The Q2 2020 Southern California Gardner Report Is Here.
Caroline
COVID-19 & Real Estate: What You Should Know if You’re in the Market.
By Caroline Abkar, Realtor
3/27/2020
Whether you’re in the market now or will be in the near future, this video will help you understand what to look out for and how COVID-19 is affecting the real estate market right now.
California’s Proposition 13 Ballot Measure 2020: What, Why?
By Caroline Abkar, Realtor
3/2/2020
There is good reason to be confused about the California Proposition 13 ballot measure. While I won’t sway anyone’s vote one way or another, I think it’s important to make the most informed decision possible so here is a breakdown of what you need to read/know.
Firstly, this ballot measure is not, nor does it have any real bearing on, the Proposition 13 — the landmark 1978 initiative that limits property taxes and restricts their annual increase. That Prop 13 transformed the state’s finances and has since become a “third rail” in California politics. It seems like an accident of fate that they have the same name.
Bay Park Home Coming Soon! 2760 Deerpark Dr, San Diego, CA 92110
2760 Deerpark Dr
2760 Deerpark Dr
🏡 Sneak peak! This beauty will be ready any day now in Bay Park and I plan to hold it open this weekend Sat 2/8 & Sun 2/9 @ 1-4pm 🔥🔥
🌴 3 bedrooms
🌴 2 bathrooms
🌴 1,722 Sq Ft
🌴 2 car garage
🌴 6,800 Sq Ft lot
🌴 Partial bay and ocean views!
🌴 Fully remodeled
🌴 Price being finalized, most likely $1,195,000-$1,295,000.
For more details and to confirm readiness, please call/text/message me at 📲 619-808-4804
Caroline Abkar, REALTOR®, B.Sc.Eng.
Your Trusted Realtor and Advisor For Life
Windermere Homes & Estates
DRE# 01998434
📲 : 619.808.4804
📧 : Caroline@YourSanDiegoRealty.com
www.yoursandiegorealty.com
2020 Real Estate Market Forecast
It’s that time of year when Windermere’s Chief Economist Matthew Gardner dusts off his crystal ball and peers into the future to give us his predictions for the 2020 economy and housing market!
U.S. Economy
In general, the economy performed pretty much as I expected this year: job growth slowed but the unemployment rate still hovers around levels not seen since the late 1960s.
Following the significant drop in corporate tax rates in January 2018, economic growth experience a big jump. However, we haven’t been able to continue those gains and I doubt we’ll return to 2%+ growth next year. Due to this slowing, I expect GDP to come in at only +1.4% next year. Non-residential fixed investment has started to wane as companies try to anticipate where economic policy will move next year. Furthermore, many businesses remain concerned over ongoing trade issues with China.
In 2020, I expect payrolls to continue growing, but the rate of growth will slow as the country adds fewer than 1.7 million new jobs. Due to this hiring slow down, the unemployment rate will start to rise, but still end the year at a very respectable 4.1%.
Many economists, including me, spent much of 2019 worried about the specter of a looming recession in 2020. Thankfully, such fears have started to wane (at least for now).
Despite some concerning signs, the likelihood that we will enter a recession in 2020 has dropped to about 26%. If we manage to stave off a recession in 2020, the possibility of a slowdown in 2021 is around 74%. That said, I fully expect that any drop in growth will be mild and will not negatively affect the U.S. housing market.
Existing Homes
As I write this article, full-year data has yet to be released. However, I feel confident that 2019 will end with a slight rise in home sales. For 2020, I expect sales to rise around 2.9% to just over 5.5 million units.
Home prices next year will continue to rise as mortgage rates remain very competitive. Look for prices to increase 3.8% in 2020 as demand continues to exceed supply and more first-time buyers enter the market.
In the year ahead, I expect the share of first-time buyers to grow, making them a very significant component of the housing market.
New Homes
The new-home market has been pretty disappointing for most of the year due to significant obstacles preventing builders from building. Land prices, labor and material costs, and regulatory fees make it very hard for builders to produce affordable housing. As a result, many are still focused on the luxury market where there are profits to be made, despite high demand from entry-level buyers.
Builders are aware of this and are doing their best to deliver more affordable product. As such, I believe single-family housing starts will rise next year to 942,000 units—an increase of 6.8% over 2019 and the highest number since 2007.
As the market starts to deliver more units, sales will rise just over 5%, but the increase in sales will be due to lower priced housing. Accordingly, new home prices are set to rise just 2.5% next year.
Mortgage Rates
Next year will still be very positive from a home-financing perspective, with the average rate for a 30-year conventional, fixed-rate mortgage averaging under 4%. That said, if there are significant improvements in trade issues with China, this forecast may change, but not significantly.
Conclusion
In this coming year, affordability issues will persist in many markets around the country, such as San Francisco; Los Angeles; San Jose; Seattle; and Bend, Oregon. The market will also continue to favor home sellers, but we will start to move more toward balance, resulting in another positive year overall for U.S. housing.
About Matthew Gardner:
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
The Best Time To Buy A House Is Now: Top 5 tips to get a deal!
By Caroline Abkar, Realtor – 9/23/2019
Buyers always ask me: when is the best time to buy a house? Turns out, realtor.com crunched numbers to figure out exactly when the best time to buy a house for 2019 is and it is… right now, right this week!
Statistics show that there will be north of 26% less competition for buyers out there with many families having already settled in time for back to school. In addition, homes that did not sell over the summer are seeing increased market days which in turn equates to motivated sellers. There is also some new fall inventory hitting the market as we speak, with sellers wanting to close their transaction before the end of 2019. Realtor.com projects a 6% increase in inventory starting this week. Throw in the low interest rates, and it’s the perfect home buying environment out there.
I am sharing my top 5 tips on to get that deal. It’s all in my quick video!
About the author: Caroline Abkar is an established Realtor and Bay Park resident who is absolutely passionate about the community as well as representing her clients in selling and acquiring the biggest investment of their lives. She will go above and beyond for those who place their trust in her. You can contact her anytime at 619-808-4804.
2019 Economic and Housing Market Forecast
Thinking about making a real estate move in 2019 but wish you knew where the market is headed? Will prices drop? Will interest rates rise? Is it the right time to buy or sell? Is the bubble about to pop?
We all wish we had a crystal ball to see into the future. What we do have though is knowledge, and that is power. Please take a moment to read this 2019 Economic & Housing Forecast by Windermere’s Chief Economist Matthew Gardner because that may just answer some of these questions you have on your mind. Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics and has more than 30 years of professional experience both in the U.S. and U.K.
Before you read the forecast, remember: every situation is unique. If you are planning to remain in your new home for at least a few years, your decision will not be based on how likely you are to make a return on investment after 2 years. Or, if you’re renting and your monthly payment would be very similar as a homeowner, there are benefits you may be missing out on if you compare your net cost of renting vs owning. Depending on your age, income, debt situation, credit profile, and goals there may be programs out there for you to benefit from. Or there may not. If you’re an investor looking for that perfect rental property, then your angle will definitely be more focused on your cash on cash return. I am here to help if you have any questions and happy to put my resources to good use for you.
Enjoy the read!
~Caroline@YourSanDiegoRealty.com
2019 Economic and Housing Forecast – by Matthew Gardner, Chief Economist, Windermere Real Estate
What a year it has been for both the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.
The U.S. Economy
Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.
Firstly, any cyclical downturn will not be driven by housing. Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.
The U.S. Housing Market
Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market. In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.
Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017. In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.
New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.
That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.
Mortgage Rates
In last year’s forecast, I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.
In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling. We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.
I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.
Conclusions
There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating. In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.
That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.
Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.
5 Reasons Rising Interest Rates Won’t Wreck the Housing Market
This blog post is written by our Chief Economist Matthew Gardner at Windermere Real Estate and originally posted on the Windermere site here: https://www.windermere.com/blogs/windermere/posts/5-reasons-rising-interest-rates-won-t-wreck-the-housing-market
I found the content too valuable not to share on my own blog!
5 Reasons Rising Interest Rates Won’t Wreck the Housing Market
Written by Matthew Gardner, Chief Economist, Windermere Real Estate
Interest rates have been trending higher since the fall of 2017, and I fully expect they will continue in that direction – albeit relatively slowly – as we move through the balance of the year and into 2019. So what does this mean for the US housing market?
It might come as a surprise to learn that I really don’t think rising interest rates will have a major impact on the housing market. Here is my reasoning:
1. First Time Home Buyers
As interest rates rise, I expect more buyers to get off the fence and into the market; specifically, first time buyers who, according to Freddie Mac, made up nearly half of new mortgages in the first quarter of this year. First-time buyers are critical to the overall health of the housing market because of the subsequent chain reaction of sales that result so this is actually a positive outcome of rising rates.
