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!!! 

Ready to Re-Do Your Kids Room for 2024?

Well, if you haven't planned for things to do in the new year, this article sure made me think some of you would like to re-do your kids rooms! 

As our lives change, we change things up in our home. New furniture, new towels, sheets. We re-paint, change counters, cabinets, and more.

Kids rooms can get a wee bit lost in the shuffle. My kids were thrilled with new Ninja Turtle sheet/comforter sets as a new bedroom!

But, and the article below all the pictures, shows TEN kids 'spaces' of 2023 that caught a lot of peoples eyes while perusing Houzz!

These ones caught mine..... 

SF Design Build - this is that whole 'mid-century modern' I keep seeing. 

But, cool for the kid to peek through those slats and not fall out!

Beth Howley Creative LLC - Either there are a ton of kids living in this home

 or they like to have a lot of slumber parties! 

Jamie Bush & Co - I couldn't help myself. This was just too cute for words.

Some little girl would absolutely LOVE this!

Susie McKechnie Interiors - Obviously for the young lady that is starting to grow up a bit.

Have you got one of those yet? 

And, here's alllll the ones via Houzz! 👇

 The Top 10 Kids’ Spaces of 2023 👈

Navy Son Comes Tomorrow & SCV Home Sales Activity December 2023!

Yes, I normally write in my blog these days on Fridays. But, our Navy son is coming for a week and we pick him up at the airport tomorrow. So, here you go... oh my goodness, on a Thursday!

Santa Clarita from Acton to Stevenson Ranch, Newhall to Castaic. All the communities in between.

As of this moment we have:

At the beginning of this year it was similar, but, we had 100 more homes available for sale!

Thankfully interest rates have gone down. I know, broken record. I am crossing fingers, toes, legs, and eyeballs, hoping that the fed does hold the course with 3 further downward rate changes in 2024.

This year was a good year for Leslie, Jennifer, and myself. We helped quite a few people with their real estate needs. Wasn't like 2020-2021, but it was still a healthy market for a lot of families.

We already have a couple of sellers in the throes of getting their home ready for market. In and out of Santa Clarita. Yes, we do go outside the SCV bubble ... at times.

And reminder, we can assist you in locating a great agent out of state if you don't have any friends where you're going to refer you to one they know. We know what to ask, what to look for, how to find you the closest to us we possibly can.

Wishing you the best of the rest of 2023 and we'll talk again in .... Oh My ...2024!!!

The Fed Holds Rates Steady, Expects 3 Rate Cuts In 2024

 The Fed holds rates steady, expects 3 rate cuts in 2024

The Fed's decision marks the fourth pause in 2023 after hiking rates 11 times since March 2022

HousingWire: By Sarah Marx and James Kleimann

The Federal Open Markets Committee (FOMC) held its short-term policy interest rate steady at a range of 5.25% to 5.5% at its last meeting of the year on Wednesday. It was the fourth pause recorded in 2023.

Federal Reserve Chairman Jerome Powell said that while inflation remains ‘elevated,’ the Fed anticipates making three 25 basis point rate cuts in 2024, a signal to Investors that hikes are over and a new phase in monetary policy is approaching.

In other words, hurrah!

The bond market responded in kind, with the 10-year Treasury yield falling to 4.0% late afternoon on Wednesday, its lowest level since late July.

“Additional rate hikes no longer appear to be part of the conversation. It is all about the pace of cuts from here,” said Mike Fratantoni, the chief economist of the Mortgage Bankers Association. “This is good news for the housing and mortgage markets. We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.”

In 2023, the Fed hiked the benchmark federal funds rate by a quarter-point at four meetings, most recently in July.

Financial conditions have eased since the last FOMC meeting on Nov. 1. The benchmark 10-year Treasury yield fell to 4.2% during the inter-meeting period from 4.8%. Simultaneously, futures markets priced in a higher chance of more rate hikes by the end of 2024. 

Despite a stronger-than-expected November jobs report, the slowing growth pace of new jobs, the slowing of wage growth and the modest rise in the unemployment rate suggest a cooling of the economy in the coming year, Selma Hepp, chief economist at CoreLogic, said in a statement last week. Meanwhile, overall inflation slowed in November but core inflation remained stubbornly high. Many economists say the current Fed policy is restrictive enough, if not too restrictive.

Rate relief in 2024

At the beginning of November, Freddie Mac’s Primary Mortgage Market Survey index hovered just below 8%. It now sits just above 7%, bringing some relief to rate-sensitive homebuyers. 

While conditions have improved, mortgage rates remain high. Prospective homebuyers bear the brunt of the lack of affordability while home sellers continue to cling to their historically low rate, pandemic-era mortgages.

No industry has been harder hit by the Fed’s monetary policy in 2023 than mortgage.

According to TransUnion, mortgage originations are down nearly 37% year-over-year, from 1.9 million in Q2 2022 to 1.2 million in Q2 2023. Dozens of lenders have gone out of business or been forced to merge in 2023.

Economists in the housing space see better days ahead.

“The Fed’s projections for 2024 will continue to anticipate a normalization in monetary policy in the year ahead,” said Realtor.com Chief Economist Danielle Hale.

Hale has forecast mortgage rates to ease further in 2024 as inflation improves and Fed rate cuts draw closer.

“Mortgage rates could near 6.5% by the end of the year, a key factor in starting to provide affordability relief to homebuyers,” Hale said. 

Among the first customers to benefit from reduced interest rates would be those who are currently making payments on mortgages with high rates. 

According to TransUnion data, since January 2021, there have been 3 million new mortgages originated with interest rates of 6% of higher, the total balance of which being over $1 Trillion. The monthly payments of each of these high interest mortgages averages $2,201.

If interest rates dropped to even 5.5%, it could result in significant savings for homeowners, as refinancing at that rate could result in an average monthly payment of $1,917 for them, a reduction of $284 every month, said Michele Raneri, VP of U.S. research and consulting at TransUnion. “This would represent nearly $300 a month that these homeowners would be able to use elsewhere in this continued high cost-of-living environment in which every dollar counts.”

We are extremely hopeful!

Holiday Decorating When Selling Your Home

Generally I prefer that you do not do a complete holiday decoration if you are selling your home. It also depends on the type of market we are in, of course. If it's a put up a sign and your house is sold kind of market, have at it. However, if it's a more normal market, best not to do too much decorating as that's a sure sign that the house has been languishing on the market if the pictures are all about Christmas and it's now Valentine's day.

But, just to show I'm not the only one.....

Courtesy of Kara Wahlgren @ HGTV:

"Staging Tips for Selling During the Holidays. 

Before you deck the halls, see which holiday decor can help you sell.

It’s the time of year that calendars are packed with holiday parties, budgets are strained by gift-giving and the roads are covered in freshly fallen snow. Alas, 'tis not the season for real estate. But the good news is that the few brave house-hunters who do venture out are serious about buying a house and stylish trimmings will make them want to ring in the new year in your home.

“Holidays can be personal on a lot of levels, but you want to make sure your decor is neutral,” advises Amy Powers, owner of Accent Home Staging & Interiors of Atlanta. “You want to romance your buyer, not invite them to your Christmas party.”

Try these tips to get buyers in the right spirit:

Clean and stage. “Before you decorate, your house needs to be staged,” Powers says. If your living room is already piled high with clutter and tchotchkes, your ceramic reindeer collection is only going to add to the sense of overcrowding.

Create a cozy vibe. The less-is-more mantra of home staging may tempt you to forgo holiday cheer this year. But a few subtle touches like a bowl of pinecones, an evergreen wreath, or a pot of cider simmering on the stove can create a warm and festive feeling in your home.

Complement your palette. Before you start untangling your tinsel, make sure your holiday collection matches your current decor. If your living room is painted a soothing ocean-blue hue, skip the clashing red garland and opt for white snowflakes or a silver glass-ball wreath. If you’ve got an earthy color scheme, accent with rich tones like cranberries, forest greens and gold.

Accentuate the positive. Too many trimmings may distract buyers, but the right accessories can draw attention to your home’s best features. Dangle mistletoe in an arched doorway, or display your menorah on the ledge of a bay window; just don’t block a beautiful view with stick-on snowflake decals or clutter an elegant fireplace with personalized stockings.

Go light on lights. Step away from the inflatable snowman, Clark Griswold. One man’s “merry” is another man’s “tacky,” so tone down any garish light displays while your home is on the market. (No, your neighbors didn’t pay us to say that.) Instead, use simple string lighting to play up your home’s architecture or draw attention to the gorgeous fir tree in your front yard.

Be an equal-opportunity decorator. Leave the life-sized Nativity scene in storage this year, because overtly religious flourishes may be off-putting to some buyers. “You want to keep neutrality throughout, so you can attract any type of buyer,” Powers says. Not sure what qualifies? Powers adds, “No matter what your religion is, you’re not going to feel offended by a nutcracker.”

Mind the tree. A tall Christmas tree can help you show off your two-story great room, but make sure the wide base won’t overwhelm the floor space. If your living area is on the small side, save space with a skinny tree. Swap the gaudy heirloom ornaments and trim your tree in a cohesive theme such as icicle lights and silver tinsel, for example, or blue and gold glass balls.

Clear the clutter. A few decorations can stir the holiday spirit, but don’t feel obliged to hang every last ornament. “A lot of people, when they decorate, tend to use all the extra space in their house,” Powers says. “You still want each space to look as spacious as possible.” Limit yourself to a few hints of holiday flair, but stash the rest in the basement for now. If you start to miss your Santa figurines, just remember that with a little luck, you’ll be celebrating next year’s holidays in a new home. And you can decorate that place any way you please."

I agree with what she said in it's entirety!

If you wonder what's too much in the way of decorations? You likely already realize it.

But, we're happy to pop over and tell you our humble opinion.

Happiest of Holidays to you all!

Crystal Ball Housing Time

So many people wondering where the housing market is going. People look to me any my 'family' of agents for our opinions. So we share them. And, while between the three of us, we have 40+ years experience, we are still just using that experience to project what we expect will happen. Not what we absolutely know will happen. 

2024 is likely going to swing the market a bit. It's been an intense Sellers market for several years now. Interest rates are below 8, but not by much. I've seen a few price reductions already too. California home insurance costs and availability will continue to plague. 

Good side to be thankful for? Inflation is easing just a tad. If that continues, albeit slowly, we should see a further reduction in home loan interest rates. As rates creep down a bit, we'll see a few more homes on the market as it becomes an easier pill to swallow for a Seller to repurchase a home that currently has a below 5% rate.

So, it's really a huge partnership with inflation. Housing / Inflation. They go hand in hand. We need to get that under control so we can get interest rates down. Get more inventory. Get homes more affordable. Buyers want to buy, Sellers want to sell. Right now we are still in the 'need' to sell or buy, not just want.

I had a client just this week that found out what their preapproval looked like with the higher rates. Now, they are a strong 'want', but we still need to find out how we're going to make it happen financially.

Another buyer of ours was just a 'meh, I want', but they moved forward with a step loan to get into the home with expectations of rates going down to refi later.

An upcoming Seller with a tenant occupied property is having their tenants talk to a lender. They don't want to move. Would like to buy the house. But, can they? We shall see.

Interest rates, lack of inventory, inflation. If that all gets better, housing will to. So, see? While we expect it to get better, our experience says it should, we make no promises. It's just our little crystal ball we're reading for you.