Monthly report · No.4
THURSDAY, JULY 25, 2024
the state of the market
The Housing Factor
By Ehsan Habib
This June we continued to experience a Year-over-Year (YoY) increase in new listings. There were 15% more new listings and 3.5% more contracts written than June 2023. Despite the modest increase in supply, the median sold price increased by 2.8%. While one would expect prices to soften in the face of an increase in supply and relatively flat buyer demand, it is important to note that 2023 was a record low in real estate activity. While 2024 has been better, it is still shaping up to be the second lowest year on record (MLS records go back to 1997).
As of the first of July the absorption rate sat at 45.5% - meaning it would take a little more than 2 months for all of the housing stock to be absorbed by buyer activity. Put simply, we remain in a sellers market. The disproportionately smaller increase in sales relative to new listings can largely be attributed to buyers being more discerning in which homes they want to write an offer on.
If you would like to discuss what is going on in your neighborhood, or would like to see custom data reports, please don't hesitate to reach out.
Industry news
The Impact of elections
on real estate
By Declan Spring
With the Republican National Convention behind us, and the Democratic National Convention occurring in August, election season has fully arrived. But what is the impact of elections on real estate?
Wondering how the second half a typical election year affects the real estate market? In this article David Childers, CEO of Keeping Current Matters, shares historical information on what we've seen in the past in regard to the number of transactions and home values. Mark Twain once said, "History doesn't repeat itself, but it does rhyme".
Childers shared the chart from page 1 (Fig. 1) that shows the typical drop in transactions for October and November of 9.8% during non-presidential election years. It also shows the 15% typical drop in transactions for the same two months during presidential election years. The key though, says Childers, is to understand that those transaction don't go away, but rather they are simply delayed to the following calendar year.
The historical data below (Fig. 2) shows that the number of sales in the year after an election year increased nine of the past eleven times, and that in addition to the increase in sales following a presidential election, house prices also rose after 10 of the last presidential elections, with 2008 being the only exception.
Mortgage news
What Is Mortgage Preapproval and
Why Is It Important?
By Evelyn Freitas | VP of Mortgage Lending at Guaranteed Rate NMLS 247578
The first step in the homebuying process, unless you're a cash buyer, is to be preapproved by a lender. Preapproval offers numerous benefits and can significantly enhance your homebuying experience, giving you a competitive edge over other buyers.
In the preapproval process, a lender evaluates your credit, income, and assets to determine how much you can borrow and the mortgage strategies that will be advantageous to you. You'll complete a loan application and provide documents to validate the information in the application, such as W2 forms, paystubs, and bank statements. The lender will review your credit report as well. If possible, work with a lender who does a soft credit pull to avoid any impact to your score. This step provides a clear picture of your price range so you can refine your search to include the right homes. I like to think of preapproval as the GPS to your home search for this reason. Having your credit report can give you the opportunity to improve your score while you're looking for your new home, so you'll get the best mortgage terms possible when you find it. Additionally, having a preapproval letter demonstrates to sellers that you are a serious and qualified buyer so they can accept your offers with confidence, giving you a competitive edge in a hot market.
For more information, please contact me at evelyn.freitas@rate.com and let's chat!
industry news
Update on the realtor® settlement
Declan Spring
The real estate industry is on the verge of change. New rules around commissions are set to take effect in late August. The media has not reported accurately on the proposed changes. In anticipation of the proposed changes the forms that we use day-to-day are in the process of revision.
By middle to late August we anticipate a situation where potential buyers will sign a contract with their preferred "buyers" agent, committing to a specific amount of compensation before they ever even visit property. This amount is usually 2.5% of the sales price.
Buyers will hope that the seller will cover this cost, as has been conventional for decades, but the compensation to a buyers agent from sellers will not be advertised in the MLS. Understanding the compensation a seller might offer to the buyers broker will become private information. If the seller is not paying the commission then the buyers will need to pay out of pocket, or make a specific demand to the seller...
spotlight
the home factor recommends
By Denitsa Shopova
Did you know that July and August are the least busy months for roofers? We've had some gloriously wet winters in recent years and if you've tried to get a roofer to your home after the onset of rain you'll have discovered that it's difficult and expensive. July and August are the best months to take action on a roof inspection and repairs.
We recommend a visit from our friends at Planchon Roofing · planchonroofing.com
The Home Factor • DRE#01398898 • Powered by Keller Willams • 2089 Rose St, Berkeley, CA 94709 • Declan@TheHomeFactor.com (415) 446-8591