Happy St Patrick’s Day! ☘

Here’s a quick market update for San Mateo County

Active homes on the market Jan-March 2022 was 690

The same time period this year for Active homes on the market is a little less at 670

Number of homes sold between Jan-March 2022 was over 860

Vs this year it is almost HALF at just 437 homes sold

As we head into the spring market it is important to stay up to date on what is going on in the market and how things are moving and changing.

What city of the Bay Area would you like a market update for? Respond to this email and we’ll run the numbers!

Do you know anyone who is looking to buy or sell this year?

There has never been a better opportunity for investors and we have a lofty goal to help over 100 families in 2023! If you have any family, friends or colleagues that might be in the market, we'd love an introduction so we can help them!

MORTGAGE RATE IMPROVEMENT

We cannot predict events that create massive reactions in the market. Yes, I am referring to Silicon Valley Bank and Signature Bank’s failure. This is a consequence of Fed rate hikes tightening the money supply. This news makes the job market much less important to the Fed’s decision making process in their upcoming meeting starting March 21.

In 1998 the Fed cut rates by 75 basis points in response to financial turmoil. This fueled the bubble and contributed to the 2001 recession.15 years ago, Bear Stearns collapsed, ushering in the Global Financial Crisis (GFC). Since then, financial regulation has changed for the better. The bond market is up 100 points as I type this. Mortgage rates could come in below 6% today if this trend continues.

Goldman Sachs: “In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March.”

This means: The unprecedented speed of rate hikes by the Feds was intended to cut demand, and drive prices downward. By making access to money more expensive, liquidity becomes an issue for banks. Banks borrow from the Feds. Bank failure is one of the consequences of rate hikes. There is a strong chance the Feds will stop hiking in light of the news.

This is a BIG DEAL. The 16th largest US bank by assets disappeared in only a few days. Imagine a society where nobody trusts their regional bank and the government protects the big corps, shareholders and investors over the American people. For many of us that lived through the 2007-09 global financial crisis, the news of banks collapsing and the fear or losing money was triggering to say the least. Watching folks lined up at their banks to withdraw money was unsettling. Fear causes the market to shift quickly.

The Fed has hiked its benchmark Fed Funds Rate eight times since last March, bringing it to a range of 4.5% to 4.75%.

"By hiking rates in a totally unprecedented manner less than a year after assuring market participants that they were NOT going to hike rates until 2024, they created conditions that predictably led to the second-largest bank failure in US history. "

SVB was poorly managed, the rate hikes didn’t help.

U.S. Regional Bank Stocks Now:

• Western Alliance, $WAL: -75%

• First Republic, $FRC: -65%

• Zions Bancorp, $ZION: -43%

• PacWest, $PACW: -41%

• Comerica, $CMA: -33%

• Fifth Third, $FITB: -20%

Markets are betting that SVB's collapse broke the regional bank system. The good news is, the government made the right choice to protect the depositors. Read below.

FDIC Acts to Protect All Depositors of SVB

WHAT MY CLIENTS NEED TO KNOW

The truth is, many people who were unaffected by the SVB news will be looking for the opportunity here. Timing is everything. Today’s rate dip will increase demand. The volatility in the market should not deter you from writing offers if homeownership is your goal.

Mortgage rates have already dropped to an average of 6.57% down 0.25%. We’ve talked about this a lot, as mortgage rates improve, demand picks up, driving prices up. With a small break in rates from their peak, we quickly shifted back to multiple offers, and homes sold well over the list price. The super low inventory environment doesn’t help. You still have a great opportunity to buy while many remain on the sidelines, buyers and sellers alike.

The “painful” road to 2% inflation means people will lose jobs, and businesses will fail. This sort of news is considered “deflationary” which means it will drive inflation numbers down, leading to more rate improvements. Mortgage rates move with the bond market, not the Fed Funds Rate.

Home prices are still forecasted to appreciate this year. Imagine what they’ll do in a rate environment in the low 5% range.

CoreLogic’s Home Price Index showed that home prices nationwide fell by 0.2% from December to January but they were 5.5% higher when compared to January of last year. This annual appreciation reading declined from 6.9% in December but is still solid. CoreLogic forecasts that home prices will drop 0.1% in February but rise 3.1% in the year going forward.

CoreLogic’s Chief Economist Selma Hepp said that “the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.” This is a far cry from a housing crash of 20% that some in the media have been predicting.

And while CoreLogic has reported slightly negative readings month to month, they still forecast 3.1% appreciation nationwide over the next year, which can be meaningful for wealth creation. For example, if someone bought a $400,000 home and put 10% down, they would gain $12,000 in appreciation over the next year and earn a 30% return on their investment due to leverage.

When in doubt, do the math. When the cost of borrowing drops, the competition on the existing inventory will increase driving prices up again. Sellers who can afford to move will come to market, buyers will come off the sidelines.

Article Written and Provided by Padi Goodspeed, SVP and Mortgage Lender at CCM

Children Eat Free at Jack's Prime! - San Mateo - March 6 weekly on Monday

Telescope Viewing at Chabot Space & Science Center – Oakland, March 17-18, 24-25

The Lightning Thief by PYT – Mountain View, March 11-19

Monarch Migration – Walnut Creek, March 16

Music for Families – San Francisco, March 18

The Day You Begin – San Francisco, March 18, 19

The Miraculous Journey of Edward Tulane – Mountain View, March 24, 25

Boardwalk Fun Run – Santa Cruz, March 25

Pollinator Hike – Walnut Creek, March 26

Olivia was our real estate agent in purchasing our home in San Francisco. She consistently went above and beyond to help us find our perfect home. First, we lived in Los Angeles when I first reached out, and she spent 45 minutes with me on the phone explaining the San Francisco real estate market. She knew the best places for my wife and I to live based on my commute, and our lifestyle. Then, I came to visit San Francisco and we spent a number of hours looking at various options. She knew how people bid on places and was able to help us craft a bid that was accepted.

After we had an accepted offer, Olivia truly went into high gear. She worked with us and our lender to have the process go smoothly. Unfortunately, our lender, Sterling Bank & Trust, was absolutely awful during this process. They were slow, did not follow up, and caused our closing to be an entire month later than it was supposed to be. Nevertheless, Olivia shone through. She was on the phone with them almost every day, she was in touch with our awful loan officer Chad's boss, Steve, and she sent several emails to them on our behalf.

Then, when Sterling dropped the ball at the last minute and it appeared that we would not be able to move in until more than a month late, she literally got on a plane with our closing documents, arranged to meet at a hotel in Los Angeles with a notary AT MIDNIGHT, had us sign our documents until 2 or 3am, and flew back to San Francisco to make sure we closed before the weekend and could move in the next day.

I can't thank her enough for everything she did for us. She will work her heart out for you. Use her if you want someone on your side throughout the process.

- N. N.

We are a boutique residential real estate team helping clients achieve their real estate goals in the Bay Area. We are a group of women who specialize in different markets across the Bay Area, while following a custom process that allows us to help buyers and sellers achieve their real estate goals efficiently. Our team is top 1% of all realtors in San Mateo County and San Francisco with a total of $340M+ lifetime sales. We take pride in knowing that our clients become friends and refer us to their friends and family members because we work to make dreams become a reality. Once our clients speak to us for an initial call, they understand why we are different and why they want to work with us. We are your personal real estate concierge in one of the most dynamic real estate markets in the world.