Dani Blain Real Estate Team

The Market Now is NOT the Same as the Market in 2008

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Anyone who works in Real Estate these days can’t escape the line of questioning surrounding whether or not we are in a housing bubble or if there is going to be a market crash. People are seeing the prices of homes on the rise, and it begins to feel familiar. For anyone who was old enough to have experienced the Housing Market Crash of 2008, it does make you scratch your head and wonder if we are on a path that is going to lead to another big market crash. 

Let’s dig in to why 2021 is NOT 2008 and we will not see history repeat itself. In today’s Real Estate Market, housing prices are up – which is the biggest similarity to 2008 – but thankfully, most similarities stop there. 

Housing Prices are high right now due to simple supply and demand

The situation in the market right now is a classic example of supply and demand – one that a high school economics teacher would be thrilled to give – it’s that perfect. Interest rates are at an all time low – which is making potential buyers feel like they need to jump at locking in this low rate before it passes them by (demand) – coupled with the fact that home inventory is at an all time low (supply), then causing the price of houses to rise.

Why were housing prices skyrocketing before the 2008 Housing Market Crash? Mostly because there was a buying frenzy causing home prices to reach unsustainably high levels, due to predatory lending practices. Down payments were almost non-existent and people were approved for loans they should have never received. People were getting into homes with adjustable rate mortgages forcing them to default on their mortgages when rates increased to levels that were doubling and even tripling their monthly payments. 

Then enter the Market Crash… it gets a little more complicated at this point, but to simplify – people defaulting on paying their mortgages, lead to foreclosures, which therefore decimated the financial securities that were backing the subprime mortgages. There is a lot more to that side of things, but the bottom line is this: in 2021, those poor lending practices are no longer allowed. The mortgage industry has been completely overhauled and regulated to ensure we do not see a repeat of 2008.

Rates are low right now to help fuel the economy through the coronavirus pandemic and according to Freddie Mac, these rates are projected to stay low throughout 2021 which will help with keeping the market lively and moving forward. 

The other main difference in 2021 vs 2008 is the fact that many homeowners have more equity in their homes than the homeowners of 2008. This helps protect homeowners that may have fallen on hard times – they can refinance or pull cash out of their homes with their equity. Additionally, they could opt to sell their home rather than having to Short Sell or be forced into a foreclosure situation. 

Will we see the market stabilize in the near future? 

That depends on what happens with inventory of homes for sale. Currently, in the Central Valley and along the Central Coast, we have a one month supply of homes on the market. A common thought is having 4-6 months of supply is a balanced market, so it may be a while that we are in what is referred to as a Seller’s Market. 

The hope is with the vaccine rollout and more things slowly returning to normalcy, current homeowners will have more confidence in listing their homes, therefore increasing inventory. In addition to those homes coming on the market, there is a fair amount of new builds that are also going to help add to the inventory, which will make things less competitive with buyers, which will slowly keep the housing prices in more balance. 

While we unfortunately do not have a crystal ball, we can look to industry expert predictions and history to feel confident in saying that 2021 will not see a market crash. We know that everything in this market can feel a bit overwhelming, but we want to make sure that our potential buyers and sellers know that we are here to serve you and meet all of your real estate needs. If you are still feeling unsure and want to speak to one of us about the market, your options, or where to begin the buying or selling process, please reach out to us. We are happy to help and discuss things with you further. 

Selling in a Seller’s Market Sounds Great… Until I Become the Buyer in a Seller’s Market

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You’ve heard it over and over… you get it! You know it’s a Seller’s Market. You are well aware that inventory is low and the market NEEDS listings. Right? You own your home, you know it is the right time to sell – but you are worried. Because it seems that all you ever hear is how quickly houses are selling and it sounds like the competition for new listings is fierce. Guess what? We (the Real Estate industry) are not doing a good job selling the idea of selling your home right now. 

Does this sound like you? 

“If I sell my house, and it’s a Seller’s Market – great. Buuuut, in the next breath I am actually a Buyer in said Seller’s Market – soooo then what? Will I be able to find another home? Will I even be able to afford the home I want (if I can find it?) What if I don’t find something before escrow closes? Where will we go? Forget it… we will stay put.”

Those are all very fair, great questions. Let us help ease some of those concerns and start instilling a bit of confidence into our would-be sellers. Here is what you need to keep in mind:

You are likely moving from one price range to another

More often than not, when people own a home and are looking to sell, it’s into a bigger home or a home in a different area that wasn’t an option to you when you first bought your home. Typically, it is the next price range up from what was a starter home. 

Right now, here in the Valley, starter homes are selling like hotcakes! Truly – they are oftentimes only on the market for a matter of days. Why is that? Because mortgage rates are so low that many first time buyers see home ownership as a reality. These are the people coming in and snatching up newly listed homes. 

If you are looking to sell your starter home and move into your forever home, you aren’t competing for the same homes as many of today’s buyers. Additionally, if you are looking to move from what you thought was your forever home and into a luxury home – this is the perfect time! Luxury listings are not as competitive and low mortgage rates may make this a more viable option for you. 

It really is a Seller’s Market, so you can negotiate not only the financial side of the contact, but also the timeline

While the process of being a buyer and a seller does add more moving parts and may make a stressful situation, feel a bit more stressful — it isn’t impossible. With the leverage you will have in the negotiation of the home you are selling, you can make sure you don’t leave yourself out in the cold. You can build in contingencies and/or you can say that you want a longer escrow. There are many ways to get creative with counter offers to make sure you set yourself up for success when you move into the buyers seat.

You can create a solid back-up plan

If things get a little dicey or the timing doesn’t match up perfectly, you should have a back-up plan. While getting ready to list your home, start saving money – ideally, you will have two times your monthly mortgage payment on hand in case you have to carry both homes for a while.

That extra money can also go towards an AirBnB you can stay in temporarily – or you can negotiate a rent back from the people buying your first home. If you can stay with family, that will save you some money and you can put money towards a storage unit until your next home is ready. 

Still feel overwhelmed by the what ifs? We got you!

It would be beyond overwhelming and stressful if you were going into this blind and alone, but guess what? You’re not! Hopefully you are working alongside an experienced Real Estate Pro… and if you are reading this on our blog – then we certainly hope it is with one of our experienced agents!

We have worked with many sellers that are also a buyer. We have had to get creative and learn how to make this market work for our clients. We are confident that we can successfully get you from one home to another even in today’s market. 

Right now is the best time to sell your home. Period. You are hearing about it all the time because it has never been more true. Even if you do move from the Seller role into the Buyer role – now is still the right time, because with these low interest rates – you will get more home for less money. 

While it is clear that this market is a “no-brainer” for Sellers – it’s also great time to jump on the investment and ownership opportunities as a buyer with the rates as they are. Soooo… if you are even the tiniest bit considering selling, reach out to us,  and we will set you up with an agent to talk things out and make you feel at ease before you officially enter into the process. 

The Reality of Today’s Market

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Seller’s Edition

Inventory is low, it’s a seller’s market, sell now! Seems like those are the things people have swirling around in their heads these days. While it is true that we are currently in the middle of a seller’s market – it’s not just any ol’ market – its a market like none of us have ever seen. We talked a while back about what the current Real Estate Market here in the Central Valley in our post “The Real Estate Market TODAY” and today we are going to dig in a little deeper on what the reality is for sellers at this moment. 

When you are working with an experienced Real Estate Agent you will have someone to guide you through what the process can look like in this unique market. Our team of Agents here at Dani Blain Real Estate have remained very busy throughout the coronavirus Pandemic and very familiar with the current trends. Some things you should be thinking about if you are going to be putting a house on the market soon:

It will be a lot different than the last time you bought or sold a house

No one has ever seen a market like this before. We can promise you – unless you have bought/sold a home in the last six months, this process will be very different than the last time you were here. You may see incredibly short listing times. With inventory low and loads of eager buyers, we are seeing houses only having live listings for a number of hours before the offers start rolling in. 

You may receive multiple offers. You may see multiple offers above your listing price. There may be heartfelt letters from sellers of why you should choose them over another eager buyer. With this seller’s market you will be in the driver’s seat – but working alongside a knowledgeable agent will be like having the perfect GPS navigating the route from the passenger seat. 

Make sure you have a strong virtual listing

With interest rates currently being so low, we are seeing a lot of first time buyers and the majority of them are Millennials. Millennials are all about shopping online and scrolling through MLS listings is something anyone can do before they even get out of bed in the morning. Having a listing with great photos, a virtual tour, etc… can really make your home stand out and garner lots of interest with excited buyers. Having people fall in love with a home before they even see it in person is what it is all about right now.

Be comfortable with the unknown 

Every house and every process is totally unique and different. Once the offers start to come in there will be a great deal of variables to work through with your agent. Having an agent that can be thinking ten steps ahead and trying to anticipate the unknown will help a lot. Being prepared to go on a bit of a journey with lots of twists and turns is what we need all of our seller’s to be comfortable with right now. 

Is now the right time to sell your house? It is a great time if you are ready! It will be important for you to have your plan and know exactly what the next steps are for after you sell your current home. We have Agents that can help you map out the best way to make this happen and help you search for a new home while you’re in the process of selling. It is a lot of moving parts during a stressful and emotional process – which makes working with an Agent you trust and click with is so important. Get in touch with us and we can help match you with an agent that will be perfect for you and your situation in any area in the Central Valley.

The Real Estate Market TODAY

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COVID-19 has changed nearly all aspects of our lives, so of course it has impacted the Real Estate Market. Here in the Central Valley and across the country, we are all dealing with this new pandemic market – a market like we have never seen. Like most industries, Real Estate was forced to make a quick pivot and adapt to the new safety measures and protocols put in place to keep buyers, sellers, agents, lenders, etc… safe and healthy. Now that we have all made the adjustments and navigated our way through some of the initial uncertainty, we have seen things settle a bit and can fill you in on what’s going on with the residential real estate market today:

Buyers are eager

They see that interest rates are at historic lows and they know they can lock in a rate in the 2.5s which is significantly better than rates have ever been. First time home buyers are looking at this as an opportunity to finally make their home buying dreams a reality. Here in the Valley, we are seeing homes in that first time buyer range of the low $200s sell in mere hours after the listing is live. In addition to those types of listings, we are seeing that there are eager buyers for every type of property coming in with creative ways to make sure they land the home they want.

Inventory is low

With so many eager buyers on the prowl for a place to call home, there are simply not enough houses on the market. With the initial uncertainty of the way pandemic would impact people’s jobs and livelihoods, there were a lot of hesitant home owners who weren’t sure that now was the right time to list their home. However, more recently, we are seeing this settle a bit. We have seen people are more aware that there is an opportunity to list their home and upgrade from a starter home into a forever home, or transition from a big family home into a smaller home for empty-nesters. Sellers are seizing this unique market as an opportunity and slowly adding to our inventory, which is great. 

Offers are WILD

It is safe to say over these last six months we have seen some of the most wild offers come through and have seen truly unprecedented things happening as it relates to this phase of the process. It can be fast paced, somewhat stressful, and feel a little intense. Sellers are favored and buyers need to come prepared for an offer process full of ups and downs. 

Now more than ever, we can say with certainty, that people that are getting into the houses of their dreams or are selling for above asking, are doing it alongside a Real Estate Agent they trust and is savvy in what is happening at this moment in Real Estate. Now is not the time to work with someone who is dusting off their license or doing Real Estate part time. Things are changing daily and our agents here at Dani Blain Real Estate are in the mix and making successful offers regularly. 

We have seen that a “bid it to win it” strategy is crucial in this market and we are well poised and experienced in this new Real Estate landscape across the valley. We invite you to reach out to us and chat with one of our agents who can help you prepare to either buy or sell in today’s market. Stay tuned for our next two blogs where we will be going more into depth on what the reality of this market is for buyers and for sellers.