September Letter from My Heart

Good Morning to a new School Year,

Perspectives can be fun. Back in my day, our family started school right after Labor Day weekend. Now most schools start in late August. How life changes and adapts.

Typically, September begins a year-end slowing in demand for homes and a slight softening of values. Yet with our very tight supply, one must wonder if this pattern will hold this year. We will keep you up-to-date over the coming months.

Speaking of wonder, do “cash buyers” have an advantage over other buyers? In most cases, no. They too, have to play at the higher ends, as today’s Sellers look to “net cash”, not just a cash offer. Often a higher priced offer, with a loan, wins the day.

And where does it all begin? It begins with our first conversation where we begin developing an understanding of your specific desires and needs. From here, we work together to carefully choose a path optimized for you, your family, and your future.

Give a call. We try to make our conversations fun,

informative, and constructive.

A quick shout out to our ‘winner’ of a 2 day ticket to J Martin’s 2 day Investor conference in Oakland. The drawing winner is Jay Singh a member of the San Francisco Out-of-State investors group I spoke at in July. Congratulations Jay and I look forward to seeing you at the event.

Before this month’s “Good, the Bad, and the Ugly,” a few helpful stats and events. .

Of Interest:

  • Our Federal Reserve talks of making changes to their balance sheet, as an act of quantitative “tightening”. Their current plan where they reinvest the principle we re-pay them on our mortgages, is called quantitative “easing”. With renewed economic growth, what better than now to work to reduce the balance sheet. The good news: This is not an outright selling of held assets, such as mortgages, only a shift in strategy.

  • Job growth continues excellent, with a net 209,000 new jobs in July. The average monthly gains remain similar to 2016. Even more, employment-to-population ratio is 60.2% – best since 2/09, with unemployment at 4.3%, despite a sharp jump in those seeking work. With this, hourly wages are rising. Month-to-Month wage growth was 0.34%, up from 0.15% in June – best since 10/16.

  • On the troubling side: Revolving outstanding credit has surpassed the former high’s of 2008. It may reflect some pent-up consumer demand plus higher wages.

  • Stable for close to 2 years, the Bay Area affordability index has recently ticked down a couple of percentage points. This could be a predictor of pending price declines or reflect our quite tight housing supply. The market will help answer: “Will buyers stop shopping, or will the overly tight supply-side, keep upward pressure on prices?”

THE GOOD, THE BAD, AND THE UGLY

The Good: Both commercial and residential lending are working on new options to reduce the need for appraisals. For commercial, this is the under $ 400,000 loan space. Call.

The Bad: Borrowed from HSH Associates. “There continues to be only a small market for private-label mortgage-backed securities (mostly jumbos, with others creeping in). There is no real “subprime” mortgage market to speak of (for better or worse, it means for a segment of the market, “credit” for housing, remains scare).

‘Fannie and Freddie remain corporate zombies, even as they dominate the mortgage markets. Housing finance reform … remains only a theoretical possibility in this political climate, as it did in the previous one.”

The Ugly: Attempts by local cities to balance open space with affordability costs. The outcome has been (in One local City) to raise impact fees to over $ 100,000 per unit. The question I ask: How does such increased costs, bring about housing affordability? Just asking.

It is important to see all sides, keeping an open mind, while being open to the realities of unintended consequences. A good approach to keep things in balance.

Thank you for our conversations and your insights

into a complex world, too big for just one.

Closing Thought: Stay or Sell ?

A complex conversation with many variables; job status (as we enter another tech boom), housing pressures, personal age, and how one views the coming years, etc.

Our conversations delve into the personal side of these questions, to help define what is important and your priorities. This helps identify workable solutions fit for you.

How one sees their world, helps define the choices we make. I invite you to call us, as we help facilitate your desired outcome. It is who we are and what we do. So please call, email, text, or from our website, schedule an appointment.

www.michael-ryan.com

Be well, be blessed. We remain gratefully yours.

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