Housing Affordability for California Buyers, Up or Down?

Housing affordability brightened somewhat in the 1st Quarter of 2023 since interest rates have dipped, see several areas below for comparisons.  The first three columns are the percentage of homebuyers who could buy the median priced home*:

Regional/State Chart for home prices in California

*Above chart from CALIFORNIA ASSOCIATION OF REALTORS® Traditional Housing Affordability Index First quarter 2023

 These figures exist for all counties, but four major areas are selected above, plus statewide figures for single family home and condos.

As has been widely stated, inventory is down, therefore total sales volume is down, 2023 units are projected to reach 279,000 units, down from the 342,000 units sold in 2022. Will home prices decrease as predicted (in blue print)? The public will have to stay tuned on both prices and interest rates:

"C.A.R. also announced it has revised its 2023 Housing Market Forecast and projects existing single-family home sales to reach 279,900 units in 2023, a decline of 18.2 percent from the 342,000 units sold in 2022. While home prices in general are expected to improve in the second half of the year, the California median home price is projected to decrease 5.6 percent to $776,600 in 2023, down from the annual median price of $822,300 recorded in 2022. The updated projection on the statewide median price, however, is an increase from the estimate of $758,600 forecast last October. C.A.R. also projects the 30-year fixed mortgage interest rate to average 6.3 percent for the year.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Buyers Want to Know: About Area Schools

Many times a buyer may be searching in an area without much familiarity with it.  And they're hoping their Realtor can provide them with an "orientation" to the area, and describe the nature or quality of local shopping, proximity to freeways, or schools.  Schools are usually important to parents because they want to ensure their children (or child) is receiving a good education in a good learning environment.  

But what Realtors specialize in is listing and selling property, and while they may have certain personal knowledge and experience with area resources, they cannot personally or professionally vouch for area standards, nor attempt to define what is "good", "not good" or "excellent" for their client. But what a Realtor can do is point their client to resources that help a buyer complete the buyer's investigation of their potentially new neighborhood, so that buyers may determine for themselves what is satisfactory or not. 

The following links are found on one or more State of California websites, and are there for anyone to use!

California Distinguished Schools

California School Dashboard

School Accountability Report Card 

Charter Schools in California

There are other sites which rate schools, but before you make up your mind about a school based on a certain rating, take the time to research it more indepth and consider what is really important to you. Compare other schools to the one you may be considering, and also research online about the current educational issues for students statewide. 

Hopefully, you will find the right neighborhood for you faster, if you start your search for factors important to you early!

Please contact me by text, email or phone call for help with property values and what it takes to buy your next home!

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

What Could the Potential Loss of Insurance Mean for a California Home Transaction?

The news about State Farm not writing new policies is part of a larger story.  

It's not news that premiums have increased and that areas of wild fires have seen a pullback from insurance companies. The refusal by insurance companies is not just in climate zones, many  types of properties are now affected, including areas that are low risk of fire and flood.

If you're a buyer or seller and currently in a transaction, be aware that the buyer contingency in a standard California Association of Realtors contract allows for investigation of the property, including insurance issues that may prevent coverage.  This is very important that the buyer understand their contracts, and follow up completely on insurance coverage.  Under standard timelines, the buyer contingencies are removed assuming the buyer is satisfied with various areas of investigation. However, since lenders offering a mortgage want to see proof of insurance coverage prior to close of escrow, buyers are strongly advised to obtain an insurance binder or evidence of commitment to insurance coverage as soon as possible in the escrow period (the 1st day it opens), and not remove their buyer contingency until they know they will have insurance policy on that property. Otherwise, they may risk losing their buyer deposit under the terms of their contact with the seller.

Homeowner associations are seeing increases in their master policy premiums, changes in coverage limits, or a refusal to renew policies.  If an HOA master policy isn't renewed, then the mortgages of the condominiums owners are also at risk, since lenders want proof of that policy coverage for the common areas. Or, in the case of some associations, the increase in premium may be so huge it causes a special assessment: one HOA reported in the San Diego Union Tribune ended up with an $8,000 per unit cost for master policy insurance coverage.

If you're a homeowner with current coverage, do not let it lapse, because it may not be renewed.  The California Fair Plan may be an option for some residents and businesses; it protects the home for fire risk and will satisfy a mortgage company's insurance requirement, but it does not cover theft, flood, earthquake, hail, vandalism or personal liability (only special earthquake policy provides coverage for that). 

Insurance brokers are reporting challenging coverage searches for their clients, and are not always successful.  The one area of insurance so far not reporting a problem is renters insurance, which does not cover fire risk.  

If you are not currently represented by a Realtor in a transaction and are interested in finding out what the buyer contingencies are in a purchase transaction, please contact me via phone, text or email.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996