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Was 2022 the Bottom of the Recent Real Estate Market Cycle?

 

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January 31, 2023

Good morning,

Lower mortgage rates are helping to bring buyers off the sidelines. We're experiencing a modest increase in sales activity consistent with an uptick in mortgage loan activity. An uptick in sales shows buyers and sellers are gradually adapting to the new normal and shifting to a more balanced market. 

 

If you have any questions regarding our local housing market, please reach out. Have a great week!

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Information + Updates

DID YOU KNOW? It's working! The Fed's aggressive and delayed interest rate hikes have started to take effect: aside from layoffs across industries - especially anything related to real estate - Core PCE inflation, the Fed’s preferred measure, rose 4.4% from a year ago, its smallest annual increase since October 2021. Consumer spending, however, dropped 0.2%, pointing to economic slowdown as 2022 closed. Personal income increased 0.2% for the month, as expected. Now let's hope they have not gone too far, too fast as many suspect...... (CNBC)

 

DID YOU KNOW? When America's richest woman Marjorie Merriweather Post built a 54-room penthouse atop a new Fifth Avenue luxury tower in 1925, the top federal tax rate was just 25%. In 1940, the federal tax rate on income over $200,000 started at 66% and by 1944 during World War 2, the top tax rate on all income over $200,000 (about $3.4 million in today’s dollars) had jumped to 94%! No-one wanted this huge place in this new high-tax era and it was left vacant all through the 1940s. In the 1950s, with the US’s top tax rate still above 90%, the palace penthouse was broken up into 6 separate units. 

 

DID YOU KNOW? There has been a sharp decline in the savings rate—2.9% in the 4th quarter compared to 7.3% a year earlier—suggesting that consumers may be running up credit cards to make ends meet or take the vacation they couldn’t during the pandemic. But as savings decline, so too may consumer spending, the biggest driver of GDP. The AVERAGE savings of American consumers is relatively high, but like all averages this one too can be very deceptive: the vast majority of these saved dollars are in the hands of the top 5-10% of the wealthiest. The lower 90% have depleted their savings and are most at risk of job losses and defaults. If they stop spending, we should expect a recession. SecureSave, an emergency-savings account company, published a survey that finds that 67% of workers cannot afford to pay for an emergency $400 expense and that 74% of Americans are living paycheck to paycheck. 

 

DID YOU KNOW? If the FED's mission is job losses, who will pick up the tab for those who have lost their jobs? ANSWER: You and I will, via government assistance.....with money borrowed at far higher rates..... πŸ™„

 

DID YOU KNOW? There are more grandparents around than ever before: almost 1.5 BILLION of them! Two big demographic trends show their rising importance. First, people are living longer. Since 1960 global life expectancy has risen from 51 to 72 years. Second, families are shrinking, which means the ratio of living grandparents to children is steadily rising. The growing roles of the elderly matter in varied and surprising ways. (THE ECONOMIST) Steve and I are grandparents to 3 scrumptious boys.

 

DID YOU KNOW? The world seems obsessed with the 3,381 global billionaires, but there is another group just below this bunch - Centi-millionaires - yes, in the US alone there are 9,730 centi-millionaires, those who have at least US$100 million in investable assets, about 38% of the world’s total of 25,490. The top 10 holiday destinations for centi-millionaires included The Hamptons, N.Y.; Aspen and Vail, Colo., and Jackson Hole, Wyo.; Palm Beach and Miami Beach; Florida the Algarve of Portugal, especially the Golden Triangle; the French Riviera; Lake Como of Italy; Ski towns in Switzerland; the Italian Riviera; African wildlife safaris, and Tuscany, Italy. Golf, art collecting, and cycling and mountain biking ranked the top three pursuits of the world’s centi-millionaires, according to the report. Classic car collecting, which ranked 7th, is on the rise. Globally, classic car prices have risen 84% over the past decade (2012 to 2022) Grandparents are often a pathway to homeownership for younger generations. (Henley & Partners/New World Wealth)

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Things To Do

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OCMA is Amazing!!!!!!

 

I loved getting a private tour of the Orange County Museum of art. The story of its making was really interesting. You know I love architecture and this structure is amazing…. that is not even commenting on the incredible art inside.

 

 

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Real Estate News

"For the first time in 10 months, all the statistics I look at are trending positively."

 

- Compass CEO Robert Reffkin, CNBC

 

Watch CNBC Segment Here

The 6 reasons why Compass CEO Robert Reffkin believes Q4 of 2022 was the bottom of the recent real estate market cycle

 

1. 25% increase in weekly mortgage applications.

 

2. Mortgage rates continue to move down to a 4-month low.

 

3. Increase in buyer interest, open house traffic, and offers.

 

4. In the last quarter of 2022, 42% of sellers were giving concessions to buyers at the closing table, a 10-year high.

 

5. Home builder sentiment improved for the first time in 1 year.

 

6. Pending closings were down 30+% at points in the fall but over the last few weeks, we have seen pending listings in most of our markets nearly flat year over year.

 

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"A Real Estate Bottom?" More Homebuyers

Jump Back in as the Year Kicks off.

 

Housing data is starting to show: More homebuyers are emerging from their self-imposed hibernation. These buyers are hoping to reap the rewards from a more favorable market, bagging seller incentives along with a slightly lower mortgage rate, before the spring-buying season attracts more competition.

Read More
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In Escrow

Off Market with Multiple Offers

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517 Emerald Bay

 

I am so happy to be representing this seller on this off market home currently in escrow. We had multiple and both buyer and seller feel good about the transaction…. It’s a WIN/WIN!

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Emerald Bay Market

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Well, finally the Emerald Bay inventory is increasing…..But it is interesting that there are more homes for sale now than any other time in the last year in Emerald Bay, but only the pocket listings have sold…….

 

Mid January 1016 Emerald Bay sold off market with multiple offers and as mentioned above I currently have 517 Emerald Bay under contract…….. So my question is, why aren’t the homes currently on the market moving….. and HUMMMπŸ€”

12 Month Lease

Winter Rental

For Lease

For Lease

There are currently 5 active homes for sale in Emerald Bay

ranging in price from $6,995,000 to $11,000,000.

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Work With Maura

Maura Short is known for her strong work ethic, broad industry know-how, and passion for architecture, in addition to her extensive network, confidentiality, and moral code. Combined with her wide-ranging local expertise, all of these assets result in favorable outcomes for both buyers and sellers under her care.
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