OCTOBER 2024

September was a turning point for home purchase demand

Pending U.S. home sales were flat from a year earlier during the four weeks ending September 29, marking the first time since January pending sales didn't decline, according to Redfin. It's worth noting that we're comparing to a period last year when sales slumped as mortgage rates surged into the mid-7 percent range. Pending sales increased year over year in 27 of the 50 most populous U.S. metros, the most since January. They rose most in Phoenix (13 percent), followed by San Jose (12 percent), and Portland, OR (10 percent). Homebuying demand is starting to improve in those places after dropping to a low point last year but pending sales are still below pre-pandemic levels.

Homebuying demand at earlier parts of the buying process is improving, too, as mortgage rates are starting to come down. Redfin's Homebuyer Demand Index (a measure of tours and other buying services from Redfin agents) is up 9 percent month over month to its highest level since April. Homebuyers locked in more than twice as many mortgages than they did a month earlier on September 30, according to Optimal Blue data.

California among top states in which buyers search for tiny homes

Tiny houses are exploding in popularity, and a new report shows where the most homebuyers are searching for diminutive dwellings. The global market for tiny homes (under 400 square feet) hit $5.61 billion in 2023, and experts predict it could rise to as much as $7.39 billion by 2031, according to research by concierge realty group Palm Paradise. "Tiny homes promote sustainability because they cost fewer resources to build and run, and they encourage minimalist living," according to the study. "Their small spaces force homeowners to be strategic and thoughtful about what they buy, promoting the concept of mindful consumption." However, many tiny homes do not include the land they are built on, don't come with septic tanks, and may be too small for families or those with more storage or accessibility needs.

California ranked number two in the list of states where people were searching for tiny homes, at 32,360 per 100,000 searches. Texas was the number one state in terms of tiny home searches, at 36,200 out of every 100,000 searches. Third was Florida, with 27,310 out of every 100,000 searches, then North Carolina, with 17,470 searches out of every 100,000.

C.A.R. releases its 2025 California Housing Market Forecast

A more favorable interest rate environment that will loosen up the "lock-in" effect and improve housing inventory will encourage buyers and sellers to return to the market to boost both home sales and prices next year, according to a housing and economic forecast released last week by C.A.R. during its annual fall meeting conference & expo in Long Beach.

The baseline scenario of C.A.R.'s "2025 California Housing Market Forecast" sees an increase in existing single-family home sales of 10.5 percent next year to reach 304,400 units, up from the projected 2024 sales figure of 275,400. The projected 2024 figure is 6.8 percent higher compared with the pace of 257,900 homes sold in 2023.

The California median home price is forecast to rise 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 in 2024 from $814,000 in 2023. A persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year. Read the entire forecast here.

Vote NO on Proposition 33

Protecting homeowners and property rights starts here!  Proposition 33 on the state ballot this November would repeal the Costa-Hawkins Rental Housing Act, allowing cities and counties to impose extreme rent control measures, without requiring a vote of the residents! Help the REALTOR® Party of California get the word out this election cycle.

A resource of essential tools has been compiled to help you in the fight to defeat Proposition 33.  The resource includes a fact sheet, key messaging, social media content, and other materials that you can use to inform and mobilize your community and your networks.  Once people understand what Proposition 33 is about, we can defeat it. Read about this proposition and get the resources.

Home Sellers: Here's what the NAR settlement means for you

As a home seller, you have a wide range of choices when it comes to listing your home. Agents who are REALTORS® are a trusted source of advice and stand ready to help you navigate this complex process and make the choices that work best for you. NAR's recent settlement has led to several changes related to broker commissions that benefit sellers, and we wanted to clearly lay them out for you.

Here is what the settlement means for home sellers:

  • You still have the choice of offering compensation to buyer brokers. You may consider doing this as a way of marketing your home or making your listing more attractive to buyers.
  • Your agent must conspicuously disclose to you and obtain your approval for any payment or offer of payment that a listing broker will make to another broker acting for buyers.
  • This disclosure must be made to you in writing in advance of any payment or agreement to pay another broker acting for buyers, and must specify the amount or rate of such payment.
  • If you choose to approve an offer of compensation, there are changes to how this can happen.
  • You as the seller can still make an offer compensation, but your agent cannot include it on a Multiple Listing Service (MLS)-MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
  • Your agent can advertise your listing via off-MLS platforms such as social media, flyers and websites.
  • You as the seller can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs). These settlement practice changes went effect August 17.

    Home Buyers: Here's what the NAR settlement means for you

    Buying a home is one of the largest financial transactions most people will ever undertake. Agents who are REALTORS® are a trusted source of advice and stand ready to help you navigate your homebuying journey and make the choices that work best for you. NAR's recent settlement has led to several changes that benefit homebuyers, and we wanted to clearly lay them out for you.

    Here is what the settlement means for homebuyers:

  • You will sign a written agreement with your agent before touring a home.
  • Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided, and for how much.
  • The buyer agreement must include four components concerning compensation: a. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined. b. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)-and not open-ended (e.g., cannot be "buyer broker compensation shall be whatever the amount the seller is offering to the buyer"). c. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and, d. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law. • Written agreements apply to both in-person and live virtual home tours.
  • You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services.
  • The seller may agree to offer compensation to your agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service (MLS)- MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale. REALTORS® are members of the National Association of REALTORS®
  • You can still accept concessions from the seller, such as offers to pay your closing costs. These practice changes will go into effect August 17. Here is what the settlement doesn't change:
  • Agents who are REALTORS® are here to help you navigate the homebuying process and are ethically obligated to work in your best interest.
  • Compensation for your agent remains fully negotiable, and if your agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with you about compensation. When finding an agent to work with, ask questions about compensation and understand what services you are receiving.
  • You have choices. Work with your agent to understand the full range of these choices when buying a home, which will help you make the best possible decision for your needs. More details about these changes and what they mean can be found at: facts.realtor.

    3rd Quarter stats for Santa Cruz & Monterey Counties & the Bay Area

    Comments: New listings continued to decline month over month in Santa Cruz and Monterey while Santa Clara turned the corner in September.  On the flip side sales were down for all three months in Santa Clara while the other two stayed relatively the same except for a September decline in Santa Cruz. The sales peak was in May. Median price is declining after its peak in June as is typical for this time of year. Sale to list price ratio peaked back in April but still showing signs of a sellers' market. (Display of MLS data is deemed reliable and is not guaranteed accurate by the MLS as of 9/30/24)