Blog – Page 2 – Wayne Ish Real Estate

Higher Interest Rates And The Housing Market

Rising interest rates bring a lot of expectations, and assumptions, about how they’ll impact the housing market. The biggest assumption is, “When rates go up, housing prices tumble,” creating a Buyers’ market overnight.

But is that what happens?

Well, no. Many factors affect the housing market at the same time. Interest rates are just one of those things. Others include a mixture of standard economic factors (like Jobs) and historical events (like a global pandemic.)

If you’re convinced that higher interest rates surely impact housing, you’re right. They’re just not the one thing. So when interest rates rise, the effect can be subtle depending on the other factors in the market.

This article will explain how we see the rising rates impacting the housing market for buyers and sellers – and you.

What’s Impacting Housing Market

Interest Rates

There’s been a lot going on in the economy over the last couple of years. Most notably, the giant elephant: the Pandemic. This unprecedented global event created economic chaos, but the Federal Reserve stepped in to soften the impact as much as possible.

One deviation from the Feds’ standard policy was keeping a steady flow of money to help the housing market. They did this by buying up Mortgage-Backed Securities.

The Federal Reserve acts to control the impact of inflation on the U.S. market. The actions they take to do this eventually move interest rates up and down. Low interest rates are an added benefit to the housing market. They make buying a home more attractive, and buyers can flood the market searching for their piece of the American dream.

When there are a lot of buyers competing for the available homes for sale, the effect of Supply and Demand forces is obvious. Home prices increase when demand increases.

But does the opposite effect occur when rates increase? Do housing prices come down, and competition go away?

Like we said before – no, not exactly. Even rapidly increasing interest rates won’t immediately result in home prices tumbling and buyers fleeing the market. And that’s because of all the other factors impacting home prices and buyers.

Buyer Motivation

Historically low interest rates are only one of the factors bringing more buyers into the housing market. But there are other factors to consider, including the number of millennials currently turning 40 – approximately 10,000 a day for the next nine years.

Not every Millennial is looking to buy a home. Still, many of them do want to purchase, and they have an unprecedented opportunity to find a home outside of commuting distance, thanks to the Pandemic’s effect on work-from-home options. It allows Millennials and other buyers to look for homes in more affordable areas.

This influx of buyers from outside areas keeps pressure on the supply-and-demand valve. Yes, rising interest rates do eliminate a portion of those buyers. But when faced with sharply rising rental prices, higher interest rates are seen as the lesser of the two evils.

Buyers may drop down to a lower price point in homes. They may pause their house hunting while saving more to borrow less. Those are two ways to mitigate higher mortgage rates’ effect on monthly payments.

Other, long-term forces are at play working to keep the supply-and-demand pressure on home prices.

Housing Shortage

According to a report by the National Association of Realtors, the U.S. has been under-building houses for almost the entire 21st century. They conclude that 2.1million homes need to be built annually for a decade to catch up to demand.

And that is not happening. For various reasons, many sourced back to the far-reaching effects of the Pandemic, home building is not on track to catch up with the backlog and increasing demand.

The shortage of new homes puts more pressure on the inventory of existing homes for sale. That’s where most buyers in the market for a home are shopping. Competition led to multiple buyers making offers on the same house, which led to those homes selling for more than the seller’s list price.

And home prices skyrocketed.

How will higher interest rates change this? It “might” reduce the number of buyers competing for every home. The remaining buyers might all go after the houses in the best condition in the best areas. Or, there may be buyers for most homes for sale – but less competition overall.

Any of these scenarios can result in a slowing in rising home prices. But, as you can see, the supply-and-demand imbalance will still be here while interest rates increase. So, the housing market may lose a bit of its headline-grabbing craziness, but it likely will not crash.

Don’t Forget About Jobs

Historically, jobs directly impact a local housing market. In a geographic area where the available jobs are steady, but no significant growth happens, housing prices remain relatively stable.

Buyers know how much they can expect to pay for a home, and they save with an end goal in mind.

What happens when there is a significant increase in new jobs? When the demand for workers to fill new roles is greater than the local population can supply, employers look out of the area for people to fill those roles. And these new neighbors need someplace to live.

If the new jobs provide adequate income, the workers look for homes to buy and compete for available housing with long-term residents. This causes the price of houses to increase.

Another way the Pandemic has impacted the housing market, as mentioned, is the influx of work-from-home buyers. New workers moved to more affordable areas without needing a new job. Over the long term, this availability of talented workers may cause large companies to create more jobs. But what if new workers move to a more affordable area without the need for a new job?

Bottom Line

Understanding all the factors influencing the housing market on a local and national level is essential. When interest rates increase, there is an impact on the housing market, but not necessarily in the way many frustrated buyers hope for – falling home prices.

Every city, area and neighborhood has its own varying degree of factors affecting the market. Demand, inventory and price range vary in differing areas, therefore, affects of interest rates may or may not affect a specific area as much. Ask your Realtor if they are experienced with the area your property is in, or where you want to purchase. He or she should be able to discuss all the factors listed above and more that will impact your decisions.

7 Ways to Upgrade Your Home Office

As we enter year three of working from home, that makeshift office doesn’t cut it anymore. Here’s how to upgrade your WFH space to make it feel productive — and more permanent.

More than two years into the COVID-19 pandemic, a whole lot of us are still working from home.

What we thought would be a temporary setup in 2020 has, for many, turned into the way we’ll be working for the foreseeable future. Experts say that even when the pandemic is a memory, many of us will work in a hybrid arrangement where we split our time between our home office and the company office. Some of us will never go back. One survey found a quarter of companies plan to move at least 20% of their on-site employees to permanent work-from-home positions.

As we enter year three of the work-from-home era, it’s time to upgrade our home workspaces to make them more functional, more professional and more comfortable. If you’ve spent months at your kitchen island, perched on a barstool and hunched over your laptop and a pile of papers, it might be time for a change. Here’s how to make your workspace work for you.

1. Designate a specific space

Not everyone has a separate room in their home they can turn into an office. If you’re in that camp, pick a space in your house and declare it your work area. Maybe it’s a counter in your kitchen, a corner in your bedroom or a spot in the living room. Wherever you choose, commit to it. Work there every day. (No hopping from spot to spot!)

Set up your chosen space to provide the environment you need to succeed, paying attention to everything from the lighting to the accessories.

2. Go for layers of lighting

The right lighting is crucial in a home workspace. Lighting affects your mood, your productivity and how you look during Zoom meetings. Don’t settle for a single overhead light. You need an array of lighting for specific purposes. Get an adjustable desk lamp for task lighting, so you can point a beam of light exactly where you need it. Add ambient light with a desktop or floor lamp that diffuses light through a shade or bounces it off a wall or ceiling. The goal: To bathe the entire space in soft light.

To help you look better on conference calls, consider investing in a ring light. This isn’t just vanity; it’s a matter of professionalism. When so much of our communication happens on a video conference instead of across a conference table, the people we are talking to need to see our faces clearly on screen. If you’re lucky enough to have natural light in your home workspace, great! Not only does natural light help your Zoom lighting (just be sure to sit facing a window), but it also can improve your mood and work accuracy and reduces drowsiness, headaches and eyestrain.

3. Declutter and organize

This seems obvious, but let’s be honest: When was the last time you cleaned your desk? Yeah, that’s what we thought. Well, now’s the time. Toss anything that needs to be thrown out, put those stray pens in one decorative container and file the piles of paper. Make sure you have all your workday essentials close at hand, and move all non-essentials elsewhere. Clutter can be a distraction, and dirty coffee cups and piles of dog-eared folders won’t look good on Zoom either. Cleaning up your workspace is not just about appearances, though. Research has shown that cluttered spaces can negatively affect our stress levels and hinder our ability to focus.

4. Mind your background

One of the early diversions of the pandemic was Room Rater, a Twitter account that praised and ridiculed the home setups of pundits who appeared on cable news channels on Zoom and Skype calls from their makeshift offices. Messy shelves and bad lighting received a 5 out of 10; nice art or styled bookshelves got a 9 out of 10. We all know the drill now — keep the background in your home workspace clean and uncluttered. If you have room, show off your style. Hang your favorite piece of art, or arrange a collection of interesting books and objects on your bookshelves. If you’re unable to change your backdrop, consider adding a filter to create a virtual one instead, or blur out your background so it’s not a distraction.

5. Get serious about your office furniture

It used to be that an office manager worried about ergonomics, the science of fitting the equipment to the worker. Now that’s your job. Make sure you have what you need to stay healthy and comfortable while working. Instead of slouching on the sofa hunched over your laptop, choose an office chair that supports your back and a desk that’s the right height for your frame. Try a standing desk, so you’re not sitting all day, and consider getting a monitor stand to elevate your screen for the most comfortable viewing. If you’re looking for a DIY solution, create your own monitor stand by using a few large hardcover books to raise your monitor. Investing in ergonomic furniture can keep you healthy by preventing carpal tunnel syndrome, muscle strains and lower back injury.

6. Divide a room for privacy

If you don’t have a separate room to dedicate to a home office, a room divider is an easy way to carve out a bit of privacy for your workspace in a larger room. Use a folding-style divider that you can pack up and stash at the end of the workday or curtains to create privacy. For a more permanent divider, use large, freestanding bookshelves to divide a room while giving you storage for your supplies. Dividers will screen out distractions, block some background noise and even provide a backdrop for Zoom calls. Consider adding a white noise machine or using noise canceling headphones to help block out even more background distractions.

7. Make your space your own

The best thing about working from home? This is your space. You don’t need to get approval from your boss or facilities to make the place you work reflect your personality. Hang art on the wall that matters to you. Surround yourself with tropical plants. Put your dog’s bed near your desk, so your best friend can snooze at your feet while you work. Set up an aromatherapy diffuser, and paint the walls your favorite color. Create an inspiration board and fill it with things that make you happy, like images of your family, friends and pets or pictures of your dream vacation spot. This is your space. If an object makes you happy, calm and productive, put it in your line of sight.

Real Estate Purchase Agreement: What It Is And How It Works

The process of buying or selling a home can be many things: exciting, stressful, overwhelming. But there’s no denying that the real estate process takes time – and a home purchase agreement can play a key role in helping speed things along during this unpredictable period.

In this guide we’ll explore what a real estate purchase agreement is, how it works and how it can help prepare you for your future.

What Is A Purchase Agreement?

A purchase agreement in real estate – also commonly referred to as a house purchase agreement, a home purchase agreement, a property purchase agreement or a real estate purchase contract – is a legally binding document detailing the terms of a real estate transaction. The interested buyer presents their proposed purchase agreement to the seller, and the seller has the ability to accept or negotiate with the buyer until both parties are satisfied.

This contract outlines everything from the offer, financing and settled-upon purchasing price, to details as small as which appliances or pieces of furniture may be included with the home. A real estate purchase agreement defines the terms and conditions under which a sale will take place, which can help govern the sale and expedite the overall purchasing process.

Although it may seem like a lot of work upfront, sorting out the details early on can help you should any unexpected obstacles pop up down the road. Real estate purchase agreements serve to protect the interest of both the home buyer and seller. They can help you keep track of the many factors that go into buying a home.

How Do Purchase Agreements Work?

Firstly, a real estate purchase agreement is typically drawn up by the buyer’s real estate agent. To ensure that the contract is legally sound, however, most agents are likely to fill out preexisting documents created by a law firm with the relevant contingencies and specifications requested by their client.

One of these specifications that is included in a purchase agreement is the “legal description.” This is the written articulation of the property or home’s boundaries and geography. A legal description will specify the precise borders of the home for sale and its exact location.

Purchase agreements are a part of what agents allude to when they talk about negotiating throughout the home buying process. They can be volleyed between the buyer and seller by using offers and counteroffers until all details are sorted and agreed upon by both parties. But once the buyer and seller are satisfied and agree upon the conditions stated in the purchase agreement, they are officially placed under contract in the eyes of the law.

What’s Included In A Purchase Agreement For A Home?

A real estate purchase agreement can seem like a lofty and intimidating piece of paperwork. But with the right agent and an understanding of what a real estate purchase agreement should look like, you’ll be well equipped for future negotiations.

Buyer And Seller Information

This is the most straightforward part of the contract for both parties involved in a transaction, as the buyer and seller information simply includes the full names and contact information of the buyer and seller.

Property Information

Property information is also a cut-and-dried portion of a real estate contract. This section should include a detailed description of the condition of the property being transferred along with its official address, and any other relevant details regarding the land and home.

That legal description we discussed earlier may pop up in this section and this is also the area of a real estate contract where disclosures, details regarding past completed home inspections and home warranty information is included. By law, homes built before 1978 are required to disclose information regarding any use of lead-based paint, as it’s been proven to be a safety and health hazard.

If there have been any previous home inspections conducted their findings will be placed here. Home inspections are a great tool to learn more about a property’s physical structure and foundation, the age of a home’s appliances and fixtures throughout the house – such as HVAC and plumbing. In addition, you’ll learn about the condition of flooring, doors, windows and other interior characteristics.

If the home includes a home warranty, information about it may be included in the real estate contract. A home warranty is a short-term service contract that will provide repairs or replacements for major appliances and systems in a home.

Home warranties typically only serve 1 – 2-year terms. Even if it’s expired, the details of a home warranty can help give the buyer a better sense of what work has been done.

Closing And Possession Dates

A real estate purchase agreement should also include the closing and possession dates. These are the exact specifications regarding when the sale’s closing has taken place and when the official transfer of a property’s title will occur, down to the hour. Any changes made to closing a sale should be written and documented.

The possession date marks when the buyer will receive the keys to the home and officially call it theirs. Outlining an exact date helps keep both parties organized and creates a deadline for the seller to move out by.

Pricing And Financing

This is where the meat and potatoes of a real estate contract is: the purchasing price and the buyer’s financing information. Here you’ll find the agreed-upon selling price for the home or property, along with any deposits that have already been made and additional costs associated with the sale.

The financing section will outline in detail how the buyer intends to finance their purchase of the property, whether with a third-party lender or by taking on the seller’s existing mortgage. Since most home sales that fall through do so due to financing, spelling out these terms exactly is a great way to expedite the home buying process and ensure that neither party will be taken by surprise.

Other Transaction Expenses

A purchase agreement can also include many other costs – a down payment, closing costs, earnest money, escrow details, and insurance or tax information. Let’s take a quick look at what these factors mean:

Down payment: The lump sum of money that goes toward closing or purchasing the home; the more money that is paid upfront, the less the buyer will have to borrow from a lender
Closing costs: Fees that come with the transfer of a property; can include real estate agent’s commissions, appraisal or home inspection fees, lenders fees, insurance and taxes. Closing costs typically make up 3 – 6% of the purchase price.
Earnest money: Also called a “good faith deposit,” earnest money is a deposit made by a buyer to show that they’re interested in a property and serious about buying. Earnest money is basically financial insurance for the seller. Should the buyer pull out of the contract before closing without a contingency being met, the seller will get to pocket the money. Should the contract go through, the deposit typically goes toward closing costs or the buyer’s down payment.
Escrow: Escrow is the withholding of money by a third party until a transaction goes through. In terms of a purchase agreement, the earnest money is typically held in an escrow account until the home sale is final or terminated.

Addendums

An addendum is an amendment made to the final purchase agreement – things that both parties agree upon, but were not included in the original copy of the contract. Adding these documents help keep the purchase agreement organized and easy to read and understand.

How To Prepare Your Purchase Agreement

A real estate purchase agreement is prepared by the buyer’s agent and we recommend enlisting this professional help. Although real estate agents cannot by law create a legal contract (something only practicing attorneys can do) they typically work with a law firm or have the contract drawn up and ready to be filled in.

Enlisting the help of a professional agent can be immensely helpful for negotiations or even just understanding what information to include or investigate further. Since it’s a legally binding contract, you don’t want to find yourself lost or floundering. Working with an expert along the way can help you avoid such situations.

The Bottom Line

A real estate purchase agreement is more than just the offer and final price. It’s a legally binding document that holds the buyer and seller under contract. In addition, it streamlines and organizes the home buying process while protecting and holding both parties accountable.

How To Buy A House When You Have Student Loan Debt

So, can you buy your dream house if you have student loan debt?

The common wisdom is bleak: student loans are preventing borrowers everywhere from living The American Dream. It doesn’t have to be that way, however. Here are 8 ways to maximize your chance of buying your dream home — even if you have student loan debt.

Student Loan Debt Statistics

If you have student loan debt, you’re not alone. There are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt, according to personal finance site Make Lemonade.

The same student loan debt statistics report also found that:

- Nearly 2.2 million student loan borrowers have a student loan balance of at least $100,000
- There is $31 billion of student loan debt that is 90 or more days overdue.
- There is nearly $850 billion of student loan debt outstanding for borrowers age 40 or younger

With student loan debt statistics like these, it’s no wonder some think it’s impossible to own a home when you are burdened with student loan debt.

Not so.

Here are 8 action steps you can take right now:

1. Focus on your credit score

FICO credit scores are among the most frequently used credit scores, and range from 350-800 (the higher, the better). A consumer with a credit score of 750 or higher is considered to have excellent credit, while a consumer with a credit score below 600 is considered to have poor credit.

To qualify for a mortgage and get a low mortgage rate, your credit score matters.

Each credit bureau collects information on your credit history and develops a credit score that lenders use to assess your riskiness as a borrower. If you find an error, you should report it to the credit bureau immediately so that it can be corrected.

2. Manage your debt-to-income ratio

Many lenders evaluate your debt-to-income ratio when making credit decisions, which could impact the interest rate you receive.

A debt-to-income ratio is your monthly debt payments as a percentage of your monthly income. Lenders focus on this ratio to determine whether you have enough excess cash to cover your living expenses plus your debt obligations.

Since a debt-to-income ratio has two components (debt and income), the best way to lower your debt-to-income ratio is to:

repay existing debt;
earn more income; or
do both

3. Pay attention to your payments

Simply put, lenders want to lend to financially responsible borrowers.

Your payment history is one of the largest components of your credit score. To ensure on-time payments, set up autopay for all your accounts so the funds are directly debited each month.

FICO scores are weighted more heavily by recent payments so your future matters more than your past.

In particular, make sure to:

Pay off the balance if you have a delinquent payment
Don’t skip any payments
Make all payments on time

4. Get pre-approved for a mortgage

Too many people find their home and then get a mortgage.

Switch it.

Get pre-approved with a lender first. Then, you’ll know how much home you can afford.

To get pre-approved, lenders will look at your income, assets, credit profile and employment, among other documents.

5. Keep credit utilization low

Lenders also evaluate your credit card utilization, or your monthly credit card spending as a percentage of your credit limit.

Ideally, your credit utilization should be less than 30%. If you can keep it less than 10%, even better.

For example, if you have a $10,000 credit limit on your credit card and spent $3,000 this month, your credit utilization is 30%.

Here are some ways to manage your credit card utilization:

set up automatic balance alerts to monitor credit utilization
ask your lender to raise your credit limit (this may involve a hard credit pull so check with your lender first)
pay off your balance multiple times a month to reduce your credit utilization

6. Look for down payment assistance

There are various types of down payment assistance, even if you have student loans.

Here are a few:

FHA loans – federal loan through the Federal Housing Authority
USDA loans – zero down mortgages for rural and suburban homeowners
VA loans – if military service

There are federal, state and local assistance programs as well so be on the look out.

7. Consolidate credit card debt with a personal loan

Option 1: pay off your credit card balance before applying for a mortgage.

Option 2: if that’s not possible, consolidate your credit card debt into a single personal loan at a lower interest rate than your current credit card interest rate.

A personal loan therefore can save you interest expense over the repayment term, which is typically 3-7 years depending on your lender.

A personal loan also can improve your credit score because a personal loan is an installment loan, carries a fixed repayment term. Credit cards, however, are revolving loans and have no fixed repayment term. Therefore, when you swap credit card debt for a personal loan, you can lower your credit utilization and also diversify your debt types.

8. Refinance your student loans

When lenders look at your debt-to-income ratio, they are also looking at your monthly student loan payments.

The most effective way to lower your monthly payments is through student loan refinancing. With a lower interest rate, you can signal to lenders that you are on track to pay off student loans faster. There are student loan refinance lenders who offer interest rates as low as 2.50% – 3.00%, which is substantially lower than federal student loans and in-school private loan interest rates.

Each lender has its own eligibility requirements and underwriting criteria, which may include your credit profile, minimum income, debt-to-income and monthly free cash flow.

Student loan refinancing works with federal student loans, private student loans or both.

If you make these 8 moves, you’ll be better positioned to manage your student loans and still buy your dream home.

Top 5 Remodeling Projects to Boost Resale Value

House hunters will likely wonder about the age and upkeep of certain big-ticket features in a home like the roof and HVAC system. But they will also likely be interested in just how move-in ready the home is. Sellers can take on some prep work to get their house move-in ready to appeal to the largest buyer pool.

HomeLight, a real estate referral company, recently interviewed real estate agents to list some of the top remodeling projects before selling a home. Some of the projects that topped their list:

1. Painting

Average project cost: $954 to $2,893 (depending on location, paint type, and labor)

Stick with neutral colors throughout, like whites, beiges, or soft grays. “It’s fine when there’s an accent wall or whatever; that’s different,” MaryBeth Harrison, a real estate professional in Dallas, told HomeLight. “But when every room’s a different color … that’s cheap to fix with paint.” More than half of real estate professionals surveyed by HomeLight said they advise sellers to paint their interiors before listing. Some of the most popular colors: Sherwin-Williams Agreeable Gray and Benjamin Moore’s Revere Pewter.

2. Keep flooring consistent

To install carpet: $789 to $2,794
To install hardwood floors: $2,493 to $6,754
To install vinyl floors: $800 to $2,900

Real estate pros may be more likely to recommend this house project if the home has several different kinds of flooring throughout. A more uniform flooring look—one or two types—can be more appealing to buyers. Real estate pros say that many buyers may expect hardwood floors or premium vinyl. But not all carpeting has to go. However, many real estate pros do suggest removing any dated carpet, like those in bright colors, as well as any stained or worn carpet.

3. Brighten the kitchen

Average project cost: $382 to $1,064 (depending on equipment and labor); $2 to $20 per piece of hardware

White-colored kitchens remain the most popular. They can brighten the look of the space. “What the buyers are looking for today is white and clean—they just want clean,” Harrison told HomeLight. “It doesn’t have to be stark white. But they just want a clean palette.”

Dated kitchen cabinets can be painted by a pro for a quick fix. If the kitchen has other colors throughout, real estate pros recommend painting the walls white to try to brighten the space. Also, kitchen cabinets can get an upgrade with new hardware, such as hand pulls.

4. Replace dated countertops and appliances

Average project cost: $40 to $100 per square foot for new countertops (depending on material); $1,360 to $19,050 for appliances

Dated appliances and countertops can turn off buyers. If replacing the countertop, Harrison suggests a bright, monochromatic look, such as a gray or white countertop made of granite, marble, or quartz. Butcher block countertops could be a more cost-effective option. Harrison advises against brown or multicolored granite, which she says can date a home. She also recommends not replacing a countertop if the rest of the kitchen has not been upgraded and is dated. New countertops will look out of place.

5. Hire a professional cleaner for your bathroom

Average project cost: $70 to $85 per hour for a professional

A thorough cleaning of the bathroom can make a big difference, and often a professional cleaner can do the most thorough job. Pay attention to tile grout lines and any signs of mildew.

Source: “What to Remodel Before Selling Your Home: 9 Light-Lift Projects,” HomeLight.com (Nov. 1, 2021)

Source: “Top 5 Remodeling Projects to Boost Resale,” https://magazine.realtor/daily-news (Nov. 22, 2021)

Zillow to shutter home buying business and lay off 2,000 employees as its big real estate bet falters

Zillow Group’s ambitious tech-fueled bid to shake up how people buy and sell homes is coming to a surprising end.

The Seattle online real estate giant said today it will shut down Zillow Offers, its iBuying program that aims to digitize and accelerate how people sell their home.

Approximately 25%, or about 2,000 people, will be laid off as a result of Zillow Offers closing. The company will take a write-down of more than $500 million related to the shutdown.

The decision is a remarkable reversal from the company’s home sales operation that represented a fundamental shift away from Zillow’s core business when it began rolling out in 2018. Zillow was pinning its future on Zillow Offers, beyond its bread-and-butter money-maker as a home price estimate platform and lead generator for agents. It originally projected annual revenue of $20 billion by 2024 off 5,000 home sales per month from the home-flipping program, which was billed as a way for consumers to avoid the hassle, time commitment and uncertainty of a traditional sale. To read full blog: https://www.geekwire.com/2021/zillow-shutter-home-buying-business-lay-off-2k-employees-big-real-estate-bet-falters/

What is California Senate Bill 9 all about?

Senate Bill 9 is a 2021 California state law that allows up to 4 homes in most single-family zones, regardless of local zoning. You can use SB9 to split your lot, add a 2nd home to a lot, or both (split lot and have 2 homes on each lot for a
total of 4 homes). SB9 takes effect on January 1, 2022.
SB9 – Senate Bill 9 Summary
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SB9 makes it possible for homeowners in CA to divide their property into two lots. It allows two homes to be built on each of those lots, with the effect of legalizing fourplexes in areas that previously only allowed one home (SFR) – There is no requirement as to whether the two residential units on each lot be a “duplex,” or attached to each other, or free-standing.
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Requires the City to approve either or both:
– A housing development of no more than two units (duplex) in a single-family zone.
– Allows for a lot split to take place (a single-family lot becoming two lots).
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Prohibits the City from requiring more than one parking space per unit.
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The new law will mark a shift from current policies that allow only two large units — a stand-alone house and an accessory dwelling unit — on single-family lots, as well as an attached junior unit no larger than 500 square feet.
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Requirements:
– The parcel is within a single-family residential zone.
– Property owners have signed an affidavit stating they will occupy 1 of the housing units as a primary residence for
at least 3 years after splitting the property or the addition of units.
– Lot splits create two parcels of similar size that are at least 1200 square feet.
– Proposals must adhere to local objective zoning and design standards unless those standards would have the effect of physically precluding the construction of up to 2 units on each lot.

What Exactly Is a Sellers Market?

A sellers’ market is a sales environment in which the number of willing purchasers far outnumbers the available product. It basically means that there is a lot of demand for a product that is in short supply. In a sellers’ market, heated bidding wars and heightened competitiveness among buyers are common outcomes. This is an excellent situation for sellers because consumers have fewer options, allowing them to negotiate better deals and higher prices for the things they are selling. It gives the sellers a lot more power.

The term “sellers’ market” is widely used in the real estate industry. It indicates that there are more willing home buyers than available homes on the market. It improves the likelihood that numerous potential purchasers may show interest in a particular property, giving the seller additional bargaining power. As a result, in a sellers’ market, purchasers must move and react swiftly.

A potential sellers’ market in the real estate sector can be influenced by a series of causes. The exact geography, for example, is quite important. When industries and businesses relocate to the area, certain communities may see population increases. As a result, population growth accelerates, increasing competition among homebuyers.

Another factor could be the time of year. Did you realize there’s a season for selling houses? This usually occurs during the summer months, beginning around April and lasting throughout July. As a result, there are fewer homes available for purchase during the winter months, resulting in a seller’s market.

Furthermore, interest rate changes can cause specific markets to react. As mortgage interest rates fall in a given region, more and more people qualify for a loan, resulting in a surge in property purchases and a sellers’ market.

Difference Between a Sellers’ Market and A Buyers’ Market

The distinction between these two is straightforward: they are totally opposite. A buyers’ market is one in which there is more merchandise than willing buyers. This is a frequent real estate term that refers to when there are more homes for sale than there is demand for them.

Because the buyer has so many more options, they can get better bargains and pricing on the house they want to buy. The buyer has increased negotiating power, which might result in significant price and value reductions.

Key Signs of a Brewing Sellers’ Market

If you want to sell a home in your neighborhood, you might want to wait for these ideal conditions. There are several ways to tell if your local area is heading for a sellers’ market.

Check out the area real estate listings to get a better idea. There should be very few properties for sale in a seller’s market. In this climate, houses sell quickly, leaving purchasers with little options. This is a clear indication of a saleable condition.

Another tell-tale indicator are fierce bidding wars. Multiple purchasers may be interested in a single house because there are fewer options for home buyers to choose from. This frequently results in the property selling for more than its original listing price.

Increased home prices and property values could be another indicator. The increasing competition for properties among purchasers frequently causes property values in the area to skyrocket. This is a perfect situation for individuals wishing to sell a home quickly and for a higher price. You’ll get more bang for your buck.

Reasons Why 2021 is Still the Year to Sell Your Home

If you’re thinking of selling your house before the end of the year, you should start planning now. When it comes to selling real estate, the sooner the better. But don’t be dismayed if you, like many others, find yourself in the fourth quarter of 2021 and still want to sell your home. Mortgage rates are now low, and properties for sale are scarce. These are ideal conditions for potential sellers. These low rates, however, will not persist forever in the natural cycle of things. The home market will gradually begin to recover as more sellers become aware of the situation.

The spring and summer are the finest times of year to sell a home. The “selling season” usually begins in May and lasts through July, and this past summer has been particularly favorable for home sellers. Naturally, this varies by region, but statistically speaking, that is the greatest time to sell.

According to Zillow, a real estate analytic company: “Generally, the best time to sell a home to maximize return and minimize time on the market is May 1 to May 15. Homes sold in the first half of May sell six days faster and for $1,600 more than the average listing.”

Don’t worry if you missed that ferry. It doesn’t rule out the possibility of selling your home in the fall or winter. These figures simply indicate that selling early in the year is easier and faster.

However, the housing market has performed exceptionally well this year. Despite the pandemic-related unemployment weariness, conventional home prices soared by as much as 24 percent at the start of the year. Even while these prices and rates are starting to cool and come back down to earth, the aftershocks of this historic spike may be felt well into next year. Especially as a growing number of people return to work.

Another factor to consider is the inventory (home) gap that exists across the United States. Fewer homes are being listed for sale at the moment, creating an extremely favorable environment for potential sellers. However, these conditions do not endure indefinitely, and if you were planned to sell, it would be in your best interest to do it now, or as soon as possible. By the year 2022, the market may have returned to competitive levels, making it more difficult to sell your house. However, in the majority of cities and areas across the United States, the market remains extremely low. The housing market in metropolitan areas is still witnessing large reductions. For example, in the last year, the population of Austin, Texas has decreased by a startling -72.7 percent.

For a large chunk of the country, selling a home has never been easier than it is right now. Homes that are just listed are flying off the “shelves” even without the staging and “setting up.” The standard rate on a 30-year mortgage fell to 2.65 percent at the beginning of January 2021, eclipsing any previous record lows in the last 50 years.

To put it another way, if you’ve been thinking about selling your house, do it immediately or as soon as feasible (before the end of the year). The housing market is delicate, and these advantageous conditions will not last indefinitely. As more people learn about it, more homes will be placed for sale, putting the seller at a disadvantage.

Pros and Cons for Joining a Homeowners Association

A Homeowners association, or “HOA”, is a community of homeowners who abide to a governed structure formed by the neighborhood. It’s an association created to care for the neighborhood formed by the residents within that community.

The association maintains and cares for the integrity of the community, similar how a landlord takes care of apartments in a complex. There are various benefits included in belonging to an HOA, but with it, comes a roster of do’s and don’ts.

HOA’s vary in structure and requirements, so it’s important to determine if it’s right for you.

Pro: Provided Amenities

Different HOA’s provide different perks. These usually include swimming pools, workout facilities, tennis courts, playgrounds, basketball courts, and sometimes even golf courses. They are only available to the residents of the community.

These perks are free for residents to use because the maintenance costs are already added to the HOA fees. Certain communities will even host community cookouts, sporting events, and block parties. If you’re looking for a sociable community, an HOA might be right for you.

Cons: More Rules to Follow

Belonging to an HOA requires a homeowner to abide by a (potentially lengthy) roster of rules and regulations.

Some of the guidelines can be quite simple to follow, while others can be more tedious and frustrating to keep up with. These rules may include the size of your garden, fence dimensions, the number of pets allowed, and even the type of fertilizer used on your lawn.

Failing to abide by these regulations may result in expensive fines and possible expulsion from the association all together.

Pro: Aesthetically Pleasing

The plus-side to keeping up with all and any community rules is that the neighborhood is always upkept and maintained.

You won’t ever have to worry about stepping in dog poo during your morning jogs or dealing with a neighbor that has 7 “project cars” taking up space in the cul-de-sac. Certain standards are expected out of the residents to help care of the community as a collective effort.

Con: Much Less Freedom of Choice

As a member of an HOA, you cannot simply decide to change the exterior attributes of your home. Everything from painting to installing new window awnings must be approved by the board of the HOA.

Other restrictions include approved yard ornaments and even garbage can placement. Failure to comply with these strict regulations result in hefty fines and possible eviction in extreme cases.

Pro: Increased Property Value

All of these rules and regulations assure residents that no individual property will degrade and compromise the property values of other homes in the area. If you are buying a home with the intentions to sell in the future, this may be an avenue worth exploring.

According to a study conducted in 2019 by UC-Irvine, homes which were sold in HOA communities increased their value by 4% on average.

Con: Risky Fees

The benefits that an HOA offer is certainly not free and require the payment of additional fees. These fees are charged separately property taxes and monthly mortgage payments. If you’re a member, you’re responsible for these payments even if you don’t use the amenities offered.

In certain communities, failure to pay these dues may result in extreme penalties such as foreclosure and liens on your home. This means that even if your mortgage payments are caught up to date, failure to pay HOA fees can still result in foreclosure.

Do Your Research

A Homeowners Association is certainly not for everyone, but some communities can be tailored to an individual’s specifications. Plenty of homes can be bought inside and outside of an HOA. Before purchasing, never be afraid to ask questions.