Is everyone else finding it impossible to read the internet or take part in a conversation without the coronavirus coming up? Well, this post will be no exception.
As someone who thoroughly enjoys the occasional night of self-quarantine (thank you DoorDash and Netflix), the coronavirus is the excuse I've been waiting for my whole life to stay at home wrapped in a blanket for hours on end without feeling guilty. But it turns out that buyers have other plans. While everyone everywhere seems to be in panic mode—avoiding large crowds, eating out less, working from home more, washing their hands often (ok maybe it's not all bad?), and stocking up on toilet paper like it's the end of days, Bay Area buyers seem unphased and are still going to open houses in droves, determined as ever to make their next move. Maybe it's the ridiculously low interest rates, lack of inventory, rush of activity after holding off last year, ambitious 2020 goals, or all of the above, but buyers have a renewed sense of energy and are back in the market in full force. Which means the bidding wars are making a comeback, as evidenced by these extreme examples: This mid-century modern house in Montclair got 21 offers. An Adams Point penthouse with a 500 sq ft roof terrace got 26 offers. And one charming house in Fruitvale even got 42 offers. That's FORTY. TWO. OFFERS! It truly is (March) madness out there, at least for now. With the spring market approaching, virus fears spreading, interest rates falling, important elections coming, stock market rollercoaster-ing, stay tuned to see how everything plays out. TO BE CONTINUED... In hopes of protecting the economy from this whole coronavirus fiasco, the Fed just slashed interest rates this week and they are now at a record low of 3.29%!
To put it into real-life terms, a $600k loan at today's 3.3% rate vs. last year's 4.5% rate saves you close to $412 a month for the next 30 years. That's like 537 additional rolls of toilet paper each month until you're retired! (Do the math here if you want to calculate your own financial situation and how much uninterrupted bathroom time you can afford.) But here's the catch: we can’t predict how long this will last. If this whole virus outbreak craze levels off soon, rates would likely bounce back up. On the other hand, if the outbreak continues to spread, it could drive rates down even further. It’s all unpredictable at this point, so you may want to lock in a solid rate now for buying or refi, juuuuust in case they creep up again. Lmk if you need a lender! In 2017, Business Insider writer Sam Dogen (also renowned author of my favorite finance and real estate blog Financial Samurai) became a stay-at-home dad after he sold his SF rental property for $2.75 million, leaving him with a $1.8 million profit after paying off the mortgage, taxes, and fees. Umm, can we say GOALS? Now a couple years later, he wants to buy property in SF again. Why now, you ask? (Or maybe you didn’t ask and I’m gonna tell you anyway?)
Well, Dogen says property prices in the US have softened and mortgage rates have collapsed. All while rent prices continue to rise! Plus he thinks the fact that 2020 is an election year, the stock market is thriving AF, and the amount of foreign buyers has dramatically decreased, all point to now being a good time to start looking into purchasing. He listed about 87** other reasons if you’re interested in reading all of them (**ok fine slight exaggeration, but honestly, there were a lot and they were all pretty convincing). *Disclaimer: Every economist, journalist, and psychic will have varying degrees of optimism and pessimism about where the housing market is going—up, down, all around. If you want to compare different points of view and form your own educated prediction, here are a few other market forecasts to satisfy your inner nerd: Realtor.com, Redfin, Forbes, Freddie Mac, and Zillow. Janet, as in Janet Yellen of the Federal Reserve (see confused lady pictured above for reference). Stockholders, homebuyers, and finance nerds everywhere are biting their nails and on the edge of their seat as they brace for the Fed's next policy meeting on March 15-16th. This is when the Fed will decide whether to hike short-term interest rates again after raising rates in December off zero for the first time since the 2008 financial crisis.
Many were hoping for an oil production cut to serve as a catalyst for higher stock prices, but that idea has been nixed for the time being. The confidence that rate hikes will be put on hold also helped the stock market rebound since the recent mid-Feb low. To keep the country in suspense, the Fed said on Tuesday night that they "simply do not know" if they will hike rates or not. Investors want the economic data (on GDP, personal income and spending) to show evidence of a perfect middle ground - that a recession isn't looming, and at the same time, that the economy isn't heating too much either. Until then, the market continues to be at the mercy of oil prices and Janet. |
Michaela ToAll things real estate. Categories
All
Archives
April 2022
|