Your February 2024 Residential Successes and News

Good morning to the coming of Spring and Spring Buying,

Mortgage Rates Trending Upwards –


Our Goal:

Turning words, charts, and data into cash, assets, and wealth.

When there is new news or data, we are learning to ask if it is straightforward, or another example of spinning the news. For me, I watch news wondering how it will affect my client’s financial future. As such, my ‘spin’ is generally positive. Why? Going back for decades, our local real estate has appreciated a bit over 6 % every single year. In addition I view from a long-term perspective, buy and hold. Home buying is not a speculative instrument. In fact, when one consider the return on the initial cash investment – down payment – the return become even more impressive.

Key to success: Success doesn’t happen in a vacuum. One needs the experience of a proven professional. Prepare for Spring by preparing now – Call Mike. Opportunity awaits.


Points of interest

News Today: Interest rates continue to chop sideways, with a recent up tick. This is so-so news for many, as hopes for lower rates remain on hold. Will this mute Spring-time buying? Some suggest “yes”. For me, I choose a contrary perspective. I believe pent-up demand for homes will outweigh the pain of any minor changes to rates. Watch Inventory of Listings.

From years of conversations with home owners and investors, one common theme – Buy now, don’t wait. With continuation of modest appreciation buying now is aa better choice than waiting. Choosing a “wait and see” approach – with a modest 5 % increase in value – only puts you further behind. My thought: Call me. Let us do a preliminary review of your situation now, so you are best set to find and own the house you desire. Being best prepared today, puts you in the best position to decide and act wisely.

Good News: Inflation continued, as we anticipated, downward. Further, the lagging numbers for “housing and rents” continue to move the overall blended rate, lower. Why Good? The Federal Reserve prioritizes core CPI when considering rates. Watch employment numbers.

1) Interest rates and the Federal Reserve: Interest rates continue below peak rates hit a few times last year. With this, the Federal Reserve confirmed their pivot to a more neutral status at the December meeting. Hopefully, the end of rates hikes should continue – with an eye to employment numbers. So far the January numbers show a continued trend for lower inflation. Rental rates – a big piece of the inflationary puzzle – is muted as well.

Based upon the most recent Federal Reserve Board meeting, I see little indication of their slowing down the balance sheet reduction. Thus, though rates have not changed, their balance sheet reduction continues to be one of quantitative tightening.

Outcome: When adding the full “lag effect” of past rate cuts, with quantitative tightening, expect more short-term pains – especially in the election year cycle. However, this may give us a “soft bounce” and solid spring board for future growth. And: Price of gas.

2) Residential Real Estate: I see and hear the Spring-time buying is upon us. Multiple offers, fewer price reductions and more over-bidding. Key: Preparation. Let’s talk.

3) Jobs and Economy: January jobs numbers are in, with January headlines going crazy. Double the expected. Yet, digging deeper reveals a serious concern – not noted by the MSM. According to ADP – Private sector job growth cooled sharply in January. The actual number regarding the private sector verses the expected, was 107,000 less than expected. Digging even further, we examine the infamous “January adjustments”. Such indicates a LOSS of 2.6 million jobs !!

My suggestion: Please – Don’t get caught up with reported “numbers” as absolutes. Note: The revisions, assumptions and just small number of actual research, skews the answer a lot. Instead, a careful review of the trend lines is far more helpful. I like the U-6 ‘all-in’ unemployment rate. It did move from 7.1 % to 7.2 %. As a trend number, it is still well below 10 %. For me, an overall trend number of 10% is worrisome, as you will see a meaningful shift in consumer confidence, consumer spending, and credit card debt.

Another reporting game”: Steady news about big company lay-off announcements. Yet we are not seeing the “weekly unemployment filings” going up. This is a big newsworthy story, leaving the Question: When do the unemployment numbers show a substantially tick upwards?

Recent Residential Success Story:

Now Me to you:

Back on track with a fun success story. One of our clients, referred to us by his brother, recently closed on their new home. Interestingly, by accepting the higher interest rates as the new norm, he benefitted as there were no competing bids for the home they wanted. Bottom line: Rates are keeping well qualified buyers, on the sidelines, leaving a bit less competitiveness. Best news: They were prepared, ready to act quickly, and the deal closed. Be prepared. Let’s talk now.

For those waiting for lower interest rates, it can be helpful to remember, as interest rates ultimately ease, one has the tried and true option of refinancing to a lower rate with lower monthly mortgage payments. Thus, all else being true, higher mortgage rates result in fewer buyers and far too many, potential buyers, prepared and ready to react in a timely manner.

Lets’s talk. Key as we seek more answers to other specific details of our Buyer’s Equation,

Supply shortages: Locally the need for more supply has many challenges. The easy one’s: Find the areas where many homes can be built. Then, the timeline issues regards permits, qualified construction workers, and overall costs. Sadly, I don’t expect much change this year.

Affordability: Another often spoken challenge. I speak often about the long-term vs short-term, yet we all have to write the check. That said, numbers comparison can be most helpful way to conceptualize: Buy Now or Wait.

Let’s review the numbers. 2021: A monthly P&I of $ 1000, needed a $ 4,000 income stream – 240 K home w/ 2.875 rate. Adjusted to today, a 280 K home w/ 6.625 rate, would see an $ 800 monthly payment. To offset this increase, one would need an additional 20% in income. Since 2021 we have seen 15 % income increase and expected about 5 % this year. Thus by the end of 2024, you may have more affordability to buy, than 2021. This outcome, solely due to the benefit of higher incomes.

2024 Predictions: 4.5 to 5 % income appreciation. Transaction volumes: Up 15 – 20 %.

Price drops: It depends on the specific aspect of the market you track. The bread and butter part of our local markets are holding up the best. Go out to the Coast – the higher cost areas – sales are slower.

There are many ways to observe and analyze the market. The best initial step is to follow general trend lines. Next, dig into specific locational details that fit you. Call me, I love to talk details, dreams, and how best to enhance your choices.

Good News: The Breadth of Our Lending Possibilities:

We have the best financing options the market offers. Consider: 1) Veterans, 2) 1st time homebuyers with some fabulous brand new programs, 3) self – employed, and 4) investors with and without traditional income sources. Good News: The well-prepared borrower. The lending world, quite cautious with its money, loves the well prepared. Moreover, our lenders offer more options than pre Co-Vid. Call. Lets review options before you buy. Let’s talk today.

Our Focus: Market Disciplines – Now More than Ever

Do you have a desire to create ‘more’ wealth for tomorrow? To feel more secure? Consider the following:

We advocate, teach, recommend options, and complete the task. And we love referral. So as you read this next section, if someone comes to mind who is ready to explore homeownership, please introduce them. It will be a fabulous conversation discussing the realities, the potentials, and the pathway to success. It all starts with that first conversation. It is what I love.

The game-plan in a nutshell:

Rule # 1: Willingness to lay aside today, for more options tomorrow. This may meaning living below your means. Not easy, but the proven path that can be accomplished.

Rule # 2: Investing – Equities, mutual funds, ETFs. I strongly suggest and recommend one maxes out on the retirement account contributions – each year. This deferred income, with tax benefits, builds for future years. Many such plans are offered, with many employer matching contributions. A great perk. Don’t leave it on the table, always being aware of how it’s invested. For many, a great way to keep your money working for you.

Rule # 3: Investing – Real Estate. Yes, yes and yes. Yes today. Yes yesterday. Yes tomorrow. This is another method to put money aside and build, while adding diversity. If your focus is to build for tomorrow, now is the time to talk and prepare.

Divesting Assets: There are times in life where one needs to sell an investment, due to life’s uncertainties. It brings home the need for a carefully review of one’s investment inventory and see if they remain on-track to achieving the intended goals.

Good News: We not only set a plan in motion, we present the handling of the unexpected, or address the significant issues of capital gains. More Good News: We have IRS approved tools and techniques to help keep your hard earned capital gains working for you – to keep them away from the taxman – federal and state – on a deferred basis. Such is the beauty of working with Mike Ryan and Associates. We are just a call away. Planning amongst friends.

Preparing to buying your next home: How about a “tool” that uses your old property, as collateral for the new home? How about tools whereby the current, “old” home payment, does not count against you, as you moved into the new. Want More Options: Call today.

Truly, our letters but scratch the surface of available options, alternatives, and potentials. We are ready and experienced in most every stage of life, to directly help you build a strong investment portfolio – regardless life’s ebb and flow. It is why a key approach to serving you, is to work with your unique view of life – today and tomorrow.

Because You Matter

Our letters are a guidepost to buying, selling, or investing – wisely. We understand the importance of being patient and of good timing. Our hope is to address your questions and find real life, customized solutions. It is what I love about my work, especially the people-to-people exchange of thoughts and ideas. It proves the best way to discovery and address your needs and unique viewpoint. To this, we then add our complete set of helpful tools designed to complement the shared goal – your success, today and tomorrow. We are here for you.

Your dreams matter. Thank you for your trust and referrals. It is appreciated.

Call me – Your success is my success.

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