My quick life update before my market update (if you are not interested in my life shenanigans, scroll down to the good stuff below).
So 1st quarter for my family was a little rough, hence, why this report is 30 days late so I apologize for the tardiness. We've had some personal family stuff take place that demanded a lot of our time and attention, which actually also allowed us to spend more time with our family on the east coast and spend Easter with them, so that was the silver lining in all of it. That's also where Ellyava took her first steps!
Also, our kids got to experience their first train ride and we all got to experience our first FULL solar eclipse, since we were in Erie, PA and that happened to be in the path of the FULL eclipse, so that was pretty cool.
I would love to hear what you are up to. Hit reply and shoot me a quick update. ;)
Now let's get into some important updates from the last few months.....
If you own a house or a rental or know someone that does:
NEW RENTAL LAWS: Many new laws went into affect in 2024 that provide tenants more rights so if you own a rental, you must get familiar with all these changes:
Highlight of the major changes:
New statewide limits on rent increases
Stricter regulations around evictions
Expanded rent control
Caps on security deposits
More rights for tenants to fight violations
Attorney website I found that provides lots of details about all the changes: NEW CA RENTAL LAWS
Now, City of San Diego passed new tenant protection laws for 2024 that are even stricter than the California Laws mentioned above so here is a property management website I found that has these changes nicely laid out: NEW CITY OF SAN DIEGO RENTAL LAWS
Short Term Rental Laws officially came into Effect on May 1st, 2023
There are still licenses available contrary to what most would expect!
To View All STR Regulations for the City of San Diego or to apply for a license, Click Here
Have you ever wondered what you might be able to additionally build on your property?
Search and discover what is possible on any property. Browse property and permit details. Apply for permits and rebates. Learn if an ADU is possible
Are your electric bills out of control? If so, consider installing solar panels like many of our clients have. Reply to this email and I will connect you with my trusted solar contact, Eric Goldstein from Powur.
If you are planning on selling or know someone that is thinking about it:
LOOKING BACK:
1st quarter was definitely back to leaning in the seller's direction for the most part. We saw 6.3% combined (attached and detached) month-over-month appreciation in February...that's astronomical.
March saw much more subdued (healthier) increases in detached (+0.58% - $1,050,000 in March, up from $1,043,900 in February) and attached median prices (+1.21% - $670k in March, up from $662k in February).
So how did Q1 shake out compared to 2023 and 2024?
Q1 has made a lot of San Diegans a lot of equity in the past 3 years!
Of the last 3 years, 2024 showed the slowest growth but considering that much of the country was seeing home prices relatively stagnant (and even dropping), 1st quarter's data is almost more impressive.
To sum it up, 1st quarter was a full on seller's market, with some slowdowns taking place in March due to interest rates starting to rise.
LOOKING FORWARD:
Active inventory is rising as interest rate remain a half a percent higher where they were back in February of this year, and one percent higher if you compare it to January.
Pricing your property slightly below market value is recommended, in order, to bring attention to your listing because there are less buyers in the market currently that can afford homes at these elevated rates and home values.
Offering concessions to help buyers buy down their interest rate is once again recommended.
Also, if you have an FHA or VA loan with a low interest rate (2% or 3%), then, those loans are actually assumable by the new buyer, so it's a great way to get more attention to your property, because what buyer wouldn't want a low interest rate in this high interest rate environment that we are in currently.
NOTE: there are many caveats to this approach, so if you want to discuss this in more detail, reach out to me as I have become an expert in assumptions in the last few months.
In Conclusion, the market is cooling off. While some properties are still seeing multiple offers and well over asking, that is becoming the exception and not the rule.
I can confidently say that prices will be falling from here, but that reality likely won't show up in the median price data until June (possibly May)
If you are planning on buying or know someone that is:
LOOKING BACK:
Buyers lost leverage in the 1st quarter of 2024 as the market heated up in the favor of the seller as mentioned above.
Interest rates stabilized and were hovering around 6% for VA and FHA loans through mid- February, and with holidays being over, buyers jumped in full force into the market, bidding wars began again, inspections and appraisals were being waived in some cases, and the values appreciated as a result.
Then, as rates started to slowly go upwards after mid-February, the market started a very gentle slowdown, but it wasn't truly felt until April, where as you can see below, rates were then a full percent higher compared to January. That's a big difference in a monthly payment for buyers when you apply that to our already elevated home prices.
If you were a VA or FHA buyer in the 1st quarter, and you needed concessions of any kind, you had a hard time getting your offer accepted. Also, there were very few properties hitting the market with assumable loans that have those low interest rates, so that option for buyers disappeared as well. Bottom line, it was a tough environment for buyers to operate in, but many did persevere and became homeowners!
The "California Dream" program was launched once again and it opened for applications in April (I emailed you about that then). Application window is now closed.
The program allows buyers to get a 20% down payment assistance up to $150,000, however, the criteria to qualify this time around was very different and more strict, plus, it's now based on a random selection (aka lottery system), not the first come, first served basis.
Learn more about the program here: https://www.calhfa.ca.gov/dream/index.htm
LOOKING FORWARD:
The leverage is coming back to you, the buyer, so asking for interest rate buy down to be paid by the seller is becoming much more common.
You will probably not compete with many offers, maybe one or two, but maybe even none.
You don't have to offer above list price in most cases unless the listing is drastically under priced.
Also, the opportunity to buy with an assumable loan that carries a low interest rate is back on the table, as listing agents are proactively marketing those properties with those loans to attract more buyers to those properties.
If the assumable loan route really interests you, please reach out to me to talk details as there are many things we would have to go over to see if this route really makes sense for you.
In Conclusion, buyer is in the driving seat once again, but we just need to get creative to get you, the buyer, a lower interest rate, which is possible for sure!
And as always, If you are planning on relocating to another state even though I would be sad to see you leave, let me know and I can help locate a great agent in whatever city that you are planning to move to. I will actually identify a couple great agents there, interview them on your behalf and connect you to that agent once I feel like he or she can serve you as I would here. (Bonus: I would stay involved over-seeing your purchase transaction on top of it for you and consult you along the way. That's if you value my opinion, of course.)
Have an amazing 2nd quarter! Let me know if you have anything specific that you want to discuss with my team and I. We are here to help you navigate through it all and yes, I would love it if you can refer me to anyone that is thinking about buying or selling.Thank you in advance!
Cheers
p.s. Thank you to our investor client, Mary from CT Homes for this 5 start review!
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