2015 Housing Market Outlook

January, 2015:

Home sales across the Bay Area and all around the country were slowed in 2014, in large part by a shortage of properties on the market. That same dynamic pushed home prices much higher in many areas, even leading to multiple offers and bids over asking price for some homes.

But as we begin 2015, many industry experts are forecasting a more balanced and normalized housing market, one that sees home sales rising once again and price increases moderating as more homes come on the market for sale.

If the forecasts hold true, this could be welcome news for potential homebuyers, many of whom may have missed out on purchasing last year due to limited inventory, rising prices and bidding wars in some communities.

When the final numbers are tabulated for 2014, the California Association of REALTORS® said it expects single-family home sales in California for the year will have been down about 8.2 percent from the previous year. But the organization is forecasting a 5.8 percent jump in sales statewide in 2015.

The 2014 median home price in California was expected to finish nearly 12 percent higher than its 2013 level, CAR® said. However, the organization is forecasting that prices will rise moderately in 2015 with a projected 5.2 percent increase in single-family median home prices.

Nationwide, the National Association of REALTORS® expects that existing home sales will be higher this year and prices will remain at a “healthier level of growth that should benefit both buyers and sellers.”

Lawrence Yun, chief economist for NAR®, forecasts that existing-home sales in 2014 are expected to be 4.9 million, and then increase to 5.3 million in 2015 and 5.4 million in 2016. He expects the national median existing-home price will rise four percent in 2015 and another four percent in 2016. His prediction is based upon more homes on the market, greater consumer confidence and continued pent-up demand.

“The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years,” Yun said.

According to a recent article in REALTOR® magazine, 2015 should present first-time homebuyers with a good opportunity to jump into the housing market after largely staying away since the housing crisis but this prediction may not be true in all areas of the country.

“In 2015, increases in employment opportunities will empower younger buyers to return to the market and fuel the continued housing recovery,” says Jonathan Smoke, chief economist for REALTOR.com®. “If access to credit improves, we could see substantially larger numbers of young buyers in the market.”

The reemergence of first time buyers is one of several forecasts for 2015 made by REALTOR.com®, including:

  • Millennials driving household formation. Households headed by Millennials are expected to see significant growth in 2015, particularly if the economy continues to make gains.
  • Existing-home sales rising. Distressed properties will make up a smaller share of that growth as investor purchases continue to play a diminishing role in the market.
  • Mortgage rates to inch up to five percent. Rates are expected to increase as the Federal Reserve increases its target rate. This could lead to an average 30-year fixed-rate mortgage of five percent by the end of 2015. (It averaged just under four percent in mid-December, according to Freddie Mac.)

REALTOR® magazine said housing affordability may fall slightly in 2015 due to home-price appreciation and rising mortgage interest rates, but any decline in affordability will probably be offset by an increase in salaries next year for many households. “When considering historical norms, housing affordability will continue to remain strong next year,” the magazine notes.

So if you’ve been sitting on the sidelines, 2015 may finally be your chance to jump into the housing market. With rates still near historically low levels and more homes expected to come on the market in the coming year, this may be your opportunity to find the home you’ve been waiting for. I’m ready to help. Please give me a call or send me an email and we’ll get started today.


Real Estate Mortgage Approved Loan Document With House Keys

There’s been a bit of confusion on what it means to be “pre-qualified” versus “pre-approved” by a mortgage lender. It’s important to know the difference because it can have a major impact on your real estate transaction.

Here’s what you need to know:

Pre-qualified means the buyer hasn’t yet been vetted by a third-party credit institution. Because their credit and documents haven’t actually been verified, a letter of prequalification is the result of a conversation with a lender. Nothing more. That isn’t to say a talk with your mortgage broker about options is a bad thing. It’s just that when it comes to your transaction, it carries little weight.

That said, a pre-approval letter is truly valuable! Both the buyer’s credit (and documents) have been verified by a reputable third party and accepted by the lender.  Sellers want pre-approved buyers. Period.  A lender who pre-approves a buyer runs their actual credit and verifies their income and assets. That’s a major difference since agents and sellers view a pre-

approval as a more firm start to the home-buying process. Ideal buyers are pre-approved – and in a hot real estate market like ours, it can really make a difference.

So whether you’re buying or selling, this really is an important distinction. I hope this has provided a bit more clarity for you

If you have any interest in knowing more about the lending process, real estate in Carmel, Pebble Beach and the Monterey Peninsula, please email buffllagrange@mac.com your email address OR your name and mailing address and I can send listing updates or more corresponding articles.  And certainly you can call me to discuss any questions at 831-594-6566.


Location, Location, Location.

Location, Location, Location….where to buy a home in Carmel, CA

I’m sure you’ve heard this term hundreds of times if you have ever purchased real estate. It still rings true for buying a home! Location is key for investment purposes, and even if you don’t intend to sell your home for many, many years, it will be important at some point.

Carmel by the Sea is a destination, a charming little village in central California that sits on the bay and is adored by people worldwide. To own a home in Carmel is to many people a thing they only dream about. I’ve discovered this fact over years of travel, as when I am asked where I live, I get that very response when I say “Carmel”. I’d like to point out though that there are several neighborhoods of Carmel that the average visitor never hears about or sees.

A home purchase in Carmel will be dictated possibly by price, which could have a bearing on location as well. For instance, a purchase price of $995,000 will not get you a home on Scenic Drive across from the beach, but for that price you can find a small home close to town, within walking distance to shops and restaurants. This is an important factor for many people who buy in Carmel by the Sea. They request to be close enough to town to walk to it, and also walking distance to the beach. There are several neighborhoods that give you this proximity, and many people never see these areas of Carmel. Carmel Woods is one, and Hatton Fields is another for example. Both areas afford you a little more lot size than homes closer to town, and therefore more privacy, potential for more square footage, and more value for your money. Many homes in these neighborhoods can have nice ocean views and yet they are less than a mile walk to town.

If you want to be closer to the beach, there is an area that is situated around the River Elementary School, which borders on Carmel Point and has some great homes and great prices for Carmel. You will find homes here more in a range of $1,295,000-2,395,000, and again lot sizes are larger for the most part than in Carmel proper.

Then, there is the “Golden Rectangle”, a much sought after area of Carmel that is located south of the main street of Ocean Avenue, west of Lincoln Street and extends towards Carmel Point. This area as well as Carmel Point just south of it, are the locations that have inspired many buyers to stretch upwards to another price level for a home. Occasionally there are “fixer upper” cottages available in these neighborhoods, starting at a low price of $1,700,000 and ranging up to $15 million for beautifully remodeled or newly constructed ocean front estates or homes just across from Carmel beach. But, the bulk of the homes are selling in the middle range of $1.7 million to $4.5 million.

If you have any interest in knowing more about these neighborhoods of Carmel or defining their locations, please email buffllagrange@mac.com your email address OR your name and mailing address and I can send you a map highlighting the different areas as well as recent sales for the corresponding areas.  Or certainly call me to discuss any questions at 831-594-6566.


Don’t be afraid of a “fixer upper”

Potential….Carmel CA “fixer Uppers”.

I think that many people are afraid of “fixer” homes and see red flashing dollars signs when the word is mentioned. True, there is going to be some money spent, but not always a lot if you are smart.

If you do your homework, familiarize yourself with neighborhoods and have a real estate agent you trust, it’s a good time to take advantage of some great prices on homes in Carmel-by-the-sea.

Many times just a fresh coat of paint, new carpet, a skylight, or new fixtures can really change the appearance of a home that feels neglected or tired. Changing out windows, or opening up a low ceiling can give a feeling of more space and light. I see such potential in so many houses that are on the market in Carmel, Pebble Beach, Big Sur and surrounding areas right now, you just need to see past what is front of your eyes, and have a vision as to what can be. I know that is hard for many people to do, but if you like an area, spend some time looking at homes for sale there, or friends homes, and make note of the things you like in those homes, the things that make you feel good when you walk in. Keep those things in mind as you look at potential purchases, don’t be afraid to open up the kitchen wall to the dining room…(that is of course if it’s not a bearing wall), or put in French doors that open to the yard instead of the small window that just looks out onto it.

If you know what you can and can’t live with, many times you can make do with the “dated” bathroom fixtures for a period of time, while you spend time and money on pitching the ceiling and refinishing floors.

The key is to know what you can and can’t do in terms of building codes or permits, and that is important and often easy information to discover. As a real estate agent, I work closely with lots of builders and trades people, so I have a readily available list of trusted people to call for bids and information to help me understand what costs are involved for my buyer’s or seller’s.

There are many instances when I see people buy a home that they love but have minor items they wish were different. Mostly they live with it because the house they are buying is costly, has just been remodeled and it doesn’t’ really make sense to change the counter tops or bathroom fixtures that are nice but just a color they don’t love. Now, if you buy a “fixer”, even a slight fixer…..you can have it how you want it. In the end, you get a home that you can truly make your own, one you can personalize with your tastes and needs for your living space. I say, don’t be afraid…be informed, be wise, but don’t be afraid of a fixer.