Rising Interest Rates: Is Now the Time to Buy or Sell?

There are many great San Diego area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Value Report so you know what buyers will pay for your home in today's market. You may also call me at (619) 562-6800 for a FREE home buying or selling consultation to answer any of your real estate questions.

Rising Interest Rates: Is Now the Time to Buy or Sell?

Today I wanted to offer my 2014 predictions and what direction interest rates are headed in. What I can tell you is that interest rates are going up. According to the National Association of Realtors, Fannie Mae, Freddie Mac and the Mortgage Bankers Association are predicting rates to be anywhere between 5-6% in 2014. What does this mean for buyers and sellers?

For buyers, if you can get into a home now and still take advantage of the low rates and pricing, I would do it! As for sellers, as rates begin to climb, it will discourage buyers from wanting to purchase property. In result there will be fewer buyers in the market for your home.

With the economy continuing to improve, the job marketing strengthening and all the reports from the various news outlets and economists, the economy’s upward movement will continue to push interest rates up.

If you’re in the market, call me. Let’s talk about helping you in the right direction; I can even tell you if this is the right time for you to buy or sell! Real estate is not like buying a car. My goal is to help you make a decision that’s in your best interest. Thanks and make it a great day!

Immigration Reform's Impact on Housing

Immigration reform is a political hot potato to many. We do not want to take a political stance on the issue. We will leave that to others. However, we do want to report on a recent study released by the Immigration Task Force of the Bipartisan Policy Center (BPC) that spoke to the impact reform would have on the housing market.
The BPC did not claim their study was all encompassing and included the following caveat:
“It is important to note that this analysis is not an endorsement of the Senate bill or any other policy proposal. The study does not examine other aspects of immigration reform including demographic or national security concerns, nor does it look at the cultural benefits that immigrants bring to our communities. Clearly, these issues are important considerations for immigration reform proposals.”
That being said, let’s look at what the study did reveal:

Continue to Drive the Housing Recovery

The study commented strongly on the economic impact reform would bring to housing:
“Immigration reform would dramatically increase demand for housing units. This would increase residential construction spending by an average of $68 billion per year over the 20-year period.” 
The study looked at the effect different policies would have on housing.

Impact of Attrition through Enforcement

“Under the “attrition through enforcement” scenario, residential construction spending declined by more than $100 billion per year compared with the baseline, and by more than $175 billion per year compared with the reference case. This is because the removal of all present and future unauthorized immigrants caused a significant decline in the U.S. population. The departure of current unauthorized immigrants would leave many dwellings vacant and the reduction in future population growth would reduce the need to build additional housing units.”

Impact of Immigration Reform

“The analysis examined immigration reform’s impact on the housing market...Demand for housing units increases as new immigrants enter the economy and form households, accelerating the current housing recovery and fueling growth in this sector of the economy. Under the reference case, average spending on residential construction increased by about $68 billion per year, with a peak of more than $110 billion per year in FY2022–FY2025. The first decade’s annual average was about $56 billion per year higher, and the second decade’s was about $81 billion.”

The economic impact on housing should not be the only consideration as to whether immigration reform makes sense. But, it is interesting to see the potential outcomes of different policy decisions.

Do You Know the Importance of Becoming Preapproved?

Do You Know the Importance of Becoming Preapproved?

Thanks again for joining me! I wanted to introduce my partner, Anita Karmo, who is my buyer’s agent. Anita helps me with all of our buyers who are looking to purchase homes. I thought it would be fitting to talk about purchasing power with getting preapproved and what the best option is for buying a home. Anita says the first thing a potential buyer must do is figure out what type of loan you can get. This can be among FHA, VA or conventional mortgages. When your spending thousands of dollars on a property, you want to know what loan program is best is going to work for you and fit into your financial budget.

Be aware of your closing costs as well! In most cases, if you have an agent like us, we can negotiate a lot of those fees to be paid by the seller. Anita also stresses that this step helps to know what your purchasing power is to avoid becoming house poor. This means owning your home and also having a life without being buried in household expenses and monthly payments. Your preapproval not only helps budgeting, but also makes for a stronger offer. Sellers treat this like having cash in hand! We have many great lenders that have pleased many of our clients and we would be happy to set a meeting with them for you.

If you’re in the market for a home or would like further education on the process of buying a home, we’re always here for you! Our goal is to make you an informed buyer to allow you and your family to make the best decision in buying your next home. Thanks and make it a great day!

Harvard: 5 Reasons to Buy a Home

Harvard: 5 Financial Reasons to Buy a Home

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. This year he released a new paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.
Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 
“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 
“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.
“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 
“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.
“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.” 
  
Bottom Line
We realize that home ownership makes sense for many Americans for many social and family reasons. It also makes sense financially.

What Can You Do to Prepare Your Home for Sale?

Today I wanted to talk to you about a topic that’s very important to people who are going to sell their home. If you are preparing your home for sale, I am going to present a few inexpensive ideas that can bring you thousands of dollars and a quicker sale. The number one factor is curb appeal. The first impression is where they will automatically form an opinion of your property before they even step food inside. There are a few basic things to bring out your home’s curb appeal. Making sure the lawn is cut, the grass is green and there is no weeds coming through gives the property a well-manicured look. You want to make the look inviting and fresh and also show the buyer that you’ve taken care of your home. Paying attention to the front and back yard is key and be sure to take care of any broken fence pieces or peeling paint.

Moving onto the interior of your home, the simple task of decluttering alone will bring you thousands of dollars. When you have me out to your home, I will point out what we can do and the changes you can make. Also, give your home a scrub down because a clean will also bring in more money. Be sure to move around furniture because when enter a home after being outside, your pupils dilate and things appear smaller. It is also important to keep your lights on when you can to make the room appear bigger.

I’ve put together a checklist for preparing your home for sale. It is very detailed and contains some great tips. If you would like me to send it to you, give me or send me an email. Thanks and have a great day!

Don’t Wait Until Spring to Sell Your Home!

This time of year, I am always asked by sellers if they should list their home in the fall or wait until spring time. What I can tell you is that serious buyers have fewer homes to choose from during the holidays and less competition means more money for you as a result of unmotivated sellers who remove their home from the market. Secondly, since the amount of listings dramatically increase in January-March, there will be less demand for your particular home because there are more homes on the market. Thirdly, people typically trying to close on a house before the end of the year for tax purposes.

Also this time of the year, people don’t want to be bothered during the Christmas week and New Year’s. We can restrict showings during those weeks to allow time to spend with your family, which is very important in my home. Traditionally during the holiday season, employers are moving their employees around for job transfers and when the first of the year comes around, these people need homes. If your home is on the market, chances are these people will see your house. You also have the opportunity to become a non-contingent buyer when spring comes around, allowing you to find the perfect home without having to worry about selling yours.

If you’re thinking about selling your home, check out our free home value report on my video blog. Feel free to call or email at any time, I’m always here for you! Until next time, make it a great day.

Exclusive Third Quarter Market Report

Hello and welcome to my video blog! This is Richard Elias with Century 21 Award. I’ll be creating short, educational videos twice a month just for you to give you insights into buying or selling your home. Today, I wanted to take a quick look at the San Diego real estate market.

We’ve seen a change in the San Diego real estate market going into the fourth quarter from earlier in the year. The first and second quarter saw a market that was in favor of buyers. Properties were generating multiple offers and over-bids while inventory was low, dipping below 3,000 homes. We also saw many people removing their appraisal contingencies to remain competitive. In the last few months, we have seen a stabilization of the market. We now have over 7,000 homes on the market in the San Diego area. Though interest rates have risen and inventory has increased, it is still a great time to buy a home, especially in contrast to renting. Owning is still 35% cheaper than renting!

If you have any additional questions about the state of the current San Diego market, or if you or someone you know is looking to buy or sell your home, give me a call at (619) 562-6800 or you can email me at Richard@RichardElias.com. Thanks and I look forward to speaking with you!