Will February surpass January for Santa Cruz, Monterey & the Bay Area? (click on title)

March 2023 market stats













MARCH 2023

Pending home sales jump by most since June 2020.

According to Yahoo Finance, signed contracts to buy existing homes in the U.S. rose in January in the largest monthly increase since June 2020, as buyers responded to better affordability from falling mortgage rates in December and January, according to the National Association of REALTORS®. All four U.S. regions posted monthly gains but saw year-over-year drops in transactions.

Pending home sales - a leading indicator of the housing market's health based on contract signings - improved 8.1% to 82.5 in January. Year-over-year, pending transactions dropped by 24.1%. An index of 100 is equal to the level of contract activity in 2001.

Buyers have a better shot at scoring a deal in these California cities.

According to Business Insider, steep mortgage rates and still-high home prices in major cities sidelined many homebuyers last year who may not have been able to make high monthly payments. As prices fall in some key areas, there's a chance for them to come off the sidelines.

The biggest declines have taken place in some of the priciest markets throughout the western U.S., according to research firm Black Knight. Leading the nation with the largest drop from the 2022 peak is San Francisco, where home prices have fallen nearly 17%. Other California cities where buyers could score a deal if rates don't rise further include Riverside, Los Angeles, San Diego, Sacramento and San Jose.

What is a homebuyer mortgage pre-approval.

You may wonder why I am posting this information, but it is one of the most important things for a potential homebuyer to take care of before getting in the car and starting to look for a home. And it is one of the things I find that new homebuyers have not done.

A homebuyer mortgage pre-approval is a letter from a lender stating that it would likely approve your mortgage loan application up to a certain amount. This is the letter is important to have handy once you've found a home you want to buy. It lets home sellers know you're a serious buyer.

This letter isn't a guarantee you'll be approved for the loan, and it doesn't commit you to using that lender. But because a pre-approval letter is based on preliminary vetting from a lender, it holds some weight and shows that you're mortgage ready. After you get a pre-approval letter, you can now start home shopping. When you find something you want to buy, your real estate agent will present your offer along with the pre-approval letter.

C.A.R. applauds House Bill to raise capital gains exclusion.

The California Association of Realtors issued a statement in response to the "More Homes on the Market Act," reintroduced last week by House Representatives Jimmy Panetta (D-CA) and Mike Kelly (R-PA). The bipartisan bill increases the capital gain exclusion amounts on the sale of a principal residence to $500,000 for single filers and $1 million for joint filers and indexes the exclusion for inflation.

"California REALTORS® thank Congressman Panetta for reintroducing the 'More Homes on the Market Act.' This bill will provide necessary tax relief for California homeowners, particularly senior citizens, who have been unable to move because of the tax burden that could result if they were to sell," said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®.

"For working Californians, a home is their biggest and most important investment. However, because the capital gains exclusion was passed 25 years ago with no indexing for inflation, fewer and fewer families have been able to downsize and access the equity built up in their homes. This has resulted in fewer homes being available for younger and first-time homebuyers to move into, which has driven up demand and home prices even more."

FHA lowers annual mortgage insurance premiums.

The Federal Housing Administration (FHA) announced yesterday that it will reduce the annual mortgage insurance premium on FHA insured loans.  C.A.R. issued a statement supporting the announcement:

"Today's move by HUD and the FHA to lower the annual mortgage insurance premium on FHA loans by 30-basis points will help increase homeownership opportunities throughout California, especially for first-time homebuyers and working Californians who rely on FHA financing," said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. "HUD and FHA play a pivotal role in providing housing opportunities for families throughout California, and for years, C.A.R. and NAR have asked the FHA to lower the mortgage insurance premium to ensure that homebuyers using FHA loans are not overpaying for their mortgages."

In 2022, California originated the third highest number of FHA loans in the nation. Last year, one in 10 California homebuyers used an FHA loan, and 16 percent of first-time buyers in the state purchased their home with an FHA loan. Additionally, more than one in five Black and Hispanic/Latino homebuyers (first-time and repeat buyers) used an FHA loan in 2022 to purchase a California home. Therefore, the reduction in the premium will result in tens of thousands of California homebuyers saving money when purchasing a home.

How does a deep freeze affect a home's foundation

The blistering cold temperatures throughout the country this week may put some properties at risk of damage. Watch out for these signs. Many areas of the country are experiencing blistering cold weather, even those that are not used to freezing temperatures. Rapid temperature swings could cause substantial issues to a home's foundation, warns Groundworks, a nationwide foundation services company.

Every year, one in 60 homeowners file claims related to water damage or freezing, according to the Insurance Information Institute. That accounted for nearly 20% of all insurance claims in 2020-at an average cost of more than $10,000 per claim. The price tag to fix a damaged foundation could easily stretch even higher.  

For homes with a crawl space, the first sign of a problem is cold floors. As the issue progresses, homeowners will notice a problem when a faucet is no longer working. If none of the faucets are running, the frozen pipe is probably near the main water line.

Homeowners with basements and slab foundations should look for cracks both inside and outside their home. Cracks can vary in size and direction. That can help tell professionals why the problem is occurring. Inward wall failure will show as horizontal and vertical cracks on the basement wall or even drywall.

The best way to prevent frozen pipes and create a more comfortable environment overall is to seal out any outside air through encapsulation. But there are some easy steps you can take to beat the freeze and keep water flowing right now. Consider insulating pipes, allow for a constant drip, open cabinets to allow for warm air circulation and remember to leave the heat on and keep a consistent temperature throughout your home during the winter.

Homes with basements have a similar process involving sealing the rim joist where pipes enter and exit the home, along with moving warm air throughout your home. All homeowners should check for plumbing leaks and look to improve energy efficiency by replacing filters or adding a smart schedule on their thermostat before sub-zero temperatures and blustery winter weather hits.

Limited Lessening

Monetary policy works most quickly via the most interest rate sensitive sectors of the economy, autos and housing. However, for very different reasons, both sectors have successfully resisted the impact of higher rates. Car sales are rising as semiconductor supply improves, and while housing starts are way down, the number of units, both single-family and multifamily, under construction is staggeringly high, and thus construction employment has yet to decline.

January to February stats for Santa Cruz, Monterey & the Bay Area

Comments: I'm thinking the stats for February are pretty much worthless. I say that because one or two listings or sales does not amount to any real stats. As you may understand, the price stats depend on what sold and closed that particular month. Granted listings were up 20-30% month over month, and that is a good thing. Median prices are weirdly increased in some areas and down in others. I think the one thing that is true is 'days on market' as I am seeing things selling more quickly and with multiple offers. As for list to sales price this again is a symptom of the market we are in where buyers are being cautious and not giving away the store as they were last summer. (Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS)