Longer Days and Sunshine: It's Summer!

The longest day of the year is almost upon us. It's my favorite time of year—the sunshine, warm weather, and longer evenings spent outdoors. Of course, it's also the beginning of the gradual march toward shorter days. ☹

The kids are out of school and fully immersed in summer activities. My grandkids are keeping busy with everything from sailing, Junior Guards, and swimming to baseball camp, theater programs, and dance camps. Summer in Southern California really is a special time of year.  I'm keeping busy with home buyers and refiances, with a little vacation sprinkled in!  I'll update you next month....

RATE UPDATE

Mortgage rates have remained relatively stable over the past several months despite ongoing economic uncertainty. Inflation appears to be moderating, but global events, geopolitical tensions, energy prices, and government policy continue to create volatility in the financial markets.

While no one can accurately predict where rates will be six months from now, most analysts expect rates to remain within a relatively narrow range through the balance of the year. If you're considering purchasing a home or refinancing, it may make more sense to focus on whether the move benefits your financial goals rather than trying to perfectly time the market.

REAL ESTATE MARKET

The Orange County housing market appears to be moving toward a more balanced environment, with some areas beginning to favor buyers. Inventory has increased from the extremely low levels we've experienced over the past few years, giving buyers more choices and negotiating power.

We're seeing more sellers offer concessions, including interest rate buydowns, credits toward closing costs, repair allowances, and other incentives to help facilitate a sale.

While median home prices in Orange County remain strong, it's important to note that a significant number of luxury and multi-million-dollar transactions have helped support those statistics. In many neighborhoods, price appreciation has slowed and homes are taking a bit longer to sell than they did during the frenzy of recent years.

CREDIT SCORES & MORTGAGE QUALIFYING

Many consumers are surprised to learn there isn't just one credit score. Different industries use different scoring models. Auto lenders, credit card companies, insurance providers, and mortgage lenders may all evaluate credit differently.

The mortgage industry is preparing to transition to newer credit scoring models that may provide a more complete picture of a borrower's creditworthiness. This could be particularly helpful for borrowers who have limited traditional credit histories but have otherwise demonstrated responsible financial habits.

If you're curious about your credit profile or wondering how today's scoring models affect your ability to qualify, I'd be happy to review your situation.

HELOCs ARE MAKING A COMEBACK

We're helping more homeowners access their equity through Home Equity Lines of Credit (HELOCs). Homeowners today are sitting on record amounts of equity, and many are using HELOCs strategically for:

• Home improvements and renovations
• Debt consolidation
• Down payments on second homes or investment properties
• Educational expenses
• Emergency reserves and financial flexibility

A HELOC isn't right for everyone, but it can be an excellent financial tool when used appropriately.

CALIFORNIA INSURANCE UPDATE

Homeowners insurance continues to be a challenge throughout California. Many homeowners have experienced premium increases, policy non-renewals, or difficulty finding coverage altogether. Areas with wildfire exposure have been particularly affected, but the impact is being felt across much of the state.

The good news is that new insurance carriers are beginning to re-enter the California market, creating additional options for homeowners. While premiums remain higher than many of us would like, there are often alternatives available that can help reduce costs or improve coverage.

If you have questions about your current insurance situation, are purchasing a home, or simply want a second opinion on your coverage options, I have relationships with several excellent insurance professionals and would be happy to connect you with someone who can help.

SUMMER FUN ALONG THE COAST

Summer is officially in full swing along the Southern California coast. From outdoor concerts and movies in the park to festivals, farmers markets, harbor events, and beach activities, there's no shortage of things to do from Seal Beach to San Clemente.

If you're looking for ideas for family activities, date nights, local events, or hidden gems around Orange County, reach out. I'm always happy to share some of my favorites.

As always, thank you for your trust, referrals, and friendship. If you have questions about the market, mortgage financing, or your home's value, I'm just a phone call away.

Have a wonderful summer!

Karen Card

FALL - FALLING RATES AND MAJOR HURRICANES!

Well, the falling rates part is a stretch, as rates fell then moved back up a bit, but appear to be on their way back down... albeit slowly.  We are hoping for another drop to the Fed funds rate this year, although the recent better-than-expected employment figures are not helping the cause.

We’ve said this before and will reiterate….as mortgage rates drop, more buyers and move-up or move-down sellers will come off the sidelines, creating upward pressure on home prices.  We should see more inventory available, but there continues to be pent-up demand, particularly in coastal California. 

NEED MORE CASH FOR A DOWN PAYMENT?

Fannie Mae has a non-borrowing Investor program where a buyer who can qualify for a loan, but needs more cash down, can use cash from an investor to buy a home.  The investor is not a borrower on the loan, but will be on title for a share of the equity.  The investor does not need to be a relative and the funds are not considered to be a gift.

This could get tricky if the investor decides they want to sell but the occupant borrower wants to stay put or cannot buy out the investor, so a legal agreement is likely a good idea to avoid future litigation.

INSURANCE WOES

As I write this Hurricane Milton is on a bullseye path for Tampa, Florida with yet another hurricane this season.  Helene was a doozy, particularly affecting North Carolina!  Insurance has already become a major headache for homeowners and lenders.  The  current fires and hurricanes are certainly adding to the issue.    I fear that many areas of Florida will not be insurable in the future meaning you can only buy with all cash.  The same will likely be the result in fire-prone areas of Southern and Northern California.  We have had more than a couple escrows cancel in light of insurance problems with HOA Master  insurance, as well as individual policies.

FIRST TIME HOMEBUYERS AND CREDIT

We often hear “I need to pay off all my credit cards and loans before I can buy.”  This is absolutely not true.  While credit does play into loan qualifying, it is the monthly payments that are considered, and not the actual balance due.   Always ask a mortgage professional about the best path to qualifying.  It is not always paying off debt first.

SELF-EMPLOYED?

We can help prepare you for a home refinance or purchase.  These borrowers take extra care and assistance.  We love to collaborate with their tax advisors to strategize for the next step.

As always, reach out to us with any questions.  And, have a Happy Halloween!

 

Labor Day Blues! Fall Market Update

Summer is almost over, and the children are all back to school. How did it possibly go by so fast? We had a lot of rain and cold, and then a month of hot, muggy summer.

Now we suddenly have the beaches all to ourselves again (for those who live near the beach) while the kids’ sports and school activities are getting very busy!

Unfortunately, not so for the Real Estate market! We are still experiencing some of the lowest loan application rates seen in 28 years. And rates continue to rise. We are well over 7% for most conventional loans today. Now, if you look at history 7% + is near the average, but what a sudden jump from 2022. And the short-term outlook isn’t rosy as inflation is bouncing up again. This, more than anything, has a direct effect on mortgage rates.

There have been seven rate hiking cycles from 1968 to 2008/09 that ended in a recession. It has taken on average 22 months from the first hike to the start of the recession. There were two cycles that didn’t end in recession. So, who knows?

INSURANCE CRISIS?

State Farm, the largest home insurer in California has stopped writing new policies as of June. Others including AIG and Chubb are both NOT renewing policies in the state. AmGuard, Kemper and Allstate are out now also. Farmers is limiting its new policies.  Why? There are multiple factors, primarily climate change, more fires, and higher costs to rebuild due to inflation. The California State regulatory guidelines for insurers have not helped.

Don’t hesitate to contact us if you are experiencing insurance woes. We have a number of experts we can refer you to who can find your homeowner’s policy a new home.

What does this spell for the long term? It will make qualifying for a home loan more difficult with prices rising, particularly in certain zip codes which are labeled as high fire hazard areas. You know who you are!

FUN FAMILY STUFF

We rounded out the end of summer with a lot of time spent at the ArtAFair in Laguna Beach, where Steve showcased his plein air and impressionist landscapes. For a neophyte he did very well and also obtained some new commissions. What is leftover is coming back home and I get to move my art in our home around a bit, which I enjoy. Changing up the landscape, so to speak!

We enjoyed some great music at various outdoor venues including the Art Festival and the Dana Point Concert series and attended the Pageant of the Masters in the Laguna Bowl, which is always entertaining.

Labor Day weekend brought out a huge crowd to the Dana Point Harbor, on various watercraft including surfboards, SUP’s, floaties, kayaks, and all manner of boats to hear our favorite David Allen Baker with the Kicking Giants band. What a hoot!