3 Costly Cases of Hot Market Wishful Thinking – Fabulous Article

I truly enjoyed reading this blog because I’ve been faced with this challenge in my own Real Estate career.  It’s one of the hardest conversations to have.  Please enjoy – and I added my 2 cents in italics.

 

3 Costly Cases of Hot Market Wishful Thinking

 

“Oh, how I wish. . .” started no wise real estate decision ever. There’s a reason they call it real estate, folks. That’s because we’re dealing with the most tangible type of property around – land – and the buildings that, formally speaking, represent improvements to that land.

Attempting to apply fantasy-realm wishes to real-life, real land situations is never a setup for success. But when the market is hot and you have a goal or a timeline, engaging in wishful thinking is not just foolhardy – it can be costly.

As evidence, here are three common, costly cases of wishful thinking that tend to arise in areas where the market is hot, offers are plentiful and prices are rising. Consider these red flags and take heed in the event you find yourself engaging in any of them:

1. Wishing the house you’re seeing was in a different neighborhood. You’ve seen 2 dozens houses, and put in offers on a dozen. No dice. And your agent keeps pushing you to look in a lower price range, assuring you that you can find what you want. And then they show it to you: safe neighborhood, good school district, good commute to work, just the house you wanted, really – but not in the tony hills or hot downtown district you’ve been trying to get into.

Wishing that you could “pick the place up and set it back down” in your desired neighborhood will not make it so, no matter how many times you say it. The reality is that when you have been outbid a double-digit number of times, something about your approach is not working. You either have to downgrade your specs in terms of the property you seek, maybe looking for something smaller, a condo instead of a single-family home or something in less-pristine condition or you need to shift your location criteria – and that can mean a neighborhood change.

Part of the reason this wish is dangerous is that the white-hot markets in many towns are hyper-localized in the Most Desirable Neighborhood in Town. That’s where the competition among buyers and bidding wars are the most intense. If you’re not prepared to house hunt for homes quite a bit lower than your top dollar to set yourself up for success, or if there simply are no homes in that neighborhood listed below your top dollar, you might need to face the reality check that you simply can’t afford to buy there now.

Stop wishing the home you can afford were in a different neighborhood, because if it were, chances are good you wouldn’t be able to afford it, either! Understand that you’ll be able to level-up your neighborhoods as time goes on and you buy your next home – and the one after that – and don’t let your inflexibility paralyze your house hunt so long that prices all over town rise even more.

A friend once told me – if wishes were horses – we’d all be riding.  Don’t be the buyer on the horse.  Buying in the San Francisco Bay Area is one of the hardest markets to get in to and catch up with.  If you cannot buy where you thought you wanted to live – look around – we’re still in the Bay Area and as prices increase – it will increase across the board.  Talk with your Realtor to find the next up and coming area.

2. Hoping that perfect house gets no other offers, even though every other house you’ve bid on has had 54. There’s a fine line between wishing something were true and denying the reality of what actually is true. Facing reality, even when it’s painful or means you can’t have what you want, allows you to make your own action plan for getting the best possible results with the resources you have – or a plan for getting more resources, whichever route you choose to go.

As a buyer in a seller’s market, actually as a buyer in any type of market, it’s ultimately up to you and only you how much you offer on a home. Your mortgage broker can try to get you qualified as high as your income will allow, your agent can get you the comps and give you strategic advice on the average list price-to-sale price ratio, but you are the be-all and end-all decision-maker on offer price, and that’s as it should be.

But if you wield your weighty decision-making power to make lowball or at-asking offers in situations where you are virtually guaranteed to run into high levels of competition, that’s a poor use of your powers. Not only do you set yourself up for failure, you do so at the near-certain likelihood of adding to the demotivating, depressing, discouraging momentum of the times when you get overbid despite giving it your legitimate best efforts. That frustration often leads to analysis and calling a house hunting time-out. And that, in turn, often leads to buying at a time when prices are even higher, and getting ultimately even less home for your money.

I have heard this exact comment and was speechless for a moment.  You cannot wish away the competition.  And asking your Realtor to find a house no one is bidding on – is nuts.  Stop wasting your time and that of the professional you hired and own the fact that you want to buy a home and so does everyone else.  Instead of beating yourself and your Realtor up – think outside the box.  The Caton Team has several offer strategies to set your offer above the rest.  

3. Wishing prices weren’t going up so fast. Here’s the deal: when prices were flat or falling, buyers were (understandably) stressed at the prospect of buying a depreciating asset. Now that they’re ascending, it’s not at all uncommon to hear buyers bemoan that, too. The fact is, the moment escrow closes and your Facebook status changes from house hunter to home owner the fact that prices are rising, and fast, will shift in your mind’s eye from curse to blessing, quick-like.

Rising prices and a recovering market might be what emboldened you to buy, empowered you to sell a formerly underwater home, and certainly have been inextricably intertwined with the increase in jobs. If prices weren’t rising, many of these other things might not be materializing, either, and that wouldn’t be so great.

Wishing prices weren’t going up so fast contributes to a costly form of denial – denial of the reality that they are. This can cause buyers to persist in making lowball offers and wasting their precious time on homes they can’t compete for within in their budget range, all while their smart targets are appreciating rapidly – and that’s how people get priced out of the market, right under their noses.

Don’t let your home buyer dreams fall prey to this costly wish-based pitfall. Work with your agent to stay in the loop about how prices are trending throughout your house hunt, and use that knowledge to power your decision-making about what price range to house hunt in and what price to offer for target properties.

Prices rising means recovery is in full swing.  I totally agree with Tara, it was interesting to watch buyers hang on the fence instead of buying during the bust.  Homes were so cheap – low competition – and there was so much inventory.  But it was scary for some people.  Me, I was born and raised on this blessed peninsula – so I always knew we’d recover.  Jobs, culture, weather – all the factors are here.  So, if you want to buy a home, give your Realtor a call – don’t have one?  Call The Caton Team.  We’ll sit down and review your plans and help you come up with a path to attain your goals.  650-568-5522.  

ALL: What are your real estate wishes, and how do you ground yourself in reality?

Thank you Tara for another great read!

I read this article at: http://www.trulia.com/blog/taranelson/2013/11/3_costly_cases_of_hot_market_wishful_thinking

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

5 Ways to Pick the Perfect Time to Sell – Great article I had to share

5 Ways to Pick the Perfect Time to Sell

I truly enjoy Tara at Trulia’s blog – please enjoy this article…

 

Smart sellers spend a whole lot of time and energy strategizing about how to sell their homes for top dollar. They factor in buyer demand, the competition, the job market, the mortgage market and their agent’s track record. And that doesn’t even account for all the time spent understand recent home sales in the area as an indicator of how local buyers will react to this listing.

Many a smart seller will also try to time their listing just right, too. And most often this looks like waiting until they feel buyers are sufficiently ready, willing, and able to pay a good price for the property. One timing consideration that sometimes gets short shrift is this: the calendar.

There’s a season for everything, as you might have heard. And recent Trulia data revealed some powerful geographically-specific seasonal trends in search activity for homes, adding proof to what agents have long known – the calendar portends various shifts in buyer activity, which sellers need to note. If you’re gearing up to list your home for sale, you should definitely take advantage of this interactive tool we’ve created to help you understand how these shifts play out in your area, and connect with your agent to discuss whether and how you might want to factor that into your home sale action plan.

But there are also a number of calendar-based factors you should just be thoughtful about as you put your plan for selling together. Here are a handful of calendars that should be – and stay – on every home seller’s radar screen:

1. The Academic Calendar. Families with school-aged children often find it less disruptive to house hunt in the late Spring/early Summer with the aim of moving in before school starts. Of course, we all know what they say about the best laid plans, so by no means should you let this stop you from listing your home at another time of year. Just know that demand for homes with convenient proximity to strong schools can uptick during the summer school break and around other times of year when kids are not in school.

2. The Tax Calendar. I cannot count the number of relatively unmotivated, looky-loo type buyers I’ve worked with over the years who got sudden, intense motivation from a massive, looming tax bill. For instance, many new professionals will seek to close escrow on homes between the time they graduate and the end of that same year, in an effort to deduct their closing costs and mortgage interest from their newly large incomes and avoid a big tax bill the following April. Similarly, just after tax time in April, a flood of newly motivated buyers come into the market, advised by their CPAs that the mortgage interest deduction is their best bet for not having to write as big a check to the IRS next year.

Fortunately for sellers, more buyers and more motivation means more demand and – all other things being equal – can translate into a faster sale at a higher price than at other times of the year.

3. The Weather Calendar. Many sellers who live in cold-weather climates are aware that wintry weather conditions can dramatically cut down on the numbers of buyers who are out viewing properties. This is why buyer searches for homes on Trulia peak earliest, in January, in warm-weather states like Hawaii and Florida – and not until after the Spring thaws in the Midwest, the South, the northeast and most of the West.

But what’s not as obvious is that the combination of what’s happening on the weather calendar and the specific features of your home can interact to impact your home’s prospects for sale – and its ultimate sale price. Behavioral economics researchers have found that homes with swimming pools sell for more in the summertime than they do in the winter. “When it is sweltering outside, a swimming pool just looks attractive. There’s an emotional connection because it reminds us of fun times we have in the summer,” said Jaren Pope, one of the study’s authors and an assistant professor of economics at Brigham Young University.

So, if you’re selling a home with ski slope access in the summer, you might want to paint the picture of a cozy, fun-filled winter by staging the place with ski gear and other items that help prospective buyers visualize how much fun they’ll have when winter comes. And vice versa -if you’re selling a pool house in the winter, consider making sure it is steamy and heated, if it has those features. Stage it with lounges, towels, lights – anything that showcases the pool to offset cold-weather buyer’s psychological tendency to discount the appeal of a pool in the winter.

4. The Holiday Calendar. During the holidays, many buyers simply prefer to spend their downtime celebrating with family and friends vs. house hunting, especially in locales where the winters are wet or cold. Our listing search data backs this up: nationwide, December is the slowest month of the year for home searches, and November is the second-slowest.

Does this mean the holidays are a bad time to have your house on the market? Not necessarily: some homes just show beautifully when all lit up and tastefully dressed up for the holidays. And the truth is that there is a hardy contingent of buyers motivated to close by year’s end for tax purposes, every year in every market. While buyers might be fewer in number, those who will brave rain, sleet and snow and forego holiday parties to house hunt can be some of the most motivated buyers of all.

5. The Gregorian Calendar (the regular old January through December calendar, that is). A survey just released by Fidelity Investments revealed that 54% of Americans said they typically consider setting New Year’s Resolutions related to their personal finances. This year, 26 percent of respondents said they are in a better financial situation today than last year (only 19 percent said so in 2012) and 28 percent say they are less in debt (vs. 25 percent in 2012).

Home buying tends to be a popular resolution among those with money on their minds at this time of year – and also among people looking forward to career promotions, developing their love and family relationships or relocating to a new home town.

 

I found this spot on – and if you are interested in more local information for the San Francisco Peninsula – we, The Caton Team – are happy to help.  Please call our email anytime.

 

I read this article at:  http://tips.truliablog.com/2014/01/5-ways-to-pick-the-perfect-time-to-sell/?ecampaign=cnews201402A&eurl=tips.truliablog.com%2F2014%2F01%2F5-ways-to-pick-the-perfect-time-to-sell%2F

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

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Please enjoy my personal journey through homeownership at:

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

Is Market Recovery Slowing Down? Great Article from SF Gate

Great article about our local Real Estate market – is recovery slowing down?  Or is supply holding back the reins?

Signs of possible slowdown in housing recovery


By: Kathleen Pender, San Francisco Chronicle & SF Gate

Bay Area home prices rose on a year-over-year basis last month, albeit at a slower pace than earlier in the year, while sales fell to their slowest pace for a December since 2007, DataQuick reported Wednesday.

It was another sign of a potential slowdown in the housing recovery.

On Tuesday, the Mortgage Bankers Association lowered its forecast for 2014 mortgage originations, citing higher interest rates and uncertainty over new mortgage rules that took effect this month.
DataQuick attributed the sales slowdown to a lack of supply, not a lack of demand.
“Demand has been impacted by a roughly one percentage point increase in rates since spring. But we think the bigger deal is the lack of inventory,” DataQuick spokesman Andrew LePage says.
In the Bay Area, 6,714 new and resale houses and condos were sold in the nine counties last month. That was up 0.8 percent from November but down 12.7 percent from December 2012.
Sales are typically higher in December than November, but the seasonal increase is normally much higher – around 8 percent.
The December sales figure was the lowest for a December since 2007, when 5,065 homes sold.
The median price paid for a Bay Area home last month was $548,500. That was down 0.3 percent from November, but 23.9 percent higher than the same time last year. From April through August last year, prices rose 30 percent or more on a year-over-year basis.
More sales in spring

LePage says there will be more homes on the market in spring and summer, when the market typically heats up. Rising home prices will leave fewer homes underwater, so more homeowners will sell because they could make enough to pay off their mortgage. Also, there has been “a little more construction,” LePage says.
“Waiting (to buy a home) will get you more choice, but all bets are off on prices,” he says.
If the current rate of appreciation holds, “the typical home would be selling for $50,000 to $60,000 more by spring.

Perhaps twice that at the upper end of the market,” DataQuick President John Walsh said in a news release.

Tight inventories are also hurting the mortgage industry.

In its forecast Tuesday, the Mortgage Bankers Association predicted that only $1.12 trillion in home loans will be originated this year, down 36 percent from $1.76 trillion in 2013. In October, it predicted that 2014 originations would drop by only 32 percent.

The forecast came out hours after mortgage heavyweights Wells Fargo and Chase announced big drops in fourth-quarter mortgage originations as part of their earnings reports.

The numbers “just kept getting worse through the end of 2013,” says Michael Fratantoni, the association’s chief economist.

The association predicts that home-purchase mortgages will rise just 3.8 percent to $677 billion this year. In October, it was expecting a 9 percent increase.

Refinance originations, it says, will hit only $440 billion, down 60 percent form last year. In October it expected a 57 percent drop.

Higher rates a drag

The main culprit is higher interest rates. Mortgage rates were around 3.5 percent at the beginning of last year but jumped by a full percentage point in May and June. They have been hovering around 4.5 percent since then.

The immediate effect was to slash refinance volume, but home-purchase originations also suffer from a low-rate “hangover,” Fratantoni says. The ultra-low rates that persisted before May “pulled forward some (purchases) that might not have occurred until six months or a year later. Now we are now we are seeing a bit of a payback in terms of lower activity.”

The association predicts that the average 30-year mortgage rate will be above 5 percent by the end of this year and above 5.5 percent at the end of next year.

It also predicts that fewer mortgages could be made this year as lenders narrow their product lineup to conform with the new mortgage rules designed to outlaw some of the abusive lending practices that led to the financial crisis.

The new rules give lenders some protection from borrower lawsuits if they make what is known as a qualified mortgage and the loan goes bad. A loan is not qualified if it has certain features, such as interest-only payments, or if the borrower’s total debt payments (including the mortgage and other debt) exceed 43 percent of gross income.
Over government limit

The new rules apply only to jumbo and other nonconforming mortgages, because all loans that could be bought or backed by Fannie Mae, Freddie Mac, the Federal Housing Administration and other government agencies are automatically deemed qualified.

Government loans account for the vast majority of the mortgages nationwide but a smaller percentage in the Bay Area, where many borrowers exceed the government limit, which tops out at $625,500 for Fannie, Freddie and FHA loans in high-cost areas.

In the Bay Area, 15.4 percent of home-purchase loans exceeded $625,500 in the fourth quarter, but this number ranged from less than 0.4 percent in Solano County to 32 percent in San Francisco, according to DataQuick.

Kathleen Pender is a San Francisco Chronicle columnist. Net Worth runs Tuesdays, Thursdays and Sundays. E-mail: kpender@sfchronicle.com Blog: http://blog.sfgate.com/pender Twitter: @kathpender

I read this article at: http://www.sfgate.com/business/networth/article/Signs-of-possible-slowdown-in-housing-recovery-5146631.php
Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

Want Real Estate Info on the Go? Download our FREE Real Estate App: http://thecatonteam.com/mobileapp

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

What Will Waiting to Buy a Home Cost You?

What Will Waiting to Buy a Home Cost You?  Great article from Realtor.com

At the end of June, mortgage rates for a 30-year fixed-rate mortgage jumped to 4.5 percent, up from 3.9 percent on June 1 — and a notable jump from the historically low 3.35 percent monthly average rate toward the end of 2012. However, while higher rates do mean an increase in monthly mortgage payments, experts are urging potential home buyers not to resign themselves to renting for the next few years just yet — it’s still a good time to buy a home.

These moderate increases in payments may still be manageable, particularly if buyers look at less expensive properties, or negotiate a lower price.

For example, the difference in monthly payments for a $200,000 home at 3.9 percent and one at 4.5 percent is just $70.03. If budgeted correctly, this could be a manageable expense.

Rick Allen, chief operating officer of Mortgage Marvel, is one expert who says now is still the time to buy a house. His platform records online mortgage loan applications, about a million transactions a year, which serves as a barometer for how well the housing market is doing. He says that refinances are down, as to be expected with a rate increase, but that “shouldn’t scare people off.”

“Relatively speaking, rates are still at or near historic lows,” says Allen. “A 4.5 percent mortgage is still an incredibly attractive rate at which to finance a home. From a real estate perspective, we’re not far off from recent lows, and we’re heading to improve real estate values. The combination of those two factors make this still a good time to buy.”

As the unemployment rate continues to decline, Allen says we’ll see more potential homeowners enter the market as well. Though Allen says “theoretically, rates could go through the roof or back down to the floor” but he personally believes we’ll see rates around 5 percent through the end of the year.

This is the early stage of the recovery of the housing market, and the rising interest rates encourage potential home buyers to be more decisive, and act quickly. As more homes are bought, supply decreases, so prices may rise even further. So if you’ve been thinking about buying a home, don’t lose your confidence, but it may be prudent to act quickly as rates continue to rise.

My 2 Cents

I couldn’t agree more – and I am NOT trying to fear monger.  The truth of the matter is – no one has control of the Real Estate market.  We as a collective influence the market by our actions or lack of – but it the end – the market will move at its own pace.  In our experience, those trying to figure it out or ‘play the game’ generally miss the boat of opportunity. 

Instead The Caton Team has our clients consider what their overall plan is, and generally having a home to live in is pretty high on their list.  So we tackle the market in the moment and do our best to achieve their goal of homeownership. 

I read this article at: http://www.realtor.com/news/what-will-waiting-to-buy-a-home-cost-you/?cid=EML301130

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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Please enjoy my personal journey through homeownership at:

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Thanks for reading – Sabrina

 

Renters May Grow by 6 Million in Next Decade – Interesting Article –

I read this on DAILY REAL ESTATE NEWS and thought it was good to share.

Renters May Grow by 6 Million in Next Decade

Since the housing crash in 2008, the number of renting households has soared. Within the next decade,  5 to 6 million new renter households are expected to be formed, according to the National Association of REALTORS®.

Much of that increase may occur in the next two years.  Within that time, the U.S. Census Bureau predicts that renter households will grow from 38 million to 41 million.

“In general, across the country there are more renters now than there were two or three years ago,” says Wally Charnoff, CEO of RentRange.

Property management companies are booming, too. Officials with Real Property Management say the company has doubled in size over the past two years. The company has 230 offices in 47 states and adds an average of eight new franchises per month.

“Profound changes in the housing market have created significant demand for property management companies like ours,” Kirk McGary, CEO of Real Property Management, told HousingWire. “And it doesn’t look like that’s changing anytime soon.”

Charnoff adds that location may be a big driver for renters. With a shortage of for-sale homes nowadays, some families are being driven to rent in order to be able to live in a specific neighborhood with good schools, he notes. “Institutional investors have provided a lot of readily available property,” he says.

However, he adds that rising mortgage rates may prompt more on-the-fence renters to jump into home ownership before housing affordability moves lower.

 

What do you think this means for our real estate market?  Share your thoughts!

I read this article at:  http://realtormag.realtor.org/daily-news/2013/06/13/renters-may-grow-6-million-in-next-decade?om_rid=AACmlZ&om_mid=_BRufS1B8zTgy7W&om_ntype=RMODaily

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

1st-Time Buyers Losing to Investors – tell me something I don’t know….

If you are a home buyer in todays real estate market on the SF Peninsula – then you already know!  Cash buyers have come out in force and it feels like they are scooping up every house on the market.

Below is an article I read in the SF Chronicle.  It hit home hard.  The Caton Team has been writing offers, sometimes multiple offers for one client on several properties praying one will be accepted.  This market is nuts.  And before I hear anyone say – you must love it!  NO!  Realtors do not like this type of market.  We are human.  We may perform some superhuman stunts from time to time –  but we are human.  Realtors like stable markets with consistent growth.  Not manic markets – with ” one open house and offers are due on Monday” – markets.  If I am feeling the rush – I know my clients are – and for them – this is a new experience.  For the Caton Team – with over 25 years combined experience, this is just another day on the job.

So as you venture and read this article – I must add my two cents.  DO NOT GIVE UP!  Giving up and not getting an offer accepted has the same results – not keys to your new home.  But dusting yourself off and getting back on the horse to meet your Realtor at lunch to see the next new listing – now that’s tackling this market like a pro!  In our experience, buyers who are dedicated to becoming owners will get a house.  It may not be the house they dreamt about.  It may not have all the bedrooms they wanted or the yard they liked – but you can make all those things happen – once you get your house.  Curious what the Caton Team does differently for our clients – come on and and let’s talk!  Questions – email me at Info@TheCatonTeam.com

Enjoy!

1st-time buyers losing to investors

Many outbid by absentee owners in a rapidly rising market

By  Carolyn Said 

Hunter Mack and Nyree Bekarian are eager to buy a home for their growing family. They started looking when their son Emmett was a year old. Now he’s 2 1/2, and they have a second child due any day. And they’re still looking.

After seven years of marriage, Carlos and Robin Mariona felt the time was right to buy their own place and looked forward to leveraging his past Navy service with a Veterans Affairs loan. But their search stretched on for months, despite the loan guarantee. While their price ranges and target areas varied, these Bay Area families confronted the same reality once they started house hunting. They were consistently outbid, often by investors who paid all cash. Sometimes, even if they had the highest bid – especially in the case of the Mariona family and their VA loan – they were still rejected in favor of an all-cash offer.

“We’re people who want to commit to a place where we can live and grow together, but it hasn’t been possible,” said Mack, who teaches mechanical engineering at UC Berkeley. “We’re two mid-30s professionals who want to spend over half a million dollars on a home, but we can’t find anything, which is ridiculous. We’ve probably made 10 offers. At this point, with many homes, we’re not making offers anymore because we know we’ll be slaughtered.”

Eager to get their piece of the American dream while interest rates are low, many first-time home buyers instead are finding that they’re priced out of a rapidly rising market where they must compete with deep-pocketed investors.

Absentee home buyers now account for about 27 percent of Bay Area home sales, according to real estate research firm DataQuick. All-cash buyers (who overlap with absentee buyers) represent almost a third of sales. Historically, cash buyers were about 13 percent of sales.

First-time home buyers bought 36 percent of California homes sold in 2012, according to the California Association of Realtors. In 2009 and 2010 they represented 47 percent and 44 percent of the market, respectively. Over the past eight years, first-time buyers averaged 39 percent of the market.

Government-backed Federal Housing Administration loans, which are popular with first-time buyers because they allow for smaller down payments, accounted for 12.3 percent of Bay Area home purchases in March, according to research firm DataQuick. That was down from 20.9 percent in March 2012.

“In recent months the FHA level (in the Bay Area) has been the lowest since summer 2008, reflecting both tougher qualifying standards and the difficulties first-time buyers have competing with investors and other cash buyers,” DataQuick said in a statement.

Neighborhood impact

The strong investor presence brings up questions about the long-term impact on neighborhoods.

“I think it’s a shame that all these properties are going to investors and not to people who actually want to live there and be part of the community,” said Rachel Beth Egenhoefer, who along with Kyle Jennings set out to find a new home before their baby was born. She’s now 5 months old, and they’re still looking. “It’s easy for sellers to take the cash and run, but what about having people who actually care about the neighborhood and want to be there and invest in it?”

Maria Benjamin, executive director of the Community Housing Development Corp. of North Richmond, had similar thoughts. The preponderance of investor buyers, most of whom rent out homes, “creates a lot of absentee landlords and a high turnover in neighborhoods,” she said. “All that causes neighborhood instability.”

Then there’s the impact on the families that spend months looking for a home to buy while staying put – in sometimes less than ideal conditions.

Many prospective buyers “are being forced to just stay where they are renting and make do,” said Jennifer Ames, an agent with Red Oak Realty. “Most of my buyers are young families who have outgrown their spaces. They’re all just hanging in, trying to do the best they can with their circumstances.”

People seeking starter homes do have some things working in their favor. Besides the historically low interest rates, home prices in many areas are still far from their peaks. The Bay Area March median of $436,000, for instance, is about a third lower than the region’s $665,000 peak in summer 2007, DataQuick said.

Still, that window of affordability seems to be closing. The California Association of Realtors on Friday said the state’s “affordability index” (the percentage of home buyers who could afford to purchase a median-priced existing single family home in the state) dropped to 44 percent in the first quarter, down from 56 percent a year earlier.

“Higher home prices put a dent in California’s housing affordability,” the Realtors association said in a statement.

Location counts

The three couples seeking homes all have solid employment and can afford to spend from about $350,000 to $550,000 – typical prices for starter homes in this region. All are looking in the East Bay, which is more affordable than San Francisco and the Peninsula. Alameda County’s current median is $416,000; Contra Costa County’s is $346,000.

Still, prices continue to rise rapidly in most of the region, making the search more difficult. “The bottom line in the decent neighborhoods keeps getting raised,” said Patrick Leaper, an agent with Red Oak Realty. “Entry-level buyers are looking at prices going up 2 or 3 percent a month sometimes. That’s critical for somebody whose finances are (tight). They end up being priced out of the market or forced to go to areas or neighborhoods that they weren’t interested in before.”

Looking around

Sometimes expanding the geographic search is what it takes to land a house. That was the case for the Marionas, who started off looking around Albany, where Robin Mariona works for the Department of Parks and Recreation.

“For the amount of money we could spend, in Albany or North Berkeley we would have gotten a smaller place than our rental,” said Carlos Mariona, an IT director for a catering company. “We were at the cusp where everyone was moving a little more north as they got priced out – El Cerrito, then San Pablo, Richmond, El Sobrante. It seemed you had more bang for the buck there.”

After more than six months of house hunting and countless rejected offers, they found a house in the Richmond View area near Wildcat Canyon Park listed at $324,000. They offered $350,000, and Leaper, their agent, negotiated with the seller to accommodate their VA loan’s tight requirements of completing all termite work before the sale closed.

“We’re very happy,” Carlos Mariona said.

More-affordable areas

Despite rapidly rising prices, more-affordable pockets remain scattered around the Bay Area. For each county, here’s the town with the lowest median price in the first quarter of this year – and how much it’s changed since the same time last year.

County City Median price Q1 2013 YOY change
Alameda Oakland $310,000 48%
Contra Costa Bay Point $153,000 4%
Marin Novato $565,000 39%
Napa American Canyon $360,000 19%
San Francisco Ingleside Heights (S.F.) $410,250 58%
San Mateo East Palo Alto $356,000 27%
Santa Clara East Valley (San Jose) $377,500 28%
Solano Vallejo $175,500 28%
Sonoma Forestville $261,450 -3%

Source: ZipRealty

Read more: http://www.sfchronicle.com/realestate/article/1st-time-buyers-losing-to-investors-4512891.php#ixzz2TJ56qE00

I read this article at:  http://www.sfchronicle.com/realestate/article/1st-time-buyers-losing-to-investors-4512891.php

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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Thanks for reading – Sabrina

What’s the Best Season for Home Buying? Great question!

Just today I was asked this very question.  “What’s the Best Season for Home Buying?”  And thought this article was interesting from the DAILY REAL ESTATE NEWS.  I must say though – when buying a home, instead of trying to figure everything out on your own, sit down with a Realtor, ask some questions.  We’re happy to meet with you.  Because truly, the time to buy is when you – as a buyer – are ready to do so.  These days (2012 and early 2013) the housing market is competitive no matter what time of year it is.  On average, buyers entering the market today are faced with a minimum 3-6+ month house hunt due to a lack on inventory and an abundance of buyers.  So writing several offers on several homes over the course of several months is standard operations these days.  If you are ready to become a homeowner – jump in and get started.  So much to learn, so much to see – The Caton Team is happy to help!

Enjoy this article…

What’s the Best Season for Home Buying?

After the holidays, buyers tend to start getting more aggressive with their house hunting. Search activity usually peaks around March or April in most states, according to a new study of home searches from 2007 to 2012 conducted by Trulia.

In September, searches slow down. By December buyer searches ebb to their lowest point of the year.

“Home-search activity swings with the seasons in every state,” says Jed Kolko, chief economist of Trulia. “Buyers and sellers can use these ups and downs to their advantage. Sellers looking for the most buyers should list when real estate search traffic peaks. Buyers, however, should think about searching off-season, when there is less competition from other searchers.”

The study revealed seasonal patterns of search activity state to state. Here are the months when online real estate searches peak in every U.S. state:

  • January: Hawaii
  • February: Florida
  • March: Arizona, California, Delaware, Georgia, Idaho, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, Ohio, Oklahoma, Pennsylvania, Virginia, Washington
  • April: Colorado, Connecticut, District of Columbia, Illinois, Indiana, Kansas, Minnesota, New York, North Dakota, South Dakota, Utah, West Virginia, Wisconsin
  • May: Real estate activity does not peak in any state
  • June: Mississippi
  • July: Alabama, Alaska, Arkansas, Louisiana, Maine, New Hampshire, New Jersey, New Mexico, North Carolina, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Wyoming
  • August: Montana and Oregon
  • September-December: Real estate activity does not peak in any state

Source: “Trulia Reveals Best Home-Searching Season,” HousingWire (Jan. 29, 2013)

Sabrina’s 2 Cents:  In my experience, especially this year with our beloved 49’ers in the Superbowl, the market doesn’t really start to pick up until after Super Bowl Sunday.  It is funny to hear – but it is true.  We see the buyers get off the couch once the football season is over and listings start coming on the market.  We are ready when you are – give us a call or email!

I read this article at: http://realtormag.realtor.org/daily-news/2013/01/31/whats-best-season-for-home-buying?om_rid=AACmlZ&om_mid=_BRCsnAB8wncg3e&om_ntype=RMODaily

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina