Orange County Housing Market Summary:
Well, the local real estate market is exploding again, with new listings popping up daily, and buyers coming out in droves.
Still thinking of making your move? There are a couple of major considerations. If you’re looking to buy, do you have a house you have to sell? Most sellers, and their agents, are waiting for a non-contingent buyer – one who can buy, without being contingent on the sale of THEIR house.
If you have plenty of equity, you might be able to buy your next home, without making the sale of your present house, a contingency, in that purchase. That makes you a much more desirable candidate for the purchase of a seller’s house. ( They don’t have to be worried about your house falling out of escrow, meaning that your purchase would also probably fall out of escrow.)
I have a couple of lenders I can recommend, if you’ll be needing a loan to make your next purchase. If you can pay with cash on hand, even better
After you’ve opened escrow with your purchase, you can then decide whether you want to sell your present house, or make it a rental home. ( Probably more than covering its payments.)
Selling your present house after buying your next one, solves one typical dilemma where the house you’re buying might need some work done, to make it truly yours, before you move in.
With the hot market we are presently having – which should last through late Summer – your old house will probably go into escrow quickly, allowing you to close a month or two after closing the house you purchased.
Of course you could put your present house on the market first, and get it into escrow, and THEN make an offer on your next property, but what if the one you loved back then, is no longer available?
One solution – also popular in a hotter market – is to either get a longer escrow, from your home’s buyer, OR, close the escrow, having negotiated a rent back agreement from your buyer, to stay in the property – paying rent – for a month or two, until a new property you love, comes on the market. In THIS scenario, you’re now a non-contingent buyer – you already closed escrow, and have cash in hand!
There are plenty of alternatives, and after 41 years of being in local real estate, I’ve done most of them, and can likely find solutions for your home buying or home selling plans.
Why not give me a call, and let’s put our heads together to come up with some options, for you?
If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.
The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer which can eventually lead to a price change.
Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.
The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.
But not all who are buying luxury properties have a home to sell first.
In a Washington Post article, Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:
“Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”
The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.
In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!
A study by GoBankingRates looked at the cost of renting vs. owning a home at the state level and concluded that in 39 states, it is actually ‘a little’ or ‘a lot’ cheaper to own (represented by the two shades of blue in the map below).
One of the main reasons owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that the current interest rate on a 30-year fixed rate mortgage is 3.91%.
Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.
That headline might be a little aggressive; however, as August 2017’s housing market data begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME TODAY!
In a recent article by CBS News, they explained that the number of existing home sales is shrinking, and Lawrence Yun, Chief Economist for the National Association of Realtors, said:
“There should be 3 million homes on the market right now…Yet, there are only 1.9 million.”
And this situation will be affected greatly by recent natural disasters. Yun continued by saying:
“Before the hurricanes I would have predicted 1.35 million in new-home construction in 2018…I’ll have to scale that down now.”
NAR, in their August 2017 Realtors® Confidence Index, indicated that:
“Amid sustained job creation and sustained historically low mortgage rates, REALTORS® reported…that buyer demand is stronger compared to conditions one year ago… and that fifty percent of properties were on the market for less than one month when sold.”
The only challenge to today’s market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is only a 4.2-month supply of inventory, which is down from 4.5 months one year ago.
With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Let’s get together and discuss the inventory levels in your neighborhood to determine your next steps.
If you are ready to start your buying or selling process
give me a call at 949-887-5305 - I´m happy to answer all your questions.