Your July 2022 Letter From My Heart, with the Good Bad n’ Ugly

Good morning to Summertime!

Don’t Wait !!

Home buying continues healthy – Home refi’s are responding to higher rates

Let’s start this month with a ‘funny’ I saw. On the back of a gravel truck:

“Dear Paper, I let you win. Signed Rock”

The Good News: Confidence in Real Estate is steadfast. So don’t miss out. Call today and let’s prepare for some summer fun.

Recent News

– Appreciation: The low supply of homes continues to support the above average appreciation seen the past couple of years.  As of yet, higher interest rates are not slowing down appreciation to any dramatic extent.  My best guess, over the next couple of months, we will see the helpful data to determine if higher rates, are slowing demand. Even so, we may also see a further reduction in the supply of available homes for sale. Regardless, a slowing can be good for stabilizing pricing, providing a more healthy appreciation. 

– Inflation: Current expectations are for a softening, over the next couple of months. Yet hitting inflation targets may not become clear, until after November elections. 

– Inventory:  From mid-2019 through early 2021, housing inventory declined ever faster. Peak decline occurred in early 2021 when Y-o-Y inventory fell a whopping 55% in response to Covid-19. Since then, the pace of declines have steadily shrunk to -30%, in January 2022. Then to near zero in early May and now up 11% Y-o-Y. Note: This is the first Y-o-Y rise in three years! That said, inventory is still 50% below pre-pandemic level and will keep rising.

Bottom Line: 

Interest Rates Are Up – ACT NOW!

Key to Success: Being well prepared. It lets your the Realtor and the Seller know your readiness and commitment. It is the first step in turning dreams into your reality. For certain, don’t let the “All Cash buyer” be too concerning. Most Sellers like – even prefer – the hands-on experience of the more traditional Home Buyer. Homes are personal and families are part of the American heritage.

Bottom Line:

Call today and let’s prepare for the Summer Home Buying Today.

Be ready today. A strong loan application is a winning attitude.

It strengthens your Realtors efforts in selling you and your offer 

to be the winning offer. Being “best” prepared is sound advice. 

Interesting News We Can Use

New Loan Limits: With increases in property values, we have new, higher conforming / conventional loan limits for SFR. The new number is $ 647,200. For higher cost Counties, this number can be up to $ 970,800. Let’s talk. What a Spring Buying window of opportunity. 

Forbearance and Foreclosures: Good News. Numbers remain very, very low – great for homeowners. Yet, if you are or might be entering foreclosure, we can still make new loans. Not always pretty, but the priority is Saving your home. Let’s talk. Sooner the better.

Interest Rates: The short answer: Rates are up – likely even higher for the next few months.

Conventional loans: Tracking low 5’s. Cash-out refinance and investor loans run a bit higher. 

VA rates and FHA ratesIf a Vet? Call today.  Fixed rates in the high 4’s. Plus Veterans refi special: 1) Refi from conventional loan into a VA loan, and 2) Rate-reduction refi’s have NO income, NO asset documentation.  NEW rule for Veterans, even a 1 % service related disability = NO VA funding fee !

Jumbo Rates: 30-year fixed: Low 5’s. 5-year fixed then adjustable: Low 4’s.

Housing: 2022: Question: As we exit peak Spring buying, will prices abate? Will rates of appreciation slow? Key: Actual Sales prices, not initial listing prices, is what we watch. 

Builders Numbers: Coming in lower. The backlog of uncompleted homes is causing a drag on new building.  This lack of available supply is helping support current pricing. 

Employment: Many large companies talk of pausing hiring. Some mention actual headcount reductions.  Add to this, Fed talk of moving rates higher, to control inflation.  Yes, this may cool inflation, but there is a risk of creating a liquidity problem. A likely key indicator will be how they analyze employment numbers. Current numbers are holding steady over the last 3 months, with the U-6 – the all in number – increasing a smidge the past 2 months.

The Good, the Bad, And the Ugly

THE Good: A counter-point to the next Housing Bubble being promoted by some. It is the same old song, repackaged.  However, there are a few major technical differences.  In the last housing bubble, we had 3.7 M homes available, with far less demand. Now we have less than 1 M and this is not enough supply – regardless interest rates. Yes, there is room for slowing, after the torrid pace of recent years. It might even be a bit relaxing. Of interest: Pending home sales are now in-line with the pre-CoVid numbers – but inventory supply is only 60 % of what it was. Thus: Stay aware, be prepared, and be ready to be nimble. 

THE BAD: Supply chain reverberation due to conflict in Ukraine – Europe – Russia. Add to this China lockdowns. When combined comes inflation, disruptions, and delays. Perhaps worse – severe food shortages and famine. Consider the millions of families being harmed. It seems time to negotiate peace by understanding all sides. Irrational reasoning needs to to end. 

THE UGLY: I am seeking data, even anecdotal, to ease my worry over electrical supply. Moving towards solar is worthy, but the pace needs to be carefully balanced with the on-the-ground realities. There is incredible technology at work, yet PG&E seeks to add additional charges to those who seek to install solar. Such thinking only helps the short-sighted.  Will we see split billing ? One bill for infrastructure and line maintenance, then another bill for actual usage ? Just a thought on how to address the growth needed.

Planning and Preparation 

Are markets peaking – stocks, bonds, real estate? Each of us has a different view. Yet how each of us respond to it, is what makes the market, the market place. It is keys to one’s planning and preparing for tomorrow. And it is here, we strive to meet you and complement your perspective. Our goal: Bring to you, a full range of possible options, ones meant to enhance your view of tomorrow, based upon today’s market place. 

Why call Mike

What We Do – Why We Are Here

We know how to explore and carefully examine the many options open to real estate. We scrutinize for safety and prioritize the most feasible. It is how we build a trust relationship with you. It is how we help you grow your wealth and secure a solid future for you and your family. 

Small Business: We love small business and provide loans offering a full array of financing.

Residential / Commercial: We offer strong lenders and a complete package of lending options.

Tax-deferral strategies:  Investment portfolio tend to be dynamic in nature, subject to change and surprise. It is why it is important to keep updated, as to tax law. Herein, is a key question: Pay taxes today  or keep your cash, working for you? How? By “deferring projected capital gains tax”? And if keeping your capital – working for you – sounds good, let’s talk. Let’s discuss the best available options and plans-of-approach. Best: We have the professional team who know how to bring it all together. Details matter and they know all the small details. 

So: Why payout up to hundreds of thousands of dollars – even Millions – when you have the ways and means to keep your hard earned money working for you – and your estate. If this sounds advantageous to you, it is time to talk and plan ahead, today. I am ready. Call me. Planning income tax strategy is more important today, than ever. New laws may stop you from passing highly appreciated real estate, onto your heirs. Further, there is no promise the Prop 13 benefits will not be taken away. It is time act. Time to be prepared. Let’s talk today.

What We Do: Our role is to explain and bring clarity to time-tested strategies able to keep your money working for you. For me, this presents a solid opportunity to keep your cash and build wealth. One that is worthy and a profitable use of your valuable time. Let’s talk. 

Tools: We offer multiple proven tools and methods for highly appreciated holdings. These strategies-of-success help keep your cash, in your proven hands. With this, we offer our highly qualified and knowledgable professionals. This combination is the defining key to your success. 

Retirement: Like myself, as we age, real estate becomes more personal. If you agree, let’s talk. Together, we can help find answers and solutions to questions about a too soon, tomorrow. We can start today. We can address a range of questions, from working at home, to a multitude of retirement options. Our effort is to bring clarity to important real estate planning issues.

Our Purpose:

Be insightful and practical. 

To Work with you, finding best answers and solutions

Being Straight Forward and no short cuts. 

Success begins with solid preparation and a proven professional – Mike Ryan. I know the ropes and am a proven advocate. I offer time-tested insights and experience. Best, I love to see my clients achieve their goals. Call us – the professional team who stands with you. Call today. We are ready. 

Thank you and continued blessings. 

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