is still on the market after 30 days? What's wrong with it? They are still used to things moving quickly. If it's not, it isn't priced right to bring in the right buyer.

There is a buyer for every home, we all know that. 

Even for this one!

But, no matter how much a buyer likes your home, if it's not priced where they think it's fair, they aren't going to make an offer to buy it. 20+ years of experience with this, trust me. Trust US. We know more than you, by far.

Off my soapbox now....til next blog post! 

Swedish Death Cleaning - April 2024

Anyone that has worked with me on selling a home is used to this phrase "You Gotta Pack It Anyways" when we are doing pre-marketing considerations.

Most people have heard of Marie Kondo and her method of decluttering. But, have any of you heard of “döstädning”? Swedish Death Cleaning? It is a philosophy that encourages reflection and mindfulness about our belongings and the legacy we leave behind.

I've had to sell a home after my moms passing. Fortunately she had already completely done a döstädning when she moved into an assisted living facility a few years earlier.  But, she had actually started years before that!

My siblings and I, as well as our children, are lucky that none of us ... mums included ... would be considered among the people that like 'things'. A lot of things, as some people do. Our family is defintely more along the lines of minimalism. 

But, let's say you are getting up there in years. You know, starting to get those senior citizen discounts? Now's about the time you really need to consider the process of clearing out the things, the clutter, the items that won't be sentimental to your heirs. 

"In a culture that often celebrates accumulation, Swedish Death Cleaning champions minimalism. It’s not about ruthlessly discarding material things but rather about curating a collection of items that truly enrich one’s life."

"Beyond physical belongings, Swedish Death Cleaning also entails organizing important information for your loved ones. This includes not only financial documents and passwords but also personal reflections and wishes." Mike & I really need to do this! "Consider creating a digital or physical legacy box containing these vital details, ensuring that your loved ones have access to them when needed. Reflecting on one’s life and documenting personal stories can also be a therapeutic process, allowing for introspection and closure." My mom left us a journal of her final years. 

And, if you're realizing that maybe this is something you should consider starting now and continuing regularly, here is a Sweedist Death Cleaning checklist for you:

*Start with sentimental items, gradually expanding to include less emotionally charged belongings.

*Curate a collection of items that truly enrich your life and align with your values.

*Organize important documents and information for your loved ones.

*Cultivate habits of minimalism and intentional living.

*Regularly assess your belongings and declutter as needed.

*Consider the happiness and well-being of yourself and others when deciding what to keep.

*Share your belongings with others through donations, gifts, or meaningful gestures.

Margareta Magnusson discusses death cleaning.

If you need some help, to start the döstädning process, we'll be glad to assist.

And, you'll be glad you started now,

 if you're thinking about selling your home anytime in the near future.

Boomers Moving Will Be More Like a Gentle Tide Than a Tsunami

Have you heard the term “Silver Tsunami” getting tossed around recently? If so, here’s what you really need to know. That phrase refers to the idea that a lot of baby boomers are going to move or downsize all at once. And the fear is that a sudden influx of homes for sale would have a big impact on housing. That’s because it would create a whole lot more competition for smaller homes and would throw off the balance of supply and demand, which ultimately would impact home prices.

But here’s the thing. There are a couple of faults in that logic. Let’s break them down and put your mind at ease.

Not All Baby Boomers Plan To Move

For starters, plenty of baby boomers don’t plan on moving at all. A study from the AARP says more than half of adults aged 65 and older want to stay in their homes and not move as they age (see graph below):

While it’s true circumstances may change and some people who don’t plan to move (the red in the chart above) may realize they need to down the road, the vast majority are counting on aging in place.

As for those who stay put, they’ll likely modify their homes as their needs change over time. And when updating their existing home won’t work, some will buy a second home and keep their original one as an investment to fuel generational wealth for their loved ones. As an article from Inman explains:

“Many boomers have no desire to retire fully and take up less space . . . Many will modify their current home, and the wealthiest will opt to have multiple homes.”

Even Those Who Do Move Won’t Do It All at Once

While not all baby boomers are looking to sell their homes and move – the ones who do won’t all do it at the same time. Instead, it’ll happen slowly over many years. As Freddie Mac says:

“We forecast the ‘tsunami’ will be more like a tide, bringing a gradual exit of 9.2 million Boomers by 2035 . . .”

As Mark Fleming, Chief Economist at First American, says:

“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”

Bottom Line

If you're stressed about a Silver Tsunami shaking the housing market overnight, don't be. Baby boomers will move slowly over a much longer period of time.

The Truth About A Complicated & Infrequent Transaction . . .

So, lord have mercy, there sure has been a lot of 'news' about the N.A.R. (National Association of Realtors) proposed settlement. 

Here, from your 22 year Realtor expert, is the truth about that settlement that is not really being calmly shared in the news.

First and foremost, the settlement is only a proposal. It will, hopefully, be agreed to this Summer. The N.A.R. chose to settle, to avoid 'copycat' future lawsuits. Nor, go into bankruptcy. I'm all for it.

• COMMISSIONS have ALWAYS been negotiable. ALWAYS. If your Realtor stands firm on their fees, you can choose another Realtor. Nuff Said. And, a Realtor can choose not to work for what you want to pay. Been there, done that.
• The MLS, Multiple Listing Service, has always shown the Buyer Agent Compensation in the agent remarks. In the last year or two, that information was made public on many Real Estate sites. Now, it cannot be noted in the MLS, so that won't show up on those sites any longer. However, there will likely be a concessions section in the MLS in the near future, as a lot of buyers will now ask Sellers to pay for their agents' fees.
• Once officially settled, it will also mean, a buyers agent will have to ask for, in writing, what, if any, Seller compensation is being offered for a property their buyer wants to write an offer on.
• Veterans & First Time Buyers will be hit hard. They frequently don't have a lot of cash on hand and are regularly asking for Sellers to pay closing costs. However, currently there are limits. Fannie & Freddie will be talking about increasing those limits as needed. We shall see on that.
• The Real Estate Purchase Agreement will start to see a lot of "Seller to Pay Buyer Agent Compensation of _____". 
• We will start to see the Buyer Broker Agent Agreement used regularly. It is used frequently by many already. More don't use than do though. It will state the buyer agent fiduciary responsibility to client, just like a sellers agent says in their listing agreement. It will also state what the agent's compensation is to be, who is to pay it, etc.
• We may see more Dual-Agency type sales. Which, me personally, I don't care for. How can you take care of two different sides of a transaction fairly at all times. "Same as why lawyers don't represent plaintiff and defendant" I just heard on a video this morning.
• As has happened so many times over the last two decades, many, I mean MANY, weaker agents will leave the business. Good, best to keep the intelligent and strong ones working for you than the fly-by-night, make a quick buck, ones....right?
• Will home prices change because of this? Very doubtful. Home prices are like everything else, Supply & Demand. But, based on the bullet point just above, if we lose crappy agents, will agent commissions go up due to that same Supply & Demand situation? Honestly, very doubtful. But, made me smirk as I typed it!
• Just some additional food for thought. When I first became licensed in 2002 to help people navigate their home sales and purchases, the average commission fees were about 6%. Last time they were over that was in 1991. The average in 2020 .... the COVID years .... was 4.94%. Most of our clients are at 5%, but, as stated above .... that is always negotiable. On Both Sides.

Me, and my 'family' of agents, hope that this post today helps to answer your questions and eliminate your concerns about what you are hearing in the news. This is not a biased, as a Realtor, post. This is the truth.

We will never break the Trust you have placed in us. 

Never.

Santa Clarita Valley Home Sales Activity March 15, 2024

Good Morning and happy Friday to you! Market is a changing! Well, a wee bit at least. Our numbers, in all categories, are up. 👆

You should all know by now that I include Acton to the East, Newhall to the South, Stevenson Ranch to the West, and Castaic to the North. Even though 3 out of 4 of them are not in the incorporated area of SCV, as a local Realtor, we find that when working the official hood, those neighborhoods do get bought and sold by us....a lot!

Here ya go, as of this moment:

Coming Soon - we have 17 (last month was 11)

Active - 362 (last month was 328)

Under contract/in Escrow - 342 (last month was 285)

Sold in the Last 30 Days - 185 (last month was 128)

I posted the info about last month so you wouldn't have to look for it!

Jennifer closed one of ours last week for a very special friend of mine. She has another closing this coming week, for a really good (and taco loving) pal. Leslie just put a new one on the market, and it's a beauty! It's for a family I've known 20+ years that are working towards their real estate goal of generational living! 

It's soooooo pretty!

As always, whatever your needs, be it selling, buying, or just consulting, our 'family' of 3 are here to help! Have a wonderful weekend.

Why An Agent is Your Best Friend When Buying or Selling a Home

No matter how you slice it, buying or selling a home is a big decision. And when you’re going through any change in your life and you need some guidance, what do you do? You get advice from people who know what they’re talking about.

Moving is no exception. You need insights from the pros to help you feel confident in your decision. Freddie Mac explains it like this:

“As you set out to find the right home for your family, be sure to select experienced, trusted professionals who will help you make informed decisions and avoid pitfalls.”

And while perfect advice isn’t possible – not even from the experts, what you can get is the very best advice out there.

The Power of Expert Advice

For example, let’s say you need an attorney. You start off by finding an expert in the type of law required for your case. Once you do, they won’t immediately tell you how the case is going to end, or how the judge or jury will rule. But what a good attorney can do is walk you through the most effective strategies based on their experience and help you put a plan together. They’ll even use their knowledge to adjust that plan as new information becomes available.

The job of a real estate agent is similar. Just like you can’t find a lawyer to give you perfect advice, you won’t find a real estate professional who can either. That’s because it’s impossible to know everything that’s going to happen throughout your transaction. Their role is to give you the best advice they can.

To do that, an agent will draw on their experience, industry knowledge, and market data. They know the latest trends, the ins and outs of the homebuying and selling processes, and what’s worked for other people in the same situation as you.

With that expertise, a real estate advisor can anticipate what could happen next and work with you to put together a solid plan. Then, they’ll guide you through the process, helping you make decisions along the way. That’s the very definition of getting the best – not perfect – advice. And that’s the power of working with a real estate advisor.

Bottom Line

If you’re looking to buy or sell a home, you want an expert on your side to help you each step of the way. Connect with a real estate professional so you have advice you can count on. Connect with us!

Jennifer, Lauren, & Leslie

(661) 313-5470 😊

Vogue's Ideas for Home Decor in 2024

Well, let's be serious, Vogue is a whole different animal in design and decor. It always has been. Deep, mysterious. So, when I mention Vogue's home decor ideas....it probably won't fit us all. Some will dislike immediately, some will be intrigued.

But, they also talk about what is OUT for 2024. And, I'm happy about some of those for sure!

Here's a few in .... per Vogue .....

Dark & very, Moody.

Dark, and busy. Old fashioned to me.

This one is more interesting, but still, 'moody' for sure.

Now, on the way out you ask? 

1) Instagram Design! YES!! or Pinterest. Basically copying anything from either is out, out, out!!

2) Ivory Boucle. I had to google that one. It's the white nubby textured fabric found on furniture.

3) Fast Furniture. Meaning the kind of stuff that doesn't last forever. I had an interior decorator tell me years ago it was okay to buy inexpensive furniture so when you got bored with it, you didn't feel guilty about getting rid of it!

4) Fake Fur Throws. Um, I don't have any of those ... do you?

5) Wicker Lamps. Well, crap. I do have a couple lamps in my living room that have woven basket looking shades. Damn it!

6) Ruffles. Like the potato chips you ask? Nope, like anything that has ruffled edges. 

7) Minimalism. Well, I say, if you like it, you like it. But, I am more into warmth in my home for sure.

8) Mid-Century Modern Angular Furniture. So, over that by me too!

9) All White Kitchens. Well, I wish mine was as it'd be so much brighter. But, I've heard for quite some time, that wood cabinets do hold the test of design time. However, needless to say, good ole Vogue is talking all about 'moody' colors instead! 

Here's the full article if you're interested: 👇

The Interior Design Trends to Know in 2024—And What’s on Its Way Out

Let us know what cha think!

Impound, or Escrow, Account Clarity

When you read an article that says only 1/2 of the people understand exactly what an Impound account is or does... First I'm surprised, second, figure I better blog about it!

Frequently when you are buying a house, or when refinancing, your lender asks you if you want to impound your property taxes and insurance. They describe it as a savings account that pays your property taxes and home insurance when they become due. It becomes part of your monthly mortgage payment.

I'd actually never done it. Didn't know why we chose to do it for our Lake House, but we did. Works perfectly fine. My monthly mortgage billing shows how much is in our escrow account. Bet that confuses people since when they were buying a house it was called 'going through escrow'. And, I'm honestly not quite sure why they refer to it as an escrow account when the mortgage broker calls it an impound.

Regardless, there are a few things you need to know:

1) When your loan gets sold, or transferred, to a new servicer.... make SURE you let your insurance company know who the new servicer is so the billing gets to the right people and the insurance gets paid.

2) On the flip side, if you change insurance companies, you must let your mortgage company know so they pay the right insurance company.

3) When insurance and/or property taxes increase, so will your monthly mortgage payment. If you're in California, be prepared for insurance likely going up a lot. And, as noted in # 2 above, if you find someplace cheaper, don't forget to tell your mortgage company!

And, Congrats go out to two of our sellers this week! One had full contingency removal and is closing very soon. Another got multiple offers, is popping into escrow well over list price, and is scheduled for a 21 day close! Now, if we could just find a couple great properties for some special buyers, that'd be awesome!

It takes a team to make things happen!

We've got a great team here!

February 2024 ~ Santa Clarita Home Sales Info

Lord have mercy, that February word is so hard to spell... still! Why that first R was ever put there I'll never know.

At any rate, sorry I missed writing a blog last week. But, just like life goes on, work goes on too, so here ya go!

All about our beautiful Santa Clarita Valley home sales. Including Acton to the East, Newhall to the South, Stevenson Ranch to the West, and Castaic to the North. Plus, our lovely little neighborhoods in between of course.

Quite honestly, not very exciting. Sales are still happening at least! I'd noticed a slight uptick in listings, but not by a huge amount. Disappointing news on the interest rates from Jerome Powell, Fed Chair. Seems no rate cuts will happen for a few more months. They actually went up this week.

"The average rate on a 30-year fixed mortgage rose to 7.11 percent, up from 6.89 percent last week, while the average rate on a 15-year fixed mortgage climbed to 6.49 percent, up from 6.3 percent a week ago." I quickly googled this morning and spotted a rate at 7.6!

Talked with a past client yesterday about his daughter buying her first home. It was so hard for me to have to give him a reality check, as he called it, about the cost of buying a home right now. During the phone call, as promised, I texted him some lender info so that he could pick their brain about different options that may help ease the 'pain' of the current interest rates.

On a lighter note, we had a property fall out of escrow and a back-up buyer popped right back in! Wahoo! AND, we have a new listing that just hit the market that Jennifer is servicing down in Culver City.

Open House this Weekend!

We're here for you. Always. Sometimes it's just to chat, counsel, learn. 

Whatever you need, all three of us are willing to help in any way we can.

NEW Television Entertainment Center Ideas !!

Looking at a new home with Buyers and frequently the thought goes to 'Where am I going to put my TV?'  When my first husband and I were looking for homes in Valencia, back in 1993, we distinctly passed on one since our ginormous television wouldn't fit in the living room. It was one of those rear projection TV's. So modern back then!

Then it progressed to the flat screen televisions. Entertainment centers, over fireplaces. But, we often still wonder how we can make the TV not really the focus of that wall, right? Well, for some members of the family I'm right. Hah!

These were some beautiful ideas from HOUZZ designers. The full article is in the link below the photos.

A librarian friend of mine probably has this already!

Very sleek, any color would do. I'd probably pick an earth tone.

This reminded me of a movie theater in a fancy airplane!

👉 Full Article From HOUZZ

One of our favorite parts of being a Realtor is seeing other peoples homes. Looking for design ideas for ourselves and for our clients as well. If you're a Realtor though, you know, the most favorite part is making someone's home dreams come true. 💗

When Should You Make A Low-Ball Offer?

We generally see investors make a lot of low-ball offers. They don't care if they get the house or not, on to the next if their offer is rejected.

Buyers that are planning on living in the home, they want to write an offer on, usually are more readily open to NOT writing a low-ball offer. They want to get the house so they certainly want to get their offer accepted.

Let's be serious, when the market is a hot, hot, hot Sellers market, there aren't many opportunities for a low-ball offer getting accepted. 

But, when should you consider making an offer well below the Sellers list price? We, your agents, will always provide you with a market analysis of what the home you have fallen in love with is 'worth'. What it's market value truly is. 

1) If the property just hit the market & is listed at the correct market value ~ don't do it.

2) If the property has been on the market for a while ~ maybe do it.

3) If the property is overpriced ~ do it.

The biggest issue is, of course, the Seller. They priced their home where they wanted to sell it. Are they motivated to truly sell their home? Will you offend them if you write a low offer? Have they done any price reductions since listed?

For a buyer, are you willing to lose the home you want by writing a low offer. Most contracts have an appraisal contingency and that will help you if it's overpriced. It, of course, depends on how your agent wrote the offer on the buyers behalf.

Honestly, the most important thing is to listen to us, your Realtors. We know precisely what is happening in the market. We can find out things you can't. We will guide you on how to get the home of your choice for the best price possible. That's just part of what we do, but we do it very well.

If you have more questions about this topic, or any other real estate topic, just reach out. 

Pay off Debt Before or During Escrow?

Not uncommon for a buyer to talk with a lender and the lender suggests paying off some debt to reduce their "debt-to-income" ratio for a better mortgage rate. If you've got the money in the bank it's great.

If you don't, but it still needs to be paid off to close escrow? Thanks to our wonderful escrow team for this reminder:

Paying Down Debt During the Escrow Process

It is actually quite common that you may be asked to pay down some of your debt during the escrow process. It may be a car, or credit cards, or other personal loans. Don’t consider this a bad thing! In a way, it’s a lot like consolidating your debt. If you’re wondering how the process works in that some (or all) of your debt is eliminated during the escrow process, read on!

By this point, you are probably acutely aware of the term “debt to income ratio.” Your mortgage lender uses this equation to determine how much money you are able to borrow. The more debt that you have, the less money you will likely be able to borrow. This is why mortgage lenders often request that borrowers pay down certain debts as a condition of loan approval.

And often, these debts are paid by escrow. This all has to do with timing. If you were to simply mail in your credit card or car payment, or even pay them online, it could take weeks before your lender could verify that these debts were paid in full. On the flip side, when escrow makes these payments, they are recorded on the buyer’s final escrow settlement statement, which is official enough for a mortgage lender to consider the debt paid as requested.

In order to help things move along smoothly, here are some other things to keep in mind when you are asked to pay debts in escrow:

Correct Account Numbers

Often times, your mortgage lender is pulling this information from your credit report, and that may mean they only have access to a partial or redacted account number or abbreviated company name. Make sure you provide your most recent statement with the correct payment mailing address and your full account number to escrow. This will ensure your account is credited properly and in a timely manner.

On-Time Payments

The last thing you need when you’re buying a home is a late payment, and that can happen when escrow is handling a debt payment. Make sure you keep close tabs on your escrow closing date and your normal monthly payment due date because debt paid via escrow will not be paid until the day escrow closes. It’s customary that physical checks are mailed, so allow time for this to avoid late fees. This may mean that you need to make a normal payment, and any overpayment will be returned to you.

Make Sure To Provide the Correct Statements

At the close of escrow, the original checks payable to the credit card or other loan company will be mailed to the addresses on the latest statements that you have provided to the Escrow Holder. You want to make sure to provide the correct statements so that you can be confident that the checks are mailed to the appropriate company.

Need to Change Amounts?

Because the dollar amounts are taken from your credit report, a living and ever-evolving document, you may find that you need to change the amount paid to your debtors (this can be higher or lower). Keep in mind that your Escrow Officer is required to abide by the written instructions of your mortgage loan company, so if you need to change the amount, contact your loan officer to find out what is required to make this happen.

This is just another instance where communication is key during the home buying process. Be sure to stay in close contact with both your Escrow Officer and your Loan Officer to ensure that the payments of your debt during escrow goes smoothly.

We're here to answer any questions you may have.

Start with us and we'll get you to the finish line!

Good Info From Calif Association of Realtors!

They call it the 'Market Minute Write-Up" & it's done every Monday. This one was good enough to share in it's entirety!

"January 08, 2024 - Americans are feeling more confident about the housing market at the beginning of 2024 as buyers and sellers start seeing a glimpse of hope at the far end of the tunnel. While rates had a slight uptick in the first week of the year, easing inflationary pressure and a soft economic outlook prompted many to believe that mortgage rates will decline, albeit slowly, in the next 12 months. The housing market should see a bounce back in activity in the coming months if the sentiment can maintain its upward momentum. The improvement, however, will likely be gradual as tight housing supply remains the norm in 2024.

Mortgage rates go up slightly to start off 2024: After reaching a 7-month low in the last week of December, mortgage rates kicked off the year with a mild uptake in the first week of 2024. The average 30-year fixed rate mortgage (FRM) reported by Mortgage News Daily inched up from 6.67% on the last trading day of 2023 to 6.74% at the closing on January 8, 2024. The boost in rates was due partly to more upbeat economic data and partly to the recent increase in traders’ doubts about the Fed’s rate cuts in the next 12 months. With the latest jobs report suggesting a stronger-than-expected labor market, rates could continue to see some volatility in the coming weeks. Mortgage demand, meanwhile, remained soft as mortgage applications dropped again at the end of last year. Despite the recent downward trend in rates, the latest purchase application index reported by Mortgage Bankers Association decreased 5% compared to two weeks ago, as supply constraints continued to hold back market activities.

Home purchase sentiment bounces back at year-end: With interest rates dropping to the lowest level in seven months, optimism about the housing market began to come back at the end of 2023. The home purchase sentiment index released by Fannie Mae jumped 2.9 points to 67.2 in December and reached the highest level since April 2022. The share of consumers who said that it is a good time to buy rose to 17%, an increase from the survey low of 14% recorded in the prior month. The surge in confidence last month was driven primarily by the increase in optimism that mortgage rates will soften, as a record-high 31% of the respondents believed that rates will decline over the next 12 months. While rates have been moving mostly sideway in the past couple of weeks, receding inflationary pressures coupled with the expectation of the Fed’s policy rate cuts will likely lead to more downward drifting in mortgage rates later this year.

Solid residential market pushes up construction spending in November: Despite a slowdown in new home sales pace in November, construction spending advanced again in November as single-family construction continued to provide support to new building activity. Total outlays for residential and non-residential posted a solid gain with an increase of 0.4% month-over-month in November and improved for the eleventh consecutive month. Residential spending was up 1.0% from October, with single-family outlays surging 2.9% as inventory remained low in the existing housing market. Multifamily outlays inched up 0.1% month-over-month in November but continued to moderate, as apartment demand remained on a normalizing trend. Builders are expected to pull back further in 2024 as the apartment supply pipeline remains saturated in the next 12 months.

December job gains top expectation: The December jobs report came in stronger than expected yet again, with employers adding a seasonally adjusted 216k jobs last month. Employers added a total of 2.7 million for the year 2023, a sharp decline from 4.8 million in 2022, but still a stronger number compared to the few years preceding the pandemic era. The unemployment rate was unchanged at 3.7% in December, but the labor force participation dipped an unusually large 0.3 points to 62.5%. A slip in the rate is a discouraging sign for the Fed officials, as fewer people being drawn into the labor force could put upward pressure on wages. Average hourly earnings, in fact, rose 4.1% year-over-year in December, a tick-up from 4.0% in November. The latest jobs report, while more robust than the consensus expectation, continues to suggest that the labor market has cooled over the past year. As such, it is unlikely to have a change on the Fed’s rate movement perspective in the next FOMC meeting.

Holiday spending up modestly in 2023: Consumers continued to spend during the holiday season, with U.S. retail sales – excluding automotive - increasing 3.1% year-over-year for the time period between November 1 and December 24, according to Mastercard SpendingPulse. Online retail sales were up sharply by 6.3% from a year ago, while in-store sales posted a more modest gain of 2.2% year-over-year. The restaurant sector recorded a big jump, with sales climbing a strong 7.8% from the comparable period a year ago, as family and friends celebrated their holidays outside of homes. According to Adobe’s Digital Price Index, many shoppers have used the “buy now, pay later” financing option during the holidays, with the payment plans racking up $16.6 billion in online spending during the holiday season, an increase of 14.4% from the year-ago holiday period. This may imply that there could be a pullback in consumer spending in the months ahead as bills come due for those shoppers who borrowed forward at the end of last year."

So there you are!!! And, I always find it interesting to see what other agents think (bottom section of picture above).

Santa Clarita Home Sales 2023 Round-Up

I do this every year. Because I presume you are interested in the totals! Reminder that I go all the way out to Acton in the East, Stevenson Ranch to the West, Newhall to the South and Castaic to the North. 

With the high interest rates and low inventory, the housing sales in Santa Clarita certainly reflected those challenges!

Our total sales for 2023 hit 2611. Spring season was the best with 810 closed sales. 2022 we hit 3301. The robust year of 2021 totaled 4861. Our average closed escrows over the years has hovered around 3900/year.

So, yes, it was definitely a challenging year. But, we have always had challenging years, robust years, and normal (if there is such a thing anymore) years.

Let's see what 2024 brings! 

Leslie, Jennifer, and I are ready!!!