The latest updates on the emerging trends in our local market.

As the real estate market continues to evolve, there are indications that it may experience further challenges before showing signs of improvement. This article explores the factors contributing to a potentially difficult market for both buyers and sellers. Understanding the dynamics of supply and demand, the impact of interest rates, and the future outlook can help individuals make informed decisions regarding their real estate transactions.

One key aspect influencing the market is the delicate balance between supply and demand. Compared to previous years, the supply of available properties remains considerably low. In some markets, the supply is even less than a month's worth, which can be attributed to various factors. Many sellers, although wanting to sell their properties, find themselves unable to afford the mortgage payments on a new house. Consequently, they opt to stay put until interest rates become more favorable. Additionally, homeowners who have accumulated significant equity in their properties have no pressing need to sell. As a result, a pent-up supply of housing inventory persists, exerting pressure on the market.

“Stay up to date and make informed decisions as you navigate the ever-evolving real estate landscape.”

Interest rates play a crucial role in the real estate landscape. Despite the demand for housing, interest rates remain high, limiting affordability for potential buyers. However, the market continues to see an increase in demand, partly driven by the millennial generation. As the largest cohort of this generation approaches the age of entering the housing market, their presence will further intensify demand. While affordability concerns may restrain the rate of price escalation, some areas are already experiencing multiple offers and a robust cash market unaffected by interest rates.

Another indicator of market performance is the state of the economy. Recent job reports indicate that the economy has been generating more jobs than anticipated, suggesting its robustness. Typically, when the economy performs well, the Federal Reserve tends to increase interest rates to counter inflation. Consequently, a strong economy and rising interest rates pose challenges for aspiring homeowners. As the months progress, it may become increasingly difficult to qualify for loans, affecting affordability and potentially discouraging buyers.

While it is unlikely that prices will decline significantly, they are expected to experience moderate increases. The primary factor to monitor will be the trajectory of interest rates. Higher interest rates translate to larger mortgage payments, further impacting affordability. As a result, it is crucial for potential buyers to consider their financial capabilities and evaluate the market conditions before making any decisions.

If you want to have a further discussion about this, feel free to reach out to me at (649) 200-3236 or on the web at sdcoastalagent.com.

You can get top dollar for your home with these four easy steps.

Selling a home can be a daunting task, especially if you're unsure of where to begin. With the current hot real estate market, you might be tempted to just put a for-sale sign in your yard and call it a day. However, taking the time to make some strategic improvements can get your house to sell faster and for top dollar. Today, I will discuss four areas to focus on that will give you the highest return on your investment of time and money:

1. Curb appeal. This refers to how attractive your home looks from the street. It's the first impression that potential buyers get when they pull up to your house. It's essential to make your home as presentable as possible at this first impression because buyers are more likely to overlook imperfections as they explore the house if they are impressed with the curb appeal.

Some ways to improve curb appeal include:

• Freshening up planter beds with new plants and adding some color
• Pressure washing walkways and bricks
• Painting the house exterior or at least focusing on the front of the house, including the window trim and front door
• Making sure the front door has nice polished hardware

These are easy fixes that can be done quickly and will make a big difference in how your home looks to potential buyers.

“Taking the time to make some strategic improvements can get your house to sell faster and for top dollar.”

2. Interior improvements. Once potential buyers enter your home, you want them to fall in love with it immediately. This will make them more likely to overlook any imperfections they may find later on. Neutralizing paint colors and using light and bright colors to bring in natural light will make your home more salable to most buyers. Even if the buyer likes color, they can always add it later, but starting with a neutral palette will open up your home to a larger pool of buyers.

Carpet is another area that can make a big difference. If your carpet is worn out, consider getting some estimates on freshening it up with a lighter color. A brighter, lighter space will look larger and more appealing to potential buyers.

3. Staging. This is the process of making your home look as appealing as possible to potential buyers. It can involve decluttering and removing personal items, such as family photos and knick-knacks, to help buyers see themselves in the space. It's also a good idea to switch out some furniture pieces if they're too large for the room or don't flow well. These quick fixes can make a big difference in how your home is perceived by potential buyers.

4. Choosing the right agent. Finally, it's crucial to choose the right agent to help you with the selling process. Look for an agent who has experience in your local market and can help you pick the right color schemes and contractors to get the job done right. They can also help you with setting a price that will attract buyers while still getting you the highest possible sales price.

Selling a home requires some effort, but with the right focus and strategy, you can get your house to sell faster and for top dollar. By improving curb appeal, making interior improvements, and staging your home, you can create an inviting space that will attract buyers. And remember, finding the right agent can make all the difference in getting your home sold quickly and for the right price.

If you have any questions about getting the best ROI for your home upgrades or real estate in general, please feel free to reach out to me by phone or email. I would be happy to serve as your resource for all of your real estate needs.

What buyers need to know about purchasing a home in today’s market.

Have you ever heard the saying “marry the house and date the rate”? This is a common saying in real estate but is that a good idea? That's what I'm going to discuss today.

Buying a house is a more permanent, long-term commitment. Dating the rate is temporary, so you can get a better rate if they go down. The Federal Reserve is forecasting that rates will eventually come down, but no one knows when or for how long. So, is it better to marry the house and date the rate? Well, it depends on your goals.

“Rates have already come down a bit, and this has increased buyer activity.”

If you're looking to buy your dream home and plan to stay there for a long time, it may be a good idea to buy now. Purchasing with a higher interest rate might make the monthly payment painful in the immediate future, but after building equity and refinancing the payment would lower. Depending on your goals, purchasing a smaller house now may be a good stepping stone. Even though it might not be your perfect house, the equity you build will help you eventually purchase the property you’ve always wanted.

Currently, inventory levels are very low, and if rates come down, it will inevitably drive home prices back up due to increased buying power. Rates have already come down a bit, and this has increased buyer activity. This all depends on your financial situation and goals. Bear in mind there are also costs associated with refinancing a home.

Overall, it seems like a good idea to buy a house now, especially with the millennials coming into their prime home-buying years in the next two to three years. This will create an increase in demand, which in turn drives home prices up. Taking this into consideration, even if rates go down, your payment will likely be more with higher home prices. So it's important to consider all factors before making a decision.

If you have any questions or need more information, feel free to call or email me. I am always willing to help!

There are some modest gains across the board in our local market.

As we wrap up the first quarter of 2023, it's a good time to take a quick snapshot of the real estate market. As reported in the previous market update for the end of 2022, home prices had flatlined from the fallout we experienced in the fall. But now, in 2023, we're starting to see an uptick in the markets, with modest gains across the board. Condos have increased by 6.5%, while single-family homes are up 10%.

The pending sales from the beginning of the year until now are increasing month over month, showing a lot more buyer activity. Closed sales have increased by 33%, and this number is expected to rise as we head into April and May, as pending sales usually turn into closed sales. Additionally, cash transactions are very strong, with the coastal markets up 39% of all transactions and a median sale price of $2.7 million. Across San Diego County, cash transactions are still well over 20%.

“We're starting to see an uptick in the markets.”

The inventory levels continue to be suppressed, with only one month's supply across the whole county, and some markets are below one month. The increased interest from buyers and a lack of inventory are helping to drive prices up. Many sellers may want to move to a larger house, but their interest rates are so good that it's just not a viable option for them.

If you want to learn more about the real estate market in San Diego County, feel free to reach out to me at (619) 200-3236.

What you stand to benefit when you get a pre-listing inspection.

Are you considering selling your home? Have you ever thought about getting a pre-listing home inspection before putting your property on the market? Today, I will share the pros and cons of getting a pre-listing home inspection.

Let's start with the pros. First and foremost, a pre-listing home inspection will give you, the homeowner or seller, a clear overall picture of the condition of the property. This will help you to look at your property through the eyes of potential buyers and identify any potential concerns they may have. Based on the inspection report, you can choose to make necessary repairs or improvements to the property, which can help you to better price the property.

Another advantage of a pre-listing home inspection is that if you show the inspection report to potential buyers, they may feel comfortable enough with it to make an offer without any inspection contingencies. This can speed up the selling process and make your property more attractive to buyers.

“A pre-listing home inspection will give the homeowner a clear overall picture of the condition of the property.”

Additionally, a pre-listing home inspection can potentially offset any fallout with the property coming out of escrow. Typically, when a property falls out of escrow, it is due to the fact that the buyer and the seller can't come to terms with requests for repairs or credits. By having a pre-listing home inspection, all parties involved will be aware of the condition of the property ahead of time, which can help to eliminate any misunderstandings or disputes down the line.

Now let's look at the cons. One of the main cons of getting a pre-listing home inspection is that it is an upfront fee that you will have to pay as the seller. However, considering the potential benefits, this fee may be worth the investment.

Another con is that you will have to disclose the inspection report and any major issues that exist on the property. However, it is always better to be upfront and honest about any issues, as failing to disclose them can lead to legal trouble down the line.

Finally, it is likely that the buyer will want to get their own inspection, which can be seen as a con. However, as the seller, you will already be aware of the condition of the property and can use this information to negotiate with the buyer if necessary.

If you are interested in getting a pre-listing home inspection or have any questions about the selling process, feel free to reach out to me at (619) 200-3236. I look forward to working with you!

Five emerging trends we’re seeing in the 2023 spring real estate market.

The real estate market has been on a rollercoaster over the past year, with many ups and downs. With spring and summer just around the corner, many people are wondering where the market is heading. Let’s explore some key indicators that can help us understand what the future of our market looks like:

1. Pending sales. Pending sales are an important indicator of buyer activity in the real estate market. Last year, we saw pending sales plummet from summer to fall, but they have since stabilized and are now on the rise. This increase in buyer activity has led to decreased inventory levels, which have been contracting for four consecutive months.

2. Sold properties. The number of sold properties has increased, meaning that more homes are coming off the market than are going on the market. In most markets, we're seeing a month or less of inventory, making for a very competitive environment.

“Now is the time to start preparing for your home sale.”

3. Loan applications. Loan applications are also on the rise, even with increased interest rates. This is a positive sign for the market, as it indicates that buyers are still willing to take on mortgages despite higher rates.

4. List price to sale price. The list price to sale price percentages are also on the rise, but sale prices are still below 100%. This means that on average, most properties are selling for less than what they're listed for. This is different from last year when properties were selling for more than their list prices.

5. Cash transactions. Cash transactions are another indicator to watch. Even in a cash-heavy market like last year, where we saw just over 20% of transactions were cash, this number is now at 22%. This indicates that inflation is still a concern, and the federal government may increase interest rates to get it under control.

These are indicators that it is going to be a competitive market for you, if you are looking to purchase a home. That said, there are some things that you may want to do to make yourself more competitive. Reach out to me and I can help you. What does this mean for sellers? First, know that market times are approaching the 30-day mark. In this market, you can still get a fair price for your property, but you need to strategize accordingly. If you're considering selling your home this spring or summer, now is the time to start preparing. If you want more information on the market or are considering buying or selling a home, reach out to me at (619) 200-3236. I look forward to hearing from you.

Five reasons why every buyer should consider purchasing a fixer-upper.

Why would you buy a fixer-upper instead of a home that’s in great condition? The truth is that there are a lot of benefits to purchasing a fixer-upper, so today I’m sharing my top five reasons to buy a home that needs a little work:

1. You get to choose how the remodel goes. Often, that brand-new home has 95% of the things you want, but there’s always something you would have done a little differently if you were in control. When you buy a fixer-upper, you get to make sure everything is exactly how you want it from the beginning. Plus, you can be confident that the work being done is up to your standards without any shortcuts being taken.

2. You get to build sweat equity. When competition was fierce, adding value to your home through hard work wasn’t as common, but now it’s coming back. Once you finish your remodel, you’ll likely have a nice amount of equity in your home.

“You can likely get the seller to help with some of the costs.”

3. You can avoid high construction costs. Right now, labor and material costs are high, but they’re predicted to go down in the next few years. If you purchase now and wait a year or two to remodel, you can take advantage of prices when they’re lower.

4. Your property taxes will be lower. When you purchase a home, the assessed value will likely be pretty low, so your taxes will be low. After your remodel, the value will increase, but your taxes will stay low.

5. You can get a great deal at negotiations. Many buyers just aren’t interested in homes that need remodeled, instead they want that shinny, turnkey house. With less competition you often have the ability to negotiate a better deal. If you work with me, I can put together a list of how much your remodel might cost, and we can bring that to negotiations to help you get some money for those costs.

If you are thinking of buying a remodel, you can call me at (619) 200-3236 or send me an email. I would love to help you with this journey!

These five indicators show that we have already hit the bottom of the market.

With the real estate market fluctuating so much, many people wonder what’s going on and what we can expect for the future. When looking at the data, I believe we saw the bottom of the real estate market in the last quarter of 2022. This is good news for everyone! Five factors make me think we’ve seen the bottom:

1. Interest rates are slowly declining. This is one of the hottest topics in real estate right now. The rates peaked in October of 2022, where they were over 7%. Fortunately, we've seen a slow decline since then. Now interest rates are hovering around 6% and are forecasted to go down as low as 5.5% by the end of the year. These are good signs, making homes more affordable for buyers.

2. Pending sales are starting to go back up. They were decreasing through the fall and hit their bottom in December because of seasonality and the decrease in affordability. However, that was up 20% in January, which is a good sign that closed sales will also go up.

“Inventory levels are decreasing from their peak level in September of 2022.”

3. Inventory is down from its peak in 2022. It peaked in September 2022 when it hit almost two months’ supply. That is still considered a seller's market. However, inventory levels in January were at 1.1 months, which is half of what they were in September.

4. The median sales price has stabilized. We were starting to see it slip a little bit during the market correction in the fall, but it has stabilized and flatlined from November 2022 through January of this year.

5. Buyers are becoming more active. We see a lot more traffic through open houses and more showing requests on listings. Plus, loan applications were up in January.

I believe the upcoming spring market will benefit both buyers and sellers. If you’re a buyer, I strongly recommend you get more aggressive now before the competition starts to ramp up soon. If you want a little bit more in-depth look at your specific situation, feel free to reach out to me at (619) 200-3236. I hope to hear from you soon!

A story about how a rate buydown helped both the buyer and the seller.

Today I am excited to tell you a story about a recent transaction I went through where a rate buydown saved the day! I have talked about rate buydowns a bit before, but I am here to talk about this situation today because, in this recent, real-life example, the buydown benefited both the buyer and the seller.

In this transaction, I was representing the buyer. They fell in love with a house listed for $1.5 million but didn’t feel like it was worth that price. They were prepared to make an offer that was $50,000 less than the list price, which would’ve required the seller to make a big price reduction, and they were understandably reluctant about that.

“With the rate buydown, the buyer and the seller both benefited.”

However, we told them about a rate buydown, and they saw it was a win-win. We asked the seller to credit a rate buydown of two points, which would cost $24,000, and then $10,000 for the closing costs. Therefore, this transaction would cost the seller $34,000 instead of $50,000.

With this buydown, the monthly payment for the buyer ended up being the same as it would’ve been with a $100,000 price reduction. That’s a huge help! They got almost $500 taken off their monthly payments, and the seller was able to sell with much less of a loss. Needless to say, both the buyer and the seller were happy and benefited.

Each transaction is different, so if you want to see how this could affect you, don’t hesitate to reach out! You can call me at (619) 200-3236. I look forward to working with you!

A lot has changed in our market in the past year, so stay informed.

We're in 2023, can you believe it? As we enter the new year, I’m going to recap 2022, because as I've mentioned before, the year was quite the roller coaster. Peaks rose even further and then the market started to correct, so I am going to share some of the important highlights.

At the beginning of 2022, we were still in a turbulent environment. Everything was going on and off the market in a matter of days, there were multiple offers, and people were overbidding like crazy. Then, that started to subside as interest rates got too high. After that, price points started to go down, and we are currently in a healthier market.

In addition, buyers are going after lower-priced and/or smaller properties more and more. Therefore, the average price per square foot is increasing. The condo market has been doing better—it appreciated 14% year over year, whereas single-family homes finished the year around 9%.

“We are currently in a healthier market.”

Another thing that changed throughout the year was the number of transactions, which came down quite a bit to almost half of what it has been. However, inventory levels haven't increased very much, as there are also fewer sellers putting their homes on the market.

The amount of cash in the market is still pretty strong and healthy at 20% countywide, and in some of the luxury markets, that number is around 40%. This makes sense as many sellers and affluent buyers were reluctant to put their money in the stocks because the stock market has been schizophrenic.

Expectations for property conditions also changed last year. Properties that are fully remodeled and turnkey are still getting a premium price. A lot of buyers are going for that kind of property because they don't have to do anything to it. However, if a buyer is willing to take on that project or just parlay it for a later date, negotiations can be made. Therefore, I recommend buying a house that needs to be remodeled, maybe doing a few small things to it, living in it for a little while, and then taking on the remodel after the market and inflation settle down a little bit.

If you want any more in-depth information, whether or not you're looking to sell or buy in 2023, reach out to me at (619) 200-3236 or on my website by clicking here. I look forward to hearing from you!