Inland Empire Real Estate BlogRecently posted or modified blog posts in the category - Educationhttps://www.thetopresultsgroup.com/blog/Copyright TheTopResultsGroup.com2023-08-24T18:26:58-07:00tag:thetopresultsgroup.com,2012-09-20:29768More Jobs & Better Pay <img src="https://assets.site-static.com/userfiles/1974/image/Screen_Shot_2023-08-24_at_6.26.23_PM.png" width="945" height="821" />
There’s been talk about a recession for quite a while now. But the economy has been remarkably resilient. Why? One reason is employment and wages have stayed strong. Let’s look at the latest information on each one and why both are good news if you’re thinking about selling your house.
More Jobs Are Being Created
Instead of facing the job losses typical of any recession, the economy has been growing and adding jobs. According to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, which is up from the 185,000 created in June. That means more people are finding work. In fact, so many jobs are being added that the unemployment rate is far lower than the long-term average of 5.7% (see graph below):
<img src="https://files.keepingcurrentmatters.com/content/branded/images/20230822/20230824-Unemployment-Rate-Declined-In-July.png" />
A low unemployment rate means that most people who want to work are finding jobs. When people have jobs, they have steady incomes – and that can help set them up to consider homeownership.
People Are Making More Money
And data also shows hourly earnings have been going up pretty steadily over the past few years (see graph below):
<img src="https://files.keepingcurrentmatters.com/content/branded/images/20230822/20230824-Hourly-Earnings-Rise-4.4--from-last-year.png" />
When wages rise, people have more money that they could save or use toward buying a home. This increase in income helps offset some of the affordability challenges in the housing market today. Affordability depends on three main factors: wages, home prices, and mortgage rates. With higher home prices and mortgage rates right now, Builder Online summarizes how growing wages can help:
“The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.”
If you’re thinking about selling your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news. It means there’s a larger pool of potential buyers out there who are in a position to pursue their dreams of homeownership.
Bottom Line
With more jobs and rising wages creating eager buyers, there’s a lot going in your favor. Reach out to our team so you have someone who can guide you through the process of selling your house, from setting the right price to getting your home ready to show.2023-08-24T18:17:23-07:002023-08-24T18:26:58-07:00Nelson Rodrigueztag:thetopresultsgroup.com,2012-09-20:27571A Drop in Equity Doesn’t Mean Low Equity<img src="https://assets.site-static.com/userfiles/1974/image/1.jpg" width="6912" height="3456" />
You may see media coverage talking about a drop in homeowner equity. What’s important to understand is that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow. And when home prices decline, equity does too. Here’s how this has played out recently.
Home prices rose rapidly during the ‘unicorn’ years. That gave homeowners a considerable equity boost. But those ‘unicorn’ years couldn’t last forever. The market had to moderate at some point, and that’s what we saw last fall and winter.
As home prices dropped slightly in the back half of 2022, equity was impacted. Based on the most recent report from CoreLogic, there was a 0.7% dip in homeowner equity over the last year. However, the headlines reporting on that change aren’t painting the whole picture. The reality is, while home price depreciation during the second half of last year caused equity to drop, the data shows homeowners still have near record amounts of equity.
The graph below helps illustrate this point by looking at the total amount of tappable equity in this country going all the way back to 2005. Tappable equity is the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio (LTV). As the data shows, there was a significant equity boost during the ‘unicorn’ years as home prices rapidly appreciated (see the pink in the graph below).
But here’s what’s key to realize – even though there’s been a small dip, total homeowner equity is still much higher than it was before the ‘unicorn’ years.
<img src="https://files.keepingcurrentmatters.com/content/branded/images/20230613/20230614-tappable-equity-still-near-all-time-highs.png" />
And there’s more good news. Recent home price reports show the worst home price declines are behind us, and prices have started to go up again. As Selma Hepp, Chief Economist at CoreLogic, explains:
“Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.”
The last part of that quote is particularly important and is the piece of the puzzle the news is leaving out. To further emphasize the positive turn we’re already seeing, experts say home prices are forecast to appreciate at a more normal rate over the next year. In the same report, Hepp puts it this way:
“The average U.S. homeowner now has more than $274,000 in equity – up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.”
And even though Odeta Kushi, Deputy Chief Economist at First American, references a slightly different number, Kushi further validates the fact that homeowners have a lot of equity right now:
“Homeowners today have an average of $302,000 in equity in their homes.”
That means if you’ve owned your home for a few years, you likely still have way more equity than you did before the ‘unicorn’ years. And if you’ve owned your home for a year or less, the forecast for more typical price appreciation over the next year should mean your equity is already on the way back up.
Bottom Line
Context is everything when looking at headlines. While homeowner equity dropped some from last year, it’s still near all-time highs. Reach out to our team so you can get the answers you deserve and help plan your move this year.
Source: KCM2023-06-15T09:40:21-07:002023-06-15T09:51:50-07:00Nelson Rodrigueztag:thetopresultsgroup.com,2012-09-20:27050The Impact of Changing Mortgage Rates
<img src="https://assets.site-static.com/userfiles/1974/image/Impact_on_Mortgage_Rates.png" width="999" height="1249" />2023-05-24T15:01:46-07:002023-05-24T15:09:07-07:00Nelson Rodrigueztag:thetopresultsgroup.com,2012-09-20:23815What Are Your Goals in the Housing Market This Year?<img src="https://assets.site-static.com/userfiles/1974/image/Black_Modern_New_Year_Facebook_Fundraiser_Cover_Photo.jpg" width="525" height="350" alt="2023" />
<a href="https://www.keepingcurrentmatters.com/2023/01/02/what-are-your-goals-in-the-housing-market-this-year/" rel="bookmark" title="Permanent Link: What Are Your Goals in the Housing Market This Year?">What Are Your Goals in the Housing Market This Year?</a>
If buying or selling a home is part of your dreams for 2023, it’s essential for you to understand today’s housing market, define your goals, and work with industry experts to bring your homeownership vision for the new year into focus.
In the last year, high inflation had a big impact on the economy, the housing market, and likely on your wallet too. That’s why it’s critical to have a clear understanding of not just the market today, but also what you want out of it when you buy or sell a home. Danielle Hale, Chief Economist at realtor.com, explains:
“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, so that you can stay in your home long enough that buying is a sound financial decision.”
Here are a few questions you can start thinking through as you fine tune your goals for 2023.
1. What’s Motivating You?
You’re dreaming about making a move for a reason – what is it? No matter what’s happening in the market, there are still many compelling reasons to buy a home today. Your needs may have changed in a way your current house can’t address, or you could be ready to step into homeownership for the first time and have a space that’s truly your own. Use what’s motivating you as a guidepost in partnership with an expert advisor to help make sure your move will give you a lasting sense of accomplishment.
2. What Does Your Next Home Look Like?
You know you want to move, but how would you describe your dream home? The available supply of homes for sale has grown, and that could mean more options to choose from when you buy. Just be sure to keep your budget in mind and work with a trusted real estate professional to balance your wants and needs. The better you understand what’s essential and where you can be flexible, the easier it can be to find the home that’s right for you.
3. How Ready Are You To Buy?
Getting clear on your budget and savings is essential before you get too far into the process. Working with a local agent and a lender early is the best way to make sure you’re in a good position to buy. This could include planning how much to save for a down payment, getting pre-approved for a home loan, and assessing your current home equity if your move involves selling your existing house.
A Professional Will Guide You Through Every Step of the Process
Buying or selling a home is a big process that takes expertise to navigate. If that feels a bit overwhelming, you aren’t alone. According to a recent Harris Poll survey, one in five respondents see a lack of information or knowledge about the homebuying process as a barrier from owning a home. Don’t let uncertainty hold you back from your goals this year. A trusted expert can bridge that gap and give you the best advice and information about today’s market.
Bottom Line
Work with our team and we will build a team of industry professionals to plan how your dreams for 2023 can become a reality.
Source: KCM2023-01-02T13:21:25-07:002023-01-02T13:29:14-07:00Nelson Rodrigueztag:thetopresultsgroup.com,2012-09-20:21337Why the Forbearance Program Changed the Housing MarketWhen the pandemic hit in 2020, many experts thought the housing market would crash. They feared job loss and economic uncertainty would lead to a wave of <a href="https://www.wsj.com/articles/many-who-lost-homes-to-foreclosure-in-last-decade-wont-return-nar-1429548640">foreclosures</a> similar to when the housing bubble burst over a decade ago. Thankfully, the forbearance program changed that. It provided much-needed relief for homeowners so a foreclosure crisis wouldn’t happen again. Here’s why forbearance worked.
Forbearance enabled nearly five million homeowners to get back on their feet in a time when having the security and protection of a home was more important than ever. Those in need were able to work with their banks and lenders to stay in their homes rather than go into foreclosure. Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association (MBA), notes:
“Most borrowers exiting forbearance are moving into either a loan modification, payment deferral, or a combination of the two workout options.”
As the graph below shows, with modification, deferral, and workout options in place, four out of every five homeowners in forbearance are either paid in full or are exiting with a plan. They’re able to stay in their homes.
<img src="https://assets.site-static.com/userfiles/1974/image/forbearance.jpg" width="768" height="576" />
Forbearance wasn’t the only game changer, either. Lending <a href="https://www.keepingcurrentmatters.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/">standards</a> have improved significantly since the housing bubble burst, and that’s one more thing keeping foreclosure filings low. Today’s borrowers are much more qualified to pay their home loans.
And while the majority of homeowners are exiting the forbearance program with a plan, for those who still need to make a change due to financial hardship or other challenges, today’s record-level of <a href="https://www.keepingcurrentmatters.com/2022/07/08/why-growing-home-equity-is-great-news-if-you-plan-to-move-infographic/">equity</a> is giving them the opportunity to sell their houses and avoid foreclosure altogether. Homeowners have options they just didn’t have in the housing crisis when so many people owed more on their mortgages than their homes were worth. Thanks to their equity and the current <a href="https://www.keepingcurrentmatters.com/2022/08/02/3-graphs-to-show-this-isnt-a-housing-bubble/">undersupply</a> of homes on the market, homeowners can sell their houses, make a move, and not have to go through the foreclosure process that led to the housing market crash in 2008.
Thomas LaSalvia, Chief Economist with Moody’s Analytics, states:
“There’s some excess savings out there, over 2 trillion worth. . . . There are people that have ownership of those homes right now, that even in a downturn, they’d still likely be able to pay that mortgage and won’t have to hand over keys. And there won’t be a lot of those distressed sales that happened in the 2008 crisis.”
Bottom Line
The forbearance program was a game changer for homeowners in need. It’s one of the big reasons why we won’t see a wave of foreclosures coming to the market.2022-08-10T10:00:00-07:002022-08-10T15:59:51-07:00Nelson Rodrigueztag:thetopresultsgroup.com,2012-09-20:166314 Reasons why the Housing Market Looks Promising in 2022 1️⃣ No housing crash in the coming months <br /> Some have speculated that astronomical home price growth has set us up for a drop similar to 2008/09. But ongoing low mortgage rates, high demand & regulations around subprime lending should keep that from happening.
2️⃣ Manageable mortgage rate hikes <br /> While mortgage rates will come off record-low levels, the hikes won't be large enough to put buyers off.
3️⃣ Help for first-time buyers <br /> The proposed legislation would assist first-time homebuyers with down payments & potentially provide additional funds for minority & low-income buyers.
4️⃣More inventory available <br /> Mortgage forbearance options established by the CARES Act are expiring. People behind on mortgages can sell their homes instead of entering foreclosure, opening more inventory for buyers.2021-12-09T09:51:00-07:002021-12-09T09:57:21-07:00Nelson Rodrigueztag:thetopresultsgroup.com,2012-09-20:13695Buyer’s agent vs. listing agent: What’s the difference?Buyer’s agent vs. listing agent: What’s the difference?
Buyer’s agents are legally bound to help buyers, whereas listing agents—the real estate agent representing the home listing—have a fiduciary duty to the home seller.
“That’s why it’s in your best interest as a buyer to get an agent who is there to represent you,” explains Alex Cortez, a Realtor with Wailea Village Properties in Kihei, HI.
“Think about it this way: If you were getting sued, would you hire the same attorney as the person suing you? Of course not. You need someone who will diligently fight for your interests and rights.”
Let’s say, for instance, you walked up to the listing agent at an open house. You might gush about how you love the home and want to buy it, but add that you will need to move soon—because you’re expecting your second child and need to decorate the nursery, pronto, or because the lease on your rental is up in a couple of months.
A seller’s agent could then use this information against you by informing the sellers that your clock is ticking, so they shouldn’t budge too much on their asking price—if at all.
Yet make this same confession to the buyer’s agent you’re working with, and it’s all fine—this professional would know to keep this info private from sellers (and their agents), so it can’t be used against you.
Some states, recognizing this problem, required a disclosure of dual agency when a broker represents both sides of a real estate transaction.
However, you may still not be comfortable after signing an agreement saying you know someone is a double agent. You might want to hire an agent who is not representing the owner, and who is looking out for your best interests.
How to find a buyer’s agent
A good buyer’s agent can ease your way to homeownership—and a bad one can result in a bumpy ride.
You should not just take the first buyer’s agent you meet (as two-thirds of home buyers do), or blindly accept the recommendation of a friend (more than half do this). Instead, it’s best to interview at least three agents and ask them a few questions, including the following:
What neighborhoods do you specialize in? Real estate requires local expertise, so you should find an agent who’s extremely familiar with the areas you’re interested in.
What’s your schedule and availability? Part-time real estate agents who are committed can do a fine job, but if the house of your dreams pops up or you encounter last-minute closing snafus, you want an agent who will be readily reachable.
How long have you been a real estate agent? You ideally want someone with a couple of years of experience, and a proven track record of selling homes.
To find real estate agents in your area, head to <a href="http://www.realtor.com/realestateagents" target="_blank" rel="noopener noreferrer">realtor.com/realestateagents</a>, where you can also read online reviews provided by past clients and learn more.
The agent/buyer contract
Once you agree to work with someone, you will have to sign a contract called an “exclusive buyer agency agreement,” outlining the agent’s services and compensation (more on that next).
This contract also means that this person will be your sole representative and that you won’t work with other buyer’s agents.
How much do buyer’s agents cost?
Home buyers don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller pays the commission for both the seller’s and buyer’s agents.2021-04-27T13:02:00-07:002021-04-28T08:51:43-07:00Nelson Rodriguez