Stay Up-To-Date on Industry Trends & Forecasts
- 88% of buyers had a home inspection prior to closing in 2022. A pre-listing inspection is becoming more common these days to help sellers identify issues that may be rectified prior to listing so they do not become a (more expensive) item later. (WSJ)
- “I have been investing for 80 years, more than one-third of our country’s lifetime. Despite our citizens’ penchant—almost enthusiasm—for self-criticism and self- doubt, I have yet to see a time when it made sense to make a long-term bet against America,” – Warren Buffett
IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in California, Alabama and Georgia
Did You Know?
- Top 10 U.S. towns where millionaires are buying second homes are: Miami, Florida, The Hamptons, New York, West Palm Beach, Florida, Napa, California, Aspen, Colorado, Santa Barbara and Montecito, California, San Diego, California, Jackson Hole, Wyoming, Carmel-by-the-Sea, California and Boca Raton, Florida. 40% of the Top 10 towns are located in California, 30% in Florida. (Henley and Partners)
- Of homes purchased in January, 29% were all-cash transactions, up from 28% in December and 27% one year ago. (BARRONS)
- “We have to step back and realize these month-to-month data sets are going to bounce around a little bit…But the broad trend is inflation has peaked in some areas and not quite peaked in others, and that’s good and that’s also the intended outcome of the Fed’s rate hike campaign.” – Brian Moynihan BANK OF AMERICA
- Mortgage demand dropped 7.7% as rates trend a bit higher. Re-financing dropped 13% in the week. Purchase applications dropped 43% compared to a year ago. Retail sales rose 3% versus 1.9% estimates…. (CNBC)
- Canada has banned foreign home buyers for 2 years in its attempts to curb price escalations…..and has passed a 1% annual tax on the market value of underutilized properties: It took effect on Jan. 1, and tax bills will be due on April 30. Vacation properties that are not weatherized are exempt, as are properties that are occupied more than 180 days per year. That’s $3,000 per year on a $300,000 home…..
- As the fear of recession looms. those renting their homes may have to cut back on their rental rates: well-off vacation home rental customers that boomed during the pandemic, renting whole homes in places like beaches and mountains, is shifting in the opposite direction. Revenue per available room for short-term U.S. vacation rentals is forecast to decline in 2023 after years of growth. (WSJ)
- The Housing Recession is being fueled by higher interest rates and consumer sentiment: only 17% of consumers surveyed by Fannie Mae in January said that it’s a good time to buy a home, compared to 52% in January 2021. Lenders are getting creative with new products that allow you to refinance later at no charge, transferring interest rates upon sale and one-day mortgage commitments/approvals…. (Marketwatch)
Tools
- Capital Gains Tax Rates For 2022 And 2023
- Capital Gains Tax Calculator
Trends & Forecasts
- Bay Area Home Prices and Affordability – Flipbook
- Mortgage Interest Rates 2022 – 2023 PDF
- Sonoma County Market Flipbook
- Sonoma, Napa & Solano Counties: Home Price Map
- Cities with the highest rate of inflation according to Wallet Hub
Market Update
We talk often about how all real estate is “local”. City by city in both Sonoma and Napa counties, we saw wide disparities in prices, number of sales and days on the market in February. However, some broad generalizations can be drawn. For example, the number of listings is down across the board with only one exception. Some by as little as 6%, others as much as over 30%. Another example is the number of days on the market. Again, in general these have increased in most communities. Some very little, in others the numbers have doubled.
Additionally, most communities in both counties saw a decrease in the closed sales price. That was true In Sonoma Valley, where we saw a year over year decrease in the median sales price from $1,624,000 to $920,000, a 43% decrease. The most interesting statistic however was the 40% increase in the median list price in the Valley, which came in at $1,822,500 in the month of February this year, fully 40% higher than a year ago in the same month.
Anecdotally, we are still seeing well-priced properties in good condition receive offers quickly, in some cases in multiple quantities and above the asking price. We know more sellers are waiting for Spring to put their homes on the market and we know buyers are being more cautious, perhaps holding back for a better supply of inventory. The Feds are expected to increase interest rates again in March by a quarter percent, but there is still some concern that they might go up by a half percent. Reports anticipated in the first part of the month will provide some indication whether the Feds actions are getting a hold on inflation.
Please note, all information is for single family residences in the Sonoma Valley as reported to BAREIS, the local multiple listing service through Broker Metrics.
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