Residential Marketing Solutions

Mortgage Rates Expected to Rise Late 2022 – Early 2023

Mortgage Rates Expected to Rise Late 2022 – Early 2023

Home sales in the U.S. are hitting peaks not seen since before the housing bubble burst in 2008. However, the current housing boom is very different than any we’ve seen before, where most analysts determined that there may not be a bubble to burst, although prices may drop slightly by the end of 2022 or early 2023.

Some economists believe that mortgage rates may rise a full percentage point by the end of 2022. Others argue the increase won’t happen until well after that point. Whatever the case, when mortgage rates rise, the housing boom will likely return to pre-pandemic numbers.

Low Mortgage Rates Bring More Buyers Into the Market

During the pandemic, mortgage rates dropped to 3%, reducing monthly payments by 12%. This has allowed more people to buy a home. Young people who would have normally waited are buying now, driving demand and home prices up. In addition to low mortgage rates, remote work is causing buyers to shift from apartment living to single family homes in suburban areas.

The U.S. is currently experiencing a housing shortage. Freddie Mac estimates that 2.5 million homes would need to come on the market to combat the current shortage. Low supply caused home builders to increase production at the end of 2020. Unfortunately, high material costs have made construction difficult. Building permits and new builds are down 30-40% since the mid-2000s.

Despite what some economists say, the current boom is definitely not a housing bubble. Current home prices can be explained by low supply and low mortgage rates. Unlike the housing bubble of the mid-2000s, we’re seeing more credit-worthy borrowers hitting the market. Bank requirements are much stricter than they’ve been in previous years. In order to secure a loan, homebuyers need a high credit score and a sizeable down payment.

Buyers Need to Act Fast to Take Advantage of Low Rates

The current market has led to frantic buying across much of the country. Record-low mortgage rates, remote work, and a shift in housing type demand are driving the boom. As homebuyers compete, bidding wars drive prices up and many U.S. homes are selling above their asking price.

Prospective buyers looking to take advantage of low mortgage rates should act quickly. It is unclear how long the current rates will stick around. Once these rates rise, buyers will ultimately pay more in interest and payments to own a home, even if home prices drop.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

 

 

 

 

Home Prices Continue to Rise in California – Here’s What it Means for Buyers & Sellers

Home Prices Continue to Rise in California – Here’s What it Means for Buyers & Sellers

Fueled by strong demand and low inventory, home prices in California continue to rise. According to the California Association of Realtors, the median price for a home in California has risen $182,000 since May of 2019. This breaks down to an increase of over $7500 per month.  Although as home prices and costs to build are rising, buyer demand in California grows.

California Home Prices Reached Record Highs in May

In May 2021, Southern California home prices experienced a year-over-year increase of 33.1%. In the Inland Empire, median home prices gained 28.9%.

Fierce competition is leading many prospective buyers to offer above the asking price and potentially the home’s appraised value. In some instances, buyers are including escalation clauses for the home of their dreams, where they will pay higher than whatever the last offer was.  Many are offering non-refundable deposits and no loan contingency.  Many home builders have started their presales up to 6 months in advance of their sales center opening and model completion, selling completely off virtual tours.

As a comparison, in 2020, an average of 20.3% of California homes sold above their list price. By February of 2021 that number increased to 42.1% of homes in the metropolitan areas of Los Angeles. According to recent data from the California Association of Realtors (C.A.R.), 70% of homes in California sold above their list price this year. Is this sustainable?

No.   Although these trends are continuing, in the long run, the market will pivot and change.  Many will be priced out of the market and decide to wait for stabilization and if interest rates increase, some will not be able to qualify.

Seller’s Market

We have seen a shift since the first quarter of 2021 eliminating Seller concessions.  This coupled with low inventory and high demand translates that California is now a Seller’s market. According to C.A.R.’s monthly Consumer Housing Sentiment Index, 59% of homeowners believe it’s a good time to sell.

Homes are selling at record speed, with many selling in just 7 days. The National Association of Realtors reported that nearly 90% of U.S. homes sold in April were on the market for less than one month. Current homebuyer interest is being fueled by low mortgage rates, shortage of available homes, and an influx of buyers seeking larger living spaces.

The trend to watch will be aging Californian residents will begin selling their homes in favor of moving out of the state. This is due to the potential tax increase proposed by the State to tax equity from a home sale should you invest in property out of state.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

 

 

 

Mortgage Interest Rate Trends – Summer Predictions

Mortgage Interest Rate Trends – Summer Predictions

For homebuyers, the pandemic brought significant relief in the form of historically low mortgage interest rates. According to Freddie Mac, interest rates fell below 3% in May, 2021. This isn’t surprising, as 30-year mortgage rates have remained in the high 2% to low 3% range for the past few months. On June 10, 2021, 30-year mortgage rates dropped .03 percentage points to 2.96%.

Interest rates for other types of mortgages have dropped as well. The current rate for a 15-year fixed-rate mortgage sits at 2.23% with 0.2 points paid. This is down 0.04 percentage points from last week. The current rate on a 5-year adjustable-rate mortgage is 2.55% with 0.2 points paid, a 0.09 percentage decrease from last week.

Although it’s impossible to predict what mortgage rates will do by the end of summer, there are a few factors that could impact rates. Inflation could drive prices up. So could economic growth, as the economy improves.

While some sources believe mortgage rates will continue to drop, this isn’t likely. Instead, mortgage rates will probably start to rise over the summer.

What Factors Impact Mortgage Rates?

Economic and regulatory factors like ten-year Treasury rates, mortgage-backed securities, and Federal rate cuts can all impact mortgage interest rates. Last March, the Federal Reserve announced their plans to keep mortgage interest rates low through 2023.

While Federal rate cuts don’t necessarily mean lower prices for homebuyers, the Feds do have some influence over mortgage interest rates. Purchases of mortgage-backed securities made by the Federal Reserve helps infuse the market with liquidity. This helps push mortgage interest rates down. Rates could continue to decrease if the Feds increase its purchases of ten-year Treasury notes.

Is It a Good Time to Buy?

Homebuyers looking to lock in a good mortgage rate should act soon. As investors grow concerned over inflation, prices may spike. Also important, mortgage seekers should not wait to lock a loan until immediately after a federal rate cut. 30-year fixed rates can spike temporarily following a cut.

Mortgage rates don’t seem to be reacting to economic reports like they normally do. Experts agree that homebuyers should focus on their own needs and not market movements if they plan to buy in the immediate future. Mortgage rates will probably continue to shift and move unpredictably for quite some time.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

2021 Southern California Housing Market Forecast

2021 Southern California Housing Market Forecast

Despite economic hardships and stay-at-home orders, the California housing market finished 2020 on a high note with median home prices reaching record highs and homes selling at impressive speed. This momentum has carried into 2021 as home prices in Southern California continue to rise driven by low mortgage rates, increased buyer interest, and shortage of available inventory.

Throughout 2020, as families spent more time at home, many realized their current living space did not meet the changing needs of their family. This led to an influx of buyers looking to upgrade.

Fierce Competition Drives Home Prices Up in California

Low housing inventory in California has made competition extremely fierce. Homebuyers in California have shown they’re willing to pay more for what they want. In March, California home prices reached record highs with almost two-thirds of homes selling above their asking price according to the California Association of Realtors (C.A.R.).

In February, 2021, single family home sales were up 19.7 percent from the previous year. Median home price in California sat at $758,990 in March, 2021. This is 23.9 percent higher than the previous year. Despite rising prices, homes are moving almost 46% faster than they did in 2020. 8 days was the median time on the market in March, 2021.

It’s not just resale homes selling quickly in California. New construction homes are selling fast as well. In fact, home builders are having a hard time keeping up with demand. Sales concessions are becoming obsolete and bidding wars are becoming more common, driving up prices in every region of the state.

Buyer or Seller’s Market?

In addition to monitoring home prices and trends in the California housing market, C.A.R. also tracks the amount of time it will take for home buyers to purchase all available homes on the market. In March, C.A.R. listed the Unsold Inventory Index (UII) at 1.6 months. This is a sharp decline from the previous year when the UII sat at 2.7 months. Whenever available housing inventory drops under 2 months, it is considered a “Seller’s Market”.

California Remains One of the Hottest Markets in the U.S.

Rising home prices and high demand aren’t likely to change anytime soon. Price trends recorded by Zillow show that that between 2012 and 2019, the median home price in California appreciated by almost 108%. California home prices have risen 11% in the last year alone and were forecasted to increase 9% in 2021.  As more homebuyers enter the market and the number of available homes go down, it’s expected that home prices will continue to rise.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

 

 

 

What Are 2021 Home Buyers Looking For?

What Are 2021 Home Buyers Looking For?

As homebuyers look back at 2020, many are excited to make positive changes in the New Year. The global health emergency impacted people around the globe. In addition to changing the way we interact with others; it also changed the way in which people look at their homes. As stay-at-home orders kept most of us inside, homeowners everywhere realized their existing home didn’t quite meet their needs or the needs of their family. This has led to an increase in people looking to buy in 2021.

Homebuyers today want specific features that will make their life more comfortable. Before selling, homeowners may want to consider making upgrades and improvements. Most prospective buyers will pay a higher price for homes in desirable neighborhoods with the features they need.

Eat-In Kitchens

A recent study conducted by the FMI Foundation found that 94% of U.S. adults are cooking the same amount or more than they did before the pandemic. Of those surveyed, 78% reported they have positive feelings about family meals. In fact, 85% plan to eat family meals more often after the pandemic. It only makes sense that homebuyers want a space for eating with family.

In addition to providing enough space for family to dine together, an eat-in kitchen makes it easier for family members to participate in other activities as well. This large space allows children to complete school assignments, parents to work from home, and family to gather for board games or other activities.

Outdoor Living Space

As people spend more time at home, outdoor living space becomes more important. This is especially true in warmer parts of the country like Southern California. Even a small patio or balcony provides homeowners with a welcome escape from indoors.

In addition to upgraded outdoor lighting fixtures, fire pits and BBQs, and outdoor ceiling fans, homeowners want a fenced-in backyard. A well-constructed fence provides privacy and keeps kids and pets safely inside.

Garage

An increasing number of millennials and first-time buyers are looking to make the switch from apartment life to owning a home. These buyers are looking for something their apartment didn’t offer – a private garage. Parking in a garage extends the life of vehicles and helps keep them at a comfortable temperature during hot weather. A private garage also provides additional security and storage for homebuyers.

Energy Efficiency

An increasing number of homebuyers want energy efficient features. These buyers understand that energy efficient appliances and newer doors and windows reduce energy costs and help protect the environment.

Reasonable Commute

Homebuyers are choosing homes they can live in for many years to come. They want a home located close to everything they may need both now and in the future. These buyers gravitate towards homes located close to shopping, entertainment, good school districts, and employment opportunities.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers.

 

 

Holiday Home Safety

Holiday Home Safety

The holidays are here and Orange County residents are excited for the opportunity to celebrate. While many people are busy decorating their homes and planning their holiday vacations, it’s important to remember that this time of year presents safety hazards as well. Fortunately, there are some things homeowners can do to protect their home and their family this season.

Holiday Lights

According to the National Fire Protection Association (NFPA), electrical problems are the leading cause of holiday fires. Homeowners that enjoy decorating with lights indoors or outdoors need to take care to ensure proper safety. Before decorating, homeowners should carefully inspect each string of lights for any signs of damage. String lights with exposed wires, corroded sockets, or loose connections should be replaced. When changing bulbs, make sure the new bulbs have the same voltage rating. Using bulbs with a different rating increases the chance of overheating and fire.

Another important safety precaution, homeowners should limit strands to no more than three strings per link. Linking more strings of lights could increase the risk of fire.

Candles

Candles add a magical glow to festivities and play an important part in many holiday traditions. Before lighting candles, check that they are properly mounted on a non-flammable base and that they are kept at least one foot from anything flammable including walls and furniture.

 Fireplace Safety

Most of us enjoy warming up next to a fire during the cold months of winter. However, it’s important to make sure your fireplace is properly maintained before and after use. It’s a good idea to have your chimney checked and cleaned each year. This helps remove creosote build-up, which can catch fire during normal use.

Before lighting a fire, make sure the flue is open and remove any decorations surrounding the fireplace. Using a screen helps protect flying embers from entering your home. Always use quality firewood and never throw paper in the fireplace as this can start flash fires.

Keep Living Spaces & Walkways Safe

While most of us in Southern California don’t have to worry about snow, for those living in cooler areas snow and ice can cause a major safety hazard. It’s important that homeowners shovel and scrape driveways and walkways regularly.

It gets dark much earlier in the winter. Make sure all of the lights in the front of your home work properly. In addition to helping you see better when you return home, outside lighting may also deter intruders.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers.

 

Top 5 Things Homebuyers Are Looking for in New Homes in 2020

Top 5 Things Homebuyers Are Looking for in New Homes in 2020

As more people make the switch to working from home and distance learning, many Americans are finding their current home simply does not meet the changing needs of their family. In addition to requiring adequate space to complete work privately, private spaces are becoming more necessary within homes for schooling and connecting to family, even if small.  Having a space to relax away from the responsibilities of work or school allows families to separate home and office. This mental separation improves productivity and strengthens relationships.

While some things remain the same, many of the features prospective homebuyers look for in a new home have changed during the pandemic. The following details the top 5 things homebuyers are looking for in a new home this year.

More Rooms

Remote work and school is driving homebuyers to search for more square footage and separate bedrooms for every member of the family.  Plus, homebuyers are looking for homes designed with office spaces and larger great rooms.

Wireless Connectivity

In 2020, more than ever, strong internet connection is not just a luxury, it’s a necessity when buying a home. In addition to enabling control of smart home features, internet connectivity and strong cell service allows for easy communication and fast connection.

Wireless connectivity makes it possible for remote learners to access classes and virtual calls. It allows remote workers to complete tasks and collaborate with teams. Wireless connectivity is required to run streaming services like Hulu and Netflix.

Updated Kitchens & Bathrooms

Regardless of the pandemic, one thing remains the same – new homebuyers want upgraded kitchens and bathrooms. This is especially true for Millennials and first-time homebuyers. According to a study conducted by Metropolitan Regional Information Systems, Inc., 81% of prospective homebuyers believe that updated kitchens and bathrooms are the most important feature when buying a new home.

With many restaurants closed, families are spending more time in the kitchen. In addition to upgraded flooring, countertops, and appliances, homes with large, open-floor kitchens are selling quickly this year.

Yards or More Community Amenities for Relaxation

As statewide restrictions to flatten the curve evolve, many homebuyers are keen to look for private yards, rooftop decks and private community amenities that provide them with outside spaces to relax in.  It’s not likely the above-mentioned features will become less important.

Low Maintenance and Energy Efficient Features

Buying a new home is one of the largest purchases a person can make. After purchase, the last thing new homebuyers want is to put a lot of money into maintenance. Prospective homebuyers are looking for low maintenance, move-in ready homes. This also encompasses money spent following the purchase of a new home, an increasing number of homebuyers are looking for new homes with energy efficient features. Features like insulation, double-paned windows, low-flush toilets, energy efficient lighting and appliances can save homeowners a considerable amount of money over time.

Final Thoughts

Especially since the pandemic began, people everywhere have had to adjust and adapt to multiple changes. Businesses have realized that remote working saves money and often makes teams more productive. Schools and parents have discovered the many benefits of virtual learning. Throughout this time, most of us have figured out what we need to move forward.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers.

 

 

 

How Smart Technology Helps Keep Homes Safe and Cool

How Smart Technology Helps Keep Homes Safe and Cool

From the cell phones we use to connect with one another to the computers used to complete important tasks, technology plays an important role in most of our lives. While you’re probably familiar with smart phones and computers, homeowners have many more options when it comes to technology for their home.

By connecting home appliances, security systems, and other everyday devices to the internet, homeowners can activate and inactivate just about anything with the click of a button on their cell phone. This smart technology makes life more convenient, reduces energy bills, and increases the security of a home.

Years ago, smart home technology was out of reach for many people. In addition to the high cost of devices and deployment, smart technology was difficult to use. Fortunately, things have changed and smart technology has become more affordable and user-friendly in recent years. In fact, according to a new study by the Consumer Technology Association (CTA), 69% of U.S. households now own at least one smart home device.

Keeping Homes Safe With Smart Technology

Smart technology allows devices to communicate their status throughout the day. This makes it possible for homeowners to take a proactive approach to a wide range of situations. Some of the more impressive smart home options include plugs with auto turn-off, water leak and monitoring devices, and connected security devices with live video feed capabilities.

Smart technology can help homeowners catch leaks faster, preventing mold and damage of property. Connecting security devices to the internet increases home security and helps prevent theft. Smart devices like motion detectors and security cameras can set off a chain of events. When triggered by a potential intruder, smart devices can activate alarms, security lights, and notify the homeowner and/or authorities immediately. These features might prove especially beneficial to rental property owners. Smart technology gives homeowners eyes on their property, regardless of their physical location in the world.

Another benefit of smart home technology, smart doorbells and smart locks alert homeowners when someone is at their front door. In addition to a cell phone alert, some of these smart devices even let homeowners view and communicate with visitors through their doorbell.

Smart Technology Keeps Homes Cool in the Summer

One of the most common smart technology devices, smart thermostats allow homeowners to control the temperature of their home or rental property from a smart phone or computer. During the summer, homeowners can turn on the air shortly before they return home. This ensures a cool and comfortable living space, while avoiding the high energy bills associated with leaving the air running when no one is home. For rental property owners, smart technology makes it possible for owners to set the thermostat to a comfortable temperature for tenants. This ensures an enjoyable experience for tenants while protecting the property owner from energy bill spikes.

Smart Technology Provides Numerous Benefits

Smart technology makes life more convenient, improves safety and security, and increases the value of a home. Many insurance companies even offer discounts to homeowners that implement smart features in their home. Homeowners and homebuyers are strongly encouraged to learn more about smart home technology.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers.

 

 

 

 

 

Thinking of Buying a Home? Here’s Why Your Credit Score Matters

Thinking of Buying a Home? Here’s Why Your Credit Score Matters

Buying a new home takes careful planning. In addition to deciding on location, features, and appearance, homebuyers must also think about their financing options. While most prospective buyers focus on finding the right home, choosing a mortgage to pay for the purchase is equally important.

Homebuyers will want to secure a mortgage with the lowest interest rate possible and a monthly payment that fits within their budget. In order to accomplish this, it’s recommended that prospective buyers start by cleaning up their credit report and boosting their credit score before applying for a loan.

Prospective Buyers Should Check Their Credit Score

Even buyers that don’t plan to shop for several months or even years could benefit from checking their credit reports periodically. This not only makes you more aware of your credit health, it also helps you catch and resolve issues sooner before they impact your ability to purchase a new home.

Although many people believe it’s better to have no credit than a bad credit score, this isn’t actually true. While having a mediocre credit score could raise the costs involved with buying a home, having no credit could make it impossible to get a mortgage at all.

FICO Score Determines How Much Borrowers Pay For a Home

Lenders look at a borrower’s FICO score to determine interest rates and the resulting interest payments. The higher the score, the lower the interest rate and interest payments will be. For example, let’s look at a $350,000 30-year fixed rate mortgage in California. A homebuyer with a credit score between 760 and 850 might see an APR of 3.778%. Whereas, a homebuyer with a credit score between 620 and 639 will likely see an APR closer to 5.374%. Although it doesn’t sound like a big difference, the second homebuyer will actually pay $119,956 more for the same home. In fact, they’ll pay a whopping $355,485 in interest alone, which is more than the original value of the home. This not only affects the homebuyer in the long run, it also makes their monthly mortgage payments higher.

Improve Your Credit Score Before Shopping for a Home

Once you’ve determined your credit score, it’s important to take the steps needed to boost your score if necessary. The fastest and easiest way to accomplish this is by making sure all accounts are in good standing and by lowering your credit utilization by making larger payments and/or paying off debt. Prospective homebuyers may also benefit from requesting a higher credit limit on the cards used most frequently. As long as you don’t spend against the increased limit, this is one of the fastest ways to reduce credit utilization.

The Problem With Too Much Available Credit

While making regular payments and keeping credit utilization under 30% can increase your credit score and improve your chance of obtaining a favorable interest rate, having too many outstanding credit lines, even if you do not use them, can hurt your FICO score by making you look more risky to lenders.

Borrowers with several open credit accounts often find it difficult to control their spending and keep track of due dates. Even if you have no plans to use open credit accounts, lenders may still see you as a risk. This is why it’s so important to close any credit accounts you do not use before applying for a loan.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers.

 

Creating the Perfect Outdoor Living Space

Creating the Perfect Outdoor Living Space

Summer has officially arrived and many of us are looking forward to spending more time outdoors. Whether you plan to spend your summer reading on your patio, or grilling up delicious meals, it’s important to make sure you create an atmosphere that promotes relaxation and tranquility.

It doesn’t have to take a lot of effort to create the perfect outdoor living space. You don’t even need a lot of room to work with. You just need to maximize the space you have, no matter how big or small.

Create an Indoor-Outdoor Connection

Homeowners can create a comfortable and stylish outdoor living space by adding many of the same luxuries they enjoy in their living room. To create this look, select outdoor furniture with plush cushions and stylish indoor-outdoor lighting fixtures. Homeowners can also add weatherproof artwork, storage units, an overhead fan, bright colored pillows, and gorgeous linens to create a space that’s both stylish and comfortable.

Focus on Color

A little color can make a big difference to the look and feel of an outdoor living space. Consider adding a large, brightly colored patio umbrella to your outdoor area. In addition to providing much needed shade, umbrellas provide an excellent vertical element to patio spaces. You can further enhance this look by matching a boldly colored umbrella with plush chair cushions.

Add Big, Bold Houseplants

Indoor plants grow quickly outdoors, making them perfect for creating a wonderful display and providing shade and privacy. Indoor plants that thrive outside include Fiddle Leaf Ficus, Peace Lily, Philodendron, Croton, Lady Palm, and Sansevieria.

Fix Up Your Old Furniture

A little spray paint can transform old patio furniture, bringing color and excitement to your outdoor living space. You can find a variety of colors and finishes at your local hardware store. Just make sure the color you choose doesn’t clash with the exterior of your home. Using a variety of colors creates or a truly unique look.

Divide the Space

Dividers add privacy and make it possible to create multiple “rooms”. This can work even with relatively small spaces. Strategically place fences, structures, or plants to create walls separating eating spaces, garden areas, and spaces meant for relaxation and rejuvenation.

Let Nature Be Your Guide

Create a gorgeous and inviting open airspace by surrounding it in colorful, fragrant, and cooling plants.  Complete this look with wicker furniture and simple patio pavers.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers.