Mohammed Salim Shaikh (Realtor, Corona)

A Drop in Equity Doesn't Mean Low Equity You may see media coverage talking about a drop in homeowner equity. What's important to understand is that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow. And when home prices decline, equity does too. Here's how this has played out recently.  Home prices rose rapidly during the 'unicorn' years . That gave homeowners a considerable equity boost. But those 'unicorn' years couldn't last forever. The market had to moderate at some point, and that's what we saw last fall and winter.  As home prices dropped slightly in the back half of 2022, equity was impacted. Based on the most recent report from CoreLogic , there was a 0.7% dip in homeowner equity over the last year. However, the headlines reporting on that change aren't painting the whole picture. The reality is, while home price depreciation during the second half of last year caused equity to drop,

Your Needs Matter More Than Today's Mortgage Rates If you're thinking about selling your house right now, chances are it's because something in your life has changed. And, while things like mortgage rates are a key part of your decision on what you'll buy next, it's important to not lose sight of the reason you want to make a change in the first place. It's true mortgage rates have climbed from the record lows we saw in recent years, and that has an impact on affordability . With rates where they are right now, some homeowners are deciding they'll wait to sell because they don't want to move and have a higher mortgage rate on their next home. As Danielle Hale, Chief Economist at Realtor.com , explains : ". . . homeowners who locked in a 30-year fixed rate in the 2-3% range don't necessarily want to give that up in exchange for a rate in the 6-7% range." But your lifestyle and your changing needs should matter more. Here are a few of the

Are Home Prices Going Up or Down? That Depends… Media coverage about what's happening with home prices can be confusing. A large part of that is due to the type of data being used and what they're choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here's an explanation of each.  Year-over-Year (Y-O-Y): This comparison measures the change in home prices from the same month or quarter in the previous year. For example, if you're comparing Y-O-Y home prices for April 2023, you would compare them to the home prices for April 2022. Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating. Month-over-Month (M-O-M): This comparison measures the change i

Why You Can't Compare Now to the 'Unicorn' Years of the Housing Market [INFOGRAPHIC] Some Highlights Comparing housing market metrics from one year to another can be challenging in a normal housing market – and the last few years have been anything but normal. In a way, they were ' unicorn ' years. Expect unsettling housing market headlines this year, mostly due to unfair comparisons with the 'unicorn' years . Let's connect so I can share the data that puts those headlines in the proper perspective .

This Real Estate Market Is the Strongest of Our Lifetime When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.  1. The Current Mortgage Rate on Existing Mortgages First, let's look at the current rate on existing mortgages. According to the Federal Housing Finance Agency ( FHFA ), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That's significant. And, to take that one step further, over 50% of mortgages have a rate below 4% ( see graph below ): Now, there's a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgag

The Main Reason Mortgage Rates Are So High Today's mortgage rates are top-of-mind for many homebuyers right now. As a result, if you're thinking about buying for the first time or selling your current house to move into a home that better fits your needs, you may be asking yourself these two questions:  Why Are Mortgage Rates So High? When Will Rates Go Back Down? Here's context you need to help answer those questions. 1. Why Are Mortgage Rates So High?   The 30-year fixed-rate mortgage is largely influenced by the supply and demand for mortgage-backed securities (MBS). According to Investopedia :  "Mortgage-backed securities (MBS) are investment products similar to bonds. Each MBS consists of a bundle of home loans and other real estate debt bought from the banks that issued them . . . The investor who buys a mortgage-backed security is essentially lending money to home buyers." Demand for MBS helps determine the spread between the 10-Year Treasury Yield and th

Real Estate Is Still Considered the Best Long-Term Investment With all the headlines circulating about home prices and rising mortgage rates , you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11 th consecutive year, consistently beating other investment types like gold, stocks, and bonds ( see graph below ): If you're thinking about purchasing a home , let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision. Why Do Americans Still Feel So Positive About the Value of Investing in a Home? Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes : ". . . homeownership is a catalyst for building wealth for people from all walks

Oops! Home Prices Didn't Crash After All During the fourth   quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts: Jeremy Siegel , Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business : "I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside." Mark Zandi , Chief Economist at Moody's Analytics : "Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession."   Goldman Sachs :  "Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research's G-10 home price model suggests  home prices will decline by

Reasons To Own Your Home [INFOGRAPHIC] Some Highlights June is National Homeownership Month, and it's a perfect time to think about all the benefits that come with owning your home. Owning a home not only makes you feel proud and accomplished, but it's also a big step toward having a secure and stable financial future. Are you ready to enjoy all the amazing advantages that come with owning a home? Let's get in touch to start the process today.

The True Value of Homeownership Buying and owning your home can make a big difference in your life by bringing you joy and a sense of belonging. And with June being National Homeownership Month, it's the perfect time to think about all the benefits homeownership provides.  Of course, there are financial reasons to buy a house, but it's important to consider the non-financial benefits that make a home more than just where you live. Here are three ways owning your home can give you a sense of accomplishment, happiness, and pride.   You May Feel Happier and More Fulfilled  Owning a home is associated with better mental health and well-being. Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), explains : "Studies have shown the emotional and psychological benefits that homeownership has on a person's health and self-esteem . . ." Similarly, Habitat for Humanity says : "Residential stability among homeowne

Keys to Success for First-Time Homebuyers Buying your first home is an exciting decision and a major milestone that has the power to change your life for the better. As a first-time homebuyer, it's a vision you can bring to life, but, as the National Association of Realtors (NAR) shares , you'll have to overcome some factors that have made it more challenging in recent years: "Since 2011, the share of first-time home buyers has been under the historical norm of 40% as buyers face tight inventory, rising home prices, rising rents and high student debt loads." That said, if you're looking to purchase your first home, here are two things you can consider to help make your dreams a reality. Save Money with First-Time Homebuyer Programs Being able to pay for the initial costs and fees associated with homeownership can feel like a major hurdle. Whether that's getting a loan, being able to put together a down payment, or having money for closing costs – there are a

Today's Real Estate Market: The 'Unicorns' Have Galloped Off Comparing real estate metrics from one year to another can be challenging in a normal housing market. That's due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared.  Comparing this year's numbers to the two 'unicorn' years we just experienced is almost worthless. By 'unicorn,' this is the less common definition of the word: "Something that is greatly desired but difficult or impossible to find."   The pandemic profoundly changed real estate over the last few years. The demand for a home of our own skyrocketed, and people needed a home office and big backyard.  Waves of first-time and second-home buyers entered the market. Already low mortgage rates were driven to historic lows.  The forbearance plan all but eliminated foreclosures. Home values

Moving Now Can Give Your House Its Day in the Sun [INFOGRAPHIC] Some Highlights If you want to sell your house , consider doing it this summer. The days are longer, the weather is warmer, and it's a great time for sellers. If your needs have changed , now's the time to capitalize on the low inventory and multiple offers in today's sellers' market . Let's connect today if you're ready to sell your house and move to a home that meets your changing needs .

The Benefits of Selling Now, According to Experts If you're trying to decide if now's the time to sell your house , here's what you should know. The limited number of homes available right now gives you a big advantage . That's because there are more buyers out there than there are homes for sale. And, with so few homes on the market, buyers will have fewer options, so you set yourself up to get the most eyes possible on your house. Here's what industry experts are saying about why selling now has its benefits: Lawrence Yun , Chief Economist at the National Association of Realtors (NAR): "Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties ." Selma Hepp , Chief Economist at CoreLogic : "We have not seen the traditional uptick in new listings from existing homeowners, so undersupply of housing will continue to heighten market competition and put pressure on prices in most regions .

Owning a Home Helps Protect Against Inflation You're probably feeling the impact of high inflation every day as prices have gone up on groceries, gas, and more. If you're a renter, you're likely experiencing it a lot as your rent continues to rise . Between all of those elevated costs and uncertainty about a potential recession , you may be wondering if it still makes sense to buy a home today. The short answer is – it does. Here's why.  Homeownership actually shields you from the rising costs inflation brings. Freddie Mac explains how:  "Not only will buying today help you begin to build equity, a fixed-rate mortgage can stabilize your monthly housing costs for the long-term even while other life expenses continue to rise – as has been the case the past few years." Unlike rents, which tend to rise with time, a fixed-rate mortgage payment is predictable over the life of the mortgage (typically 15 to 30 years). And, when the cost of most everything else is r

Why Buying a Vacation Home Beats Renting One This Summer For many of us, visiting the same vacation spot every year is a summer tradition that's fun, relaxing, and restful. If that sounds like you, now's the time to think about your plans and determine if buying a vacation home this year makes more sense than renting one again. According to Forbes :  ". . . if the idea of vacationing at the same place every year makes you feel instantaneously relaxed, buying a vacation home might be a wise move ."    To help you decide if making a move like this is right for you, let's explore why you may want to consider purchasing a vacation home today.  Benefits of Owning Your Vacation Home You don't have to worry about finding a place to stay. It can be a challenge to find a rental where you want, when you want. Some summer vacation destinations are more popular than others, meaning your favorite place may be booked up in advance. Bankrate explains why owning your vac

Why Buyers Need an Expert Agent by Their Side The process of buying a home can feel a bit intimidating, even under normal circumstances. But today's market is still anything but normal. There continues to be a very limited number of homes for sale , and that's creating bidding wars and driving home prices back up as buyers compete over the available homes. Navigating all of this can be daunting if you're trying to do it alone. That's why having a skilled expert to guide you through the homebuying process is essential, especially today. Bankrate shares this perspective:  "Advice and guidance from a professional real estate agent can be invaluable, particularly amid a hot or unpredictable housing market." Here are just a few of the ways a real estate expert makes a big difference:   Experience – Real estate professionals know the ins and outs of what's happening today, how it impacts buyers, and how to navigate any hurdles that may pop up. Education –

The Impact of Changing Mortgage Rates [INFOGRAPHIC] Some Highlights If you're looking to buy a home, you should know even a small change in mortgage rates has an impact on your purchasing power . These charts show how rates generally affect your monthly payment . The best way to navigate changing mortgage rates and make an informed buying decision is to rely on the expertise of a local real estate professional and mortgage lender.

Powerful Job Market Fuels Homebuyer Demand The spring housing market has been surprisingly active this year. Even with affordability challenges and a limited number of homes for sale, buyer demand is strong, and getting stronger. One way we know there are interested buyers right now is because showing traffic is up. Data from the latest ShowingTime Showing Index , which is a measure of buyers actively touring homes, makes it clear more people are out looking at homes than there were prior to the pandemic ( see graph below ): And though there's less traffic than the buyer frenzy of the past couple of years, we're not far off that pace. There are a lot of interested buyers checking out available homes right now. But why are buyers so active at a time when mortgage rates are higher than they were just last year? The Job Market Is Growing at a Stronger-Than-Expected Pace With inflation still high, the Federal Reserve (the Fed) repeatedly hiking the Federal Funds Rate, and a l