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Christy Mobile: 858-220-3003 | Christy Email: christy@gellens.com

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Sellers’ Corner: 4 Big Incentives for Homeowners to Sell Now

4 Big Incentives for Homeowners to Sell Now

4 Big Incentives for Homeowners to Sell Now | MyKCM

The housing market keeps sailing along. The only headwind that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons.

Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today.

1. Homeowners don’t know if they’ll be able to secure their next home before selling.

In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.

In today’s market, buyers have compelling reasons to purchase a home now:

  • To own a home of their own
  • To buy before prices continue to appreciate
  • To secure a mortgage at a historically low rate, while they last

These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.

This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.

2. Homeowners don’t know if their current home will sell for the asking price or top market price.

This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers.

Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported:

“For the first time ever, the average U.S. home is selling for above its list price.”

If a seller is looking for a top-dollar sale, there’s no better time to sell than right now.

3. Homeowners don’t know if they will get an offer without their home requiring work or updates.

Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.

A recent post on whether or not to renovate before selling notes:

“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”

If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.

4. Homeowners don’t know if they can have a quick closing process.

When speed is important, there are two points sellers should look at:

  • The time it takes to find a buyer for the home
  • The time it takes to close the transaction

In the latest Existing Home Sales Report, NAR explains:

“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.”

Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state:4 Big Incentives for Homeowners to Sell Now | MyKCMRegarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days.

If a mortgage is necessary, the most recent Origination Insight Report from Ellie Mae shows:

“Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.”

If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time.

Bottom Line

Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Let’s connect today so you can learn more about the opportunities for homeowners who are ready to sell.

Sellers’ Corner: Tax Change

Motivational Monday-Leadership & Emotional Intelligence

Emotional Intelligence in Leadership

Emotional intelligence is the ability to recognize your own emotions and recognize the emotions of those around you, working with you, family, etc.

Leadership skills and Emotional Intelligence are becoming more and more important in this digital age going forward.

A great read on EI 

or read

Daniel Goleman’s

Social Intelligence: The New Science of Human Relationships

Surf Report 

small surf-beautiful, sunny day

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California Proposition 19

PROP 19 OVERVIEW

Homeowners who are 55 or over, severely disabled, or whose homes were destroyed by wildfire
or natural disaster, may transfer the taxable value of their primary residence to a replacement
primary residence …
-Anywhere in the state
– Regardless of the location
– Regardless of the value of the replacement primary residence — even if it’s greater in value
(with an upward adjustment in the tax basis if the replacement property is greater in value)
– Within two years of the sale of the original primary residence
-Up to three times (although there’s no limit for those whose houses were destroyed by wildfire
or natural disaster)
These rules are in effect on and after April 1, 2021.

Please see link below for more information provided by California Association of Realtors

Prop_19_PP_Final

Buyer’s Corner: How to Make a Winning Offer on a Home

 

How to Make a Winning Offer on a Home

Keeping Current Matters

Today’s homebuyers are faced with a strong sellers’ market, which means there are a lot of active buyers competing for a relatively low number of available homes. As a result, it’s essential to understand how to make a confident and competitive offer on your dream home. Here are five tips for success in this critical stage of the homebuying process.

1. Listen to your real estate advisor

An article from Freddie Mac gives direction on making an offer on a home. From the start, it emphasizes how trusted professionals can help you stay focused on the most important things, especially at times when this process can get emotional for buyers:

“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”

Your experienced, local real estate professional is the expert to guide you and lean on for advice when you’re ready to make an offer.

2. Understand your finances

Having a complete understanding of your budget and how much house you can afford
is essential. The best way to know this is to get pre-approved for a loan early in the homebuying process. Only 44% of today’s prospective homebuyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. Doing so make it clear to sellers you’re a serious and qualified buyer, and it can give you a competitive edge in a bidding war.

Some San Diego sellers do require a pre-approval letter and proof of funds for your deposit in order to see the home in person. Being prepared financially is key in this fast San Diego market. If you are paying all cash, make sure you have your proof of funds ready and will be available to liquify within the time frame of the escrow.  

3. Be prepared to move quickly

According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), the average property sold today receives 3.7 offers and is on the market for just 21 days. These are both results of today’s competitive market, showing how important it is to stay agile and alert in your search. As soon as you find the right home for your needs, be prepared to submit an offer as quickly as possible.

4. Make a Fair Offer

It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t make an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this part of the process will help you stay competitive:

“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”

We have experienced with our listings that low offers can drive other buyers to offer higher just because their is another offer on the table.  Local knowledge of the micro markets is key, and it is important to have an experienced agent to guide you with your offer price and terms. 

5. Stay Flexible in Negotiations

After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. You can strengthen your position with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). Freddie Mac explains that there are, however, certain contingencies you don’t want to forego:

Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

Because of the very low inventory, many sellers are needing to rent back or stay in possession of the home until they can move to themselves. Lenders do have time restrictions on this, so be prepared to know those time limits with your lender before you offer them in a counter. 

Today’s competitive market makes it more important than ever to make a strong offer on a home, and work with a local, experienced agent.  Let’s connect to make sure you rise to the top along the way.

Call us today to discuss your plan
Drew & Christy Littlemore
858-220-3004  858-220-3003
www.littlemoregroup.com

March 8th Featured La Jolla Business- La Valencia Hotel

La Valencia Hotel

1926

Hollywood Glamour On The California Riviera

Intimate and charming. Dramatic and iconic. La Valencia Hotel has been an unforgettable destination since 1926 and a getaway for Hollywood elite in the Golden Era. Perched above the La Jolla Cove cliffs along the sparkling Pacific Ocean, La Valencia offers something for everyone in our four distinctive room types – Vintage, Classic, Villas and Icon. Enjoy international cuisine with the freshness of California in our signature restaurants and lounges. Relax by the beautiful outdoor pool with ocean views. Explore miles of idyllic beaches and coastline for swimming, surfing, kayaking, snorkeling and diving. Walk to the Village of La Jolla to trendy boutiques, museums and art galleries. Discover championship fairways at Torrey Pines Golf Course, venture to San Diego attractions or simply relax at our charming seaside retreat.
Spend A Day Poolside

Access La Valencia’s iconic pool for the day with ResortPass. Buy a day pass online and take a seat next to the outdoor pool, surrounded by bougainvillea and palm trees, or soak up the sun with a margarita in hand. Organic COOLA sun care products are now available for purchase at the cabana to complete your day spent poolside.

Day Pass Includes:
– Access to Outdoor Heated Swimming Pool
– Complimentary WiFi
– Poolside Food and Beverage Service

https://www.lavalencia.com

 

San Diego Unified School District Reopening Update

 

Feb. 23, 2021 @ 3:00 p.m.

The San Diego School Board meeting will discuss the reopening of schools and CA state legislation bill AB/SB 86

To watch the meeting live, click here.<https://sandiegounified.org/about/board_of_education>

Also in the News today:

SAN DIEGO (KGTV) — San Diego Unified School District is set to reopen in-person classes for all grade levels by mid-April, according to the district Board of Education President Richard Barrera on Tuesday.

Barrera says students will be allowed to return on April 12. Students will also have the option to stay home.

SDUSD teachers will return to the classroom on April 5. Barrera added that teachers will be vaccinated before reopening, and vaccinations for educators are set to begin next week.

https://www.10news.com/news/local-news/san-diego-unified-to-resume-all-in-person-classes-by-mid-april

Short Term Vacation Rental Update

 

During a meeting with San Diego’s new mayor, Todd Gloria, he announced to the La Jolla Town Council that the city council would be voting on the Short Term Vacation Rental ordinance put forward by Council President Jennifer Campbell. Should this ordinance pass, San Diego could see some changes to the rental market in January 2022.

Date: Feb. 23, 2021

Agenda Item #330

An Amendment to the City’s Municipal Code and Local Coastal Program to Impose a License Requirement and Operating Regulations for Short Term Residential Occupancy including Hosting Platforms and Repeal Regulations for Bed and Breakfast, and Boarder and Lodger Accommodations.

STVR O-2021-96_Ordinance

STVR O-2021-96_Digest

STVR O-2021-96_Strikeout

 

 

Throwback Thursday: Casa de Manana

Casa de Manana was a luxury resort built in 1924, designed by architect Edgar Ullrich. Today Casa de Manana is a large ocean front retirement home in La Jolla, California run by Front Porch. It is suggested that appointments are made months in advance to reserve a unit or villa. Please contact Casa de Manana directly for more information on pricing and reservations.

858-456-4390

https://casademanana.org

3 Reasons We’re Definitely Not in a Housing Bubble

3 Reasons We’re Definitely Not in a Housing Bubble

3 Reasons We’re Definitely Not in a Housing Bubble | MyKCM

Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different.

1. This time, housing supply is extremely limited

The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.

In real estate, supply and demand are measured in “months’ supply of inventory,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a sellers’ market in which prices normally appreciate.

Between 2006 and 2008, the months’ supply of inventory increased from just over 5 months to 11 months. The months’ supply was over 7 months in twenty-seven of those thirty-six months, yet home values continued to rise.

Months’ inventory has been under 5 months for the last 3 years, under 4 for thirteen of the last fourteen months, under 3 for the last six months, and currently stands at 1.9 months – a historic low.

Remember, if supply is low and demand is high, prices naturally increase.

2. This time, housing demand is real

During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management’s International Center for Finance, called “irrational exuberance.” The definition of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historic market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.

The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the Mortgage Credit Availability Index (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one. Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high of over 868. Again, just about anyone could get a mortgage. Today, the index stands at 122.5, which is well below even the pre-boom level.

In the current real estate market, demand is real, not fabricated. Millennials, the largest generation in the country, have come of age to marry and have children, which are two major drivers for homeownership. The health crisis is also challenging every household to redefine the meaning of “home” and to re-evaluate whether their current home meets that new definition. This desire to own, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real.

Remember, if supply is low and demand is high, prices naturally increase.

3. This time, households have plenty of equity

Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATM machines. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes. From 2005 through 2007, Americans pulled out $824 billion dollars in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where the mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.

Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis a little over a decade ago. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.

This conservative approach has created levels of equity never seen before. According to Census Bureau data, over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). Also, ATTOM Data Solutions just released their fourth quarter 2020 U.S. Home Equity Report, which revealed:

“17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value…The count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about one in three, of the 59 million mortgaged homes in the United States.”

If we combine the 38% of homes that are owned free and clear with the 18.7% of all homes that have at least 50% equity (30.2% of the remaining 62% with a mortgage), we realize that 56.7% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.

Bottom Line

This time, housing supply is at a historic low. Demand is real and rightly motivated. Even if there were to be a drop in prices, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.