FEBRUARY 2023
SF and LA top list of cities homebuyers looked to leave in 2022
San Francisco and Los Angeles were the two top cities people were looking to leave at the end of 2022, according to Redfin. About 50,000 people on the company's website searched to leave those two cities in the last three months of the year due to elevated mortgage rates, still-high home prices and economic.
San Diego was the most popular destination for Los Angeles residents looking to relocate. Las Vegas was the second-most searched for location by Los Angeles residents, followed by Phoenix, Arizona; San Jose; Seattle; Dallas, Texas; Bakersfield; Portland, Oregon; and Houston, according to Redfin. Sacramento, however, bucked the trend and was the most searched for destination for homebuyers looking to relocate, followed by Las Vegas, Miami, Tampa, and Phoenix.
Nationwide, a quarter of all homebuyers searched to move to a different city between October and December 2022 as Americans sought less-expensive areas amid an ongoing housing affordability crunch. California was one of the top five states or districts homebuyers looked to leave, followed by New York, the District of Columbia, Massachusetts, and Illinois.
California market update for January
More mixed news last week. Consumers' evaluation of their present situation improved to a 9-month high, but they were less upbeat about the future of the economy as fears of a recession still loom.
Construction spending downshifted at the end of last year and while the recent retreat in mortgage rates may improve activity in the housing market, performance remains volatile and sluggish.
However, the big news last week was the Fed scaling down their rate hike to a quarter of a point as encouraging inflation data suggests the worst is behind us. The good news was short lived as the latest jobs report showed the U.S. economy added more jobs than expected in January, which puts pressure on the Fed to keep rates high this year to prevent a resurgence amidst a strong labor market.
Some interesting stats:
Single women outpace men in homeownership?
Historically, women face more financial hurdles than men and earn 83 cents for every dollar a man makes. However, single women own roughly 10.7 million homes, compared to 8.1 million for single men, according to a recent analysis from LendingTree that looked at 2021 Census data.
The trend may have long-term financial implications for single Americans given that homeownership is often one of the most effective methods of building personal wealth. A typical homeowner who bought their home in 2011 accumulated $225,000 in housing wealth by 2021 on average, according to an analysis from the National Association of Realtors in 2022.
Homeownership creates rising tide of personal wealth
The typical net worth of homeowners is about 40 times greater than that of renters, with home equity often the largest component, according to data in the Federal Reserve's Survey of Consumer Finances. But the financial benefits go deeper than the numbers alone suggest. Moving into the ranks of homeowners requires planning, saving and prudent management of personal finances that often pays dividends into multiple aspects of personal finance, not just homeownership.
These attributes allow owners to accumulate assets and better withstand adverse financial shocks such as a bout of unemployment or large unbudgeted expenses. Moreover, as a homeowner with predictable, and perhaps lower housing costs compared with renting, more income becomes available for saving and investing, helping to boost overall wealth apart from home equity. Think twice before expecting rates to drop to 3% anytime soon.
Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows of 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans. Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year's peak. That's potentially great news if you're a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.
While this opens up a window of opportunity for you, remember: you shouldn't expect rates to drop back down to record lows like we saw in 2021. Experts agree that's not the range buyers should bank on. It's important to have a realistic vision for what you can expect this year.The recent pullback in mortgage rates is great news - but if you're ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today's rates impact your goals.
How to navigate an ever-changing housing market
Anyone who keeps an eye on the headlines knows the housing market has been topsy-turvy over the past few years. First, the rush to move during the pandemic put a crunch on already tight inventory. This skyrocketing demand ushered in soaring home prices, which have risen nearly 30 percent since 2019.2 Then the past year brought higher mortgage rates resulting in less competition3, which has led to some small gains in inventory, depending on the market. The ups and downs of the housing market might have you questioning if homeownership remains a good investment. The answer is a resounding YES.
The ability to pass down wealth gives families a significant financial advantage that plays out in the ability to avoid costly debt. Although the market has experienced some turbulence, market fluctuations don't erode the long-term advantages of home buying and selling. In fact, over the last 30 years, despite downturns in the market like the Great Recession, homes have continued to appreciate, according to date from the National Association of Realtors.
Real estate can also be a hedge against inflation. As rents soar, a fixed-rate mortgage means your housing costs can stay the same, even as your property value increases. Owning a home has always been a significant way to build wealth. In 2021, the median net worth of a homeowner was about $300,000, while that of a renter was $8,000. Home ownership also provides owners with multiple options for seeing a return on their investment, or for optimizing their property's use.
In an ever-evolving housing market, it's normal for buyers and sellers to feel anxious. That doesn't mean they have to go it alone. With technology that supports fairness for buyers and sellers and a slowing market with less competition, people likely have more options in an intimidating housing landscape than they realize.
Make them laugh
It's almost Valentine's Day. If you haven't gotten that special someone a box of chocolates, you still have time. If you have an ex who just won't bug off, you also have options. The San Antonio Zoo's annual Cry Me a Cockroach Fundraiser is here to help. You can have a cockroach named after them and fed to a pack of hungry meerkats. For a bit extra, zookeepers will capture a video that you can email your old flame. The program has proved both clever and lucrative. For the past four years, the San Antonio Zoo has raised tens of thousands of dollars and generated a mountain of free publicity. Why? Because it's funny and everyone needs a good laugh. Humor can pay off.
Comparing October 22 - January 23 stats for Santa Cruz, Monterey & the Bay Area
Comments: As one might have expected, if you track stats, new listings declined (33% combined) thru the end of the year in 2022 and then January showed an uptick yet considerably below 2022. On the other side of the coin is sales, which continue declining as listings improve. Consequently, the median price seems to never react significantly the same way as it continues to rise. Days on market is rising a bit which reflects in the list to sales price ratio now under 100% in most areas. All three countries have seen declines. Are there some good buys out there? YES, YES, YES. (Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS)
