Sale Price: $720,000
3 Bed / 2 Bath
Year Built: 1966
Home Size: 1,716 Sq Ft
Community: El Cajon
Sale Price: $720,000
3 Bed / 2 Bath
Year Built: 1966
Home Size: 1,716 Sq Ft
Community: El Cajon
The economy continues to bounce back but is recovering at a moderate pace. While many economic indicators are clearly showing signs of improvement, it will take time to get back to the pre-pandemic level as many uncertainties remain unanswered.The housing market, on the other hand, remains a rare bright spot even as it transitionsinto the traditional slow time of the year. While the market is showing signs of leveling offin recent weeks, it is still stronger than normal as low rates and renewedinterest in home buying continue to fuel housing demand.
California Job Market Is Slowly Recovering: Employment conditions continued to improve in California, with the unemployment rate falling to 11.0 percent in September, as nonfarm payrolls added a net total of 96,000 jobs. California has added back more than 994,000 jobs since May, but the state employment level is still below the February peak by 1.6 million. With job growth moderating in the last three months and not expected to see significant surge in the last quarter of 2020, the recovery will take some time.
Retail Sales Top Estimates as Consumer Sentiment Continues to Rise: Despite slow growth in the job market, consumers continued to spend at the fastest pace in three months. Retail sales shot up 1.9 percent in September, more than double the consensus expectation. The unexpected big gain in spending reflects that consumers could be tapping into their elevated savings, as the personal saving rate remains high at 14.1 percent in August after peaking at 33.6 percent in April. Meanwhile, consumer sentiment continued to improve as the index released by the University of Michigan climbed again and continued to move in the right direction.
Housing Starts Fall Short of Expectation, but Builder Confidence Remains Upbeat: Housing starts rose 1.9 percent in in September, with multifamily starts declining 16.3 percent, while single-family starts jumped 8.5 percent. As apartment constructions continued to slow, single-family homebuilding gained momentum as housing demand remained robust since the pandemic lockdown was lifted. Homebuilder confidence remains elevated as the National Association of Home Builders housing market index climbed to the highest level on record. Low rates and ongoing shift in housing preferences to adjust to new COVID norms are primary factors for the rise in developers’ confidence.
Buying Season Continues to Slow but Fall Will Likely Be Stronger than Normal: The statewide average daily sales declined again and dipped to the lowest level in five weeks, suggesting a continued slowdown of the extended home buying season. The momentum of housing demand has not completely fizzled out, however, as pending sales inched up slightly from the prior week. This could suggest a stronger-than-normal fall market if rates continue to stay near record lows. Tight supply remains an issue though, as average daily new listings were down 6.5 percent and reached the lowest level since early July.
The market will likely moderate in the upcoming weeks/months as we move into the holiday season. Despite the anticipated seasonal slowdown, market participants remain positive, at least for now, about the outlook of the housing sector.
Congratulations to my buyers of 16125 Oakley Rd, Ramona, CA! We were able to find these first home buyers a wonderful spot in Ramona that I hope they will enjoy for many years with their new baby on the way! If you are interested in purchasing or selling a home please reach out to Garrett Trainor at First Line Realty. Property With A Purpose!
Sale Price: $580,000
4 Bed / 2 Bath
Year Built: 1977
Home Size: 1,905 Sq Ft
Back in April, NBC 7 reported the coronavirus had hit the local housing market in San Diego. Listings plummeted and homes on the market were taking longer to sell. Fast forward to today, realtors say inventory is still low, but homes on the market are selling extremely fast.
According to CoreLogic data, last month’s home prices in San Diego County blew past previous records to hit an all-time high of $634,000, which is a 9% price increase over the year before. “Within a day, I will get a bunch of calls. Within two or three days you’ll get people who are putting in offers,” a local realtor said.
Despite high unemployment and a global pandemic, home prices continue to climb due to historically low-interest rates and low inventory. Earlier this month, mortgage rates dropped below 3% for a 30-year-fixed rate mortgage, the first time in nearly 50 years. Last year, you were seeing that balance where you had that 30 days on the markets, which is more typical. Now, you are seeing multiple offers where its taking 3 or 4 days.
There are other reasons for the scarcity of homes on the market. Some people think selling now could expose them to COVID-19 by letting people into their homes. Plus, buyers are seeing increased value in homeownership as they are stuck working and taking classes from home. You have those that are sitting in their homes and saying this is a little more cramped for me. I have to stay here for I don’t know how long of a time. We need more space to work, more space to move around.
Across the six-county Southern California region, The biggest gain was in San Bernardino County. But this real estate trend is being seen nationwide. The Commerce Department recently reported that construction of new U-S. homes surged nearly 23% in July as homebuilders bounced back after a coronavirus lull.
Let’s take a look at some of the key metrics comparing July data in Poway for 2019 vs 2020.
New listings dropped 30.0% and median sales price increased by 6.7%. Inventory of homes for sale dropped 61.8% which is causing a surge in demand with far less supply than the previous year. With the favorable current interest rates and far less homes on the market results in a surge of purchase price. Houses are selling quicker since the months supply of inventory is only one month! This is a sellers market for Poway as well!
Single family homes are really selling quickly and for more money in Ramona! Let’s take a look at some of the key metrics comparing July data in Ramona for 2019 vs 2020.
New listings dropped 15.6% and closed sales increased 11.5%. Inventory of homes for sale dropped 62% which is causing a surge in demand with little supply. With the favorable current interest rates and far less homes on the market results in a surge of purchase price -> 8.1% year over year increase. This is a sellers market for Ramona!
Garrett Trainor has made the calculated leap of faith and is pouring all of his energy, time, and commitment into First Line Realty. Previously, he worked as a full time police officer while also trying to grow his real estate business and charity. However, he can’t in good conscious give half effort into something, and thus he has stepped away from the police department.
If you are not aware, Garrett donates a portion of all commissions into One Line Foundation. One Line Foundation operates exclusively for charitable and educational purposes in accordance with Section 501(c)(3) of the Internal Revenue Code. In particular, One Line Foundation is dedicated to providing financial aid to families of first responders working in San Diego County through educational scholarships, mental and physical health assistance, and memorial funds.
Garrett’s goal is to promote “Property with a Purpose” by satisfying his clients’ real estate needs while simultaneously working to build a stronger community. He will work diligently with you by providing extraordinary client services with integrity and professionalism.
Get in touch with Garrett for any real estate needs with no obligation!
Signs of economic optimism continued to persist last week, particularly with respect to the housing market. Many realtors are feeling more optimistic, buyers still want to buy, and rates remain very favorable. However, the recovery is running into headwinds that have increased uncertainty about the future with key, fundamental indicators like jobless claims and consumer confidence both moving in the wrong direction. We continue to remain optimistic about the recovery, but have grown more cautious in recent weeks.
Buyer demand remains robust: Although the economy has suffered a few setbacks in recent weeks, demand for housing remains strong as mortgage applications for new purchases increased by more than 20% on a year to year basis last week. This was a slight decline from the previous week as the homebuying season begins to fade towards the end of July, but it was an acceleration compared to the same point in 2019. Record-low interest rates are likely compounding the urgency for buyers that has already been created by interest in housing that better meets their needs in a lockdown environment.
Sellers more positive in weekly survey: Sellers took a big step back during the onset of the crisis, with the percentage of consumers who respond to the monthly Housing Sentiment Index say that it was a good time to sell falling by more than half in March and April. However, those numbers have rebounded for 3 consecutive months. In addition, just 16% of Realtors surveyed over the weekend reported that they had a seller remove their home from the MLS last week—the lowest reading since we began asking the question in late-May.
Realtors are feeling more optimistic about future: Not only were fewer sellers getting cold feet, but California Realtors were feeling more optimistic about their prospects moving forward. Recently-added questions about members’ outlook show an uptick last week. The percentage of Realtors who thought listings would increase this week improved to 28% of respondents over the weekend, from 26% the week before. Similarly, 37% of members thought sales and prices would increase this week—up from 35% and 31%, respectively, the previous week.
Record-low rates significantly boost affordability in California: Despite the fact that California set a new all-time high for the median price of an existing single-family home last month, record low rates mean that the monthly principal and interest payment on that home has come down significantly from just a few years ago. In 2018, when interest rates averaged 4.7%, the median priced home costs roughly $2,460 per month. Today, the payment on the (more expensive) median priced home is just $2,160. That represents more than $100,000 in saved interest payments over the life of the loan.
Labor markets deteriorate after consistent improvements: Nationally, jobless claims increased for the first time in 15 weeks as more states clamp down on businesses to combat rising coronavirus cases. Here in California, jobless claims have been on the leading edge of this national trend rising in 6 out of the last 10 weeks. We are still well below the levels of almost 1.1 million in late March, but nearly 300,000 per week have begun to lose their jobs again in the state with likely consequences for housing demand—particularly on the rental side of the market.
Closed sales begin to decline last week: After weeks of slower growth in closed transactions, the number of homes sold per day declined (-6.3%) last week for the first time in 11 weeks. Part of this is due to slower growth as the homebuying season ramps back down towards the fall. However, this is also the result of a lack of inventory which has been stifling the uptick in pending sales since June. Indeed, prices continue to rise, which further implicates a lack of supply as this price pressure is a prime symptom of a market with excess demand.
Pending sales resume downtrend: Pending sales themselves resumed their downward trend last week—declining -3.2%—after a brief increase the previous week. We know from statistics on mortgage applications and requests for private showings that buyer demand remains robust. This means that it is the lack of new listings coming onto the market, which have not risen since early May, that continues to prevent many buyers from taking advantage of record low rates.
Less business activity being reported by Realtors last week: Realtors were more optimistic about the future over the weekend, but they also reported less progress in their own business last week as well. 32% had a listing appointment last week, down from 33% the week before. 24% listed a property last week, which was up slightly from 23% the week before, but is down from nearly 30% back in June. 28% entered escrow on a transaction last week, which was also up from the week before (26%) but down from June. The percentage with a transaction that fell out of escrow increased from 6% of members to 7%, and only 21% had a transaction close last week—the lowest reading in over a month.
This week, there was a balance of both encouraging news and new obstacles for the recovery to surmount. California Realtors are generally feeling more optimistic, even if they did not report an actual uptick in their business last week. Due to the nature of the job losses, buyer demand is expected to remain strong in California—especially with near record low interest rates. However, ripple effects associated with more job losses and declining consumer confidence will eventually reach the purchase market if they persist so we will continue to monitor the market and the broader economy closely in coming weeks.
As with any major purchase, it pays to be informed prior to making any decisions. As experienced buyers already know, buying a home is a complicated process, so it’s important to start at the beginning and thoroughly understand each step. Whether you’re buying your first home or your third, make sure you have the necessary financial resources and have explored all your options before you purchase a new home.
If you’re a first-time buyer, you should weigh the pros and cons of homeownership versus renting. There are many advantages and disadvantages to consider. For example, renters have the freedom of mobility if they choose to move, but their monthly rent checks do not establish long-term equity or produce any other benefits. And while homeowners’ mortgage payments accumulate equity, these payments are generally higher than rent payments and come with the responsibility to manage the care and upkeep of the property.
Both new and experienced buyers have their own sets of financial considerations when it comes to buying a home. Move-up buyers should evaluate their financial situation to ensure they’re prepared to meet the higher mortgage payments involved with relocating. Likewise, first-time buyers should determine if monthly mortgage payments fit in their budgets. In addition, you’ll need to be prepared to cover the downpayment and closing costs. And, you should consider whether you meet the basic criteria to qualify for a mortgage; lenders prefer that applicants offer a stable job history and a good credit record.