The
Real Estate Digest
A California Real Estate Newsletter
Edition 8, November, 2015

Why It's a Good Time to Buy a Home




Interest rates are extremely low, 3.2% for a 15-year fixed mortgage. 
  • Be sure your credit is in top shape, review it for inaccuracies, work with a credit repair organization if necessary. 
  • Low interest rates are one of the most important factors to the success of your investment. 
If you have gains from the stock market, it could be a wise move to transfer some of those into real estate, positioning yourself nicely for another spike.
  • Putting your money into real estate can help you diversify your investments.
Is it the right time for you?
  • Do you have savings for a down payment?
  • Do you have an emergency fund that can cover any unexpected repairs?
  • Do you anticipate living in the same area for at least the next five years?
  • Is the real estate market in your area a good market for investment real estate? Some areas hold great investment opportunities, while other areas do not. 

UCLA report forecasts higher housing costs over the next 3 years.

  • As the amount of building will not meet demand, housing is forecasted to become increasingly less  affordable in the next two years. 
  • The affordability of rental units is becoming a concern as 46% of renters, compared with 40% a decade ago, now spend more than 30% of their income on rent. 


  Bleak Outlook for Renters, Prosperous Outlook for Landlords
 

For Rent
  • The rental population in the U.S. will climb by about 4 million people in the next 10 years.
  • About one-half of renters in high demand markets (vacancies around 7% or less) spend more than 30% of their salaries on housing, a quarter of them spend 50% or more. 
  • The number of rent burdened Americans (those paying 50% or more for rent) will get worse in the next decade, it is predicted to increase by 11% to over 13 million people in 2025. 
  • The current trend: fewer Americans will opt for homeownership, this will continue over the next decade.

Distressed Home Owners



  • If you are dealing with Lone Star or Caliber Home Loans, you may want to read this. 
  • Private Equity and hedge fund firms, like Lone Star, have purchased more than 100,000 troubled mortgages at a discount from banks and federal housing agencies.
  • They are accused of aggressive liquidation of these mortgages. 
  • Entire article here: 

NY Times September 28, 2015 Article

 

 


Construction Spending 
is Up

  • In August 2015:
    • 0.7% above the revised July numbers
    • 13.7% above August 2014 estimate
  • During the first 8 months of 2015, construction spending was up 9.8% from the same period for 2015.
  • Sharp increase in construction of apartments and other multi-family housing, up 18.3% in September. 

Homeownership Rate at a 
 30-Year Low

large-stucco-home.jpg
  • The rate has been steadily declining from 69% to 63.5% since 2005.
  • Economists believe homeownership rates are leveling out and will likely level out soon. 
  • Home prices are growing more quickly than incomes, making it difficult for renter households to afford homes. 
 
   Housing Expected to Expand  Despite
 Economic Weakness

 

  • According to Lawrence Yun, Chief Economist for the National Association of Realtors: 
    • There is plenty of pent-up housing demand to keep the positive momentum rolling.
    • Home sales, new construction, and home prices have all been rising and will continue to rise. 
    • Numbers for this year's growth over last year's on a year to date basis:
      • Existing home sales up 7.9%
      • New home sales up 17.7%
      • Housing starts up 12.0%
      • Median home price of sold homes up 6.4%
      • Home price index (FHFA) up 5.5%
      • Rents (CPI) up 3.6%
    • Why such solid gains and why will it continue?
      • The U. S. population is rising at a rate of one birth every 8 seconds, one death every 12 seconds, and one international immigrant arriving every 33 seconds. The net impact is 2 - 3 million additional residents are living in America every year. 
      • In 2000, existing and new home sales combined totaled 6.05 million. Today, the total is expected to reach only 5.8 to 5.9 million home sales. There were 40 million fewer people living in the country in 2000. 
      • Americans believe in the American dream of homeownership. 


Quick Links
 LOCAL MARKET TRENDS

 

In This Issue

Christine's Corner


Please take a moment to review our core principles and business philosophy. Thank you. 
 
We commit to the highest standards of trust, integrity, competency and results in helping you. 
 
TRUST is essential and primary to successful business transactions. When mutual, it is very fruitful. We are intelligent in how we give it and ask that you do the same. We build on it throughout our relationship. 
 
INTENTION is the backdrop for all decisions. Our intention is to discover your needs and create deals that meet them. We do it with integrity. We take care of everyone in the deal, not just our customers. 

COMPETENCY
is held in high regard by our company. You work directly with the broker. You as our client, the market dynamics, and industry changes are always in focus. 
 
RESULTS are the measure of our success and we track them. They give us the sharp edge of refinement. 
 
Thank you for doing business with us.



Schneider Estates, Inc.
Christine Schneider, Broker
831-600-6550
www.schneiderestates.com
cs@schneiderestates.com
BRE# 01749537

Issue 8
November, 2015
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