How much did that house sell for?

The volume of closings are down for the week with 36% selling for more than $100k over asking price. In the next couple weeks you can expect similarly reduced closings as we head into the new year anticipating new inventory.

The spring market is the time when new inventory bursts on the market, when the flowers are blooming, the skies are more blue than grey, and the market is primed and ready for movement. This used to happen in late February or early March, however in 2015 we saw the "spring" market begin in late January. I don't think we'll have to wait even that long to see an influx of inventory hit the market in 2016.

As I've mentioned in previous posts, this holiday season has been unseasonably hot with copious buyers competing for dwindling inventory. Those buyers will still be here come spring, in addition to those who sat out the holidays.

If you're thinking about moving in 2016, now is the time to get started making that happen. Don't wait. They say luck is where preparation meets opportunity, set yourself up for a lucky 2016 by calling me now to get your ball rolling before the ball drops for new year's.

Simple ways to clear out clutter

Ahhh Christmas, Hanukkah, & all the holidays that are about so much more than gifts, but which ultimately leave our houses filled with an excess of decorations, toys, gadgets, housewares, clothing... you get my point. As soon as next week we will all begin to consider our goals for the coming year, and for weirdos like me being more organized is toward the top of my annual list of resolutions. I know I feel better when the spaces where I live and work are (relatively) clear and clean of clutter. The space around me tends to be a reflection of my mind, and vice versa, so keeping it open and organized feels better than cramped and cluttered. Rather than waiting for the spring cleaning season to be upon us, why not get a jump on things now? An easy first step could be when putting away gifts from the holidays, pull out whatever they may replace and decide if you're going to donate, give away, or throw away the old item(s). Here are some more tips on ways to declutter:

From Style at Home:

• Identify problem areas. Take "before" pictures to help plan and measure progress.
• Be prepared. Keep items where they're most likely to be needed (gloves & keys by the door, for example)
• Utilize open spaces for organized storage. Consider under the bed, a bench with built-in storage, or an ottoman to keep throws and extra pillows inside.
• Use bookshelves to display your favorite tomes and keepsakes. Donate books you've replaced with digital versions to make space to showcase items that bring you joy.
• Keep a donation box at the ready. Rather than make a huge to-do of decluttering, keep a box open and ready so you can toss things in whenever you decide they're no longer wanted or needed in your space. When it gets full, take it to a local donation center & being anew.
• Use those reusable shopping bags! Keep them near your keys so they're easy to grab on your way out to the store.
• Be true to yourself. As much as I appreciate a minimalist look, it is simply not the way I live and that's okay. Sometimes my piles of organized chaos get a bit high, sometimes my display shelf gets a bit full, sometimes I need to cull problem areas, sometimes I enjoy the fullness. Be where you are and allow your home to reflect the best of you.

How much did that house sell for?

Last Open House Lists of 2015

This is the final open house list publication for the year, so go see what's out there this weekend and enjoy the lull of the holiday weekend next week. I am working and around all week, so feel free to reach out if I can help you now, or in planning your best move in 2016.

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Let's Talk Leverage

When throwing around housing prices, appreciation percentages, down payments, mortgage payments, and the like, you end up with a lot of big numbers. It's easy to look at a home appreciating 10% in a year (a reasonable number in many parts of the San Francisco Bay Area) and be astounded that in a year you can earn $80,000*.

But let's take a closer look because you didn't just earn 10%; if you put 20% down, you earned not 10%, but 50% return on your investment. Yes, you read that correctly: 50% ROI. To understand how this works, you need to understand leverage.

Leverage, in the most simplistic terms, means that you are using something to its maximum advantage. Keep in mind I'm going to stick to easy, broad numbers for the sake of simplicity but you can really drill down to the pennies, interest rates, and total expenses incurred if you so choose (and for true accuracy to your situation, you may want to do that -- and ask your financial professional for help).

Example:

Purchase price in 2015: $800,000

Downpayment (20%):  ($160,000)

Home value 2016:  $880,000

Increase in value:     $80,000 (10%)

Output (downpayment): $160,000

Earnings (appreciation): $  80,000

Return on initial investment: 50% ($80,000/$160,000)

If you put down less money you are more highly leveraged and your return can be even greater on a percentage basis:

Example:
Purchase price 2015: $800,000

Downpayment (10%): $80,000

Home value in 2016: $880,000

Increase in value:        $80,000 (10%)

Output (downpayment): $80,000

Earnings (appreciation): $80,000

Return on initial investment: 100% - Doubled your initial investment

Wow! Where else can you have the potential to earn such amazing returns on your capital these days? I know, it's pretty impressive. Still, I would be remiss to not warn of the flip side of being highly leveraged which is that should the market experience a correction you may not have the cushion of equity that comes with a larger initial output (downpayment) to stay in the black with your head above water. 

Everyone's situation is different. Ask yourself questions to determine what strategy is best for your longterm (or short term) goals. Is owning real estate part of your investment strategy, or is the investment in homeownership less of a consideration than buying your family a home? Are you considering selling and wondering if you've held your property long enough to realize your desired return? What will you do with the proceeds when you sell your home? What do you risk losing if you wait to take the first step? What can you gain by taking that first step today instead of tomorrow? Call or email me today if you're ready to take that first step.

*Please note all the numbers used were pulled out of thin air for the sake of the examples and offer no guarantees or promises of market returns, appreciation in the coming year(s), or anything else that would otherwise require a crystal ball.

How much did that house sell for?

This weekend's open house lists

The 2015 holiday market continues to buck trends as sellers and buyers alike are demonstrating their motivation to sell & buy, regardless of the time of year. New houses are open this weekend in coveted areas like Montclair, Redwood Heights, Rockridge, Temescal, Piedmont Ave, Alameda... the list goes on (as you can see below). While lower inventory than I expect to see in Spring persists, there's certainly more options than is typical.

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I love this #colorful #mediterranean #bungalow in #oakland 's #oakmore #neighborhood. #architecture #love #house #home #beautifulhome #eastbay #realestate #realtor #oaklandrealestate #notforsale

via Instagram @shannonkellyhomes http://ift.tt/1HYA5SR

#tbt 13th & Broadway then (around 1901) & now #oakland #downtownoakland #downtown #historic #oaklandhistory

via Instagram @shannonkellyhomes http://ift.tt/1QznUNj

#architecture found while driving through #oakland. #realestate #realtor #sfbayarea #beautifulhome #notforsale #victorian #oaklandhills #oaklandrealestate

via Instagram @shannonkellyhomes http://ift.tt/1Ol6M9D

Homeownership is getting easier

When I speak with people about how to buy a house one of their first concerns is about the downpayment. When homes in Alameda County have an average price exceeding $800,000 (Oakland is averaging under $500,000) a downpayment of 20% or even 10% can seem totally out of reach. How do you save $80k-$160k for a downpayment (and an additional 2-3% for closing costs)? It can be a daunting thought that can make the most astute savers' knees wobble. Well, Fannie Mae, the government department which essentially sets the rules for lending by commercial banks and lenders, is loosening up the pursestrings a bit.

For some time now unless a buyer got an FHA loan the minimum downpayment was 10% of the purchase price. However, as of December 12, 2015 that minimum is being reduced to 5% for conforming high balance loans (loan amounts up to $625,500 in high cost areas like ours). This is great news for people who can afford the costs of being a homeowner but have trouble saving 10% or more for the downpayment.

For buyers currently in the market who have been planning on putting down 10%, they now have more purchasing power. Now with just over $30,000 you can buy a home around $650k instead of $300k -- that's a pretty sizable difference in the type of home and neighborhood you can afford! If you're in this kind of situation remember to run the numbers to see how an increased purchase price will affect your monthly payments.

This is fantastic news for so many people and will allow more people to realize the security and comfort of homeownership. It may even translate to more inventory as it could also provide sellers with more options for where to buy when they sell.

I work with a variety of loan officers whom I am happy to connect you with if you'd like to learn about how this new change can affect your 2016 living situation. Call or email me today -- don't wait to start planning your next move. It's better to begin early and be prepared than to rush and try to catch up with your competition.

How much did that house sell for?

Please note the LP to SP % was calculated to show how much less the list price was to the ultimate sale price. To see how much over/under asking price a particular home sold for, divide the selling price by the listing price.   

This Weekend's Open House Lists

This winter market is as strong as, if not stronger than, the late summer & early fall markets earlier this year. The multiple offers & over asking price bids continue shucking the standard expectations of a winter slow down. The trend that isn't so different is lower inventory than we've seen throughout the year, which means the spring market will welcome additional inventory and renewed fervor, likely with more buyers entering (or getting back into) the market. What's the point of all this? To say that when you find the right house and have the ability to buy it, don't wait! The right time is when you're ready & you find the house for you.

If you'd like to talk more about your search, the market, and how to best achieve your goals, shoot me an email or give me a call.

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