Happy New Year!
As 2018 begins, what can you expect for the local and statewide real estate industry? Predictions vary from housing industry experts, but here’s what some of them are saying:
It’s all about inventory, even as demand remains strong.
While the economy and stock markets are doing remarkably well, housing availability remains a challenge, but that’s nothing new. Shrinking inventory is likely to be a major factor shaping the 2018 housing market. Yet, Realtor.com expects more houses could be for sale toward the end of the year, giving homebuyers a greater selection to choose from. “It looks like we could get to a point where we’re seeing growth in inventory sometime in the fall of 2018,” said Danielle Hale, chief economist for Realtor.com.
Meanwhile, demand for housing will remain a constant, resulting in rising prices. Watch for demand from a variety of clients, ranging from millennials, babyboomers and immigrants to foreign investors and even gen Xers who want a bigger house. Also, don’t forget about bankruptcy survivors who have waited out their seven-year year exile. Even with some people moving out of California for more affordable areas, demand will not wane.
Clients will still be eager to buy real estate because: home prices are appreciating and it’s a safe investment over the long haul; millennials need a home to raise their families; flips of older properties continue to provide returns; the economy is steadily improving under the Trump administration; foreigners are still eager to own U.S. property.
With the shortage in listings, homes may sell even faster in 2018. In 2017, 25 percent of homes in the U.S. sold in two weeks or less and one in five homes in less than one week. The California Association of REALTORS® recently reported that homes in San Diego County remained on the market for 17 days in November 2017, 19 days in October 2017 and 20 days in November 2016.
Mortgage rates will remain affordable.
Redfin expects the 30-year mortgage rate to inch up to between 4.3 and 4.5 percent for a standard, 30-year loan in 2018, which is still affordable for many buyers. Meanwhile, CoreLogic’s estimate is that the 30-year fixed will average 4.7 percent in December 2018. Mortgage rates are expected to slowly increase as a result of a portfolio reduction by the Federal Reserve. Back in October 2017, the Federal Reserve began reducing the size of its $4.5 trillion asset portfolio that includes $1.7 trillion in mortgage securities.
However, the combination of higher home prices and higher interest rates means mortgage payments will be higher in 2018 for the same home, which means a decline in affordability. For example, if mortgage rates rise to 4.7 percent toward the end of 2018, and the median price of existing homes rises by 4.1 percent, then monthly mortgage payments for a typical house would be higher. According to CoreLogic, monthly payments of principal and interest rose 13 percent in 2017, compared to 2016.
On the other hand, expect more options for buyers with credit issues. A growing number of lenders will offer interest-only mortgages, and even loans with limited income documentation. Some of these mortgages are dubbed “non-QM” because they don’t meet Fannie Mae’s and Freddie Mac’s plain-vanilla “qualified mortgage” rules.
No housing bubble in sight.
Home prices are expected to climb modestly, but not as fast. Home-price appreciation is expected to cool down in 2018 after a torrid couple of years, which is good news for first-time buyers.
No bubble is predicted even in impossibly hot markets such as the Bay Area. That’s because buyers are still making large down payments or paying all cash and sellers are getting their asking price -- and then some. Overall, today’s average buyer has less debt relative to the value of their home than they did in 2006, before that infamous bubble burst.
Also, construction of single-family houses is expected to rise sharply in 2018. Take, for example, the city of Santee. Permits for 3,500 new homes are under review by the city. Currently, about 500 homes are under construction, which are part of 13 separate housing projects. In 2017, just 72 apartments, condos and homes were built in the city.
Tax reform not expected to deter most homebuyers and sellers.
Under the new tax reform law, buyers can deduct interest on mortgages up to $750,000 for home bought after Dec. 15, which is down from the previous $1-million limit. (Homes purchased on that date or before aren’t affected.) That means a homebuyer with a 20 percent down payment can purchase a $930,000 home and still deduct all the interest. Even for a borrower who took out a $1-million loan at 4 percent interest, $30,024 of interest payments are deductible in the first year, leaving $9,656 that are not.
In most cases, if a buyer borrows a million bucks to get a home, the write-off is typically not their primary concern. For sellers, single homeowners can still exclude $250,000 of sale proceeds from capital gains taxes as long as they’ve lived in the home for two out of the previous five years. Couples can continue to exclude up to $500,000.
Growth in the economy.
Brad Inman is predicting the economy will grow like crazy. He cites that job creation is at record levels, unemployment is at a 17-year low, wages are feeling upward pressure and companies are investing at a fast and furious pace. He writes, “A backdrop of political uncertainty will not slow down the global economic thoroughbred that is galloping at a full run.”
The Calbre issued needed Guidelines for Unlicensed Assistants. Read more to find out about how they can or cannot be involved in:
-Cold calling -Open Houses -CMA's -Communicating with the public -Arranging appointments -Accessing property -Advertising, preparation, and delivery of documents -Trust funds -Communicating with Principles -Reviewing Documents
As real estate professionals representing home sellers who are expecting top dollar for their property, you have the opportunity to recommend home staging ideas that can improve the attractiveness and draw a premium price. But, the real fun is to heighten a home’s curb appeal with tweaks that cost very little money.
Although some believe that staging is optional, it really shouldn’t be. Com’on, why settle for a lower sales price if you don’t have to? Plus, a staged home sells faster. So, here are a few ideas on staging a home on the cheap without breaking the bank.
Declutter bedrooms for the photos or video that will be posted online. Remember, the benefits of staging go beyond appealing to warm bodies at an open house. That’s because most buyers first go online to first check-out a home for sale. Your goal is to give shoppers a visual picture of themselves as residents of that home. Consider maximizing space by removing some furniture and furnishings from certain rooms for the photo session, especially those rooms designated by the residents for storage. As everyone knows, it’s not easy for buyers to see past clutter. Plus, open space can make a home look bigger.
Make decluttering fun by hosting a 30-or-60-day packing party for your sellers as they prepare for their move to their future home. Order a pizza and request the sellers to pack-up any unnecessary or personal items, room by room, not needed for the next one-to-two months. Have a plan to store the packed items perhaps in a self-storage facility or in the garage until the home sells. Put away knickknacks. Keep in mind that buyers will be interested in your closet space, so tossing everything inside the closet to hide it away could make a home look like it lacks closet space. Often, people are amazed at how much space they have after their home is decluttered.
Sanitize and get the house sparkling clean. No one wants to see splattered spaghetti sauce, grimy grease or piles of crumbs in their potential new home. Every surface should sparkle, from shining floors and gleaming windows to clean counters and scrubbed grout. The extra effort will be worth the trouble. Wood cabinets can be refreshed to make them look new. And, don’t forget the baseboards, trim and floor corners. Give all floors a thorough cleaning and steam-clean the carpets if necessary to get rid of pet odors. Hide the extra-loved pet toys and doggie bones when tours are scheduled. If wood floors are in poor shape, then the strategic placement of area floor rugs can go a long way.
Rearrange furniture in rooms with a single purpose in mind. Suggest to sellers that the best way to visually showcase their home may be to reposition some furniture, artwork and accessories in order to improve traffic flow or highlight a home’s distinctiveness and true potential. For example, some dining rooms can look larger without a desk in the corner and some bedrooms can look more inviting with a comfortable armchair recliner in a sitting area. Also, bathrooms can look prim and polished with rolled-up towels, decorative baskets, candles and new shower curtains. Be sure to replace any broken toilet seats and paper holders. New pillows that match the couch can be an effective thematic element. The goal is to highlight rooms for their intended purposes as places of relaxation and comfort.
Spend extra time arranging the kitchen, which some might consider as the most important room in a home. You might want to display a cookbook on a stand on a kitchen counter and have it open to a fun recipe. Also, a basket of fresh farmer's market produce on the kitchen counter can be the right touch. A blank dining room table might be perceived as boring. Instead, set it for a dinner party to create a wow factor when potential buyers see your beautifully arranged table.
Take advantage of your home's natural light. Open all curtains and blinds for open houses and add supplemental lighting where necessary. Lighten-up dark areas with floor lamps equipped with high-wattage bulbs. Outdated or broken light fixtures can be cheaply and easily replaced. Great lighting can make a home look warm and inviting.
Spruce up the landscaping. Get the law mowed and trees and bushes trimmed. Display a welcome mat and add potted flower pots to a walkway or porch. Maybe replace worn-out house numbers. Perhaps hang a hammock or add a bench swing in the backyard. A couple of folding chairs can help potential buyers envision themselves relaxing. You never get a second chance to make a first impression and the goal is to record high favorability ratings from the greatest possible pool of prospective buyers. While we’re talking about yardwork, feel free to raid the yard for fresh cut flowers, branches, clippings of fern fronds that can be displayed inside vases or as a centerpiece.
Smells count. Take care of bad odors with a spray to deodorize the home. Present inviting aromas by baking cinnamon-coated apples or slice-and-bake cookies in the oven, or by burning vanilla-scented candles. Another idea is to grind a lemon in the garbage disposal to remove sink odors.
These tips will not only give your listing a facelift, but your sellers are likely to see a bigger return on investment.
A number of NSDCAR members, have alerted us that they have received fraudulent emails from someone posing as a CRMLS Compliance officer. The emails are sophisticated phishing attempts and should not be opened. Here is how to know if the notice is fraudulent: 1.The violation or warning does not come from email@example.com. Any legitimate violation or warning would come from that address. If you receive a CRMLS violation or warning from any address other than firstname.lastname@example.org, it is fake. 2.The violation or warning cites this MLS number: BB17171684. Any legitimate violation or warning CRMLS sends you would be related to one of your listings. 3.The violation or warning directs you to login to CRMLS. There is no link in a valid Violation Notice that requires a member to enter their log information. Here is what to do if you receive one of these emails: 1.Do not open the email. Review any violation/warning-related email subject line and sender address to determine its legitimacy. 2.If the email is fraudulent, delete it. 3.Under no circumstances should you enter any personal information into any site linked in a fraudulent email. Personal information includes your MLS login, credit card or bank information, or any other information you might want protected. CRMLS Violation Notices do not require that you login to CRMLS. CRMLS is investigating the cause of these fraudulent emails, and is experiencing a heavy volume of calls and other communications on this issue. Please do not contact CRMLS Support or CRMLS Compliance on this issue unless absolutely necessary. If you have safely deleted the fake email, we recommend you stand by for possible further communication on this issue.
By Dana Whittaker
A highpoint in our profession is winning a new client. But you won’t get picked if they don’t know about you. So, I would like to share with our NSDCAR REALTOR® members about the importance of including some personal information in your bio.
Whether it’s posted on the broker’s website, or your own personal website, your bio needs to include more than the sales-brochure-language, blah-blah boring platitudes about how hard you work and how honest you are. Does that differentiate you from any other REALTOR®? I don’t think so.
Sure, your business background is helpful. However, in addition, be transparent and share with the readers your personal goals, hobbies and family. Don’t be afraid to give them some info they can resonate with.
When you’re transparent, you invite trust by revealing that you have nothing to hide. You establish yourself as an honest, credible person in the eyes of others. There is freedom in transparency. The last thing your new client wants to see is for you to be isolated and hide behind walls in the shadows. Instead, show people that you are honest and authentic and you don’t wear masks. Integrity is when people honestly describe you as: “What you see is what you get.” Our business is all about relationships. And showing who you are can create relationships.
I know this to be true. I have won new clients because they later said to me, “I read your bio and I share the same goals as you do,” or “I have a family like you do,” or I have the same hobbies as you do,” whether it’s standing up on a paddle board or running marathons. I’m a mom, daughter, caretaker, sister and school volunteer, and our clients need to know that.
Another way I’ve won new clients is to take the initiative and create and put together a deal where no deal previously existed. I’ve learned that sometimes it works to not wait for inventory to come on the market. Instead, on behalf of a buyer, go out and find a property. Yes, there are owners who are thinking about selling, but they haven’t put their hands up yet. Yes, it took extra work, including knocking on doors, sending letters and calling on the phone. But, I’ve closed several deals for buyers because we found the home they wanted before the owner decided to sell. Make it happen with effort and persistence.
We work in a very rewarding and fulfilling industry. But, it takes a warrior mindset to be successful. There must be a willingness to move mountains and do whatever it takes to serve our clients well.
SAN DIEGO, Dec. 19, 2017 – The three-member Associations of Sandicor® MLS have agreed to a Memorandum of Understanding (MOU) as the first step towards a resolution to realign their MLS memberships to service the best interests of their respective association members. Sandicor® MLS is comprised of North San Diego County Association of REALTORS® (NSDCAR), Pacific Southwest Association of REALTORS® (PSAR), and Greater San Diego Association of REALTORS® (GSDAR). The MOU will be reviewed by a neutral third-party attorney who specializes in Association of REALTOR® and MLS representation to assist the parties in drafting a final settlement document. Although there are more steps that need to be taken before a resolution is reached, all parties involved support the details of this initial step which ensures that agent access to MLS information is at the forefront of the outcome. With this proposed resolution, NSDCAR and PSAR will join California Regional MLS (CRMLS), and GSDAR will operate as its own MLS. Each Association has acted with the intention of providing its membership with the most valuable MLS products and customer service. To ensure all members receive open access to as much information as possible, all three Associations have agreed to share data across both MLSs. MLS Subscribers will continue accessing MLS data and have the same level of access via Paragon, the software platform San Diego-area MLS users have been using for over three years, with no disruption of service. All three organizations have also agreed to keep the user experience the same for the members – the same look and feel that Sandicor® members have grown accustomed to will remain after the settlement takes effect for all members. In addition to keeping the Paragon system in place for all agents in San Diego County, users will have access to all listings and sold data for the entire county as well. This resolution will provide each Association with their desired MLS outcome. As such, NSDCAR and PSAR will become members of CRMLS, and GSDAR will operate their own MLS, to be named SDMLS (San Diego MLS). The name SANDICOR, as a distinct brand in the San Diego marketplace, will cease to exist. Both CRMLS and GSDAR’s MLS will share the same Paragon system, and will share their listing data with each other. It is anticipated to take at least 6 months for the new shared Paragon system to be built, but the new system will have the same design and functionality of the current system. The parties will continue to keep San Diego County agents updated on the settlement process. “This is a win for members of each Association,” said GSDAR President Bob Kevane. “Despite the philosophical differences between Associations that led to a parting of ways, our goal is for all members to continue to receive the same access, the same data, and the same MLS platform we’ve all grown familiar with.” Similar sentiments were echoed by NSDCAR Board Chair Michael Carunchio and PSAR President Sarah Heck. “We are confident this resolution will benefit NSDCAR members,” said Carunchio. “When all parties act in the interest of their users, it’s the agents and brokers who come out ahead,” added Heck. While the MOU is an expression of the intention of all the parties at this point, some modifications or amendments may be necessary in the future.