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Jim Valentine: Real Estate’s confused sea

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Jim Valentine on real estate

Saturday, October 16, 2021

Real estate markets are very similar to an ocean in that they are made up of an infinite number of variables that create many different “moods”. We had a very strong “current” real estate market for most of the year. This situation is easy to spot and many have participated in it to keep it going. While there is still strong “flow” in the market, other factors are starting to stir it up a little.
On the ocean there is a situation known as the “confused sea”, which is defined as a severely disturbed water surface without a single, well-defined direction of wave motion. In such situations the waves go in all directions and create confusion. There are times in the real estate industry when we have such tangled maritime circumstances and it seems like we are about to step into such a time. What could be causing such confusion in such a strong market, one might ask?
The change in the population is interesting. We are seeing an increase in listings in several market segments. One can only wonder why they waited, but it is very likely that these new sellers will see the market weaken and want to intervene before it’s too late. The market may no longer be what it was, but it is still very strong. Buyers may be able to find a home now, but there are other factors that are causing the swirling waves.
Interest rates are rising, which affects the purchasing power of buyers who are restricted in their borrowing. They are still very, very low, but if they increase it can affect the market. There was a time when the interest rates were 18% and 9 points (1 percent of the loan) and we agents said if they ever get back to 12% we could make a living. Buying money from 2.5% to 3.5% is more psychological than financial, but it can have an impact. Other factors at play may cause it to climb a little higher, but it’s still much lower than the dynamic market from 2005 when we had 5 and 6% money.
Inflation has worked its way back into our vocabulary and can cause most of the disruption. The cost of living has skyrocketed ie gasoline, fuel oil / gas, groceries, electronics, cars, appliances, etc. The real impact on daily life is only just beginning to be recognized by the masses, with many public statements reflecting the possibility of this being long term and get worse. Higher cost of living affects creditworthiness.
It is still a good time to buy so that you can own your home and not have to be subject to rent increases or vacate the property because the owner wants to take advantage of this still great market. You can secure a very good interest rate and have stability in your payment. Sellers are more cooperative and therefore allow more conventional approaches to your purchase than the frenzy we had earlier this year which caused many to compromise their emotional and financial comfort to shop in a competitive marketplace. There is still competition, but not as insane. Northern Nevada’s economy remains strong, which is a good thing.
Confused seas have a greater impact on smaller ships. As a tenant, you will feel the confusion in the real estate market more than as an owner. Don’t overwhelm yourself, invest wisely and enjoy the American Dream while everything else is fine. We know from our 40+ years of property sales in Northern Nevada that the market will be cyclical. It always does. Slat the hatches, secure the loose items, and drive off. It makes the ultimate smooth sailing that you are about to experience that much sweeter. Get a plan to sell or buy your home with your realtor and work your plan out.
If you are clear about your wants and needs, you can achieve them in this market. Your clarity will help clear the confusion around you. Work your plan and enjoy the results. Those are the good old days!
When it comes to selecting professionals to assist you with your real estate needs … experience is priceless! Jim Valentine, RE / MAX Realty Partner, 775-781-3704. dpwtigers@hotmail.com

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A California court just returned real estate it took from a Black family in 1924. It could be the beginning of a wave of redistribution.

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California Governor Gavin Newsom shakes hands with Anthony Bruce after signing the law to return land in Manhattan Beach to his family.Ringo HW Chiu / Associated Press

  • The state of California has returned the land that it took years ago to the Black family.

  • It is the first time black Americans have recaptured land that has been taken from them by significant domains.

  • Activists want this to be a precedent, but there are logistical hurdles.

The Bruce family gets their land back. It is the first time black Americans have successfully reclaimed land that the government has taken from them, raising hope for families like her who have lost their homes throughout US history.

The family regains ownership through a law signed by California Governor Gavin Newsom in September. In 1924, the city of Manhattan Beach used a significant area to wrest land from the Bruces, says Newsom’s office. Eminent Domain is a law that allows the government to take privately owned land and recapture it for public use. The procedure includes compensation for the previous landowners, but otherwise they have no other choice of surrendering their property.

Newsom signed the land over to the descendants of Willa and Charles Bruce, who left Manhattan Beach after facing racial harassment from the Ku Klux Klan and their white neighbors in the early 20th century. Willa and Charles turned the property into the West Coast’s first black resort and named it “Bruce’s Lodge” when racial segregation kept them away from most other beaches.

The KKK tried to burn the resort down. White Manhattan Beach residents harassed resort customers.

The city seized the land, claiming they wanted to turn it into a public park – they never did. It remained as an empty lot before it was transferred to the state, then LA County.

The Manhattan Beach government recognized the racist motive for occupying Bruce’s Lodge twenty years later in an article for the Redondo Reflex newspaper by one of the city council members who voted for it, Frank Doherty.

“We thought the Negro problem would stop our progress,” he wrote in 1945. “We had to acquire these two blocks to solve the problem, so we voted to condemn them and build a city park there. We had to protect.” ourselves.”

The story goes on

There are still obstacles to the nationwide reclamation of Black Lands

The landmark case of the Bruce family inspires others who hope it will set a precedent. However, experts say proving original ownership can be quite a challenge.

Kavon Ward, the co-founder of Where is My Land group, helped fight on behalf of the Bruce family. She told the Washington Post on Monday that she heard from more than 100 people willing to argue that they have a legitimate claim to property that does not currently belong to them.

The land of Bruce’s Manhattan Beach was relatively clear – their historical claim to the property was well documented through their resort and the violence they were subjected to. Few other cases are supported by written history.

The historical confiscation of black property is at the center of the current disparities between black and white wealth in the United States. In the first quarter of 2020, 44% of black households owned their homes while 73.7% of white families owned their homes, according to the US Census Bureau. That gap is even worse in individual cities – for example, according to a study by Redfin, only about 25% of black families in Minneapolis own their homes.

According to the Federal Reserve, the typical black family owns only about 10% of the average white family’s wealth. Phenomena such as redlining and blockbusting – the effects of which will continue even after the Fair Housing Act of 1968 was passed – are also responsible for the stagnation of black home ownership and wealth in the United States.

When it comes to significant domains, this type of relationship with ex-black owned real estate is evident: even our most sprawling national icons, like Central Park in Manhattan, are not immune.

Read the original article on Business Insider

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2022 real estate forecast paints grim picture of housing market in Texas

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According to Realtor.com’s 2022 Real Estate Forecast, released Wednesday, demand from first-time buyers will outpace the domestic real estate market’s recovery as Americans stand a better chance of finding a home but face a competitive sellers’ market.

The year will also be a mix of housing affordability challenges and opportunities, as listing prices, rents and mortgage rates are expected to rise, according to the website.

Realtor.com predicts that home sales will hit their 16-year high in 2022, up 6.6 percent year-over-year. Buyers are expected to remain active and inventory for sale is expected to begin to rebound from the recent sharp declines. The real estate agent is forecasting record list prices, skyrocketing sales and limited options to sell homes as existing property listings lag behind pre-COVID levels. The supply shortfall in the construction of 5.2 million new homes could also shrink as builders continue to ramp up production, which is expected to increase by 5 percent year-on-year.

“Whether the pandemic delayed plans or created new opportunities for a move, Americans are poised for a tumultuous home buying year in 2022. With sellers expected to enter the market due to continued strong buyer competition, we expect strong growth in the Home sales at a more sustained pace than in 2021, “Realtor.com chief economist Danielle Hale said in a statement.

“Affordability will become increasingly challenging as rates and prices rise, but working remotely can expand search areas and allow younger buyers to find their first home sooner than usual,” continued Hale. “And with more than 45 million millennials in their prime ages 26 to 35 making first-time purchases by 2022, we expect the market to remain competitive.”

Sales in the Austin Metro real estate market are expected to increase 4.7 percent, with prices expected to increase 3%. Dallas-Fort Worth is expected to see sales growth of 8.3 percent on a price increase of 4 percent, El Paso is expected to see sales increase of 10.6 percent on a price increase of 5.1 percent, and the Houston Metro region is expected to be around 2.6 percent and 2.4 percent rise percent in prices. McAllen Mission is expected to increase 5.9 percent in sales and 5.1 percent in prices, and San Antonio is expected to increase 5.1 percent in sales and 3.5 percent in prices.

According to Realtor.com, potential sellers are increasingly planning to enter the market this winter, although affordability will play an increasing role amid rising mortgage rates and house prices. A growing economy, strong labor market, and flexibility in the workplace should enable first-time buyers to buy houses without breaking the bank.

Home buying could also become the more affordable option, Realtor.com said, with rents expected to exceed home prices for sale in 2022. Rents are expected to rise 7.1 percent and home prices 2.9 percent year-on-year. The home ownership rate is expected to increase slightly to 65.8 percent in 2022.

Recent survey data shows that over half (53 percent) of potential buyers planning to buy their first home within the next year are millennials, according to Realtor. This first time home buyer demand is expected to exceed both new and existing home ownership. Home buyers will face fierce competition for the next three years, real estate brokerage projects as millennials look for first-time homes, Generation Z increasingly enters the housing market, and more older Americans try to downsize.

Recent survey data also shows that 19 percent of potential sellers want to move because they no longer have to live near the office, up from just 6 percent in the spring, according to Realtor.com.

Realtor.com predicts that suburbs will continue to be more popular than large urban subways as home shoppers look for relatively affordable and larger homes. The typical 2,000-square-foot single-family home price rose double-digit years (16.7%) in October, meaning buyers may have to sacrifice additional space to afford a home in their desired area.

“Our housing forecast suggests we have another dynamic year of activity ahead of us, but 2022 will also be fraught with mounting pain as we progress from the peak of the pandemic to a new normal,” said George Ratiu, manager, economic research for Realtor.com said in a statement. “With most real estate markets going to be competitive by 2022, it’s important to remember that you are in the driver’s seat on your real estate trip.

“The bottom line for buyers is making sure you are on top of your schedule and budget – and especially for younger buyers making this massive financial decision for the first time,” Ratiu continued. “For sellers, consider your local market conditions and the likely increase in the number of homes for sale, and market your prices at a competitive rate.”

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Here’s why the luxury housing market is exploding in Metro Phoenix

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In the past five years, the average home price in the Metro Phoenix market has nearly doubled. The average home price in Phoenix is ​​$ 405,000, according to Redfin market data, compared to $ 215,000 five years ago. From April through June, homes across town had their lowest number of days on the market, down from 22 days in Phoenix.

According to Redfin market reports, the average retail price of single-family homes in Scottsdale is $ 900,000, up 20% year over year. In the paradise valley. The median median single-family home sold for $ 2.8 million, up 34% year over year and more than doubling since late 2016.

ALSO READ: The 5 Most Expensive Cities in the Arizona Real Estate Market

As of October 2020, 32.7% of Scottsdale homes have sold above list price.

The luxury real estate market is subject to the same trends as the rest of the market. Low inventory levels, supply chain issues with new builds and demand, and rising prices are affecting both markets.

At the same time, people are migrating to the county for the same reason as the rest of the luxury market. Maricopa County is one of the fastest growing areas in the country and much cheaper than other areas.

Babbi Gabel, founding partner of RETSY.

“The same house that someone here could buy for $ 6 million would have cost maybe $ 12 million in the Bay Area,” explains Babbi Gabel, founding partner of RETSY.

About half of the houses that Gabel’s customers are looking for are second homes.

But what makes a luxury house luxury? Gabel describes them as homes that are custom built, have bespoke finishes, or have a unique aspect, starting at around $ 1.5 million.

Five to ten years ago, Scottsdale and Paradise Valley weren’t a $ 5 million market; today, prices average between $ 4 million and $ 6 million. Increased material costs have led to more expensive conversions and new builds in the luxury housing market.

“We’re starting to see new builds in the $ 7 million to $ 20 million price range. That was completely unknown five years ago, ”she explains.

Buildable land also contributes to rising prices. In places like Paradise Valley, which is surrounded by inland land with no room for expansion, home builders are paying nearly $ 2 million per acre. In order for the new building to be profitable, they have to build at a much higher price per square meter.

Gabel says that like the non-luxury market, inventory is lower than ever, but demand is still high. She notes that she had 571 active listings in Scottsdale in 2020 and down from 333 listings in 2021. And like the rest of the market, homes have multiple listings and sell quickly.

“There are times when the luxury market does its own thing, but what we’ve seen in the past three years is just one insane market across the board,” says Gabel. “My partner and I currently have 20 buyers valued at over $ 2 million who are looking here in the Valley. We can’t find anything. “

She predicts that these trends will continue in the future.

She concludes: “In the next four to five years, growth and demand will continue to drive the housing market. Provided there is nothing unpredictable and interest rates or inflation do not go up. ”

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