California sees spike in home sales falling through due to insurance

 

California sees spike in home sales falling through due to insurance

Source: Newsweek
California home sales are falling as property insurance becomes increasingly unaffordable, a new report from the CALIFORNIA ASSOCIATION OF REALTORS® has found. Based on responses from 96,000 REALTORS® in California, 13.4 percent said a sale had fallen through because of issues finding affordable insurance. That means about one in seven REALTORS® saw home insurance issues derail a sale – what was double the rate of last year, when 6.9 percent of REALTORS® said the same. 

For 74.7 percent of REALTORS®, no insurance was available to a client, reflecting a growing crisis as more insurers leave the state. Meanwhile, 17.8 percent of the REALTORS said insurance premiums were simply too expensive for their client, causing the deal to collapse. While the insurance crisis might not be posing a significant problem in top markets such as the Bay Area, it can still force expensive renovations and delays in escrow, experts say. 

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

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New Real Estate Rules: what buyers and sellers need to know

 New real estate rules: what buyers and sellers need to know

The experience of buying or selling a home will soon be different than it was in the past. A recent National Association of REALTORS® class action settlement agreement has laid out new rules that will change how brokers and agents are paid. “The buyer and seller [will be] looped into the transaction more so we’re able to be more transparent with them about compensation,” said Barbara Clemons, president of the Bay East Association of REALTORS. “There will be more forms for the buyer and seller to fill out.” 

That will be apparent when visiting an open house – buyers will be asked to sign forms and if they don’t have an agent representing them, they might not be able to get additional information about a property without an agent. Buyers will have to negotiate how much they are willing to pay the broker representing them. But sellers could incentivize a sale by offering to pay all or a portion of the buyer’s agent’s commission. 

Read more on the subject.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

U.S. Home Investor Share Reached New High in Q4 2023

 U.S. home investor share reached new high in Q4 2023

Source: CoreLogic

The share of homes being purchased by home investors in the U.S. climbed to almost 29 percent in December 2023 and could exceed 30 percent in 2024, according to CoreLogic data. Despite price appreciation slowing in 2023, the share of investor purchases has remained high.

Elevated interest rates have not deterred home investors, and in fact because both prices and rates remain high and the Federal Reserve has yet to cut rates, there is strong demand for home rentals that investors are seizing upon. 

Owner-occupied buyers are purchasing about 100,000 fewer homes per month than they were before 2022, though investors are likely only making a small dent in homeownership numbers. Home-flipping activity continued to fall in the first half of 2023. Only 12 percent of investors who purchased a home in March 2023 resold by the end of December 2023. Flipping is a relatively less attractive business model than renting out a home when appreciation is slow and interest rates are high. If mortgage rates decline in the second half of 2024, this may bring owner-occupying buyers back off the sidelines, leading to a drop in home investor share. 

Read the whole article here – by Thomas Malone, Professional, Economist.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

A Perspective on Real Estate Prices

 A Perspective on Real Estate Prices: this is a graph that I created and have been updating for over 25 years now.

Prices have been fairly stable in 2023, going down slightly from 2022.  But these are median prices of Single Family Residences for the US, California, the 9 counties of the SF Bay Area, and the County of Santa Clara.  

This is not always the same story for townhomes/condominiums:  median prices have usually gone up a bit from 2022 to 2023, in the Bay Area Cities.

Click on the graph to see larger.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

California Program Helps You Pay For Your First House

 

Applications open April 3 for California program that helps pay for your first house

Source: KQED

When it rolled out last year, the California Dream for All Shared Appreciation Loan program – a loan application for first-time homebuyers – exhausted its approximately $300 million of funding within 11 days. That prompted some changes this year for when the down payment assistance program reopens for residents on April 3. The state has about $250 million in the fund, which is expected to assist between 1,600-2,000 new applicants, according to the California Housing Finance Agency (CalHFA). 

“The program is designed to help those who may not have had the benefit of generational wealth in buying their first home,” said CalHFA Spokesperson Eric Johnson. Under the program, the state will put down up to 20 percent of the cost of the home, or up to $150,000. The money gets repaid when you sell the home, plus 20 percent of any appreciation in the home’s value. Applicants must be California residents making up to 120 percent of the area’s median income, as well as a first-generation homebuyer, meaning that their parents do not own a home in the United States. 

Read the full article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

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Want a largely risk-free California home purchase? Own it for 12 years

 

Want a largely risk-free California home purchase? Own it for 12 years  

 Source: Lake County Record-Bee

Buying a home is generally a long-term investment, but how long does one need to keep a home in order to increase one’s odds of seeing the price increase? This op-ed discusses analysis by a Southern California business columnist, Jonathan Lansner, of home price trends in the state since 1987.  

He found that while the majority of one-year, two-year, four-year, or even eight-year periods yielded price increases, 30 percent of one-year periods saw prices fall, and 27 percent of four-year periods also showed decreases. Even owning a house for eight years wasn’t foolproof because 21 percent of eight-year periods saw prices decrease (while 79 percent saw prices rise, even as much as 61 to 214 percent). Since 1987, Californians who owned a home at least 12 years saw no price declines, and the average price gain was 94 percent. There’s no guarantee that this historical trend will predict the future, but it reinforces the benefit of thinking long-term.

Read the whole article from Jon Lansner (jlansner@scng.com) Orange County Register.  

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?