Real Estate • April 24, 2023

Careful to Price it Right When Selling

by Kara Brem

Over the last year, the housing market’s gone through significant change. While it’s still a sellers’ market, homes that are priced right are selling, and they get the most attention from buyers right now. If you’re thinking of selling your house this spring, it’s important to lean on your expert real estate advisor when it comes to setting a list price. As Realtor.com explains:

“Move-in-ready homes with curb appeal and in desirable areas—and that are priced to sell—are especially likely to move quickly this spring.”

In today’s market, how you price your house will not only make a big difference to your bottom line, but to how quickly your house will sell.

Why Pricing Your House Right Matters

Your asking price sends a message to potential buyers, especially today.

If it’s priced too low, you may leave money on the table or discourage buyers who may see a lower-than-expected price tag and wonder if that means something is wrong with the home.

If it’s priced too high, you run the risk of deterring buyers. When that happens, you may have to lower the price to drive interest when your house sits on the market for a while. But be aware that a price drop can be seen as a red flag by some buyers who will wonder what it means about the home.

To avoid either headache, price it right from the start. A real estate professional knows how to determine the ideal asking price. They balance the value of homes in your neighborhood, current market trends, buyer demand, the condition of your house, and more to find the right price. This helps lead to stronger offers and a greater likelihood your house will sell quickly.

The visual below helps summarize the impact your asking price can have:

Bottom Line

Homes priced at the current market value are selling faster and at a better price right now. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassles, let’s connect today.

Real Estate • April 2, 2023

California Dream for All Homebuyer Assistance Program – 20% Shared Appreciation

by Kara Brem

The California Dream for All homebuyer assistance program is a shared appreciation down payment assistance program that provides 20% down payment of assistance, in the form of a silent second loan, to qualified first time buyers. Assistance can be used to pay down payment and/or closing costs.

The DFA fund homebuyer assistance program is not a handout or a subsidy that will be a burden on the California tax payer because it will be self sustaining from the returns on the shared equity.

Benefits of the California Dream For All Assistance Program:

Lower interest rate than other assistance programs
Lower monthly payment because you avoid paying private mortgage insurance(PMI)
Lower monthly payment due to lower loan amount
Increased buying power due to larger down payment and lower rate & payment
No monthly repayment of the subordinate silent 2nd assistance loan
Homeowner doesn’t repay until they sell, refinance or transfer the property

Repayment of the Dream For All Assistance Loan

Upon sale, transfer of the home, or if the borrower refinances, the homebuyer will repay the original down payment loan, plus a share or percentage of the home appreciation. The silent second DFA loan does not accrue interest…..it is 0%.

Ability to Refinance

You will be able to refinance and re-subordinate the DFA shared appreciation loan in order to reduce your interest rate and payment just ONE TIME without being required to repay the DFA loan.

What does Shared Appreciation Mean?

It’s not a bad thing. Shared appreciation just means that since the California State Housing Finance Agency is investing (partnering) in your ability to purchase a home that will build generational wealth for you, that you will split or share a small percentage of the increase in the value of the home when you sell, transfer ownership, or refinance.

How Much Appreciation is ‘Split or ‘Shared’?

The percentage of appreciation that is split or shared with the state housing authority when you sell, refinance or transfer your home depends on what your income is.

80%/20% Split = Borrowers with income between 80% to 150% of the AMI (moderate income) keep 80% of the home appreciation. The state receives 20%.

75%/15% Split = Borrowers with income under 80% AMI. (This is almost no one) keep 75% of the home appreciation. The state receives 15%. Search AMI income here.

** Shared Appreciation Cap = Appreciation is capped at 2.5 times the original principle loan amount.

Dream For All Shared Appreciation

Below is what a $500,000 purchase might look like if a moderate income (AMI 80-150%) homeowners sells their home for $700,000 or refinances and it appraises for $700K.

Shared Appreciation Example

Dream For All Eligibility & Qualifying Criteria:

First time homebuyer (anyone who hasn’t owned a home in the last 3 years)
Minimum Credit Score & DTI ratio:
45% DTI with 680 – 699 FICO score
50% DTI with 700+ FICO score
45% DTI with 660 up FICO score (income below 80% AMI)
Property Type: SFR / Condo / Manufactured
Min/Max CLTV: 70%/105%
Non-occupied co-signers not allowed
Cannot Exceed County Income Limit of $211,000
CalHFA homebuyer education course required
One year home warranty required
Must be used with CalHFA DFA Conventional 1st loan
Cannot be combined with other CalPLUS ZIP or MyHome Assistance programs

For more information, reach out to me today and I can set you up with a loan officer to explore if this program will work for you.

Real Estate • March 22, 2023

Here’s Why the Housing Market Isn’t Going To Crash

by Kara Brem

Highlights:

Today’s housing market is different than it was in 2008.
Lending standards have tightened, foreclosures have declined, home inventory is much lower, and homeowners have far more equity.
If you’re concerned about a crash, meet with a local real estate professional to discuss why this isn’t like last time.

Real Estate • March 7, 2023

One Major Benefit of Investing in a Home

by Kara Brem

One of the many reasons to buy a home is that it’s a major way to build wealth and gain financial stability. According to Freddie Mac:

“Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

With spring approaching, now’s a great time to consider if buying a home makes sense for you. The best way to figure that out is to talk with a trusted real estate professional.

The Largest Part of Most Homeowners’ Net Worth Is Their Equity

You may be surprised to learn just how much of a homeowner’s net worth actually comes from owning their home. The National Association of Realtors (NAR) shares:

“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”

In other words, home equity does more to build the average household’s wealth than anything else. And according to data from First American, this holds true across different income levels (see graph below):

Bottom Line

One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth.
Let’s connect today so you can start investing in homeownership.

Real Estate • February 20, 2023

You May Not Need as Much as You Think for Your Down Payment

by Kara Brem

You May Not Need as Much as You Think for Your Down Payment [INFOGRAPHIC] | MyKCM

Some Highlights

Many people believe you need to put down 20% of the purchase price when you buy a home. But recent homebuyers actually put down far less on their purchase.
And with programs like FHA loans, VA loans, and USDA loans, some qualified buyers are able to put down as little as 0-3.5%.
Let’s connect to make sure you have a trusted lender and can find out if you’re ready to buy a home sooner rather than later.

Real Estate • February 7, 2023

Lower Mortgage Rates Are Bringing Buyers Back to the Market

by Kara Brem

Lower Mortgage Rates Are Bringing Buyers Back to the Market | MyKCM

As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.

Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.

So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.

Mike Fratantoni, SVP and Chief Economist, MBA:

“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

Thomas LaSalvia, Senior Economist, Moody’s Analytics:

“We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.”

Sam Khater, Chief Economist, Freddie Mac:

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”

Bottom Line

If you’ve been thinking about making a move, now’s the time to get your house ready to sell.

Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.

Real Estate • January 17, 2023

Don’t Wait for Mortgage Rates to Drop to 3%

by Kara Brem

Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.

Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Mac, shares:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.

While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrate, explains:

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.”

It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.

Bottom Line

The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today’s rates impact your goals, and let’s connect to explore your options in our area.

History of Interest Rate 2023

Real Estate • January 13, 2023

What Experts Are Saying About the 2023 Housing Market

by Kara Brem

What Experts Are Saying About the 2023 Housing Market | MyKCM

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market this year. In 2022, the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices. But what about 2023?

An article from HousingWire offers this perspective:

“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”

This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.

The 2023 forecast from the National Association of Realtors (NAR) says:

“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”

Danielle Hale, Chief Economist at realtor.com, adds:

“. . . buyers will not face the extreme competition that was commonplace over the past few years.”

Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:

“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Mark Fleming, Chief Economist at First American, says:

“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.”

Bottom Line

If you’re looking to buy or sell a home this year, the best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect.

Real Estate • December 12, 2022

5 Interior Design Trends for 2023

by Kara Brem

A living room in a modern home decorated with some of the top interior design trends for 2023 including earth tones like off-white, light browns, and blues and organic materials like linen and marble.

The interior design trends of 2022 included a renaissance of colorful decorating, a preference for sustainable materials, and incorporating nature throughout the home. They reflected the continued evolution of our lifestyles in recent years and showed an overall desire for our homes to be somewhere we can relax, decompress, and focus on our wellbeing.

With 2023 just around the corner, expect to see the latest design trends continue that trajectory of creating a home that’s vibrant yet soothing.

5 Interior Design Trends for 2023

1. Butler’s Pantries

There’s something endlessly fascinating about features throughout a home that tie spaces together and create harmony. A butler’s pantry is the perfect resource for homeowners who feel their kitchens are always running at capacity. Typically located adjacent to the kitchen or dining room, modern butler’s pantries are often concealed behind cabinets or pocket doors. An economical solution for food and kitchen item storage, they allow you to prep meals outside the kitchen, gather silverware, and prepare to set the table. Kitchens are the heart of the home, and this space has taken on even more significance in recent years. It’s no wonder these special home features are on the rise.

A look through a modern kitchen to a butler’s pantry with a separate entrance. The shelves are stocked with silverware and china.

Image Source: Getty Images – Image Credit: PC Photography

2. Colorful Kitchens

Color in the kitchen is back in style! The neutral-toned backdrop of farmhouse-style interiors that leapt to the forefront of home design in recent years is still popular, but homeowners can expect to see more bold colors in 2023. The kitchen island, cabinets, and backsplash are three target areas for adding color to your kitchen. These large surface areas are tailor-made for color splashes to lead the eye throughout the room. Experiment with complimentary tile designs, two-toned cabinets, and dark-stained wood to create a kitchen atmosphere that feels anything but bland.

A modern kitchen with state-of-the-art appliances and matching navy-blue cabinets and drawers with gold handles. The island has a matching navy base and warm butcher-block like wood top. Against bright white walls and with metallic accents, the space is both colorful and warm.

Image Source: Getty Images – Image Credit: JohnnyGreig

3. Organic Materials and Décor

In some ways, the design trends that defined 2022 will continue into next year. One such trend that will ring true in 2023 is a desire to fill the home with organic materials. Indoor plants will continue to be a popular decorative item throughout the home, both for their health benefits and their ability to mix and match with any décor style. In the living room, natural materials like stone, wood, and organic fabrics will help tie a home’s organic aesthetic together. And in the kitchen, stone and marble countertops add an earthy touch.

A young woman works from home on her laptop surrounded by house plants. The walls are off white, and with white plaster planters and natural wood accents, the green color of the plants pops against the clean backdrop.

Image Source: Getty Images – Image Credit: Tatiana Buzmakova

4. Earth Tones

While bold colors are making their return to the kitchen, earth tones will help to balance out homeowners’ interior design palettes next year. Many design leaders’ color of the year selections for 2023 are in, all showcasing unconventional takes on earthy colors. Whether it’s beige, magenta, cream, or forest green, you can use these shades throughout your home to create balance and ground your bolder color choices elsewhere. Looking to swap out your grey couch? Have you always wanted to paint your gallery wall something other than off-white? Now is the time!

A living room designed with earth tones. The rattan chair and side tables are a wood-toned brown, the walls are painted with a warm latte color, the pillows and couch range from off-white to clay, and the hardwood floor is a light-stained wood. Black accents round out the room which has a calm and cozy ambience.

Image Source: Getty Images – Image Credit: FollowTheFlow

5. Intentional Spaces

Homeowners have made significant adjustments to their lifestyles in recent years. For many, that’s meant spending time on their hobbies, exercising, and working on passion projects at home, whereas previously they may have gone elsewhere. After a couple years of making do with whatever space was available, moving forward, we’ll see a more intentional approach to creating space at home for those activities. Whether it’s building out a home gym, setting up your home office, craft room, art studio, yoga sanctuary, etc., having a dedicated area allows for privacy and focus while doing the things you love.

A woman cuts shapes out of construction paper in her craft room.

Image Source: Getty Images – Image Credit: Petar Chernaev

Article by Sandy Dodge

Interest Rates • Real Estate • November 23, 2022

Mortgage Rates Will Come Down, It’s Just a Matter of Time

by Kara Brem

Mortgage Rates Will Come Down, It’s Just a Matter of Time | MyKCM

This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home price growth has slowed. All of this is due to the fact that the average 30-year fixed mortgage rate has doubled this year, severely limiting homebuying power for consumers. And, this month, the average rate for financing a home briefly rose over 7% before coming back down into the high 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year.

Inflation Is the Enemy of Long-Term Interest Rates

As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation. As Ali Wolf, Chief Economist at Zonda, says:

“The housing market is expected to face continued uncertainty heading into 2023 as consumers, financial markets, and policymakers work through their respective challenges in today’s economy. . . . we are watching for any additional stability in the MBS market, signs of cooling inflation, and/or less aggressive Federal Reserve action to give us confidence that mortgage rates are past their peak.”

What Does This Mean for the Future of Mortgage Rates?

As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen nods of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well. Bill McBride from Calculated Risk says:

“My current view is inflation will ease quicker than the Fed currently expects.”

As we look toward next year, we certainly hope he’s right.

Bottom Line

Mortgage rates will come down – it’s just a matter of time. The hope is we continue to see more positive news on inflation, and that’ll bring mortgage rates down. This will give prospective homebuyers more buying power and lead to more homeowners throughout the country.