Dear Readers,  If your a homebuyer in this current market, you might be hearing that the market is slowing down right now. You might be thinking things will be different for me. Friends, family and co-workers may be telling you there is a shift happening and prices should be going down.  I'm here to tell you there is a simple and easy way to truly understand this market, it's called absorption rate. Take a look at the image below. You will see 3 columns each depicting a different market based on months of inventory (homes for sale). To discuss this further, the image above depicts 3 different markets. Each market is determined by the number of months a home sits on the market waiting to be sold. This number also tells us if home values can expect to appreciate or depreciate.  0-6 months of inventory is a sellers' market and we can expect continued appreciation because inventory is low and buyer demand is high.   6-7 months of inventory is a Neutral/balanced market and home prices will only appreciate with inflation.   7 or more months is a buyers' market and home prices will depreciate because there are more sellers than buyers and homes are sitting on the market longer. Let's go over a few examples to solidify your understanding of this simple concept that you can share with everyone, including your realtor, if they have not informed you already in the market you are looking to buy.  In one of the main Los Angeles zip codes 90011, inventory is turning over at 1.8 months. This means if a home goes on market today the soonest it will sell, or get absorbed by a buyer, is on average 1.8 months. This is anywhere from 1 day to 71 days, specifically in this zip code. Keep in mind Los Angeles is a unique market and this number changes from neighborhood to neighborhood. For example, let's take a look at the Highland Park market. During the pandemic many home buyers flooded to the North East LA region in hopes to find less competition amongst buyers. Highland Park saw historic price appreciation over a short period of time.  Currently the absorption rate in Highland Park is 2 months ranging from 0-159 days based on the number of homes active on market and homes sold over the past 6 months.  What is important for you to consider is what the data show regarding how long homes are sitting on the market within a specific period of time.  If homes are sitting on the market less than 6 months, then we are in a sellers market and can expect home prices to continue to appreciate, it's really that simple. So if I were to ask you what type of market we are in and what we can expect, your response would be; Sarah we are in a sellers market, because homes are being sold quickly, less than 2 months on market and we can expect continued appreciation because buyer demand is high and invetory is low.  To learn more about the market, the buying and selling process, reach out, we are here to help 😊

As a Realtor and Behavioral Scientist researching on behalf of our clients is always top of mind.  I was recently asked by one of our buyer clients "what can you tell me about the 10% down payment assistance program?" What I knew was very little so I put my researcher hat on and went to work.  Here is what I found out when I went onto the CalHFA website. After opening up the home page and reading thoroughly through the content, I went to the CalHFA preferred loan officers site. I knew I had to talk to the source! I called through the list of lenders until I found a lender that would speak to me. Juan Rivera, one of the lenders at Golden Empire Mortgage was very informative and walked me through the scenario I am about to share with you below.  The 10% down payment is forgivable when you qualify based on specific criteria and use one of CalHFA preferred lenders. Juan communicated with me that the big "challenge" of being approved for this program is the ability to purchase in the area where you are looking to live. The loan will have a limit based on a debt to income ratio of 45% not including any other debts such as car payements, credit cards, etc.  Let's walk through this example together (I'm going to assume you have visited the site and are familiar with the basic qualifications listed, first time buyer etc.).   1. A map is provided to conduct a search of the area you are looking to buy in. In Los Angeles, the maximum median income is $68,880 (See search example below). (retrieved from https://ami-lookup-tool.fanniemae.com/amilookuptool/) 2. We would take the income amount ($68,880, the low income area median approval amount not to exceed) and divide by 12 months = $5,666.67/month income. 3. The debt to income ratio for the CalHFA loan is a 45% debt to income ration = $5666.67 x 45% = $2,550 4. You would then minus all debts from the $2,550 (car payment, credit cards etc.) Let's say you have $500.00 a month in debts = 2550-500 = $2000 5. Your approximate mortgage payment would now be $2,000 approving you for a loan amount at $250,000. 6. Current program interest rates are at 5.75-6.25% Next you are ready to look for your new home valued at $250,000. This is where the challenge comes in. If your expectation is to purchase a home in Los Angeles or any other neighboring city, you can only purhcase up to $250,000.  If you have any questions please connect with us or our preferred lenders who are always here to help and answer any of your quesitons. Until next time, please keep sharing your quesitons and we will find the answers to best guide you.  It's what we do best. 🤓      

What is the Key To Building Wealth?? Some would argue its Homeownership Let's take a look... The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of the National Association of Realtors (NAR), says: "Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability." Here are just a few reasons why, if you’re looking to increase your financial stability, homeownership is a worthwhile goal. Owning a Home Is a Building Block for Financial Success A recent NAR report details several homeownership trends and statistics, including the difference in net worth between homeowners and renters. It finds: “. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.” To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter (see visual below): The results from this report show that owning a home is a key piece to the puzzle when building your overall net worth. Equity Gains Can Substantially Boost a Homeowner’s Net Worth The net worth gap between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as your home appreciates in value and you make your mortgage payments each month. In other words, when you own your home, you have the benefit of your mortgage payment acting as a contribution to a forced savings account. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month. To sum it up, NAR says it simply: “Homeownership has always been an important way to build wealth.” Bottom Line The gap between a homeowner’s net worth and a renter’s shows how truly foundational homeownership is to wealth-building. If you’re ready to start on your journey to homeownership, let’s connect today.

Everyone is asking...When will More Homes Come to the Los Angeles Market? According to a recent survey from the National Association of Realtors (NAR), one of the top challenges buyers face in today’s housing market is finding a home that meets their needs. That’s largely because the inventory of homes for sale is so low today. If you’re looking to buy a home, you may have noticed this yourself. But there is good news. Recent data shows more sellers are listing their houses this season, which may give you more options for your home search. Early Signs Inventory May Be Growing The latest data from realtor.com shows the number of listings coming onto the market, known in the industry as “new listings,” has increased since the start of the year (see graph below): This indicates more sellers are listing their homes for sale each month this year. And according to realtor.com, this growth is expected to continue. Their research finds the majority of potential sellers plan to list their homes over the next six months. Realtor.com says: “. . . markets may see a noticeable bump in the number of homes for sale as we move through spring and into summer. A majority of homeowners planning to sell this year indicated that they aim to list in the next six months, with almost 10% having already placed their properties on the market.” Homes Are Still Selling Quickly But while new listings are increasing, it’s important to know they’re also selling quickly. The latest Realtors Confidence Index from NAR shows the median days on market for recently sold homes since the beginning of the year (see chart below). The time on market has decreased month-over-month. That means homes are selling even faster than they did the previous month. What That Means for You While a low-inventory market is difficult to navigate as a buyer, there is hope. The growing number of new listings and the expectation more sellers will list their homes in the coming months is great news if you’ve had a hard time finding a home that fits your needs. Just remember, those new listings are going fast. That means you’ll want to keep your foot on the gas and be ready to act if you find a home you love this season. Your agent can help you stay on top of the latest listings in your area so you can find the home that’s right for you and submit your strongest offer as quickly as possible. Bottom Line If you’ve been having a hard time finding your dream home, stick with your search. More options are coming to market and your ideal home could be one of them. Let’s connect so you can stay up to date on the latest listings in our market, so you can be ready to move fast when you find the one that’s right for you.

FINDING THE RIGHT LENDER "Getting the best interest rate is what's most important" Right?  Or is it? We see it all the time. Clients out on their own start to throw around the idea of buying a home with no real guidance on the process. Just winging it!  They reach out to their bank and the banker asks them a couple of questions about income etc and poof they have a pre-qualification for $1,000,000!! Sounds great right? Or is it?  Well here's the thing... Buying a home in a competitive sellers market like we are experiencing here in 2021 is no small task. The Team you have representing your matters in this fast paced environment. This includes both your Agents and your Lender. Working together as a team is more important than ever. Not only that but the question arises about timelines during the actual escrow contract time.  So because of all of this I have put together a list of other important items that you should take into account when searching for the right lender to add to your home buying team.  Enjoy!  Questions To Ask Your Lender   Are you able to provide Direct Underwritten Loan approval? Your Agents will request an updated letter from your lender the day the offer is written with the exact offer price and date of the offer.   Will you provide Direct contact and communication between you my lender and my agent? It is very important that your chosen lender is available to speak to everyone directly.   Will you provide your personal Cell phone & Email contact info so that our Agent can include you on the offer email and will you be readily available to call Listing Team after the offer has been submitted?   Will you be available for the seller's Listing Team to answer questions regarding the loan and timelines, available by phone and email days nights, and weekends?   Communication on achievable Timelines - (This communication usually happens between your chosen Lender and Your Agent when writing the offer and is then approved by you but it is important to find out what they can achieve sooner than later)   COE - Close of Escrow What is the minimum number of days the lender will need to close escrow? -21 days or less is preferred. Appraisal Contingency - What is the minimum number of days the lender will need to complete the appraisal and have it back to the buyer to review and remove the contingency? 7-10 days is preferred Are they able to waive the appraisal contingency if requested by the seller in counteroffers? This is important in today's seller market. Are they able to get it done during the inspection contingency (7-10 days) if necessary? Loan Contingency - What is the minimum number of days the lender will need to complete the loan approval and have it back to the buyer and buyer's agent to remove the contingency? -14 days or sooner is preferred. Are they able to waive the loan contingency? This will help sweeten your offer with the seller. Seller Leaseback - Is the Lender able to approve a seller leaseback and if so for how long? (EX 29 or 60 Days) This oftentimes will be requested by the seller in the initial offer guidelines or during counters.   Hope this helps!  Reach out to us if you have any questions.  We would love to chat!  Best,  Brandon 

    Below is the estimated home price performance, and it’s from the Home Price Expectations Survey. Continued appreciation is expected through the rest of 2021 according to the report. With an expectation of nearly 11.74% This is a shift from the massive 18-20% appreciation that we have seen in the market over the past year. A more moderate pace through the rest of this year will to most buyers be a welcomed change.  Looking forward into 2022 through 2025 we’re seeing continued appreciation but at that more moderate pace. With expectations of appreciation in 2022 to be near 5.82% home prices should not start to show us any decline, they’re just expected to appreciate at a slower pace. The good news is that we will see the market yearly growth at a more moderate and healthy pace. Prior to 2020, we saw growth at a healthy rate and so this is what is expected to be experienced in the coming years.  With an overall cumulative Home value change to be at 31.8% through 2025 buyers can hopefully rest easy at night with some security they are still making a good financial decision in today's market.  Have more questions about the national (Macro) or local (Micro) market? Contact us today!