IT’S AN OLYMPIC SPORT – I was moaning to my real estate client that our April new sale transactions opening count was down. She was moaning back to me, sharing her most recent endeavors to find a property for her client. Here’s her story: she showed her client 6 properties and could not get anything, but that’s not too unusual. What exasperated her was that the last property she showed was listed for $595,000, had over 70 people viewing and 26 offers. She offered $700,000 all cash and didn’t make the cut. It ended up selling for over $700,000. The property is in Fontana, not what I would consider a super popular Southern California locality, but you go where the supply is!
So, that’s why our openings are down – our clients have to embrace the Olympic motto when they go shopping for homes – citius, altius, fortius – faster, stronger, higher.
Don’t make the assumption that it’s just California. Austin, Texas? Crazy. Raleigh, North Carolina? Crazy, crazy. Even Logan, Utah! Crazy, crazy, crazy! I’ve heard Texans say that their craziness is caused by Californians rushing in to invest. That’s right, just blame California. We are used to shouldering the blame anytime something weird happens.
Added to the lack of inventory is the lack of lumber for the inventory. Oh, sure, there is lumber, but at what cost? CNBC reports that not only is $36,000 is being added to the price of an average new home it is also affecting the bottom line for any remodeling on existing homes. What else can happen to this market?
We are by no means alone, my California friends. Everyone is feeling the pain of unrequited real estate.
FIRST TIME IS OF THE ESSENCE: If your clients are hoping to hit the jackpot and become a first time home buyer, now is the time. Not only is there a $15,000 tax credit bill that is going through Congress, some first generation first timers may also qualify for a $25,000 tax grant (Downpayment Toward Equity Act) to help cover closing costs.
But before they plunk down an offer on that fixer-upper, consider this other issue – do they have a student loan they need to figure into their financial mix? Is its payoff required to qualify for the new mortgage? There are pros and cons as listed in this article to be considered. Do the math before the decision is made to purchase. Don’t let that student loan stop them from accessing the American dream of homeownership!
WHEN YOU CAN’T STAND TO LOOK AT YOUR NEW HOME: And talking about homeownership, remember the story last month of the new homeowners who could not get the Seller out the home they closed escrow on because the Seller played the eviction card? Here is a follow up to that article. In short the Buyers finally got possession, but after 15 months of anger and frustration every time they looked at the house, they could not bear to move in. I feel for them but if they can’t see themselves living there here’s my suggestion: List it for sale, get 70 viewings, 26 offers and sell it for over $100,000 of what they purchased it for in January of 2020! How about that!
IS IT ACT FOUR OR THE FINAL ACT? Now that the economic crisis has stabilized (sort of) and the industry is going berserk, the Consumer Financial Protection Bureau (CFPB) has a proposal on the table that would stop foreclosures on principal residences from August 31 to December 31. Protection of the consumer is the CFPB’s agenda so they want Lenders and Borrowers to have an opportunity to work out options, particularly if they are coming out of forbearance. Here is the simplified notice from Bloomberg. The proposal comment period ends May 11, 2021. I am sure Lenders and loan servicers will provide their 2 cents worth.
ARE YOU MORE “VISUAL”? Are you one of those brainy people who like and understand squiggly lines going up and down and sideways? Do you like graphs? Well, then you will love this article which has the spring real estate industry forecast from the Mortgage Bankers Association in squiggly lines. This is a graphic visualization of what we already know – mortgage rates are low, refinance volume is high, values are rising and demand far exceeds inventory. It’s nice to have some pretty graphs to give an overview of what has been happening through the pandemic in comparison with years before.
THE FTC IS LOOKING OVER US: Another consumer protection agency, the Federal Trade Commission is much more approachable and oriented towards the masses (compared to the CFPB). Their daily updates let us view what is running through their radar at any given time. Here is a link to their 20/20 vision: Highlights of the Year edition. Did you have a product that you purchased and never got? Are you a victim of deceptive ads on products? Do your part and report it at www.reportfraud.ftc.gov so that the FTC will investigate and shut them down. Don’t let those companies get the better or you.
UNDERSTANDING THE WIFE’S CODE: And for my Funny of the month, here is a treat for husbands (and wives) alike. Learn what comedian Jeff Allen has deduced is “the Wife’s Code” after 30 some years of marriage.
Pass this video to your spouse. Remember, laughter keeps the marriage alive!
~ Quote of the month ~
“It’s the job that’s never started that takes longest to finish.”
Samwise Gamgee – Lord of the Rings
My YouTube offering for the month:
Escrow Tip #5
Funding, Closing, Possession,
There is a difference!
You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com