🌞 Sunshine, Celebrations & Real Estate Insights!

 In the face of market uncertainty, let’s take a moment to focus on the positives this month:

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🌼 Spring is in Full Bloom!

The sun is shining, the flowers are blooming, and Dana Point is bursting with life. We’ve officially shaken off the winter blues!

🌮 Cinco de Mayo Celebrations

🎉 Join us Saturday at the Dana Point Yacht Club for a floating tequila cocktail contest—a spirited kickoff to May!

💐 Mother’s Day – Sunday, May 12th

A heartfelt reminder to honor the amazing mothers in our lives—our own, or those we admire and love in our community.

⚓ Opening Day at DPYC – Mid-May

Tradition, fun, and a little pomp and circumstance—Opening Day at the Dana Point Yacht Club is always a standout event.

🎶 Memorial Day Weekend – May 25–27

In Dana Point, Memorial Sunday brings a rock concert on the water with a fabulous local band—an unforgettable way to launch the summer!

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🏡 Real Estate Market Update

Interest rates continue their unpredictable climb—but we’re seeing slight improvement as of this writing. Properties are staying on the market a bit longer, yet sales remain brisk. Pent-up demand appears to be fueling continued activity.

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💼 Common Issues We Help Solve

📈 Investor Activity on the Rise

We’re working with a growing number of both first-time investors and those completing 1031 exchanges. A popular tool?  DSCR Loans (Debt Service Coverage Ratio) – which qualify borrowers based on property income instead of personal income. It’s much easier to navigate!

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💰 HELOCs, HELOANS & Reverse Seconds

Want to access your home equity without touching your low-rate first mortgage?

✅ Over 55? Ask us about the Reverse 2nd TD – no monthly payment required.
✅ We also offer traditional second loans with fixed monthly payments.

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🏠 Down Payment Assistance (DPA)

Think you need 20% down? Think again.
You might not even need 5%. If you qualify for the loan, we can match you with a DPA program to help get you into your next home—faster than you think!

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🏢 Condo Buying: What to Watch For

Condos add a layer of complexity due to HOA requirements. Beyond insurance issues, you may encounter:

• Insufficient reserves
• Delinquent HOA dues
• Pending litigation
• Special assessments

We provide thorough pre-purchase due diligence so our clients can close with confidence

 

RATES DROP AMID MARKET CHAOS!

Market Overview

As we move past March, the Orange County real estate market continues to show resilience amid fluctuating mortgage rates. Demand persists, keeping home values stable. However, notable changes in the broader financial landscape are starting to shake things up.

Rates have improved with the dramatic announcement of tariffs across all imported goods. The stock market does not like uncertainty, nor the specter of rising costs for all imports, and has spoken. This resulted in a flight to security, which means bond yields dropped as demand increased. As a result, mortgage rates have come down, with the average 30-year fixed rate currently at 6.6%.

What Does This Mean?
If you’ve been waiting for the right time to make a move, now might be it. Whether you're buying for the first time, moving up or down, or considering a refinance, it's time to start the process. We are seeing more inventory entering the market, but multiple offers are still common on well-priced homes.

Insurance Challenges
We continue to experience issues with home insurance, particularly for condominiums. Master HOA policies are struggling with wildfire coverage and have lost it altogether in some locations. Be cautious with condominium ownership and carefully review all HOA documentation, including insurance coverages and reserves.

CalFire released a new wildfire hazard map.  Your home may be impacted.  You can check it out here: https://osfm.fire.ca.gov/what-we-do/community-wildfire-preparedness-and-mitigation/fire-hazard-severity-zones?itid=lk_inline_enhanced-template  These areas will likely see further insurance premium increases.

VA Loan & Interest-Only Loan Insights
For veterans and active military, VA loans continue to offer significant advantages, including competitive rates and no down payment requirements. Additionally, interest-only loans remain an option for buyers seeking lower initial payments, particularly in high-cost areas like Orange County.

Looking Ahead
With economic volatility and shifting policy decisions, buyers and sellers should keep an eye on key indicators such as job growth, inflation, and lending guidelines. The Fed is currently holding firm on further rate drops, but that could change. If you're considering making a move, now may be the perfect time to lock in a favorable rate.

For personalized guidance, feel free to reach out!

 

Rates Drop and Tensions Rise

 RATE OUTLOOK

We continue to see market fluctuations influenced by the following:

• Inflation (pretty flat so far)
• Unemployment (low so far, but could rise with government layoffs)
• Monetary policy (no change by the Fed yet)
• Stock market gyrations and uncertainty (causing a flight to security)

What does that mean?  Whenever there is uncertainty there tends to be a move towards the most secure investment there is, currently U.S. Treasuries.  The demand causes prices of bonds to climb, resulting in lower yields (rates).  Most economic analysts expect rates to continue to experience volatility in the coming months, with the potential to rise if inflation does pick up due to tariffs.

INSURANCE

California continues to experience insurance woes…with the specter of increasing premiums for most homeowners due to pass-through of increased costs resulting from shoring up the Fair Plan.  State Farm continues to plead for an increase in excess of 20% for new policies.  So far, our insurance commissioner has not yielded. We are seeing more HOA Master Hazard policies with wildfire exclusions, or severe limitations.  This renders those homes un-lendable in most cases-- as the insurance does not meet traditional lending guidelines.

HOME VALUES AND MARKET ACTIVITY   

New home sales fell by 10% in January and it appears it was the slowest month for sales in general in the last in four years ++.  Many sales cancelled.  This is actually good news for buyers, which can lead to some softening in home prices.  Although homes continued to appreciate at pretty high rates last year (7% annually) they are going to slow down if inflation kicks back in and rates go up.  Nothing is going according to schedule at this point! 

TAX TIME

Income taxes are due April 15^th and Property taxes (2^nd Half) are due just before, on April 10^th.  However, if you are a victim of the recent fires in Los Angeles, you have until October 15th to file income taxes and you will qualify for relief for property taxes.  Let us know if you need any assistance for either of these items. 

You should have received a 1098 showing your mortgage interest paid for the year, which is a deduction, along with your Real Estate Taxes, up to a max of $10,000.  

However, there is talk of the new administration doing away with that cap on those deductions, which would be nice for California.  I’ve also heard whispers of an increase in the capital gains exclusion for homeowners of $250K per person upon sale of your primary residence.  One can only hope as we have built up so much equity in the last five years.

LOAN UPDATES – First Timers and Veterans

We love working with our veterans. There is no longer any loan limit for a VA loan which will go up to 100% of purchase price.  The Vet must qualify, but the guidelines are much more lenient than for any other loan programs. 

First time homebuyers are coming off the sidelines, and there are numerous programs out there to assist them.  For many who are paying high rent, saving for the down payment is difficult.  Don’t despair!  There are many down payment assistance programs available, and some don’t require payback.

 Please give us a call with questions, or for assistance.  Happy March!

 

FIRE FALLOUT & TARIFF WARS

 

FIRE SEASON

How to describe the pain and suffering, grief and loss surrounding the LA fires? 

Both my husband and I were born and raised in Los Angeles, and attended university in LA.  (cross-town rivals!)  We’ve both lived through fires in our neighborhoods but never had to face the loss of our home.  We are devastated. 

Insurance was already at a crisis state in California, and this will exacerbate the situation.  The three insurance companies-- with the most exposure in order of number of policies-- in Pacific Palisades and Altadena are:   State Farm, the FAIR plan and Farmers.  The Fair Plan, known as the insurer of last resort, has limited reserves such that they will need to be “augmented” by the rest of the California insurers per the setup of the plan.

The Fair plan also limited insurance coverage to $3 Million, so many of the  homes they insured in the Palisades are woefully underinsured.

How does all this shake out for the rest of the state?  All of our premiums will rise.  It will become more difficult to insure in many areas noted as fire-prone. This will render some areas as “uninsurable” and therefore unfinanceable.  Cash only.  Only time will tell exactly how it all plays out. But it is not good for anybody. 

TARIFF WARS

As I write this the tariffs have been temporarily stayed against Mexico and now Canada. The stock market reacted quite unfavorably due to the unknown consequences of the tariffs, and whether they might increase costs to businesses and individuals across the country, thereby increasing inflation.  

All this has had the result of keeping mortgage rates right about where they have been, hovering around 7%.  This is beginning to look like the new normal, and the reality is 7% is close to (maybe a tad over) the average mortgage rates of the last 30-40 years.  But that does not make it any easier for home buyers who are facing inflated home prices due to lack of inventory and continuing demand.

DEBT CONSOLIDATION

We are currently working with clients on refinances for debt consolidation using fixed rate 2^nd liens.  This protects their low-rate first mortgages until they are ready to move or refinance their first loans. 

We have access to a number of different programs for HELOANs (fixed) and HELOCS (floating) depending on specific needs and parameters of the borrower.

As always, call us with any questions you may have. 

WILL RATES EVER DROP?

MARKET OUTLOOK

As we step into 2025, mortgage rates remain a hot topic. Over a year has passed since the anticipated drop in rates, and while they dipped slightly earlier this year, they’re back to hovering around 7% as I write this. Factors like a strong economy, low unemployment, and uncertainty surrounding the new administration’s policies continue to fuel inflation concerns. Compounding this issue is the persistent lack of housing inventory.

While inventory has increased slightly, it’s still insufficient to curb the rise in home prices. The combination of elevated home prices and higher mortgage rates adds further pressure to inflation.

Looking ahead, rate predictions for 2025 vary widely, ranging from the low-to-mid 5% range to as high as 7%. Despite this uncertainty, we remain optimistic about potential rate declines and an increase in housing inventory, which could stabilize the market.

The Good and the Bad

Home prices continue to appreciate at a historically elevated pace, offering both opportunities and challenges for buyers and sellers.

TIME TO REFI?

While many homeowners currently enjoy rates lower than today’s levels, some may be grappling with consumer debt accumulated in recent years. With credit card rates climbing, tapping into the equity gained during the recent housing boom could be a smart move to consolidate and pay off high-interest debt.

HAPPY NEW YEAR TO ALL!

As we embark on 2025, don’t forget to set your goals and objectives for the year ahead.

Cheers!
Karen

CREDIT CRUNCH FOR THE HOLIDAYS & ALERT FOR CORPORATIONS!

 Rate Update

As we patiently wait for mortgage rates to drop further, now is the time to consider preparing for a cash-out refinance to manage high-interest credit card debt. Consumer credit has surged since COVID, leaving many borrowers with significant balances.

While no one wants to replace a low-interest-rate first mortgage, there comes a tipping point where the savings outweigh the cost of refinancing at today’s higher rates. Though we’re not there yet, we expect this opportunity soon—fingers crossed!

Currently, most mortgage rates are hovering in the mid- to high-6% range, with some requiring points. If you’d like to discuss whether refinancing makes sense for you, reach out!

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Mandatory Report for Corporations

Did you know? The U.S. government now requires all corporations and limited liability companies (LLCs) to file a report disclosing basic ownership information. If you own multiple active corporations or LLCs, you must file this report for each entity before the end of 2024.

What happens if you don’t file?
Failure to submit your Beneficial Ownership Information (BOI) report could result in penalties of $591 per day, up to a maximum of $10,000.

The good news? Filing is quick, easy, and free. You’ll need the following information for each company owner:

1. Address
2. Telephone number
3. A scanned copy of their driver’s license (both sides)

You can file online at this link:
https://boiefiling.fincen.gov/

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We wish you and your loved ones a joyous holiday season filled with laughter, love, and cherished moments with family and friends!

Warm regards,

The Card Team

Karen, Katie and Stephanie

Election Drama, Rates and our Veterans!

We hope you voted!   Many of you may be wondering how political changes will influence interest rates and the real estate market here in Southern California. We want to provide you with insights that can help you navigate these uncertainties.

Interest Rates: Current Trends

Interest rates have been a significant topic over the past year, with the Federal Reserve making adjustments to combat inflation. Currently, we are seeing rates moving back up to around 7% which has impacted borrowing costs for homebuyers. While we hope for stability, it’s essential to recognize that rates can fluctuate based on economic conditions and policy changes. We still expect the Fed to drop the rate again this month by .25% --but the market may have already taken that into account.

The Election’s Impact

The Election outcome can have profound implications for interest rates. Depending on which party gains control, we may see differing approaches to fiscal policy, taxation, and housing regulations. Historically, a change in administration can lead to shifts in market confidence, which, in turn, can influence the Federal Reserve's decisions.  There are many differing opinions as to which party will be better for the economy and for interest rates.

Regardless of the outcome, keeping an eye on post-election economic policies will be crucial for predicting interest rate trends.

VA loans

Assisting our Veterans has always been one of our priorities.  Veterans are eligible for lower interest rates, higher Loan-to-Value (up to and in some cases over 100% of purchase price) and more lenient underwriting guidelines in terms of Debt-to-Income and FICO scores.   

There is no longer any “Loan Limit” for VA loans, so long as the borrower qualifies with automated underwriting for the loan.  We are seeing more jumbo loan amounts such as two-, three- or four-million-dollar VA loans.  But, with higher loan amounts the VA Funding Fee becomes more consequential.  It can be a pretty large number if the VA loan has been used in the past.

Current State of Real Estate in Southern California

The Southern California real estate market has shown resilience despite rising interest rates. Home prices remain relatively high, driven by limited inventory and strong demand. However, higher borrowing costs coupled with rising insurance costs have made it more challenging for some buyers to enter the market.

Key Observations:

• Market Adjustments: As interest rates rise, we’re starting to see a slight cooling in the competitive bidding wars that characterized previous years. Buyers are becoming more cautious, and many are waiting for a better entry point.
• Opportunities for Buyers: For those who can navigate the current landscape, there are still opportunities. Some sellers are more willing to negotiate, and there are potential benefits for first-time buyers in specific markets.
• Refinancing Trends: For homeowners considering refinancing, it’s essential to assess whether the potential savings outweigh the costs, especially in a high-rate environment.

Looking Ahead

It is vital to stay informed. Keep an eye on interest rates, local market conditions, and how political decisions may shape the economic landscape.

Call our office if you have any questions or need personalized advice regarding your mortgage options. We are here to help you navigate these exciting yet uncertain times in the real estate market.  We expect activity to pick up in in the next six months.