Fresno Area Real Estate News and Market Trends

You’ll find our News Posts to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Dec. 14, 2023

Everything You Need to Know About iBuyers and the “Instant Cash Offer”

 

 

Everything You Need to Know About iBuyers
and the “Instant Cash Offer”

 

 

Technology is changing the way we do almost everything, and real estate transactions are no exception. In fact, a new crop of tech companies wants to revolutionize the way we buy and sell homes.

 

iBuyer startups like Opendoor, Offerpad, and Properly are rapidly expanding into new territories, and now established players, like Zillow, are starting to get in on the action. Also known as Direct Buyers, these companies use computer algorithms to provide sellers with a quick cash offer to buy their home.

 

While the actual market share of iBuyers remains small, their big advertising budgets have helped create a noticeable buzz in the industry. This has left many of our clients curious about them and how they work.

 

In this article, we explain their business model, weigh the pros and cons of working with an iBuyer, and share strategies you can use to protect yourself if you choose to explore this new option to buy or sell your home.

 

 

FIRST, HOW DOES THE iBUYER PROCESS WORK?

 

While each company operates a little differently, the basic premise is the same. A seller (or seller’s agent) completes a brief online form that asks questions about the size, features, and condition of the property. Some also request digital photos of the home.

 

The iBuyer will use this information to determine whether or not the home fits within their “buy box,” or set of criteria that matches their investment model. They are generally looking for houses they can easily value and “flip.” In most cases, their ideal property is a moderately priced, single-family home located in a neighborhood with many similar houses. The property shouldn’t require any major renovations before listing.1 These qualities make it easier to assess value (lots of comparable sales data) and help to reduce risk and minimize carrying costs.

 

Once the iBuyer has used their algorithm to determine the amount they are willing to pay, they will email an offer to the seller, usually within a few days. The offer should also disclose the company’s service fee, which is typically between 7% and 12% of the purchase price.2

 

If the seller accepts, an in-person visit and inspection are scheduled. The iBuyer will ask for a reduction in price to cover any defects they find during the process. Once the sale closes, they will make the necessary updates and repairs and then resell the home on the open market.

 

 

WHAT ARE THE PROS AND CONS OF SELLING TO AN iBUYER?

 

Of course, the biggest benefit of selling your home to an iBuyer is convenience. For some homeowners, the stress and disruption of preparing and listing their home can feel overwhelming. And what busy family with kids and pets wouldn’t want to skip the hassle of keeping their house “show ready” for potential buyers? Additionally, many sellers like the predictability of a cash buyer and the flexibility to choose their closing date.

 

However, this added convenience does come at a cost. An iBuyer is an investor looking to make a profit. So their purchase offer is usually below true market value. When you tack on service fees of up to 12% and deductions for updates and repairs, studies show that sellers who work with iBuyers net a lower amount than those that list the traditional way.3

 

In fact, a MarketWatch investigation found that transactions involving iBuyers net the seller 11% less than if they would have sold their home with an agent on the open market.2

 

 

WHAT ARE THE PROS AND CONS OF BUYING FROM AN iBUYER?

 

Buying a home from an iBuyer is a lot like buying a home from any investor. The pros are that it’s usually clean, neutral, and moderately updated. You’ll often find fresh paint and modern finishes. And because it’s uninhabited (no one is living there), you don’t have to work around a seller’s schedule to see the home.

 

However, there are some pitfalls to avoid when working with iBuyers. Speed is of the essence, so sometimes the renovations are rushed and the quality can suffer. Also, their investment margins don’t leave much room for negotiating a price reduction or additional repairs. That leaves buyers —who have already invested hundreds of dollars in an inspection—little recourse if any issues are uncovered.4

 

That’s one of the reasons we always recommend viewing properties with an agent. During your visit, a real estate professional can point out any “red flags” at the home, provide background information about the neighborhood, and help you assess its true market value. That way, you don’t invest time and money in a high-risk or overpriced property. Safety is also a concern. Some companies allow buyers to access their homes via a smartphone app. While it may seem convenient, it provides an easy way for squatters and others to enter the home illegally.5

 

Luckily, since most iBuyers (and traditional sellers) pay a buyer agent’s commission, you can benefit from the guidance and expertise of a real estate professional … at no cost to you!

 

 

HOW CAN I PROTECT MYSELF IF I CHOOSE TO WORK WITH AN iBUYER?

 

While it may seem like the “quick and easy” way to go, working with an iBuyer can present some unique challenges. For example, they are notorious for presenting a strong initial purchase offer and then whittling it down with a long list of costly updates and repairs once they complete their inspection.2 And unlike a traditional buyer who is incentivized to make a deal work, iBuyers can easily walk away if you don’t meet their demands.

 

Just like you wouldn’t go to court without a lawyer, you shouldn’t enter into a real estate transaction without an advocate to represent you. Having a professional agent on your side can be especially important when negotiating with an iBuyer. Remember, they employ sophisticated representatives and a team of lawyers who are focused on maximizing their profits, not yours. You need someone in your corner who has the skills and knowledge to ensure you get a fair deal and who understands the terms of their contracts, so you don’t encounter any unpleasant surprises along the way.

 

Overall, we think the emergence of new technology that helps to streamline the real estate process is exciting. And if we believe a client can benefit from working with an iBuyer, we present it as an option. But there is—inevitably—a cost to the convenience. After all, most iBuyers eventually list the properties they acquire on the open market, which is still the best place to find a buyer if you want to maximize the sales price of your home.

 

EXPLORE YOUR OPTIONS

 

Do you want to learn more about iBuyers and other options currently available in our area to buy or sell your home? We can help you determine the best path, given your unique circumstances. Contact us to schedule a free, no-obligation consultation!

 

 

Sources:

1.      The Dallas Morning News -
https://www.dallasnews.com/business/real-estate/2019/07/11/so-called-ibuyer-real-estate-firms-pitch-programs-to-buy-your-house-help-you-hunt-for-another/

2.      MarketWatch -
https://www.marketwatch.com/story/selling-your-home-to-an-ibuyer-could-cost-you-thousands-heres-why-2019-06-11

3.      Forbes -
https://www.forbes.com/sites/alyyale/2019/08/16/study-shows-ibuyers-cost-home-sellers-thousands-is-convenience-worth-the-price/#697ac0c42269

4.      US News & World Report -
https://realestate.usnews.com/real-estate/articles/what-to-expect-when-buying-a-home-from-an-ibuyer

5.      Inman -
https://www.inman.com/2019/09/11/police-arrest-couple-found-squatting-in-opendoor-home-with-their-kids/

 

Posted in Market Updates
Dec. 7, 2023

Serious About Selling? 5 Steps to Make Your Home the Best on the Block

Serious About Selling? 5 Steps to Make Your Home
the Best on the Block

 

We all want to be good neighbors. But when it comes to selling your home, it’s not just about “keeping up with the Joneses.” It’s about outshining them at every opportunity!

If you’re looking to sell your home fast and for the most money possible, you’ll need a strategy to set it apart from all the other listings competing for buyers in your area. That’s why we’ve outlined our proven, five-step plan for serious sellers.

Use these five tactics to help your listing get noticed, win over buyers, and net a higher sales price than your neighbors!

STEP 1: Stage Your Home to Show Its Full Potential

The average seller will do the minimum to prepare their home for market: clean and declutter, fix anything that’s broken, mow the lawn. And while those tasks are essential, today’s buyers want more than just a clean house and tidy yard. When they dream of buying a new home, they envision a designer house with modern finishes. Help them see your property’s full potential by staging it.

Home staging is one of the hottest trends in real estate—because it works! According to the Real Estate Staging Association, homes that are professionally staged spend 73% less time on the market.1

So what exactly is staging? In a broad sense, staging is the act of preparing your home for market. The goal is to highlight your home’s strengths, minimize any deficiencies, and help buyers envision themselves living in the space. When staging a home, you might rearrange the furniture to make a room feel larger or remove heavy curtains to make it appear brighter.

Some sellers choose to hire a professional home stager, who has specialized training and experience, to maximize the appeal of their home to the largest number of potential buyers. Others may opt to do it themselves, using guidance from their agent.

We can help you determine the appropriate budget and effort required to push your home ahead of the competition in your neighborhood. The good news is, an investment in staging pays off. A 2018 survey found that 85% of staged homes sold for 6-25% more than their unstaged neighbors homes.2

 

STEP 2: Draw Buyers in with High-Quality Listing Photos

You only have one chance to make a first impression with potential buyers. And many buyers will view photos of a listing before they decide whether or not to visit it in person. In fact, 87% of buyers find photos “very useful” in their home search.3 Poor-quality or amateur-looking listing photos could keep buyers from ever stepping through your door.

Since good photography plays such an important role in getting your property noticed, we only work with the top local professionals to photograph our listings. But we don’t just rely on their photography skills when it comes to showcasing your home.

We go the extra mile to ensure your listing photos showcase the true essence of your home. We’re always on site during the photo shoot to help the photographer capture the best angles and lighting, and to let them know about unique or compelling selling features that they should photograph. The extra effort pays off in the end. In fact, listings with high-quality photography sell 32% faster than the competition … and often for more money!4

  

STEP 3: Price It Properly From the Start

Even in a strong real estate market, there are homes that will sit unsold for months on end. This can be the “kiss of death” in real estate, as buyers tend to imagine that there must be something wrong with the property, even if it’s not the case.

But why are those houses still on the market in the first place? It’s because they are often priced too high.

Every buyer has a budget. And most will be viewing listings within a particular price range. If your property is overpriced, it can’t properly compete with the other houses they’re viewing that are priced correctly. Which means it’ll sit on the market until you’re eventually forced to drop the price.

Alternatively, if you price your home aggressively, it can be among the nicest homes that buyers have seen within their budget. This can lead to emotionally-attached buyers, who are often willing to pay a premium or settle for fewer seller concessions. And in certain markets, it can lead to a multiple-offer situation, or bidding war. The end result? More money in your pocket.

We can help you determine the ideal listing price for your home in the current market. Pricing it properly in the beginning is the best way to ensure a fast and profitable sale.

  

STEP 4: Put on a Good Show at Each Showing

Once buyers are interested enough to schedule a visit, it’s crucial that you put on a good show at each showing.

The first step is to make your home readily available—and often on short notice—for buyers to see it. A missed showing is a missed opportunity to sell your home. If you set too many restrictions on when it’s available to view, busy buyers will simply skip over your listing and move on to the next one.

Part of making your home available means keeping it relatively show-ready as long as it’s on the market. Most of us don’t live picture-perfect lives, and our homes reflect the day-to-day reality of our busy (and sometimes messy) families. But a little extra effort spent keeping your home clean, fresh-smelling, and ready for buyers will help it sell faster … which means you can get back to your regular routine as quickly as possible!

 

STEP 5: Use a Proven Promotion Plan

 Most agents are still marketing their listings like they did 20 years ago  … put a sign in the yard, put the listing in the MLS, and pray that it sells. Yet, we know that 93% of buyers search for real estate listings online.3

That’s why we invest in the latest training and technology—to ensure your listing appears in the places where buyers are most likely to look. Our dual-level promotion strategy includes both pre-launch activities designed to seed the marketplace and post-listing activities to ensure your home stays top-of-mind with potential buyers.

By utilizing online and social marketing platforms to connect with consumers and offline channels to connect with local real estate agents, your property gets maximum exposure to prospective buyers.


LET’S GET MOVING

Are you thinking about listing your home? Get a head start on your competition! Contact us for a copy of our Home Seller’s Guide, which offers a complete guide to the home selling process. Or call us to schedule a free no-commitment consultation. We’d love to put together a custom plan to maximize the sales potential of your property!

Sources:

  1. Real Estate Staging Association - https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
  2. Home Staging Resources -
    https://www.homestagingresources.com/2018-home-staging-statistics/
  3. National Association of Realtors -
    https://www.nar.realtor/sites/default/files/documents/2018-real-estate-in-a-digital-world-12-12-2018.pdf
  4. RIS Media -
    https://rismedia.com/2018/12/12/shocking-stats-importance-photography-real-estate/
Posted in Tips And Tricks
Feb. 18, 2023

What is weather like in Clovis California?

Clovis, California is a vibrant city located in the San Joaquin Valley, just a few miles east of Fresno. With its warm climate and sunny days, the weather in Clovis is a major draw for both residents and visitors alike. From hot summer days to mild winter afternoons, the city has a lot to offer in terms of weather patterns and climate.

 

One of the most notable aspects of the weather in Clovis is the heat. The city experiences hot and dry summers, with temperatures averaging around 97 degrees Fahrenheit in July and August. The high temperatures can be a challenge for those not accustomed to the heat, but for many residents, it's just another day in paradise. Fortunately, Clovis has plenty of ways to beat the heat, including popular attractions like Wild Water Adventure Park. With over 30 water rides and attractions, this park is a must-visit destination for anyone looking to cool off during the summer months.

 

While the summers in Clovis can be hot, the rest of the year is characterized by mild and comfortable weather. From September through November, the city experiences mild temperatures in the mid-70s, making it the perfect time to explore the outdoors. With numerous parks and outdoor recreational activities, including the Sierra National Forest just a short drive away, there is no shortage of things to do in the fall.

 

Winter in Clovis is typically mild, with temperatures averaging around 55 degrees Fahrenheit in December and January. While the city doesn't experience snow, it can get chilly in the evenings, making it a great time to cozy up indoors and enjoy the city's many indoor activities.

 

Spring is another great time to visit or live in Clovis, with temperatures ranging from the low 60s to the mid-70s. With wildflowers in bloom and the sun shining, it's the perfect time to take a hike or enjoy a picnic at one of the city's many parks.

 

While the weather in Clovis is generally mild and pleasant, there are occasional unique weather events to be aware of. The area is susceptible to heatwaves during the summer months, as well as wildfires in the surrounding foothills. However, with proper precautions and planning, these events can be safely navigated.

 

Overall, the weather in Clovis is a major selling point for the city. With its warm and sunny climate, mild winters, and plenty of indoor and outdoor activities, there's something for everyone. Whether you're cooling off at Wild Water Adventure Park during the summer or enjoying a brisk hike in the fall, there's never a bad time to visit or live in this charming city.

Feb. 5, 2023

The Fresno Grizzlies: A Story of Passion and Love for Live Sports

 

For many people, attending a live sporting event is a magical experience that stays with them forever. For me, that experience was at a Fresno Grizzlies game, where I fell in love with live sports as a fourth-grader. My stepfather had season passes right behind home plate, and every time a foul ball came our way, I was in awe of the excitement and energy of the stadium. From that moment on, I was hooked, and the Fresno Grizzlies have held a special place in my heart ever since.

 

The Fresno Grizzlies, a minor league baseball team, have been a staple of the Central Valley sports scene for over two decades. Founded in 1998, the team has been affiliated with several Major League Baseball organizations, including the San Francisco Giants, Houston Astros, and Washington Nationals. Over the years, the Grizzlies have made a name for themselves as one of the top minor league teams in the country, with a passionate fan base and a reputation for success both on and off the field.

 

One of the key aspects of the Grizzlies' success has been their partnerships with local organizations. For example, the team has formed a strong relationship with the Boys and Girls Club of Fresno County, supporting the organization through various initiatives and fundraising events. The Grizzlies have also worked with local schools to promote education and healthy lifestyle choices, hosting events such as the "Take a Swing at Reading" program and the "Stay in School" initiative.

 

Another hallmark of the Grizzlies is their commitment to the community. Each year, the team participates in various events and initiatives aimed at giving back to the people of Fresno and the surrounding area. For example, the Grizzlies have hosted events to raise money for local charities, such as the Fresno Rescue Mission and the Central Valley Alzheimer's Foundation. The team has also hosted events to benefit military veterans, including a special Veterans Day game and a "Military Appreciation Night."

 

Over the years, the Fresno Grizzlies have made a number of key accomplishments, both on and off the field. In 2015, the team won its first Pacific Coast League Championship, defeating the Reno Aces in a thrilling five-game series. In addition to their on-field success, the Grizzlies have also been recognized for their contributions to the community, receiving numerous awards and accolades for their efforts.

 

Despite its success, the Fresno Grizzlies' history has not been without its challenges. The team has faced a number of challenges over the years, including changes in ownership and changes in Major League affiliations. However, through it all, the Grizzlies have remained committed to their fans, partners, and the community, working hard to ensure that they are providing the best possible experience for everyone involved.

 

For me, the Fresno Grizzlies will always represent the thrill and excitement of live sports. Whether it's the energy of the crowd, the roar of the stadium, or the sound of the crack of the bat, attending a Grizzlies game is always a special experience. So why not come out to Chukchansi Park and see what all the fuss is about? You're sure to be entertained, inspired, and maybe even fall in love with live sports, just like I did all those years ago.

Feb. 1, 2023

"Clovis vs. Fresno: The Great Central Valley Showdown"

Are you tired of hearing about the Bay Area and Los Angeles all the time? Well, it's time to give some love to the Central Valley, and what better way to do that than by comparing two of its biggest cities: Clovis and Fresno.

 

First up, let's talk about the elephant in the room: crime rates. According to Niche, a website that ranks cities based on various factors, Fresno has a higher crime rate compared to Clovis. But, before you start packing your bags and moving to the countryside, it's important to remember that both cities are still safer than the national average. Plus, let's be real, crime can happen anywhere.

 

Now, on to the more fun stuff. When it comes to schools, Clovis takes the cake. Niche ranks Clovis Unified School District higher than Fresno Unified, so if you're a parent, this might be an important factor to consider. That being said, both cities have their share of great schools and it's always best to do your research and find the right fit for your family.

 

When it comes to things to do, Fresno has a slight advantage. As the bigger city, it offers a wider range of options for entertainment and activities, but that doesn't mean Clovis is lacking in this department. From the famous Clovis Rodeo to the Sierra Nevada Brewery, there's always something to keep you busy.

 

In conclusion, both cities have their pros and cons, and the best one for you ultimately depends on your personal preferences and priorities. Whether you prefer the charm of a small town or the excitement of a big city, Clovis and Fresno have something to offer. So, grab a burrito from El Super Taco, kick back, and enjoy all that the Central Valley has to offer.

 

Below are the community pages showing all the homes for sale in the referenced article communities.

 

Homes in the City of Clovis

Homes in the City of Fresno

Homes in the Fresno Unified School District

Homes in the Clovis Unified School District

Jan. 30, 2023

2023 Real Estate Market Outlook (And What It Means for You)

 

 

Last year, one factor drove the real estate market more than any other: rising mortgage rates.

 

In March 2022, the Federal Reserve began a series of interest rate hikes in an effort to pump the brakes on inflation.1 And while some market sectors have been slow to respond, the housing market has reacted accordingly.

 

Both demand and price appreciation have tapered, as the primary challenge for homebuyers has shifted from availability to affordability. And although this higher-mortgage rate environment has been a painful adjustment for many buyers and sellers, it should ultimately lead to a more stable and balanced real estate market.

 

So what can we expect in 2023? Will mortgage rates continue to climb? Could home prices come crashing down? While this is one of the more challenging real estate periods to forecast, here’s what several industry experts predict will happen to the U.S. housing market in the coming year.

 

 

MORTGAGE RATES WILL FLUCTUATE LESS

 

In 2022, 30-year fixed mortgage rates surged from roughly 3% in January to around 7%. According to Rick Sharga of real estate data company ATTOM, “We’ve never seen rates double in so short a period.”2

 

This year, economists forecast a less dramatic shift.

 

In an interview with Bankrate, Nadia Evangelou, senior economist for the National Association of Realtors, shares her vision of three possible mortgage rate scenarios:3

 

  1. Inflation continues to surge, forcing the Fed to repeatedly raise interest rates. In that scenario, she predicts that rates could reach as high as 8.5%.
  2. Inflation decelerates and mortgage rates follow suit, averaging 7 to 7.5% for the year.
  3. Rising interest rates trigger a recession, which could ultimately lead mortgage rates to drop closer to 5% by the end of the year.

 

Realtor.com forecasts something similar to scenario #2 above: “Mortgage rates will average 7.4% in 2023, trickling down to 7.1% by year’s end.”4 The Mortgage Bankers Association, however, projects something closer to Evangelou’s scenario #3, with the 30-year fixed rate declining steadily throughout the year, averaging 6.2% in Q1 and 5.2% by Q4.5

 

Economists at Fannie Mae fall somewhere in the middle. In a recent press release, they predicted that the U.S. economy will experience a “modest recession” this year.6 But in their December Housing Forecast, they project that 30-year fixed mortgage rates will only fall by half a point from an average of 6.5% in Q1 to 6.0% in Q4.7

 

“From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession,” said Fannie Mae Chief Economist Doug Duncan.6

 

What does it mean for you?  Even the experts can’t say for certain where mortgage rates are headed. Instead of trying to ”time the market,” focus instead on buying or selling a home when the time is right for you. There are a variety of mortgage options available that can make a home purchase more affordable, including adjustable rates, points, and buydowns—and keep in mind you can always refinance down the road. We’d be happy to refer you to a trusted mortgage professional who can outline your best options.

 

 

SALES VOLUME WILL FALL AND INVENTORY WILL RISE

 

It looks like the home-buying frenzy we experienced in recent years is behind us. While the desire to own a home remains strong, higher mortgage rates have made it unaffordable for a large segment of would-be buyers.

 

Many economists expect the number of home sales to continue to decline this year, leading to an increase in listing inventory and days-on-market, or the time it takes to sell a home. But, there is a wide range when it comes to specifics.

 

Economists at Fannie Mae forecast that total home sales will fall by around 20% this year before rising again by nearly 15% in 2024.7 National Association of Realtors Chief Economist Lawrence Yun projects a less extreme dip of 7% in 2023 with a rebound of 10% next year.8

 

Realtor.com Chief Economist Danielle Hale foresees something in between. “The deceleration in home sales is likely to continue as high home prices and mortgage rates limit the pool of eligible home buyers. We anticipate that existing home sales will decline another 14.1% in 2023.” She expects this drop in sales to lead to a nearly 23% increase in inventory levels this year, offering more choices for buyers who have struggled to find a home in the past.9

 

However, given the severe lack of housing supply, even with a double-digit increase, the market is expected to remain relatively tight and below pre-pandemic levels. Hale points out: “It’s important to keep historical context in mind. The level of inventory in 2023 is expected to fall roughly 15% short of the 2019 average.”9

 

What does it mean for you?  If you’ve been frustrated by a lack of inventory in the past, 2023 may bring new opportunities for you to find the perfect home. And today’s buyers have more negotiating power than they’ve had in years. Contact us to find out about current and future listings that meet your criteria.

 

If you’re hoping to sell, you may want to act fast; rising inventory levels will mean increased competition. We can help you chart the best course to maximize your profits, starting with a professional assessment of your home’s current market value. Reach out to schedule a free consultation.

 

 

HOME PRICES WILL REMAIN RELATIVELY STABLE

 

While some economists expect home prices to fall this year, many expect them to remain fairly stable. “For most parts of the country, home prices are holding steady since available inventory is extremely low,” said Yun at a November conference.8

 

Nationally, Yun expects the average median home price to tick up by 1% in 2023, with some markets experiencing greater appreciation and others experiencing declines.8 Economists at Fannie Mae offer a similar projection, forecasting a slight decrease in their Home Price Index of about 1.5%, year-over-year.7

 

Other experts foresee a larger fluctuation. Hale expects U.S. home prices to rise by 5.4% this year, while Morgan Stanley is forecasting a 7% drop from the peak in June 2022.9,10

 

Still, many economists agree that a housing market crash like the one we experienced in 2008 is highly unlikely. The factors that caused home prices to plunge during the Great Recession—specifically lax lending standards and a surplus of inventory—aren’t prevalent in our current market.10 Therefore, home values are expected to remain comparatively stable.

 

What does it mean for you?  It can feel scary to buy a home when there’s uncertainty in the market. However, real estate is a long-term investment that has been shown to appreciate over time. And keep in mind that the best bargains are often found in a slower market, like the one we’re experiencing right now. Contact us to discuss your goals and budget. We can help you make an informed decision about the right time to buy.

 

And if you’re planning to sell this year, you’ll want to chart your path carefully to maximize your profits. Contact us for recommendations and to find out what your home could sell for in today’s market.

 

 

RENT PRICES WILL CONTINUE TO CLIMB

 

Affordability challenges for would-be buyers, inflationary pressures, and an overall lack of housing could continue to drive “above-average” rent price increases in much of the country.11 The Federal Reserve Bank of Dallas expects year-over-year rental price growth to tick up to 8.4% in May before moderating later in the year.12

 

According to Hale, “U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth. At a national level, we forecast rent growth of 6.3% in the next 12 months, somewhat ahead of home price growth and historical rent trends.”9

 

However, there are signs that the surge in rent prices could be tapering. According to Jay Parsons, head of economics for rental housing software company RealPage, there’s some evidence of a slowdown in demand. He predicts that market-rate rents will rise just 3.3% this year. Still, analysts agree that a return to lower pre-pandemic rental prices is unlikely.10

 

What does it mean for you?  Rent prices are expected to keep climbing. But you can lock in a set mortgage payment and build long-term wealth by putting that money toward a home purchase instead. Reach out for a free consultation to discuss your options.

 

And if you’ve ever thought about purchasing a rental property, now may be a perfect time. Call today to get your investment property search started.

 

 

WE’RE HERE TO GUIDE YOU

 

While national real estate forecasts can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and drive home values in your particular neighborhood.

 

If you’re considering buying or selling a home in 2023, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

 

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

 

Sources:

1.      Forbes -
https://www.forbes.com/advisor/investing/fed-funds-rate-history/

2.      Bankrate -
https://www.bankrate.com/mortgages/will-mortgage-rates-go-up-in-december-2022/

3.      Bankrate -
https://www.bankrate.com/real-estate/housing-market-predictions-2023/

4.      Realtor.com -
https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/

5.      Mortgage Bankers Association -
https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/mortgage-finance-forecast-dec-2022.pdf?sfvrsn=b584bf7_1

6.      Fannie Mae -
https://www.fanniemae.com/newsroom/fannie-mae-news/economy-still-expected-enter-and-exit-modest-recession-2023

7.      Fannie Mae -
https://www.fanniemae.com/media/45801/display

8.      National Association of Realtors -
https://www.nar.realtor/newsroom/nars-lawrence-yun-predicts-us-home-prices-wont-experience-major-decline-could-possibly-rise-slightly

9.      Realtor.com -
https://www.realtor.com/research/2023-national-housing-forecast/

10.   The New York Times -
https://www.nytimes.com/2022/11/04/realestate/housing-market-interest-rates.html

11.   CNBC -
https://www.cnbc.com/2022/09/28/how-much-higher-rent-will-go-in-2023-according-to-experts.html

12.   Federal Reserve Bank of Dallas -
https://www.dallasfed.org/research/economics/2022/0816

 

 

Posted in Market Updates
Jan. 2, 2023

2023 Upcoming Events in Fresno and Clovis, California

 

The Central Valley is gearing up for a packed season of exciting events! Whether you're a local or just visiting, there's something for everyone in Fresno and Clovis.

 

In Fresno, the Fresno Food Expo is set to take place on March 15th at the Fresno Convention Center. This event brings together local food producers, chefs, and distributors to showcase the best of the Central Valley's food and beverage industry. Expect to see everything from craft beer to farm-to-table cuisine, as well as cooking demonstrations and tastings.

 

For those interested in the arts, the annual Rogue Festival is returning to Fresno's Tower District from March 9th to 20th. This eclectic festival features an array of performers, including musicians, comedians, and poets, all showcasing their unique talents in a variety of local venues.

 

If you're looking for a family-friendly activity, then the Clovis Farmers Market is a must-visit. Held every Saturday from 8am to noon at Old Town Clovis, this market features a wide range of local vendors selling everything from fresh produce to handcrafted goods.

 

The Big Hat Days festival is also a popular event in Clovis, happening on April 9th and 10th. This Western-themed festival features live music, a parade, a rodeo, and a variety of food and craft vendors. The festival takes place in the heart of Old Town Clovis and is a great way to experience the city's rich history and heritage.

 

For sports enthusiasts, the Fresno Grizzlies are set to kick off their season at Chukchansi Park on April 7th. This minor league baseball team is affiliated with the San Francisco Giants and offers an exciting and affordable way to enjoy America's favorite pastime.

 

These are just a few of the many events happening in Fresno and Clovis this spring. Whether you're interested in food, the arts, or sports, there's something for everyone in the Central Valley. So grab your friends and family, and get ready to experience all that the area has to offer.

Posted in Market Updates
Nov. 24, 2022

Buy Now or Rent Longer? 5 Questions to Answer Before Purchasing Your First Hom

 

Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you’re a first-time homebuyer. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership. 

 

A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.

 

But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.

 

So, what's the better choice for you? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we'll help walk you through your options. You may also find it helpful to ask yourself the following questions:

 

 

  1. How long do I plan to stay in the home?

 

You'll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.

 

There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures.

 

Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out a market’s ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation.

 

Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage – and you’ll have more security and stability overall.

 

Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.

 

 

  1. Is it a better value to buy or rent in my area?

 

If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.

 

One helpful tool for evaluating your options is a neighborhood’s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.

 

According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.6

 

In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7

 

So even if renting seems like a better bargain today, buying could be the better long-term financial play.

 

Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.

 

 

  1. Can I afford to be a homeowner?

 

If you determine that buying a home is the better value, you’ll want to evaluate your financial readiness.

 

Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that’s a sign you may be better off waiting until you’ve built a larger rainy-day fund.

 

Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won’t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.

 

Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it’s not always the cheaper option.

 

Plus, even though you’ll be in charge of financing your home’s upkeep if you buy, you’ll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home's market value.

 

If you want to buy a home but aren’t sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.

 

 

  1. Can I qualify for a mortgage?

 

If you’re prepared to handle the costs of homeownership, you’ll next want to look into how likely you are to get approved for a mortgage.

 

Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.

 

For example, lenders like to see evidence that your income is stable and predictable. So if you’re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren’t at risk of becoming financially overextended.

 

In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.

 

Whatever your circumstances, it’s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you’re interested, and we’ll give you a referral to a loan officer or mortgage broker who can help.

 

 

  1. How would owning a home change my life?

 

Before you begin the preapproval process, however, it’s important to consider how homeownership would affect your life, aside from the long-term financial gains.

 

In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you’ve only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.

 

On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you’re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.

 

The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next.

 

The choice – like the home – is all yours.  

 

 

HAVE MORE QUESTIONS? WE’VE GOT ANSWERS

 

The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don't hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We'd be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

 

Sources:

1.      CNN -
https://www.cnn.com/2022/08/11/homes/home-prices-second-quarter/index.html

2.      NPR - https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l

3.      Bankrate -
https://www.bankrate.com/mortgages/5-year-real-estate-rule/

4.      Federal Reserve Bank of St. Louis -
https://fred.stlouisfed.org/series/MSPUS

5.      National Association of REALTORS - https://www.nar.realtor/blogs/economists-outlook/price-to-rent-ratios-by-state-from-2014-2019

6.      National Association of REALTORS -
https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years

7.      Statista -
https://www.statista.com/statistics/200223/median-apartment-rent-in-the-us-since-1980/

 

Posted in Market Updates
March 14, 2022

Hedge Against Inflation With These 3 Real Estate Investment Types

The annual inflation rate in the United States is currently around 7.5%—the highest it has been since 1982.1 It doesn’t matter if you’re a cashier, lawyer, plumber, or retiree; if you spend U.S. dollars, inflation impacts you.

 

Economists expect the effects of inflation, like a higher cost of goods, to continue.2 Luckily, an investment in real estate can ease some of the financial strain.

 

Here’s what you need to know about inflation, how it impacts you, and how an investment in real estate can help.

 

 

WHAT IS INFLATION AND HOW DOES IT IMPACT ME?

 

Inflation is a decline in the value of money. When the rate of inflation rises, prices for goods and services go up. Therefore, a dollar buys you a little bit less with every passing day.

 

The consumer price index, or CPI, is a standard measure of inflation. Based on the latest CPI data, prices increased 7.5% from January 2021 to January 2022.1 A little bit of inflation is considered healthy for the economy, but 7.5% in a single year is high.

 

How does inflation affect your life? Here are a few of the negative impacts:

 

      Decreased Purchasing Power

We touched on this already, but as prices rise, your dollar won’t stretch as far as it used to. That means you’ll be able to purchase fewer goods and services with a limited budget.

 

      Increased Borrowing Costs

In an effort to curb inflation, the Federal Reserve is expected to raise the federal funds rate. Therefore, consumers are likely to pay a higher interest rate on new mortgages, car loans, and variable-rate credit cards.3

 

      Lower Standard of Living

Wage growth tends to lag behind price increases. According to Moody Analytics, when adjusted for inflation, average weekly earnings in January were down 3.1% from a year earlier.4 As such, life is becoming less affordable for everyone. Inflation can force those on a fixed income, like retirees, to make lifestyle changes and prioritize essentials.

 

      Eroded Savings

If you store all your savings in a bank account, inflation is even more damaging. As of February 2022, the national average interest rate for a savings account is 0.06%, not nearly enough to keep up with inflation. And economists don’t expect that rate to go much higher.3

 

One of the best ways to mitigate these effects is to find a place to invest your money other than the bank. Even though interest rates are expected to rise, they’re unlikely to get high enough to beat inflation. If you hoard cash, the value of your money will decrease every year and more rapidly in years with elevated inflation.

 

 

REAL ESTATE: A PROVEN HEDGE AGAINST INFLATION

 

So where is a good place to invest your money to protect (hedge) against the impacts of inflation? There are several investment vehicles that financial advisors traditionally recommend, including:

 

      Stocks

Some people invest in stocks as their primary inflation hedge. However, the stock market can become volatile during inflationary times, as we’ve seen in recent months.5

 

      Commodities

Commodities are tangible assets, like oil, livestock, and minerals. The theory is that the price of commodities should climb alongside inflation. But the classic choice–gold–hasn’t risen consistently during periods of inflation since the 1970s, according to data from Morningstar Direct.6

 

      Inflation-Indexed Bonds

Treasury inflation-protected securities, or TIPS, are U.S. government-issued bonds that are indexed to the inflation rate. Bonds are considered low risk, but the returns they offer are generally low, as well.7

      Real Estate
Real estate prices across the board tend to rise along with inflation and often rise faster than inflation.8 That’s one of the reasons demand for real estate is soaring right now.9

 

We believe real estate is the best hedge against inflation. Owning real estate does more than protect your wealth—it can actually make you money. For example, home prices rose nearly 17% from 2020 to 2021, 10% ahead of the 7% inflation that occurred in the same timeframe.10

 

Plus, certain types of real estate investments can help you generate a stream of passive income. In the past year, property owners didn’t just avoid the erosion of purchasing power caused by inflation; they got ahead.

 

 

TYPES OF REAL ESTATE INVESTMENTS

 

Though there are myriad ways to invest in real estate, there are three basic investment types that we recommend for beginner and intermediate investors. Remember that we can help you determine which options are best for your financial goals and budget.

 

      Primary Residence

 

If you own your home, you’re already ahead. The advantages of homeownership become even more apparent in inflationary times. As inflation raises prices throughout the economy, the value of your home is likely to go up concurrently. At the same time, you’ve locked in a set mortgage payment for the next 30 years, so you’ll be immune to rising rental costs.

 

If you don’t already own your primary residence, homeownership is a worthwhile goal to pursue.

Though the task of saving enough for a down payment may seem daunting, there are several strategies that can make homeownership easier to achieve. If you’re not sure how to get started with the home buying process, contact us. Our team can help you find the strategy and property that fits your needs and budget.

 

Whether you already own a primary residence or are still renting, now is a good time to also start thinking about an investment property. The types of investment properties you’ll buy as a solo investor generally fall into two categories: long-term rentals and short-term rentals.

 

      Long-Term (Traditional) Rentals

 

A long-term or traditional rental is a dwelling that’s leased out for an extended period. An example of this is a single-family home where a tenant signs a one-year lease and brings all their own furniture.

 

Long-term rentals are a form of housing. For most tenants, the rental serves as their primary residence, which means it’s a necessary expense. This unique quality of long-term rentals can help to provide stable returns in uncertain times, especially when we have high inflation.

 

To invest in a long-term rental, you’ll need to budget for maintenance, repairs, property taxes, and insurance. You’ll also need to have a plan for managing the property. But a well-chosen investment property should pay for itself through rental income, and you’ll benefit from appreciation as the property rises in value.

 

We can help you find an ideal long-term rental property to suit your budget and investment goals. Reach out to talk about your needs and our local market opportunities.

 

      Short-Term (Vacation) Rentals

 

Short-term or vacation rentals function more like hotels in that they offer temporary accommodations. A short-term rental is defined as a residential dwelling that is rented for 30 days or less. The furniture and other amenities are provided by the property owner, and today many short-term rentals are listed on websites like Airbnb and Vrbo.

 

A short-term rental can potentially earn you a higher return than a long-term rental, but this comes at the cost of daily, hands-on management. With a short-term rental, you’re not just entering the real estate business; you’re entering the hospitality business, too.

 

Done right, short-term rentals can be both a hedge against inflation and a profitable source of income. As a bonus, when the home isn’t being rented you have an affordable vacation spot for yourself and your family!

 

Contact us today if you’re interested in exploring options in either the long-term or short-term rental market. Mortgage rates are expected to rise, so you’ll want to act fast to maximize your investment return.

 

 

WE’RE INVESTED IN HELPING YOU

 

Inflation is a fact of life in the U.S. economy. Luckily, you can prepare for inflation with a carefully managed investment portfolio that includes real estate. Owning a primary residence or investing in a short-term or long-term rental will help you both mitigate the effects of inflation and grow your net worth, which makes it a strategic move in our current financial environment.

 

If you’re ready to invest in real estate to build wealth and protect yourself from rising inflation, contact us. Our team can help you find a primary residence or investment property that meets your financial goals.

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

 

 

Sources:

 

1.      Bloomberg -
https://www.bloomberg.com/news/articles/2022-02-10/u-s-inflation-charges-higher-with-larger-than-forecast-gain

2.      CNN -
https://www.cnn.com/2022/01/01/economy/inflation-prices-2022-preview/index.html

3.      CNBC -
https://www.cnbc.com/2022/01/26/the-fed-sets-the-stage-for-a-rate-hike-heres-what-that-means-for-you.html

4.      Reuters -
https://www.reuters.com/business/us-consumer-prices-rise-strongly-january-weekly-jobless-claims-fall-2022-02-10/

5.      NBC News -
https://www.nbcnews.com/business/markets/market-slide-dow-falls-700-points-sp-enters-correction-territory-rcna13304

6.      CNBC -
https://www.cnbc.com/2021/12/20/gold-is-losing-its-status-as-an-inflation-hedge-two-traders-warn.html

7.      Morningstar -
https://www.morningstar.com/articles/1079158/why-are-inflation-protected-bond-funds-losing-money

8.      The Washington Post -
https://www.washingtonpost.com/business/2022/01/04/heres-how-inflation-could-affect-your-next-real-estate-move/

9.      Bloomberg -
https://www.bloomberg.com/news/articles/2022-01-24/is-real-estate-a-good-investment-hedge-against-inflation-what-the-experts-say

 

Posted in Market Updates
Jan. 10, 2022

A Return to ‘Normal’? The State of Real Estate in 2022

Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021.1

 

However, there were signs in the fourth quarter that the red-hot housing market was beginning to simmer down. In the month of October, only 60.3% of sales involved a bidding war—down from a high of 74.5% in April.2 While this trend could be attributed to seasonality, it could also be a signal that the real estate run-up may have passed its peak.

 

So what’s ahead for the U.S. housing market in 2022? Here’s where industry experts predict the market is headed in the coming year.

 

 

MORTGAGE RATES WILL CREEP UP

 

Most economists expect to see mortgage rates gradually rise this year after hitting record lows in late 2020 and early 2021.3

 

Freddie Mac forecasts the 30-year fixed-rate mortgage will average 3.5% in 2022, up from around 3% in 2021.4

 

The Mortgage Bankers Association predicts that rates will tick up to 4% by the end of the year. "Mortgage lenders and borrowers should expect rising mortgage rates over the next year, as stronger economic growth pushes Treasury yields higher," said Mike Fratantoni, chief economist for the Mortgage Bankers Association at their 2001 Annual Convention & Expo in October.5

 

However, it’s important to keep in mind that even a 4% mortgage rate is low when compared to historical standards. According to industry trade blog The Mortgage Reports, “Between 1971 and December 2020, 30-year mortgage rates averaged 7.89%.”6

 

What does it mean for you? Low mortgage rates can reduce your monthly payment and make homeownership more affordable. Fortunately, there’s still time to lock in a historically-low rate. Whether you’re hoping to purchase a new home or refinance an existing mortgage, act soon before rates go up any further. We’d be happy to connect you with a trusted lending professional in our network.

 

 

THE MARKET WILL BECOME MORE BALANCED

 

In 2021, we experienced one of the most competitive real estate markets ever. Fears about the virus and a shift to remote work triggered a huge uptick in demand. At the same time, many existing homeowners delayed their plans to sell, and supply and labor shortages hindered new construction.

 

This led to an extreme market imbalance that benefitted sellers and frustrated buyers. According to George Ratiu, director of economic research at Realtor.com, “Prices and sellers reached for the moon [last] year. It looks like we are now about to move back to earth.”7

 

Data from Realtor.com released in November showed that listing price reductions had more than doubled since February 2021. And the average days on market (an indicator of how long it takes a home to sell) has been slowly creeping up since June.7

 

What’s causing this change in market dynamics? The real estate market typically slows down in the fall and winter. But economists also suspect a fundamental shift in supply and demand.

 

At the National Association of Realtors’ annual conference last November, the group’s chief economist, Lawrence Yun, told attendees that he expects increased supply to come from an uptick in new construction—which is already underway—and an end to the mortgage forbearance program. “With more housing inventory to hit the market, the intense multiple offers will start to ease,” he said.8

 

Demand is also predicted to wane slightly in the coming year. Rising mortgage rates and record-high prices have made homeownership unaffordable for a growing number of Americans. And in a recent Reuters poll, nearly 80% of property analysts said they expect housing affordability to worsen over the next several years.9

 

What does it mean for you? If you struggled to buy a home last year, there may be some relief on the horizon. Increased supply and softening demand could make it easier to finally secure the home of your dreams. If you’re a seller, it’s still a great time to cash out your big equity gains! And with more inventory on the market, you’ll have an easier time finding your next home. Reach out for a free consultation so we can discuss your specific needs and goals.

 

 

HOME PRICES LIKELY TO KEEP CLIMBING, BUT AT A SLOWER PACE

 

Nationally, home prices rose an estimated 16.8% in 2021.8 But the average rate of appreciation is expected to slow down in 2022.

 

Danielle Hale, chief economist at Realtor.com, told Yahoo! News, “Home asking prices have decelerated in the second half of 2021, with median listing price growth slipping from a peak of 17.2% in April to just 8.6% in October.”10

 

But experts disagree about how much more property values can continue to climb this year. Goldman Sachs predicts that home prices will rise by 13.5%, while Fannie Mae and Freddie Mac are forecasting a 7.9% and 7% rate of appreciation, respectively.2

 

However, not all analysts are as bullish. The National Association of Realtors predicts a 2.8% rate of appreciation for existing homes and 4.4% for new homes, while the Mortgage Bankers Association expects the average home price to decrease by 2.5% by the end of the year.10,2

 

According to Hale, “With prices near all-time highs and mortgage rates expected to rise, we expect this slowdown in prices to continue.”10

 

What does it mean for you? If you’re a buyer who has been waiting on the sidelines for home prices to drop, you may be out of luck. Even if home prices dip slightly (and most economists expect them to rise) any savings are likely to be offset by higher mortgage rates. The good news is that decreased competition means more choice and less likelihood of a bidding war. We can help you get the most for your money in today’s market.

 

 

RENTS WILL CONTINUE TO RISE

 

Along with home, gasoline, and used vehicle prices, rent prices rose dramatically last year. According to CoreLogic, in September, rents for single-family homes were up 10.2% nationally year over year.11 And economists at Realtor.com expect them to climb another 7.1% in 2022.12

 

“Homes are expensive now...but for most people, the comparison that is most important is how that cost of homeownership is going to compare to the cost of renting,” Zillow Senior Economist Jeff Tucker told CNBC in November.13

 

Tucker also pointed out that rent is less predictable than a mortgage—and more likely to go up along with inflation.13

 

Real assets, like real estate, are often used as a hedge against inflation. That’s because property values typically rise with inflation.14 And when a homeowner takes out a mortgage, they lock in a set housing payment for the next 30 years.

 

In contrast, renters are at the mercy of the market—and they don’t gain any of the benefits of homeownership, like tax deductions, equity, or appreciation.

 

George Ratiu of Realtor.com told CNBC that he advises buyers to consider their budget and time frame. If they plan to stay in the home for at least three to five years, he believes it often makes sense to buy.13

 

Fortunately, it’s shaping up to be a better year for buyers. “I think 2022 has the promise of providing less competition, a lot more homes to choose from, and, as a result, a lot more approachable prices,” Ratiu said.13

 

What does it mean for you? Both property and rent prices are expected to continue rising. But when you purchase a home with a fixed-rate mortgage, you can rest assured knowing that your monthly mortgage payment will never go up. Whether you’re a first-time homebuyer or a real estate investor, we can help you make the most of today’s real estate market.

 

 

WE’RE HERE TO GUIDE YOU

 

While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.

 

If you’re considering buying or selling a home in 2022, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

 

Book a consultation at TraftonHomeTeam.com

 

Sources:

1.      Fortune -
https://fortune.com/2021/11/04/us-home-prices-real-estate-forecast-2022-outlook/

2.       Fortune -
https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/

3.       Freddie Mac -
http://www.freddiemac.com/pmms/pmms30.html

4.       Freddie Mac - https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-strong-housing-market-will-continue-even-rates-and

5.       Mortgage Bankers Association -
https://www.mba.org/2021-press-releases/october/mba-annual-forecast-purchase-originations-to-increase-9-percent-to-record-173-trillion-in-2022

6.       The Mortgage Reports -
https://themortgagereports.com/61853/30-year-mortgage-rates-chart

7.       Realtor.com -
https://www.realtor.com/news/trends/has-housing-market-peaked/

8.       National Association of Realtors -
https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022

9.       Reuters -
https://www.reuters.com/world/us/rise-us-house-prices-halve-next-year-affordability-worsen-2021-12-07/

10.    Yahoo! News -
https://www.yahoo.com/now/where-home-prices-headed-2022-130012748.html

11.    CNBC -
https://www.cnbc.com/2021/11/16/inflation-rent-for-single-family-homes-surged-10percent-in-september.html

12.    Realtor.com -
https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/

13.    CNBC -
https://www.cnbc.com/2021/11/23/rising-inflation-hot-housing-market-what-you-need-to-know-about-buying-a-home.html

14.    Money -
https://money.com/inflation-2021-stocks-bitcoin-gold-reits-commodities/

Posted in Market Updates