AUGUST 2024
Homebuyers gained $30,000 in purchasing power with rate drop
Daily average mortgages have dropped to their lowest level since April 2023, according to Redfin. Welcome news for homebuyers who have been waiting for affordability to improve. A homebuyer on a $3,000 monthly budget can afford a $466,000 home with a 6.35 percent mortgage rate, roughly the daily average on Aug. 5. That buyer has gained nearly $30,000 in purchasing power over the last month alone: they could have purchased a $437,250 home with a 7.15 percent rate roughly the daily average at the start of July. And that same buyer has gained more than $40,000 in purchasing power since April, when mortgage rate hit a five-month high of about 7.5 percent.
To look at it another way, the monthly mortgage payment on the median priced U.S. home, which goes for roughly $443,000, is $2,842 with today's average mortgage rate. Just one month ago, the payment would have been $3,032, nearly $200 more.
How the real estate industry rules will impact CA buyers/sellers
Earlier this year, the National Association of REALTORS® and several major real estate brokerages agreed to pay over $950 million to settle federal lawsuits claiming they forced homeowners to pay so-called inflated commissions to sell their homes. The industry also agreed to policy changes aimed at creating more transparency around how brokers and agents are paid for their services. RE/Max President Amy Lessinger discussed what homebuyers and sellers can expect from the industry rule changes taking effect this month.
The first change that Lessinger discusses is that buyers pursuing a listing on the MLS will have to sign a written buyer's agreement, which was already required in roughly 20 states and soon to be in California. The second is that offers of compensation can no longer take place on the MLS. How that agent is compensated is between the buyer and their agent, and it will be spelled out. It could be a flat fee model, or the buyer could direct their agent to negotiate the fee with the seller as part of the contract. People need to decide what the value is of having a trusted professional represent their best interests, negotiate on their behalf, provide them with their local expertise and walk them through the process. The value hasn't changed just the process.
Property taxes by state: 2024 guide to understanding
If you want to become a homeowner, you'll want to make sure you can afford your area's property taxes. Because property taxes vary so much from state to state and even county to county, a home that affordable for you in one part of the state could be a budget-buster in a different zip code. The money from property taxes is often used to fund local schools, infrastructure and services such as the police, EMT and firefighter departments. Depending on where you live, you may owe a variety of different property taxes, both locally and at the state level. These include taxes charge by your city, county, local government, area school district, local utility district, and your state. Every state has some sort of property taxes, though some don't have state-level taxes and only local taxes.
In California, the median home value in 2024 to date is $809,860, and the median property taxes paid in 2023 were $4,831. Property taxes are typically calculated based on three key numbers, including the home's assessed market value as determined by a local tax appraisal or assessment board; the mill levy (another term for tax rate) you'll pay per dollar of your home's assessed value, which rates are set by local governments based on budgetary needs; and any property tax exemptions or deferrals you may qualify for, if you do. For example, most homeowners qualify for a homestead exemption, which reduces your taxable value and lowers your bill. Check with your local government to learn about any exemptions you might qualify for.
Read the entire article on Business News.
C.A.R. wins important concessions on Ballot Measure Legislation.
C.A.R. won significant changes to legislation concerning measures that are heading toward the statewide ballot.
ACA 1 will place Proposition 5 on the ballot. If approved, that measure will lower the voter approval threshold on local taxes and bonds for affordable housing and infrastructure projects from two-thirds to 55 percent. C.A.R. opposed ACA 1, and through its opposition several amendments have been made. The ballot measure now includes several changes that C.A.R. had lobbied for, including a new, more limited definition for public infrastructure, strengthening of the prohibition against the use of bond funds to acquire single family 1-4 units, removal of language which lowers the vote requirement for parcel taxes and sales taxes, as well as other provisions. Because of these amendments, C.A.R. has removed its opposition to ACA 1.
Another measure, ACA 13, would make it much more difficult to limit taxation in California by requiring initiatives that raise the vote threshold for state and local taxes to be approved by the same threshold. For example, if an initiative proposed to raise the vote threshold for a particular type of tax to a super majority, it too would have to be approved by a super majority before its provisions could be applied.
Additional legislation moved this and other measures to a future date. ACA 13 has been pushed back to the November 2026 ballot. C.A.R. was prepared to engage heavily to defeat ACA 13 on the ballot, and our opposition contributed significantly to the decision to postpone the measure to a later election date.
Stats Comparison for Santa Cruz & Monterey Counties & the Bay Area
Comments: Since May I have been surprised at the decline in new listings and current sales. Granted there was a very slight uptick in Monterey and Santa Cruz counties but nothing to sneeze at, especially given the time of the year. Surprisingly enough, even the median price dropped for the first time since April. The days on the market dropped substantially, maybe due to some price reductions? Yes, that is substantiated by the reduction in sale to list price across the board. If this trend continues, and we get the promised interest rate decrease, this trend should continue to see some real change. (Display of MLS data is deemed reliable and is not guaranteed accurate by the MLS as of 7/31/24)