RISING MORTGAGE RATES MAY NOT BE AS BAD AS FIRST FEARED
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If mortgage rates continue to rise, is selling or buying an Arrowhead vacation home the right choice for you? Answer: Lake Arrowhead is one, two hours from home, a mile high, above the clouds, quiet, casual, clean air, and we believe people live longer and happier here.
If mortgage rates continue to rise, is selling or buying an Arrowhead vacation home the right choice for you? Answer: Lake Arrowhead is one, two hours from home, a mile high, above the clouds, quiet, casual, clean air, and we believe people life longer and happier here. Question?
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that after declining for two straight weeks, mortgage rates reversed direction this week and rose to their second highest level this year.
“The good news is that the impact on consumer budgets will be smaller than past rate hike cycles, per Chief Economist Khater. That is because a much smaller segment of mortgage loans in today’s market are pegged to short-term rate movements. The adjustable rate mortgage (ARM) share of outstanding loans is a lot smaller now – 8 percent versus 31 percent – than during the Fed’s last round of tightening between 2004 and 2006.”
Added Khater, “Still, inflation continues to firm and borrowing costs are inching higher. Although wages are slowly growing, stronger gains would certainly go a long way in helping consumers offset these increases in prices and rates.”
Over the past 25 months average prices nationwide have risen 8% for existing home prices. In the same 25 months Arrowhead Woods prices have risen a bit over 5%. Good for a vacation/ second home market; now about 75% of Arrowhead Woods.
In a short time prices, local and national, can rise 15% only to shortly fall an equal or greater amount. A vacation home is discretionary money, neither seller nor buyer must sell or buy, exercising their willingness to hold to a price, win or lose; a tough market
MAY 2018 35 SOLD,ARROWHEAD WOODS 3 distinct price brackets
Low end = $200k to $499k + Mid = $500k to $999k + High end = $1 Million plus
$500,000 to $1 MILLION IS CLOSE TO A BUY/SELL BALANCE. THE SPREAD OF PROX. 3.3% DISCOUNT FROM ASK TO SELL IS A HOT MARKET FOR PAST 6 MONTHS.
In Arrowhead Woods, the mid-range of $500,000 to $1 million has the most homes for sale, from the lowest price to the most expensive. How do I know buyers are excited? Paying 96.57% of the asking price is exciting!
The table below illustrates the high demand of buyers with the average home sold in 92 days. In a resort, near two hours drive from home, it’s a quick decision. Next week we’ll look at the luxury end of the Arrowhead market.
2018 MARKET HAS AN UPWARD TREND. SALE PRICES SOFTEN A BIT. IT COULD BE JUST A BLIP. We’ll see.
As we near mid-year and the sales peak of Summer, it seems a good time to prepare for ‘future think’. The table of change in the last three months is telling us that prices are softening in velocity and homes are selling even faster.
New on the market sellers are more confident than ever with Comparable List Prices rising 2% in three months. Sellers are negotiating harder too, with the Median Sale Price giving up only 1.4% from the asking price. We must be cautious in our entheusiasm for the negotiated ask price as the seller may have had one or two previous price reductions.
Economists overall expect the economy will continue to do well this year. But the rise in consumer prices and interest rates could start a squeeze in summer and fall when home buying reaches its’ peak. The rise in interest rates would add about $88 to the monthly cost of a $300,000 mortgage. 30 year mortgage rate at 4.55% & history
April 2018: 42 Arrowhead Woods homes sold. Our vacation market is understood best when viewed as three segments; Cabin, $200,000 to $499,999; Premium, $500,000 to $999,999 and Luxury, $1 million plus. For a change of pace I’ve divided and summarized each segment. Give me your feedback on this new data perspective.
Arrowhead Woods is easily described as a Premium and Luxury market. 75% of the homes in ArrowheadWoods are vacation, get-away homes; discretionary money. Although data is nationwide, our mountain community is following the trend of a Seller’s Market..
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Arrowhead Woods continues to improve in prices, but we have a listing shortage. Some owners are losing out. It’s a national problem.The plus side is loan rates are stable.
FIX OR NOT… Buyers will react to your decision.
Selling your home? Then you’ve likely had that rude awakening where a real estate agent tours your home and breaks some tough news: Your house needs work before it goes on the market.
For starters, you’ll have to fix the furnace. And paint. And replace those outdated cabinets … the list might go on and on.
Given that all these tweaks cost money, you might wonder: Do I have to do everything?
Many of these fixes are indeed necessary, says Kathleen Kuhn, president of a national chain of home inspection offices.
“Any defect or condition that affects the intended function or operation of a major house system should be fixed,” she says. This would include taking care of leaks, built-in appliances not functioning properly, insect infestations, plus any imminent safety or environmental hazards.
But beyond that, it’s up to you: Sure, the nicer your home looks, the more money you’ll likely be able to fetch when selling it. But not all improvements you make offer the same return on investment. Here are some fixes that some experts say you can pass on without too many repercussions.
1. Fixing cosmetic damage
Cosmetic damage includes things such as scuffed floors or peeling paint: They don’t interfere with the function of your home, although they do make it look run-down. The good news is, a keen home buyer knows to look beyond that, says Craig Webb, editor of Remodeling Magazine.
“Sophisticated home buyers and home flippers know that cosmetic damage can be easily fixed,” says Webb. What will give them pause is the hard stuff.
“They are going to want to know that the electrical and plumbing systems are up to grade and that the utility bills are decent,” says Webb. If the home’s structural issues are sound and the “bones” are good, then you can let the surface stuff slide.
2. Updating kitchens and bathrooms
So your kitchen is woefully outdated, your bathroom avocado green (yuck). That may be OK. Really.
The reason: Many buyers these days look forward to remodeling these “fun” areas-plus, trying to second-guess what they want and have it there waiting for them is just plain unrealistic, given all the home decor styles there are to choose from today.
“Maybe you favor a French provincial kitchen and he or she likes Scandinavian modern,” says Webb. “People have very different ideas about what a perfect kitchen is or what a perfect bathroom is. It’s a big risk, and unless you know your exact buyer, it’s better not to guess. The next person will impose their own dreams on the house anyway.”
3. Doing partial fixes
If you do decide your kitchen and bathroom are so bad they’re worth redoing, don’t go halfway. Unless you can redo a whole kitchen, don’t bother with partial fixes. Older cabinets with brand-new granite countertops only highlight the old.
4. Repainting in trendy colors
We don’t care if the color du jour is violet-selecting “trendy” paint colors is yet another bad move.
The reason: Color trends come and go so fast, what might look great today will look dated tomorrow or, even if they’re totally hip, might not appeal to large swaths of buyers anyway.
“Bright colors are really trendy right now, but they don’t appeal to a wide audience,” says Samantha Hancock, a real estate agent with Re/Max Advantage Plus, based in Chanhassen, MN. So if you must paint, “keep things neutral,” advises Hancock. “Odds are the buyer is going to paint the house how they like it anyway.”
5. Renovating beyond your neighborhood’s norm
There is a saying that Webb likes to use: “Too much house for the neighborhood.” In other words, if all the houses on your block are beautifully furnished and landscaped, then it likely is worth it to spend the extra cash on your own. But if your house is the only house on the block with a well-kept rose garden and indoor dog shower, you may not get the return you hope for.
“No matter how much you try to have the jewel house to live in, you aren’t going to get the return on the investment if the rest of the neighborhood doesn’t match,” Webb says. So check out your neighbors’ homes and plan accordingly.
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In this era of intense partisanship and division, we can be grateful for the common denominators that bond us as Americans. Our national aversion to spiders, clowns, and trust, falls. Our adoration of heroes, entrepreneurs, and puppies wearing Christmas hats. And, perhaps most of all, our endless fascination with luxury real estate.
Everyone, it seems, loves peeking inside the closed gates of exclusive abodes, or hearing of head-spinning megahome sales. But high-end real estate is much more than just sumptuous kitchens and sparkling infinity pools. Whether you’re an active participant in the nosebleed section of the housing business or just a bystander, luxury
matters. Because the strengths or weaknesses of the upper reaches trickle down to us commoners: Higher home prices at the top pull up prices in the middle and bottom. And vice versa.
So the data team at realtor.com® set out to find the luxury neighborhoods where prices are growing-and falling-the fastest. We found some big changes afoot in some of America’s highest-profile bellwether markets.
Some of the most prestigious neighborhoods in the nation are seeing prices stagnate or fall after years of overbuilding-or because they simply ran out of land on which to erect new, extravagant homes. Foreign buyers in some perennially hot luxe markets have become more scarce. Meanwhile, neighborhoods that until recently weren’t considered the best of the best are taking off.
“The opportunity for new development is more limited now in the more well-known and established luxury locations,” says Jonathan Miller, a New York-based real estate appraiser at Miller Samuel. “Now we are seeing the [luxury] footprint expand into neighborhoods that are nearby or adjacent-areas that [until recently] weren’t thought of as luxury markets.”
To find these big-ticket hot spots, the realtor.com data team pulled housing data for more than 600 ZIP codes where the median home listing price was above $1 million between April 2016 and March 2017. Then we compared that 12-month period to the previous year to see which ZIP codes saw the largest median price increases and decreases. We eliminated ZIPs with fewer than 10 listings per month. We also limited our list to just two ZIP codes per state to give the list some geographic diversity.
For the first two months of 2018, Arrowhead Trends appeared to be a soft price and sales recovery. March was an upturn in mid to high end sales. The big picture, when seen together, affirms a growing mountain home economy.
Below are 6 forecasts to get the big picture for careful planning