THE ANSWERS TO THE 4 BIGGEST REAL ESTATE QUESTIONS BEING ASKED THIS SUMMER
1. WHAT’S HAPPENING WITH MORTGAGE RATES?
Rising mortgage rates are no doubt one of the biggest factors impacting the housing market right now… but it’s important to remember that the low rates of the last few years were an anomaly.
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As inflation rises and mortgage rates climb, many may see their purchasing power shrink and their dream of homeownership fade. However, it’s important to remember one big piece of economic wisdom: there is no better hedge against inflation than homeownership. Historically, we have seen homeownership outperform inflation in most decades. So, if there’s an asset to invest in, housing is one of the few tangible assets that tends to hold its value.
2. WHAT WILL HAPPEN TO REAL ESTATE IF WE GO INTO A RECESSION?
Post-2008, nothing will strike fear into the hearts of buyers and sellers like the word “recession.”But again, historical context is everything. Take a look at the chart below for some serious perspective. In 4 out of the last 6 recessions, home prices have continued to appreciate. So, if a recession happens, it does not necessarily mean home prices will decline. The other big takeaway if a recession happens: interest rates usually go up at the beginning of an economic decline, but in order to stimulate the economy, they will typically fall. According to Fortune, “Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.” So, while the days of mortgage rates below 3% may be over, we also can’t say for sure they’re only going to go up from here. Making sure your clients know this is crucial to understanding what to anticipate from today’s shifting market.
3. WHAT’S GOING TO HAPPEN THIS YEAR IN REAL ESTATE?
When we’re constantly being bombarded with different opinions and information, it’s easy to get lost in the noise. Time and time again, agents will let this get the best of them and their business. So, while signs of a market shift become clearer each day, it’s important to remember that context is everything. Yes, we are seeing a slowdown. However, we are really just heading back toward the market pace we saw pre-pandemic, and those were still great years for real estate. Focus on the big picture, and that’s this: the housing market is still very strong, and previous projections are already outperforming what industry experts forecasted earlier this year. For example, all major real estate institutions are forecasting at least 6 million homes sold in 2022. Instead of getting caught up in headlines that do more to terrify than clarify what’s really happening in real estate, cut through the noise and focus on what carries the most weight: expert-backed data and insights.
4. SHOULD I BUY A HOME RIGHT NOW?
This is probably one of the biggest questions I’m getting asked right now. For all the reasons I mentioned above, the short answer to this question is yes. Trying to time the housing market for that deal of a lifetime is like trying to win the lottery. And while purchasing a home today may not be as easy as it was a couple of years ago, the latest data shows that inventory levels are rising, which means more moderate price appreciation and more options for buyers.
We can’t control what’s going to happen with mortgage rates or price appreciation, but we can control what we prioritize. That way, in times of uncertainty, you see these factors less as stop signs and more as opportunities for growth and change. Remember this: the key to success in any market is staying educated and acclimating to the current climate. The best way to do that this summer is let me help you navigate through the conditions. If you have questions, let’s talk…
(Portions of the content provided by Keeping Current Matters)
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5 Bed | 3 Bath | $2,278,000 | Compass Listing
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Amazing beautifully renovated one story in Danville’s Rancho San Ramon neighborhood with spectacular pool. Side gate access for both RV/boat parking! Separate detached office with loft on property. Features include stunning updated kitchen with quartz countertops, Quartz center island opening to the great room! New stainless steel appliances include Samsung refrigerator, KitchenAid oven/gas ranged hood, built-in microwave, and new shaker cabinets. Backyard, with multiple patio entertaining spaces, centers on sparkling swimming pool with travertine coping, Carrara pool tiles, and new Pentair pool equipment/filter. Further upgrades such as outdoor bluetooth speakers, Rheem tankless water heater, Ecobee thermostat, and custom Belgard Pavers in both the circular front driveway and backyard pool surround.
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4 Bed | 2.5 Bath | $2,274,500 | Compass Listing
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A sprawling rancher nestled on a tree-lined street is the perfect home to unwind, sit back and enjoy the California sun. Exceptional .58 flat acre and an additional 1800 square foot warehouse with endless possibilities! This home has been well maintained with a neutral paint palette, hardwood floors, tile and carpet, recessed lights, dual pane windows and sliders which showcase abundant natural light. A spacious living and dining room combo, kitchen with granite counters, island, stainless steel appliances and white cabinetry that leads to cozy secondary living area with an inviting fireplace as its focal point. The yard is a true treasure. Perfect for sport/car enthusiasts. RV/boat parking. Fabulous location, close to freeways, schools, 1 mile from downtown Danville with tons of shopping and dinning opportunities.
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90 Saint Andrews Lane, Alamo, CA 94507
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4 Bed | 3+ Bath | $2,749,000 | Compass Listing
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Private custom home, perched above Round Hill Country Club on a small cul-de-sac. Walls of windows take advantage of an abundance of natural light and remarkable vistas. Owned solar, expansive three car garage with epoxy floors, 1.32 acres. Essentially two primary suites, one on the main level and one on the lower level. Main floor living has a spacious open kitchen, dining room, living room, library, primary suite, office and a large workshop/hobby area. Lower level hosts additional office space, family room, three bedrooms, two full baths, laundry and a large storage area. Decks on both sides of the home wrap around the living and sleeping areas, embracing the views while offering entertaining and peaceful spaces.
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5 Bed | 4+ Bath | $5,895,000 | Compass Listing
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Panoramic ocean views from the Queen's Necklace to Point Dume, the Channel Islands, and beyond! This stunning contemporary home has been freshly updated and offers a private sanctuary near the crest of Malibu Park. Surrounded by mature, meticulously maintained landscaping, this private estate is completely fenced in with gated entries on both Cuthbert and Horizon and spans 1.2 acres. The interior boasts massive vaulted ceilings, oversized windows, tile floors, lavish marble accents, and 4 spacious bedrooms. An outdoor patio and grassy lawn has perfect southwest exposure for watching sunrise and sunsets with an outdoor dining area and built-in barbeque. A detached one bedroom one bathroom guest home with a separate driveway features a kitchenette, living room, in-unit washer and dryer, and peaceful ocean views from a private patio.
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Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material presented herein is intended for informational purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any description. All measurements and square footage are approximate. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
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