Signs of Optimism
At the end of July, MLSListings reported there were signs of optimism for real estate. After sheltering in place for months, there’s an uptick in demand. That demand is fueled by:
- Renters needing more space and wanting to avoid shared community spaces like elevators or green open spaces
- Homeowners who are tired of working at the dining table and need dedicated space for working or shifting where their children attend virtual school.
- The stock market’s resilience and homebuyers’ ability to cash out and use that money for down payments.
- Amazingly low mortgage rates boost potential buying power for new homeowners or existing owners who want to trade up.
“We are encouraged by the positive factors moving the market in the right direction.” ~ Dave Wetzel, President & CEO of MLSListings
Home Equity Improve Across the U.S.
Earlier this year — and before the pandemic — CoreLogic reported that the average homeowner gained approximately $9,600 in equity during the past year. ATTOM Data Solutions, an organization that curates the nation’s premier property database, released an August 6th report that speaks to growing home equity. It labeled 15.2 million residential properties as “equity rich,” a term used for homes secured by loans 50% or less than their estimated market value.
It’s unclear how the economic impact of Covid-19 shakes out. However, when you take a longer view, investing in San Francisco Bay Area real estate has been a smart financial move.
A Refinancing Rush
I’ve reported on mortgage rates touching 3% levels. Historically low rates have spurred many homeowners to refinance to restructure debt, pull money out for improvements, or lower their monthly payment.
My trusted mortgage advisor, Tracie Southerland, shared a bulletin announcing an adverse market-refinance fee related to Freddie Mac, Fannie Mae, and other government-sponsored enterprises (GSEs). This fee, effective September 1, 2020, is a result of risk management and loss forecasting caused by Covid-19 economic and market uncertainty. Specifics that Tracie pointed out about the fee:
- Called “Market Condition Credit Fee”
- Is 50 basis points (.5%) of the loan amount
- Does not affect purchase mortgage loans
- Affects cash-out and no cash-out refinances
- Goes into effect more quickly — less than 30 days after the official August 12 announcement
Santa Clara County Home Value Increase
Comparing single-family homes from a year ago, appreciation in Santa Clara County averaged nearly 7%. The median sales price in July 2020 rose to $1.38M compared to $1.29M in July 2019.
Inventory is down slightly from May 2020 levels. Yet the number of available homes is still below the September 2019 peak.
Reach out & Connect
I’m meeting with clients via phone, video conferencing, and by appointment. Whether you’re looking to buy or sell, you need an experienced guide in this complex and fast-paced real estate market. I’ve helped hundreds of individuals like you successfully negotiate the most important financial transaction you’ll ever make.