Hey friends, welcome back to the channel. If you're new here, my name's Nagaraj Annaiah. I’m a tech realtor in the Bay Area. On this channel, we explore the news and happenings in Bay Area real estate along with practical tips on how you can land the best deals in town. Here are the top realty headlines of the week before we get to the big story: Four Reasons Why You Should Buy A Luxury Home in the Bay Area? You could jump to your favourite chapter, and view it right away. If you have any property-related query, let me know in the comments below. And if you are planning to buy or sell a home in the Bay Area, text me NOW. So let’s get started with the top realty news of the week.
TOP REALTY NEWS OF THE WEEK
- Consumer surveys indicate that almost one-third of Americans plan to relocate to more affordable areas across the nation. New job opportunities, remote work policies, and the ongoing shortage of affordable housing are some of the reasons.
- Another survey found that Californians are 35% less likely to qualify for a starter home than the average US house hunter compared with 29% in 2020.
- Property insurance rates are set to drop in California for people who install fire-resistant roofs, install defensible space around their homes, create a clear route for evacuations and remove vegetation overgrowth in their yards.
- 57% of CEOs in California are considering leaving, according to a study of business leaders in the Bay Area.
- The city of Fremont in Alameda County is ranked as the 'happiest city in America'. A personal finance website analyzed 182 of the largest cities in 30 "key indicators of happiness," such as depression cases, income growth, and leisure time spent per day.
- Investors are buying houses, but not in the Bay Area because prices are too high. They are choosing homes in Atlanta instead. Last year, people bought up just 4% of homes sold in San Jose and 6% in San Francisco and the East Bay. It debunks a popular claim among homeowners and slow-growth activists, namely that corporate real estate players are pushing into the Bay Area, buying up properties and driving up home prices. Realtors and economists say millennials and wealthy tech workers are driving high prices instead since there are so few houses on the market.
- January was the most competitive month ever for homebuyers. Redfin agents faced competition on 70% of home offers in January, up from 60% a year earlier. That’s the highest share since April 2020, when Redfin began recording this data.
- And now, wait till you hear this. According to Realtor.com's Danielle Hale, home sales will reach a 16-year high in 2022.
4 reasons why you should buy a luxury home
Stunning views, superb finishes, and breath-taking amenities. Luxury homes are pricey for a reason, and they are the best investments that money can buy. Here is why I would recommend buying a luxury home, if you have the money. If you are looking for privacy, exclusivity, customisation, extravagant amenities and appliances, idyllic location, security, and status, a luxury home is what you are looking for. Here are four reasons why you should invest in a luxury home.
- You get better returns: Cryptonaires are buying up luxury homes for a reason. While $2m investment can come down to one-tenth its value overnight in the crypto world, it is an impossibility in real estate. Did you know that 85% of properties sold for $3 million to $5 million were snapped up by luxury home buyers in 2021? What's more, the sales of homes above $5 million more than doubled from the previous year. The price of single-family homes is now almost $1,100 a square foot, up from about $900 in early 2019. A Malibu property of 7 acres was bought for $41 million in 2013. It sold for $177 million eight years later. An unrivaled return of 400% can only be found in a luxury home. Incidentally, that's the highest price ever paid in California and second-highest in the US. If you are a short-term investor, you can renovate and resell the property or rent it out.
- You Can Own your dream: If you want more space, thanks to the pandemic, a luxury home will not only keep you safe from the crowds, but also make you own the American dream. Statistics reveal that Bay Area dwellers have become wealthier after the pandemic due to a bubbly stock market as the median home prices surged by almost $200,000 in the past year. With a rising income graph, you can now dare to own the dream.
- Better amenities and infrastructure: City life is way better for millennials than the slower pace of suburbs. And as most of them have double incomes, owning a piece of luxury real estate is within their reach. So why not go for two offices and a home gym? Not to mention, some outdoor space for their kids and guests to hang out. As most luxury homes are completely remodelled, they are expensive for a reason.
- Less competition: High-end homes stay on the market longer, giving you more chances to land the deal. Agreed that valuation can be challenging, causing the delay. But here is where you need to hire local realtors like me to help you out. I will educate you on the hidden costs, and also prevent you from any superfluous financial risk.
Although mortgage applications stabilized despite higher rates last week, refinance activity slowed sharply. Also, purchases are down from their recent highs, but they're in much better shape overall. In the bond market, there has only been a limited influx of safe haven demand because of geopolitical risks and the flight to safety out of stocks. After falling below 4% for the first time since early February, 30-year fixed rates are now back above 4.08%. In the end, mortgage rates went up at the beginning of the week and then dropped because of what's going on in Ukraine. Acceleration of home prices remained flat but slightly increased. Loan applications decreased, as did jobless claims. Gross domestic product ticked up, but new home sales fell. There was no change in inflation, personal spending increased, and personal income didn't change.
Homebuyers are in luck, as more and more homes are going on the market each week. You may have some hope for better selection in the future after January's dramatic drop in new listings as it was only a temporary phenomenon brought on by inclement weather and the spike in Covid cases. The MLS data for active, new, pending, and sold listings clearly suggest that in Santa Clara, San Benito, Santa Cruz, Monterey and Santa Cruz counties. In just the same way, if we look at the San Francisco data, you will notice that the sale to list price ratio has steadily gone up from 105.3% in January last year to 121.7% in February this year. The number of homes for sale have traditionally been more than the number of homes sold in the last year. If 444 homes were for sale in March 2021, but only 275 homes were sold, the situation has become much worse this year. Out of 314 homes for sale, only half of them were sold. And yet, this is a seller's market, not a buyer's market. Homeowners are holding off on sales until they get the right price, and the buyers are withholding their plans until the price falls. This trend is in tandem with the months of inventory for single family homes in San Francisco as they have gone up from 1.2 months in December last year to 2.1 months in February this year. But are the prices falling? No. In August 2021, the prices stood at $2.1m. Last month, they were at $2.4m. That's a jump of 15% in 6 months. If you are wondering if the Russian war will crash the housing market in the Bay Area, watch my previous video whose link is in the description below. It's a must-watch if you want to better understand the most happening realty markets in the Bay Area.
Who can be the owner of a luxury home, then? If you are looking for a luxurious lifestyle and have an income to match, then you could be the person. Because millennial buyers and cryptonaires are a lot wealthier after the pandemic, now is the perfect time to invest in luxury real estate. There's a lot of competition because of the low inventory numbers. As a result of the Russian war, energy prices are going up, which will only slow homebuyer demand and raise mortgage rates. If you're buying now, you'll get a better deal. Let me help you before the price goes up again. Let's talk!