March 1, 2018
Be careful with an ARM loan
Sarah O’Brien of CNBC posts an excellent article about potential dangers of adjustable rate mortgages (ARM). It’s the same story I’ve read three other times in my 40 year real estate career. Interest rates today are in the mid 4% range. When ARMs were first introduced rates were 13% plus and went up to over 18%. We’ve got a long way to go to reach that level so it’s not time to panic with an ARM loan if you’re a buyer or refinancing.
February 28, 2018
U.S. pending home sales drop 4.7%
The National Association of REALTORS Pending Home Sales Index shows a drop to its lowest level since October 2014. “The economy is in great shape, most local job markets are very strong and incomes are slowly rising, but there’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates,” states NAR chief economist Lawrence Yun.
County home median price drops $11k
“The San Diego County median home price was $529,000 in January, down by $11,000 since December, said real estate tracker CoreLogic,” reports Phillip Molnar of the San Diego Union-Tribune. The story talks about rising interest rates slowing sales but my experience says otherwise. In a rising interest rate environment owning a home is one of the best hedges against inflation as home appreciation almost always outpaces the rate of inflation.
February 24, 2018
High HOA fees when selling
Informative article by Kelly Richardson in the San Diego Union-Tribune about fees home owner associations charge property sellers. “Pursuant to Civil 4530, sellers pay the association’s fee for the documents. Civil 4530(b)(1) requires associations to charge “actual reasonable costs” for document fees.”
February 21, 2018
Homes for the wealthy only?
“The sharp drop in January home sales was not due to a shortage of homes for sale. It was due to a shortage of affordable homes for sale,” reports Diana Olick of CNBC. This is especially true in markets like San Diego. I attended a real estate seminar back in the 1980’s where a local economist predicted this exact outcome. His prediction was that home ownership in San Diego would only be available to the highest paid professionals in the medical and scientific fields (this was before the internet and information technology) and that everyone else who could afford high rents would work in the service economy. Welcome to San Diego 2018.
February 15, 2018
Home Builders Optimistic
“With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace,” said National Association of HomeBuilders chief economist Robert Dietz as reported by CNBC.
February 14, 2018
County set sales records in 2017
“The housing market reached new price peaks in 2017, shattering records left over from the 2005 housing boom,” reports the San Diego Union-Tribune. Higher sales prices and even lower inventory of homes for sale contributed to the record breaking year.
February 9, 2018
Low new home inventory
San Diego Union-Tribune story lists the new home projects available for sale in San Diego County. The average sales price is $877,000.00. Residential real estate markets work best when first time buyers stimulate a “move-up” market. With San Diego County home prices out of reach for most potential buyers and a lack of new communities for move-up buyers to move to we have a stagnant residential real estate market locally.