November 2020
Election Dominates the News
Today and the next will be hard enough for many of us to get through as well as the next couple of months no matter who you voted for.
So other than reading this newsletter (hah, hah), step away from the computer when you start to feel overwhelmed. Take a breath, a bath, a walk, dance or play a game, whatever helps you clear your head.
If you do find a need to check out the latest news, Identify credible sources in advance (like your secretary of state, or state/local election officials. Use in-platform resources to look for credible info and report suspicious materials. Be very cautious about reports of fraud or hacks or interference. Wait for verified information.
And lastly remember, we will get through this together as we have for the last 244 years.
Forecast: Will the 2020 election change mortgage rates?
What will happen to mortgage rates after the election? If you want to buy a house or refinance within the next few months, you should already be strategizing about how to lock the lowest interest rate.
Which might leave you wondering: How will the presidential election impact mortgage rates?
If you are planning to buy or refinance soon, here's what you should know. Let's go back to 2016 for a moment, to the last presidential election. According to Freddie Mac, average mortgage rates went from 3.47% in October to 4.2% in December.
The catch is that relating mortgage rates to presidential elections is hardly an apples-to-apples proposition. In 2012 rates essentially stood still. They were at 3.38% in October and 3.35% in December. For 2008 the news was good. Rates went from 6.2% in October to 5.29% in December, a substantial drop. In 2004 rates were largely unchanged. They stood at 5.72% in October and 5.75% in December. So, how can we predict what will happen after the next election?
Is there some reason to think that whoever wins the 2020 election can directly change mortgage rates one way or the other? Last year the typical 2019 mortgage rate forecast said interest rates would soar, going well above 5.5%. What actually happened was the reverse: Weekly rates at the start of December were at 3.68%, down from 4.75% a year ago. The predictions today say that 2021 mortgage rates will be around 3%.
In short, it's hard to say exactly how a new president will move the needle on interest rates. Who-or what-sets mortgage rates? No one-not the President, the Congress, or the Federal Reserve-sets mortgage rates. Rates rise and fall with the push and pull of the financial markets. Not just markets within our borders but markets worldwide. That's because money moves with electronic speed to the places and investments that money managers hope will produce the best combination of risk and reward.
Who, or what sets mortgage rates?
Bay Area Home Prices Soar
Bay Area homebuyers shook off any lingering reservations about shopping during the coronavirus pandemic, driving median sale prices up nearly 20% in September in a tight housing market. The median sale price of an existing Bay Area single-family home climbed to $965,000 in September, near peak levels set in 2018, according to DQNews and CoreLogic data.
Real estate insiders say a swell of high-end sales pushed prices higher, as homebuyers sought bigger houses and yards for a long-term future of remote work. "At the end, it's really about your home and your space," said Selma Hepp, deputy chief economist at CoreLogic.
The median price in September in Contra Costa County jumped 18.6%, rose 15% in Santa Clara County, increased 12.1% in San Mateo County, and grew 12.1% in Alameda County, according to DQNews.
Sale prices in 7 of 9 Bay Area counties rose by double-digit percentages. Nationally, high prices and the prolonged recession have made it the toughest market for buyers since late 2018, according to a survey by the National Association of Home Builders and Wells Fargo.
Agents report brisk sales, anxious house hunters searching through limited inventory, and bidding wars for desirable suburban properties with indoor and outdoor space. Work from home rules at major tech companies, in addition to rising stock values, have given tech professionals added incentives to step up the property ladder or shop for their first home.
Check out the full story here.
Real Estate Agents Must Comply, according to the DRE
In a letter released on October 9, the Enforcement Division of the Department of Real Estate (DRE) reiterated that the health and safety of consumers is a priority, and that complaints regarding non-compliance with the showing protocols have been and will continue to be investigated.
COVID showing protocols (per the COVID-19 Real Estate Guidance or "the Guidance") require, among other things, that all visitors to a property wear masks, agree to the posted rules of entry and use hand sanitizer upon entry. Agents may also need to clean and disinfect the property both before and after each showing and ensure that social distancing and all other COVID showing protocols are adhered to.
Additional requirements must be considered for vulnerable populations. The real estate industry must comply with all Cal/OSHA standards and be prepared to adhere to its guidance as well as guidance from the Centers for Disease Control and Prevention (CDC) and the California Department of Public Health (CDPH).
Precise information about the number and rates of COVID-19 by industry or occupational groups, including among critical infrastructure workers, is not available at this time. Please make sure your agent is complying with all Covid-19 restrictions for your health, and if not report them to the DRE and then go find yourself a Realtor who complies.
Sept-Oct Comparisons for Bay Area, Central Coast & Santa Cruz
Comments: In Santa Clara County, total new listings rose 8% month over month while total closed sales increased 11.7%. In Monterey County both new listings and sales declined but in Santa Cruz County listings rose 19% while sales fell 6%. Since the south counties are usually behind the Bay Area, will this same situation happen there...time will tell. Reviewing the median prices, we see a slight downward trend except in 2 of 3 counties. Santa Cruz County experienced a 25% decrease in the Days on Market, with Monterey County increasing 33%. Once again, the list to sale price ratio stayed within 0.1% of the previous month.(Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS)
