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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.

Source: https://www.car.org/marketdata/marketminute

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!

• Just Sold September 2020
• Selling Agent
• Sale Price: $580,000
• 4 Bed / 2 Bath
• Year Built: 1977
• Home Size: 1,905 Sq Ft
• Community: Ramona

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.

Source: https://www.nbcsandiego.com/news/local/looking-to-buy-a-house-during-the-pandemic-wait-in-line/2395930/

Let’s take a look at some of the key metrics comparing July data in Poway for 2019 vs 2020. 

2019 -> 2020 Numbers Respectively:

• New Listings: 70 -> 49
• Pending Sales: 52 -> 49
• Closed Sales: 53 -> 48
• Median Sales Price $780,000 -> $832,500
• Percent of Original List Price Received: 96.7% -> 99.2%
• Days on Market Until Sale 36 -> 23
• Inventory of Homes for Sale 102 -> 39
• Months Supply of Inventory 2.6 -> 1.0

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.

2019 -> 2020 Numbers Respectively:

• New Listings: 64 -> 54
• Pending Sales: 48 -> 49
• Closed Sales: 52 -> 58
• Median Sales Price $545,000 -> $589,000
• Percent of Original List Price Received: 97.9% -> 99.7%
• Days on Market Until Sale 32 -> 32
• Inventory of Homes for Sale 133 -> 51
• Months Supply of Inventory 3.2 -> 1.3

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!

• CA DRE License #01945714
• Phone: (619)-630-8826
• Email: Gtrainor@first-linerealty.com

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.

Source: https://www.car.org/en/marketdata/marketminute

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.

Source: https://www.car.org/marketing/clients/buying/areyoureadytobuy

Low mortgage rates sparked a refinance frenzy at the beginning of 2020, overburdening many lenders who simply couldn’t meet the demand. Now, a new report released Monday by data analytics company Black Knight shows just how much demand there was: More than 1.3 million homeowners refinanced during the first three months of 2020, hitting a seven-year high. 

Homeowners enjoyed record levels of home equity while facing economic uncertainty as the pandemic began rattling the country earlier this year, prompting folks to line up for lower rates. This trend has persisted into July as current refinance activity is 74% higher than this time last year, according to the latest Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.

Rates on the 30-year fixed mortgage have steadily dropped from 3.5% in late March to 3.07% last week, Freddie Mac’s lowest recorded level, while the 15-year fixed-rate slid to 2.56%, the lowest in seven years. A recent Fannie Mae forecast pegs rates at 3% during the last three months of the year and 2.9% by early 2021. 

“The spread between the 10-year Treasury and mortgage rates is still wide, so there’s room for mortgage rates to fall. We could see rates drop to 2.7, 2.8, 2.9%,” says Ralph B. McLaughlin, chief economist and senior vice president of analytics at Haus, a co-investment platform for home ownership. “If we get a vaccine for the virus or the effects are lessened and people pull their money out of bonds, we’ll see increased yields which will drive up rates.”

Although today’s ultra-low rates give borrowers a chance to save money on a mortgage refinance, lenders have made it more difficult to qualify. We’ll tell you how to improve your chances of getting a low rate. 

Homeowners Have More Equity, but They’re Not Using it

Borrowers’ appetites for saving money via refinancing is strong, but they are not as interested in withdrawing cash from their homes, confounding some experts. 

“We are not seeing an increase in cash-out refinances, which surprised us. With the COVID impact, we thought there would be more interest in home improvement and upgrades, but that’s not the case,” says Glenn Brunker, mortgage executive at Ally Home.

In the first quarter of 2020, homeowners received an 8% boost in home equity, according to Black Knight. Propelled by an 11% hike in home values during the same quarter, the total amount of home equity in the U.S. hit a new high of $6.5 trillion.

However, homeowners were not tapping it, despite the surge in refinancing. The number of cash-out refinances decreased, bringing the cash-out refi share of total refinancing to 42% in Q1. This is the lowest volume since the beginning of 2016. 

“The decline seen in Q1 cash-out refinance lending is likely the result of a combination of factors. Credit tightening, more acutely seen among cash-out refinances, is certainly one such factor,” says Andy Walden, economist and director of market research at Black Knight. “There’s also the unfortunate reality that the homeowners most in need of tapping their equity—due to loss of income or unemployment—may now also be the least likely to qualify for the same reasons.”

It’s Tougher to Qualify for a Mortgage Refinance

Many lenders have tightened borrower requirements, trimming things like the required loan-to-value (LTV) ratio from 80% to 70% in cash-out refis and boosting FICO score minimums on all refinanced mortgages, Walden says. Black Knight reported a dramatic rise in credit scores among cash-out refinance rate locks, zooming 24 points—from 720 to 744— from January through June.

Both Fannie Mae and Freddie Mac, the two biggest buyers of mortgages on the secondary market, have stiffened requirements for self-employed borrowers, as well. They now require a current audited profit-and-loss statement, showing revenue, expenses and net income as well as the last two business depository statements.

The credit crunch is a direct result of a still murky economic outlook. The Department of Labor reported there were 1.4 million unemployment claims during the last week of June, as the unemployment rate took a surprising 2.2 percentage point dip to 11.1%. Lenders likely will keep credit tight as they try to mitigate risk until the economy is on solid ground.

How To Get the Lowest Mortgage Rate

The most powerful tool borrowers have in snagging a low mortgage rate is their FICO score. This is good news, as controlling your credit score is easier than doing things like improving your disposable income by jumping income brackets. Since rates are expected to stay low, you’ll likely have time to punch up your score.

FICO scores are made up of five credit factors, and they are not weighted evenly: 

• Payment history (35%)
• Amounts owed (30%)
• Length of credit history (15%)
• Type of credit (10%)
• New credit lines (10%)

You can improve in some of these areas more quickly than others. Here’s what to do:

Straighten your payment history over time. If you sometimes or usually pay your credit card, mortgage, auto loan bills late, this will have a negative impact on your score. The moment you begin making on-time payments, however, you’ll be on your way to a better score—it just won’t happen right away. 

Pay down debt. You can impact the amount you owe more quickly than you can improve your payment history, provided you have cash on hand. Keep in mind, FICO treats debt types differently. For example, installment loans (such as car loans) don’t have the same negative impact as high credit utilization on credit cards. You should keep your credit card balances below 30%. Maxing out your credit, even if you make on-time payments, can hurt your score.

Don’t close your credit accounts. This applies to accounts you don’t use, too, unless there’s an annual fee and you’re not reaping any benefits. Keeping accounts open will help you build a credit history, which is 15% of your FICO score. 

Shop around. Make sure you compare quotes from multiple lenders. Be sure to look at the APR, not just the interest rate. The APR is the all-in cost of borrowing, which includes lender fees as well as the rate. Lender fees vary, so comparison shopping can definitely save you money.

Source: https://www.forbes.com/sites/advisor/2020/07/06/record-low-mortgage-rates-stoke-hot-refinance-market-heres-how-to-take-advantage/#273b051a2ce7

The Case Shiller Indices show home prices keep going up, despite COVID-19.

San Diego home prices continued to increase into COVID-19’s second month and grew at a quicker pace than other California cities. 

Home prices in the San Diego metropolitan area had risen 5.8 percent in a year, the S&P CoreLogic Case-Shiller Indices reported Tuesday. It was the highest annual increase since July 2018. 

Across the United States, home prices in April were up an average of 4.7 percent with experts attributing the rise to a shortage of homes for sale, low mortgage interest rates and high demand from before the crisis continuing. 

“The price trend that was in place pre-pandemic seems so far to be undisturbed, at least at the national level,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.ADVERTISING

Phoenix had the biggest annual increase of the 19 cities covered by the index at 8.8 percent. It was followed by Seattle at 7.3 percent and Minneapolis at 6.4 percent. One city normally on the index, Detroit, was left off because its recording office was closed as a result of the pandemic. Chicago had the smallest gains at 1.4 percent. 

Other California cities were behind San Diego’s nearly 6 percent gain, with Los Angeles at 4.1 percent and San Francisco at 2.8 percent. 

Selma Hepp, deputy chief economist for CoreLogic, said a lot of factors that pushed up demand in the months before COVID-19 have continued, and may even have accelerated. 

“Supply headwinds, such as declining for-sale inventories, will continue to keep a lid on the number of transactions but also push up home price growth,” she wrote. 

National homebuilding slowed considerably during the Great Recession, as the population continued to grow, which many analysts say created a lack of homes for sale. More recently, a drastic increase in sellers pulling homes off the market to wait for the virus to go away have been attributed to price wars for a limited number of properties. 

In San Diego County last year, the smallest number of housing units (apartments, single-family homes and condos) were built since 2014. The 8,053 homes constructed represented a 16 percent drop in construction, said the Real Estate Research Council of Southern California, and was the biggest homebuilding drop in Southern California. In April, the same time as the Case Shiller report, there were about 5,160 homes listed for sale, said the Redfin Data Center, a drop of 27 percent from the same time last year.

Zillow economist Matthew Speakman wrote that the April index illustrates how low mortgage interest rates fueled demand even as there were fewer homes to choose from and drove up prices. 

The mortgage rate for a 30-year, fixed-rate loan was 3.31 percent in April, according to Freddie Mac, down from 4.47 percent at the same time last year.

“Substantial risks remain and the longer-term outlook for home prices is still very much unclear, but at least for now,” Speakman wrote, “the housing market continues to cruise through this historic downturn more or less unscathed and prices seem poised to continue their ascent for the coming months.”

The Case-Shiller indices take into consideration repeat sales of identical single-family houses as they turn over through the years. Prices are adjusted for seasonal swings. The San Diego County median home price for a resale single-family home in April was $650,250, according to CoreLogic data provided by DQNews.

S&P CoreLogic Case-Shiller Indices: Yearly increase by metropolitan area:

• Phoenix: 8.8 percent
• Seattle: 7.3 percent
• Minneapolis: 6.4 percent
• Cleveland: 6 percent
• San Diego: 5.8 percent
• Tampa: 5.8 percent
• Charlotte: 5.6 percent
• Las Vegas: 4.7 percent
• Atlanta: 4.5 percent
• Boston: 4.3 percent
• Portland: 4.3 percent
• Los Angeles: 4.1 percent
• Denver: 4 percent
• Miami: 3.9 percent
• Washington, D.C.: 3.8 percent
• Dallas: 2.8 percent
• San Francisco: 2.8 percent
• New York: 2.5 percent
• Chicago: 1.4 percent
• Detroit: N/A
• NATIONAL: 4.7 percent

Source: https://www.sandiegouniontribune.com/business/real-estate