Residential landlords to provide bed bug disclosures

Beginning July 1, 2017, a landlord is required to provide a written bed bug notice to a prospective tenant prior to entering into a lease or rental agreement. Beginning January 1, 2018, the notice is required to be provided to both existing and prospective tenants. See this link for more details.

Empty Nesting Thoughts

As I read this Houzz article, I kept thinking about all the people I know who would have been empty nesters if the economy was still as strong as it was 20+ years ago. Today, many of the people we meet are ‘doubled up’ with multiple generations living in the same home.  If you’re among those who have the option to downsize, here are a few thoughts on what that can mean for you.

Coastal Cities Hardest Hit By Rate Increases

Courtesy National Association of Realtors
Daily Real Estate News | Monday, January 23, 2017

Home buyers along coastal housing markets are being impacted the most by rising mortgage rates over the past few weeks, according to an analysis by the National Association of REALTORS®.

The average 30-year fixed-rate mortgage went up from 3.5 percent in November to about 4.12 percent in January.

Home buyers in San Francisco County, Calif., have felt the pain of that jump the most, with nearly a $375 increase to their average monthly mortgage payments, according ton NAR’s analysis. Other markets that are seeing costs rise the most are San Mateo County, Calif.; Nantucket County, Mass.; New York County, N.Y.; and Teton County, Wyo.

Housing costs in expensive coastal markets are seeing a rapid increase in prices, due to limited housing supplies mixed with a high demand from buyers as the job markets pick up.

“Unless you have unlimited funds, every little tick up in the interest rate lets you buy less and takes people out of the market if they’re struggling to buy their first home,” says Jeff Barnett, a real estate professional in Silicon Valley, told The Wall Street Journal.

But not all cities are feeling the burden of rising mortgage rates. For example, NAR’s analysis shows that Cochran County, Texas, is seeing the smallest impact from rising mortgage rates. Since the rate increases, mortgage payments have gone up just $13 a month there.

NAR is predicting further rate hikes on the horizon. They expect mortgage rates to increase to 4.4 percent by the end of 2017 and 4.8 percent in 2018.

Los Angeles County — Beach Warnings

Beach Hazard Statement
Issued: 1:34 AM PST Jan. 18, 2017 – National Weather Service

… Beach hazards statement remains in effect from Thursday
morning through Monday evening…

* hazards… another large long period west swell will bring high
surf to area beaches Thursday through Monday… with a chance
of much larger… damaging surf late Friday through Saturday.
Surf of 8 to 13 feet Thursday and Friday will possibly build
to 15 feet or higher late Friday and Saturday. The surf will
begin to subside Sunday into Monday… but is expected to
remain above high surf thresholds.

* Impacts… large… powerful and potentially damaging surf will
create dangerous ocean conditions. Coastal erosion and coastal
flooding will be possible. Frequent strong rip currents and
long-shore currents are expected. Much larger waves may occur
without warning… which can wash people off their feet in the
surf zone or off of rocks and jetties. West-facing Harbor
entrances such as Ventura Harbor may see breaking waves across
the entrance.

Economic Response to Trump Presidency

Following the Federal Reserve Bank meeting last week pundits around the globe have been working at predicting future financial markets under a Donald Trump presidency.  Personally, I’m holding my tongue.  However, the following comments come from one of the many mortgage brokers who keep me aware of changes in the lending market.

Not only did the election of Donald Trump rock the U.S. political establishment, it has had a major influence on interest rates as well—resulting in the economy’s single biggest post election shift. Interest rates on 30-year conforming mortgages have moved up by more than 50 basis points since the election on Nov. 8. (A single basis point is 0.01%.) That means that within just a few weeks, mortgage rates have moved to levels we haven’t seen in more than two years.

So what does that rate shift mean? Well, it indicates an economy with very low inflation moving to one with more significant inflationary pressures.

In real terms, the movement in rates so far has increased mortgage payments by 7%. On a median-price home, that shift amounts to more than $750 in additional interest per year. Make no mistake: That is bad news for future buyers.

This week, the average 30-year mortgage had a rate of 4.27%. Over the past five years of the housing recovery, rates have failed to stay above 4%. But things look different this time around. Rates are more likely to go up from here rather than down. And that means that now more than ever, potential buyers need to be working hard to secure the best rate possible on their own mortgage.

It’s easy to see the immediate impact on buyers.  There are also work-around plans that can help buyers achieve their goals despite the higher rates.

Interest rate increases generally hurt sellers at least as much as buyers, and in some very diverse ways.  Over the next few publications we hope to discuss how sellers can mitigate the impacts.  Keep in touch and we’ll be certain to let you know about those special releases.

How Valuable are Open Houses?

This is a “thought in process” kind of post. One of my clients isn’t ready to buy yet, but wants to “size up the market.” To make that easier, every weekend I send over a list of open houses with the right size, location, etc.

A few weeks ago, that list started getting very short. What had been 8-12 homes, dropped down to less than half that. Today the list was only 4 properties. The number of open houses on any given weekend varies, of course. Holiday weekends are typically very light, for example.

When there didn’t seem to be a common reason for the short list, I started looking around. Have the prices gone up enough to price the client out of the desired market? Are homes in that price range selling before the open house?

Changing the price range didn’t help. Prices are up a tad, but overall sales prices are leveling off, with very low rate of increase. The number of sales hasn’t gone up dramatically, so the homes my client wants are out there, for sale. Agents just aren’t holding them open.

There are probably a lot of reasons for that. I’ll start asking around to see if there’s a consensus on why it’s happening. It could be crime reports. It could be the election year. Probably, it’s a combination of several disparate things.

More important is knowing that only about 15% of the available properties are actually showing up on the weekend open house list. And, making sure my clients, both seller and buyer, understand the situation.

From a seller’s perspective, this could mean a longer time to sell. To a buyer, it could mean we need to schedule “buyer tours” on the weekend instead of visiting open houses.

All in all. It means I need to do some research to better serve my clients, on both ends of the transaction.

Checklist for First-Time Buyers

Checklist for First-Time Buyers
By: Paula Pant, Forbes
Courtesy: California Association of Realtors

Here’s your step-by-step guide to getting all your ducks in a row so that you’re ready to make a winning offer on the home of your dreams.

Step 1: Make sure you’re (really) ready

Homeownership is a big commitment. Before you leap, make sure you can answer “yes” to the following questions:
– Is your job stable?
– Do you see yourself living in this town for the next five to 10 years?
– Are you prepared for all the extra work that comes with homeownership, such as repairs and maintenance, yardwork, pest control, and attending HOA meetings?

Step 2: Create a list of “musts”

Homebuying is like dating: If you’re expecting absolute perfection, you’ll be disappointed. Few people find a home that’s 100 percent ideal. It’s important to know which issues you’re willing to compromise on and which are deal breakers.

Maybe you’re willing to buy a fixer-upper if it’s in a great location. Maybe square footage matters most to you, and location is secondary. Maybe you’re willing to get a home that requires a major makeover as long as the “bones” underneath are solid.

Check out different neighborhoods, home styles, and listings online to get a feel for what’s most important to you.

Step 3: Figure out what you can afford

Your mortgage payments aren’t the only cost you’ll need to consider.

First, you’ll need a down payment. Ideally, you’ll want to put down at least 20 percent of a home’s purchase price to avoid paying private mortgage insurance (PMI), an additional charge tacked onto your mortgage payment.

You’ll also want to make sure you’re financially secure enough to handle any maintenance or repair costs that can (and will) crop up. If the plumbing bursts or the roof needs replacing in a few years, do you have enough of an emergency fund on hand to cover it?

As a rule of thumb, you should set aside 1 percent of the purchase price of the home, each year, in your “house emergency fund.” That’s $83 per month for every $100,000 of home value.

Step 4: Gather documents

The loan approval process is a test of how much paperwork you’re willing to endure. It’s time to spend a weekend organizing your files.

Collect your proof of employment, such as pay stubs and copies of the past two years of W2 forms (or 1040 tax returns if you’re self-employed). Print out bank and investment account statements from the past 30 days, canceled checks from the past 12 months showing that you’ve paid rent on time, and contact information for your landlords for the past two years.

Step 5: Get prequalified or preapproved

You don’t want to lose out on your dream home because you haven’t gotten pre-approved for a mortgage. (It’s happened.)

Before you visit a single house, gather that documentation from Step 3 and get prequalified for a loan. The prequalification process is relatively quick and easy — you’ll simply provide information about your income and debts. Many sellers won’t even consider a bid unless you’re prequalified for a loan.

For extra credit, take the next step and obtain a preapproval letter. This step is more time-intensive and requires a through credit and background check, but it can make you a stronger candidate in a seller’s eyes.

Step 6: Assemble your support team

You’re new to the homebuying game, so you’ll need the right people on your side to help you navigate it. Find a real estate agent you trust and communicate well with, and don’t hesitate to enlist a friend or family member for a second opinion.

Thoughts On Value #1

When I think of value, the first thought in my mind is, “Value to whom?” We each have our personal definitions of value. They’re shaped by all the years we’ve been shaped, by the people and events around us. Those definitions begin with our personal preferences. As we grow and age, they are increasingly shaped by our social environment. Only then does financial value becomes a consideration. Many times the lines blur and value shifts back and forth.

I see it often as clients express preferences about the characteristics of a home. One will want a porch, another a fireplace. As a prospective buyer walks through a potential home, it may gain value in one room and lose some in the next. In the end, the total value is determined by how closely it matches our mental image of the ideal home.

As an agent, a key part of my job is to understand the image you have. That allows me to fit your ideal into my knowledge of the neighborhoods, construction styles, price ranges, available financing options, school ratings, and the myriad other details I work with every day. That’s the value I bring to the transaction. It allows me to help you find a close match to your ideal, or at least a good compromise.

Of course, there’s room for complications. A couple, purchasing a home together for the first time, may find a clash in what they each expect to find. Then there’s the financial wherewithal. But those are thoughts for another time.