Tuesday, January 21, 2020

Jan 2020


Market Update with Chad Phillips 
Re/Max Gold Roseville

We're seeing the market start slow this year.  This is typical; however, what we're not used to seeing is inventory this low.  Generally I'm of the opinion for my sellers to wait until spring time, or at least after the Superbowl to list their house for sale.  This is the first year where I'm thinking a seller will potentially gain more on the sale of their home by listing now and beating the usual influx of homes that tend to come up for sale in April/May.
Interest rates are near record lows as well.  With rates in the low to high 3's, it's certainly an incentive for buyers to make the move.  Rates are also encouraging some folks to say put and refinance.  I'm currently in that boat!  I'm looking to do a cash out refi on my primary to pay off a rental property.  The numbers make sense! Another benefit of a refi could be to shave off years on the loan.  Going from a 30 year to a 20 year or even 15 year loan and your payment is roughly the same.  That will save you a lot of money over time.
As for the coming year, 2020 looks to be another year of gains in property values.  There are several factors that indicate that we're on a solid path, notably the jobs reports, low inventory, interest rates and overall strength of the economy.  I do foresee some factors that are posed to negatively effect us though.  This rent control bill will likely have a negative impact.  The intention of the bill is to keep rents low; however, I think the 5% a year cap is only going to encourage landlords to adhere to this an impose the 5% a year.  Another proposition on the table is getting rid of prop 13, but they disguise it by this title: California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative.  If this goes thru it will drive more businesses out of California.  If commercial property owners property taxes skyrocket, it's going to translate to higher leases.  It might take a couple years to hit home, but when leases come up for renewal we'll start to see more offices buildings empty.  The lack of common sense here is disturbing, and unfortunately deliberate.
For what it's worth, I'm predicting a good 2020 and then a market correction in 2021.  Regardless of who wins the presidency!  The market has rebounded from the bottom at 2012 to surpass values of the past peak in 2005.  There are no indicators of a crash like we had before, but a price correction is what I'm preparing for.  Only time will tell!  Keep your real estate investments conservative at this point.  If you need help running the numbers on a project, feel free to contact me and let's see if it's viable and worth doing.  Have a great 2020 folks.

Friday, January 10, 2020

2020 placer county real estate market



01-10-2020

I like to do quarterly updates and here we are in the new year.  Currently we're seeing low inventory which is contributing to the rise in prices.  Supply and demand, simple concept but of course there's more to the story.  Interest rates are near record lows and it's an incentive to keep the market going.  What we're seeing though is more folks refinancing and staying put. 
Usually I advise folks that are thinking about selling to wait until early spring to list; however, this year is different.  I have several clients that are getting ready to sell and I'm advising the sooner the better.  For example, I have a house coming soon in Orangevale at 375K.  Currently there are only 2 houses on the market between 350 - 375K and one of them just hit the market.  It's likely that a seller will make more right now than waiting for spring. 
If you're looking to sell this year, contract me to come formulate a game plan.  It's just as important to know what not to do for preparing your house for sale.
Below are some info about the market as a whole.  This is your Roseville real estate agent signing out.  I'll have a more in depth quarterly review come April.




BUSY '20?


The U.S. housing market is poised for a brisk year. In CoreLogic's latest Home Price Insights report, Chief Economist Dr. Frank Nothaft said, “The latest U.S. index shows that the slowdown in home prices we saw in early 2019 ended by late summer. The decline in mortgage rates has supported a rise in sales activity and home prices.” CoreLogic predicts home prices will rise 5.3% year-over-year by November.






RATE RANGE


Mortgage interest rates have hovered in a limited range for the last two months according to Freddie Mac. In its Primary Mortgage Market Survey for the week ending January 2, Freddie dubs the activity "welcome news after the interest rate turbulence of the last year, which caused a slowdown in the housing market," and declared that "the low mortgage rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices."






RISING RENTS


Average rent rose nationwide according to January's National Rent Report from Zumper. Rent for a one bedroom rose .4% in December to $1,217 per month, while average rent for a two-bedroom increased .1% to $1,440. In its survey of over 1 million active rental listings, Zumper says the majority of large rent growths nationwide occurred in the mid to lower tiered markets.






INS & OUTS


Idaho and New Jersey got top billing in United Van Lines' 43rd Annual National Movers Study. Idaho had the highest number of people moving in, followed by Oregon and Arizona. New Jersey saw the most outbound immigration, followed by New York and Connecticut. United Van Lines has been tracking U.S. migration trends since 1977.


   

Chad Phillips Real Estate Broker Associate  RE/MAX GOLD
916-390-1476 2998 Douglas Blvd #125 Roseville CA.  95661 |chad.remaxgold@gmail.com | www.RealEstate-Roseville.com
LIC # 01405825





Tuesday, August 6, 2019

3rd quarter real estate update for placer and sacramento county


August 6th 2019 - Real Estate Update - Placer

I like to do the quarterly updates and relay my observations as it keeps me more aware of what the market is doing.  As a full time real estate agent in Roseville we see trends and deal with things daily.  When you get down to it the market adjusts mostly on the basis of supply and demand.  Of course there are countless other factors that come into play, such as rates, job markets, economy as a whole, building fees, government regulations and taxes...
It's been 10 years now since I joined Remax in Roseville Ca.  I like reviewing the trend graphics as its a good visual representation of what the market is doing.  Below is a graph showing the number of homes that are active pending and sold for Placer county month over month.  Since winter we're seeing and increase in the amount of homes for sale and pendings and solds have dropped off.  July's numbers aren't showing up yet, but they will show the continuing trend.  Buyers will have a better chance of scoring that house they want to buy, but keep in mind the nice houses priced right will still gain multiple offers.
I think it's more interesting to see the graph of the value ranges where people have been buying houses and how that's changed since 2012.  As you can expect the 200's and 300's where hot back in 2012 and now it's 400's and 500's.  People have gained equity and are buying up and it's hard to even find properties sub 300k in Roseville / Rocklin area.
Interest rates have been great, they keep coming down too.  If you think about it, the feds need the rates low due to the national debt problem they have.  Interest payments alone are almost a run away train.  If rates were at 6%, I'm not sure we'd be able to pay.  My point is, don't worry about rates going up any time soon!
We are due for a market correction though.  Are we seeing that now?  I don't think so!  I think we're seeing the normal trend of the end of summer slow down.  We're getting closer to an election year and that seems to be a factor.  Trump will do what he can to keep the ball rolling but inevitably we'll see a correction.  For those investors out there, stack some chips.  In a couple years I think we'll see a good time to pick up some rentals.  For home buyers, find something and go with it as long as the payments are comfortable.  Even if the market drops 10-15 percent, over time 5-10 years you will be fine.

If you have any specific real estate questions, feel free to give me a call.  I work on commercial property, land developments, partition sales, trustee sales...  It's a fun business that is always changing!

 

Re/Max Gold - Chad Phillips
2998 Douglas Blvd Ste 125
Roseville, CA. 95661
916-390-1476
Real Estate Broker #01405825

Friday, May 24, 2019

Sacramento / Placer Real Estate Update May 2019

I've reviewed the metrics for both counties and they are roughly have the same market indicators.  We're in a stall or flat market right now.  Things are selling and around 50% of homes for sale are selling with multiple offers.  This is a strong indication; however, we've seen the prices flutter and max out.  Unless a property is priced right it will sit there and require price reductions.   Buyers are now more opt to write low ball offers and contingent offers to make the transition more favorable for them.  This is a clear indication of a change in the real estate market.  At the end of the day it comes down to affordability.  Either prices or rates have to come down.

Rates have come down, around 4% now.  It would seem low rates would help trigger buyers that are on the fence buying a house in Roseville; however, people seem to focus more on price than rates.  It makes sense.  I did notice something rare yesterday.  The treasury bonds for the 1 month were better then the 10 year.  For those that don't know what that means, it suggests that there is concern of economy.  Things have been going pretty good since Trump came into office, but it never lasts forever.  A recession is predicted by some in the next 18-24 months.  I'm in agreement, although I think it will be more of a slow down with GDP and a market correction.  If you look at the charts and what real estate prices have done since the bottom of  2012, its about 20% appropriation a year.  That's been a great ride, brought prices back to where there were in 2005, but 20% a year is unsustainable. 

Some investors are liquidating and looking to sit on cash.  It wasn't that long ago when things collapsed and no one seemed to have any cash to take advantage on the situation.  We learn from our mistakes.  I'm looking to pick up another rental property but I'm steadfast and want a deal like everyone else.  I did pick up a rental last year in Citrus Heights.  The numbers worked and it's cash flowing.  They are out there!  If you're looking for a good income property, I can help with that. 

Below is a chart for Placer county showing the houses for sale vs sold houses and pending.  In spring we tend to have an upward tend and downward in the winter.  This is looking very typical for the housing market in our area.

If you're a first time buyer, make sure your comfortable with the payment and make sure you get a good real estate agent to help guide you so you don't end up with a lemon.  Happy to help if you have questions!




   

Chad Phillips Real Estate Broker Associate  RE/MAX GOLD
916-390-1476 2998 Douglas Blvd #125 Roseville CA.  95661 |chad.remaxgold@gmail.com | www.RealEstate-Roseville.com
LIC # 01405825

Tuesday, January 8, 2019

Top listing agent in December and 2019 Forecast

Here we are 2019 folks.  I typically have a slow down this time of year but I've been able to ride the wave and stay busy.  Overall the market is certainly doing its cyclical thing here in Sacramento and Placer county.  Good time for home buyers in my opinion.  Demand is down and we're rarely seeing multiple offers.  We've seen the Sacramento real estate market prices pull back over the last 6 months.  A small correction was in order, the year over year gains we've had since 2012 are unsustainable.  I foresee the Roseville and Rocklin real estate market picking back up come spring time so if you're a buyer, my advise is not to wait.  Get a game plan put together with an experience broker like myself and a good local lender. ( I can recommend several ).  For sellers, I think we're going to see a lot of inventory come on this year.  I think there's a number of people fed up with California and looking to take there money and run.  I already know of some investors that are looking to liquidate. 

  Even though the feds raised rates 1/4 pt last month mortgage rates took a dip.  Go figure!  Loan programs are loosening too.  This makes me a little nervous after what we went thru last time.  I understand the greed and to keep the party going; however, that just a recipe for a strong hangover.  Let me be clear though, loans aren't anything like they were back in 2006, so we're not going to repeat that same mistake.  We might see the market peak in 2019.  Too much uncertainty in our economy.  The Dow is like a ping bong ball, government is shut down and all this over a wall.

At the end of the day folks, if you can afford to buy and not be house poor, then do it.  I don't want to see you with a 50% DTI...  Under 40 is preferred!  Let me help find you a good house and negotiate a better deal. 
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Thursday, November 8, 2018

Placer County Real Estate - Days on Market and Sales Price/List price percentage


I always like this graph that Trend Micro puts out every month.  It's very easy to read and it give a good visual of how the real estate market is going in Sacramento and Placer county.  The green line is simply showing that sellers are having to come off their asking price around 5% to get it sold.  This is a solid indicator that the market has shifted to more of a buyers market.  Back in the spring of 2018, sellers were getting almost 100% of ask.  Some sellers were getting over asking, that's how that percentage is almost at 100%.
The orange graph is representing the days on market to sell.  I'm scratching my head a bit with these numbers because on another graph I noticed the months of inventory is at 2.7.  There's a correlation here...  We can see that the DOM has increased along with the number of houses for sale so that does make sense.
The biggest thing to take away from this is that properties are selling on average 95% of asking price. 
Prop 5 not passing is going to add to the slow down.  I was holding out hope that prop 5 would pass.  That would have helped seniors move closer to their families and bring their property tax basis with them.  I had several folks from the bay area that were counting on that; however, looks like they're not moving now.  Can't say I blame them!
If you have any real estate questions, feel free to give me a call.

Thank you,
Chad Phillips
Remax Gold
916-3901476
DRE# 01405825



Thursday, October 18, 2018

reverse mortgages

I just went to a lunch and learn about reverse mortgages yesterday.  Being in the business I had a rough idea of what a reverse mortgage was and how it works, but I really didn't.  There's multiple different reverse products and some can really make sense for some folks in particular situations.   I was made aware of a new where you obtain a reverse mortgage but it becomes a credit line.  You get the going rate plus a half a point and it will compound.  The longer you wait to pull the cash the more it grows.  Very interesting, it also get the gears going for me wondering where they put that money.  They have to be putting it somewhere in order to pay the gains.  The question is out to Big Valley mortgage now. 
The traditional reverse can work for people that are looking to more financial freedom in the golden years.  If you don't have kids and not really worried about leaving an inheritance, then a reverse is perfect.  Maybe you do have kids but you have other assets that you set aside for them.  Using a reverse mortgage can be the ticket.  It's becoming more popular that I ever imagined.  The baby boomers are getting to the age and they like the bigger and better.  They're not as conservative as their parents were.  I'm skeptical of the stat, but I was told 47% of the baby boomers are moving up, not down.  I thought it would have been around 10% of boomers moving up.  Typically seniors buy down, the kids are gone, don't need as big a place anymore.  Not our boomers!  lol.  A true testament to capitalism.
If you have questions about reverse mortgages, you can get in touch with Jeff Silver 916-204-4653