July 2021

Proposition 19, Home Protection for Seniors

This bill went fully into effect on April 1st, empowering millions of homeowners across the state of California to move to a new home without incurring a tax penalty. Apparently, no one knows about this, so I am spreading the word.

Under this new law, homeowners who are age 55 and over, severely disabled, or victims of wildfires or natural disasters may now transfer the taxable value of their primary residence to a replacement primary residence when they move.

The replacement home can be located anywhere in California and sell for any price (with an upward adjustment to the property tax base if the new home is more expensive than the original home). The new home must be purchased within two years of the sale of the original home, and eligible homeowners can transfer their tax base up to three times.

Millions of Californians stand to save thousands of dollars on property taxes every year by taking advantage of Prop 19. This new law will have a real impact on so many Californians lives, easing the way for some to move into homes better suited to their needs and increasing available inventory for others looking to get into homeownership for the first time.

Buying? Here are 5 Strategies to Keep Your Offer Competitive

1. Prove your financing is in order: Cash is always king, but buyers who need financing can still compete by showing they're already approved and ready to close.

2. Bring your best offer, not just your best price: In markets where bidding wars are escalating prices above appraised values, buyers need to present their best offer because they may not get a change to counter.

3. Have YOUR agent make nice with the listing agent: How do you know what the seller wants? A call from your agent to the listing agent is an opportunity to communicate with enthusiasm and to confirm your solid offer.

4. Consider waiving or minimizing contingencies: Waiving contingencies can be a gamble for buyers, but it's growing more prevalent in hot markets. It has been recently reported, that 21% of all winning offers waived the appraisal contingency.

5. Put more skin in the game: Offer extra reassurance that you intend to close. A buyer may be able to make a higher down payment or offer more earnest money to show commitment. Be educated about the realities of bidding wars. Know the pitfalls and advantages and BE READY.

Update from the California Association of Realtors

Gov. Gavin Newsom signed AB 832 into law Monday night which, among other things, allocates additional federal rent relief dollars to the state rental assistance program for housing providers with qualified tenants.

While C.A.R. recognizes that federal law restricts the state's use of federal funds to assist only tenants who earn up to 80% of area median income, C.A.R. believes that, given the extended moratorium, housing providers who have tenants who earn above that federal cap who are experiencing pandemic related hardships and are unable to pay their rent should receive rental assistance. C.A.R. has expressed these concerns to the Legislature and is continuing to work to see if state funds can be allocated for such assistance.

Additionally, the CDC has extended the eviction moratorium for one final month through July 31, 2021. To protect homeowners with federally backed mortgages against foreclosure, the Administration is extending the foreclosure moratorium until July 31.

Homeowners impacted by the pandemic with mortgages backed by HUD, VA, USDA, Fannie Mae, and Freddie Mac, as well as housing providers with Fannie Mae or Freddie Mac multifamily mortgages, may apply for forbearance until September 30, 2021.

As housing boom fizzles, weekly mortgage demand falls nearly 7%

Record high home price appreciation is sidelining ever more buyers and finally taking the bang out of the pandemic-induced housing boom according to an article from CNBC. Weekly mortgage demand is falling along with it, down 6.9% for the week according to the Mortgage Bankers Association's seasonally adjusted index. That is the lowest level in lmost a year and a half and the slowest pace since the start of May 2020, when lockdowns were in full force. >p>Demand is now slumping due to weakening affordability, especially at the lower end of the market where demand is strongest. Both the types and size of loans for which borrowers are now applying also point to an overheating in the homebuying market.

Purchase applications for conventional loans declined last week to the lowest level since last May. The average loan size for total purchase applications increased, indicating that first-time homebuyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale. Mortgage rates also set more than a dozen record lows last year, giving buyers more purchasing power and helping to inflate home prices.

Now higher mortgage rates are doing just the opposite for buyers. The average contract interest rate for 30-year fixed-rate mortgages increased to 3.20%. Mortgage rates were volatile last week, as investors tried to gauge upcoming moves by the Federal Reserve amidst several divergent signals, including rising inflation, mixed job market data, strong consumer spending, and a supply-constrained housing market that has led to rapid home-price growth.

2nd Quarter comparisons for Santa Cruz, Monterey & the Bay Area

Comments: June new listings dropped significantly in Santa Cruz County, yet sales rose 13%. Most likely the reason list to sales price rose over 5% month over month. Monterey County had an increase in both new and sold listings of over 16-18% and once again the list to sales price ratio rose 3.5%. Santa Clara County showed no significant increase except for the City of San Jose. County wide the median price ticked up a bit yet the days on market and list to sale price remain mostly the same month over month. Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS.