AUGUST 2022 Vol. 09 | Issue 8
Labrescia Dawson PRESIDENT, FOUNDER AND CEO OF DAWSON’S MANAGEMENT
HAVE YOU READ OUR PAST ISSUES YET? the power is now
magazine CENTRAL EDITION Vol. 09 | Issue 8
Eric Lawrence Frazier, MBA Publisher Office: (800) 401-8994 Ext. 703 Direct: (714) 361-2105 eric.frazier@thepowerisnow.com www.thepowerisnow.com EDITORIAL TEAM Sheila Gilmore Editor in Chief (800) 401-8994 ext. 711 sheila.gilmore@thepowerisnow.com Daniels George Managing Editor (800) 401-8994 ext. 712 daniels.george@thepowerisnow.com Goldy Ponce Arratia Graphic Artist and Design Manager goldy.ponce@thepowerisnow.com
CONTRIBUTORS The Power Is Now Research Team
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CONTENTS
AUGUST 2022 HEALTH NEWS Pg. 18. The Steps Biden has taken to protect reproductive rights.
FROM OUR VIP AGENTS:
GREEN NEWS Pg. 8. The governor of California signs landmark bill to tackle plastic pollution.
ECONOMIC NEWS Pg. 10. Fed Analysis: A strong economy will handle the rising rates.
REAL ESTATE NEWS Pg. 12. Why are homebuyers canceling deals high-interest rates since the start of the pandemic?
MORTGAGE NEWS Pg. 14. How mortgage rates are affecting your pockets and this is how to adjust your housing budget.
TECHNOLOGY NEWS Pg. 16. Behind The Hype: What 5G Means for Real Estate.
Pg. 21. Buying a house “as is” in Texas? Here are some red flags to watch! by Sharon Bartlett. Pg. 25. Maryland Real Estate Market Overview: Appreciation Trends and Q3 Forecast, by Emerick Peace. Pg. 31. Peak hurricane season is almost here. This is how to prepare yourself!, by Adriana Montes. Pg. 35. Scottsdale Real Estate Market appreciation data. Market summary, by Yvonne McFadden. Pg. 39. How do I find the perfect home in Payson?, by Tamra Lee. Pg. 43. If priced out of the single-family home market, can you buy a condo?, by Walter Huff. Pg. 47. Is it advisable to ‘try before buying?’ How pre-inspection could end up hurting you, by Heith Mohler. Pg. 51. Riverside Market Update and Market Appreciation Data for Q3, 2022, by Ruby Frazier.
COMMUNITY NEWS
Pg. 54. Labrescia Dawson, President, Founder and CEO of Dawson’s Pg. 122. Should racism be declared a public health Management. crisis? Pg. 59. Georgia Market Overview: Where is the Market Moving? by Labrescia Dawson. Pg. 67. Corona Market Overview: Where is the Market Moving? by Jenny Gonzalez. Pg. 124. Let’s talk about shared equity. Pg. 71. How to save for homeownership in a hopeless market?, by Ian Batra. Pg. 75. Corona Market Update: Market overview and Forecast for Q3, 2022, by Pg. 128. California First Time Home Buyer: 2022 Kamesha Keesee. Programs and Grants. Pg. 79. Should I Waive Home Inspections?, by Serina Lowden. Pg. 83. What are the risks of selling your home through iBuyer? by Briana Frazier. Pg. 87. The risk buyers face buying a house with a sight unseen, by Edwin Engelke. Pg. 91. Mississippi Real Estate Market in 2022: Forecasts + Trends, by Francine Marsolek. Pg. 95. Real Estate Market Data:New York’s tough bidding wars means a crazy season for buyers, by Harriet Robertson. Pg. 99. Homebuyer’s education: Who pays the real estate commissions when buying a home?, by Janet Petrozelle. Pg. 103. The pros and cons of financing a home in retirement, by John Costigan. Pg. 107. Homeownership for seniors: buying a home at 65, pros and cons, by Norman Green. Pg. 111. Are sellers allowed to relist a house when earnest money hasn’t been returned?, by Steven Rivkin. Pg. 115. Let’s talk about Real Estate closing costs:Find all the fees you’ll pay, by James Joseph. Pg. 119. Menifee Market Overview: Where is the Market Moving?, by Monica Hill.
LEGAL NEWS
SPECIAL NEWS
August 2022 FROM THE EDITOR Dear readers, Every year I do my best to attend the National Association of Real Estate Brokers Convention. This year’s convention will be happening from August 2 to August 6, 2022, at JW Marriot Tampa Water Street in Florida. NAREB is an organization deep rooted in real estate history, formed in 1947, making it the oldest national minority trade association in America, and I couldn’t have been prouder to be a part of this great organization. One of the things that I admire about NAREB is that while most of the members are African Americans, the organization has opened its doors and openly embraced membership of other races, colors and nationalities who are real estate professionals and who share in the vision of equal housing opportunities for all. The NAREB Convention comes at an opportune time when we need to re-examine the place of minorities in so far as housing is concerned. For over 70 years, NAREB has been at the forefront of fighting for housing and has partnered with various other organizations like NAACP, The Urban League and the Congressional Black Caucus to level the playing field for all races in America. I am very excited about the campaigns NAREB has run successfully in the past and all the people the organization has put into homes. The remaining part of the year will be full of events, and also coming up is the NAHREP L’ATTITUDE Convention happening at The Manchester Grand Hyatt San Diego from September 22 to 25, and not to forget AREAA’s National Convention happening on October 20 to 22 at The Manchester Grand Hyatt San Diego. It will be my pleasure to attend all of the conventions. I am a champion for knowledge; if I learn, I try as much as I can not let that moment pass. In this month’s cover personality, we feature Labrescia Dawson, founder and CEO of Dawson’s Management, a certified 8(a), HUBZone and Economically Disadvantaged Woman-Owned Small Business (EDWOSB) currently headquarters in Atlanta, GA and now a VIP Agent with our VIP Agents program. Folks, if you are not a part of this program, you miss out on a lot. Ms. Dawson shares her journey and how she became a contractor with the government and other organizations. It is a remarkable journey, as you will find out, especially given that she started as a car salesperson. Her journey is a true inspiration to everyone in this industry, and you should definitely read it. This month, an interesting phenomenon has been happening: homebuyers are canceling deals at high rates since the pandemic hit. We get to examine what’s been happening, the overall effect on the industry, and the various ways California 6 | AUGUST 2022
legislators are helping buyers buy houses with down payments. These are interesting developments happening in the world of real estate, and it will be interesting to see how the events unfold as we head into fall. Also, this issue will look into some of the Golden States’ firsttime homebuyers grants you need to know about. This issue also delves into one of the most contentious issues that have been ignored for quite a while. While it forms some of the most progressive discussions, many people approach this issue cautiously. Should racism be declared a public health crisis? What is your opinion on this issue? Declaring racism a public health crisis will definitely advance effective anti-racist legislation and repair long-standing rifts between decisionmakers, community organizers, healers, and public health professionals. We’ve seen many organizations coming up to support this initiative which is something I must confess I can’t wait to see how it all unfolds. The active involvement of organizations and groups led by Black and Indigenous People of Color (BIPOC) is essential to holding governmental institutions accountable
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for making statements. I want to encourage my team at The Power Is Now and the VIP Agents to attend these events. Even as NAREB and other organizations flex their muscles to see exemplary excellence for our community, I’d like to ask everyone to participate in this transformation. Honestly, when we work together, we will truly eliminate the gap in wealth for our community. As the Founder of The Power Is Now and a member of NAREB Orange County, I am committed to doing my part as a real estate and mortgage broker. I am conducting educational seminars online and working with various faith-based organizations in Orange County to empower African American borrowers with information and loan programs that can help them buy a home.
ERIC L. FRAZIER MBA President and CEO The Power Is Now Media, Inc.
CALL YOUR HOST FOR MORE INFORMATION
SHARON BARTLETT
(800) 401-8994 ext. 712 Sharon.Bartlett@thepowerisnow.com www.thepowerisnow.com
AUGUST 2022 | 7
GREEN NEWS
The governor of California signs landmark bill
to tackle plastic pollution
As a result, seabirds, whales, fish, turtles, and other marine mammals mistake plastic garbage for prey. As a result, most of these animals die of malnutrition as their bellies are filled with plastic. In addition, they also have lacerations, infections, limited swimming abilities, and internal traumas. In the past, California has established itself as a national leader in the fight against ocean 8 | AUGUST 2022
trash by outlawing single-use plastic bags and microplastics in toothpaste and other washoff products. In late June this year, Governor Gavin Newsom signed the country’s most comprehensive law to reduce plastic trash.
“For far too long, plastic waste has been a growing burden for humans, animals, and the water, soil, and air we need to exist,” said S.B. 54 author Sen. Ben Allen, D-Santa Monica. “We knew that we needed to act. And in this time of extreme polarization in our nation, California was able to show that we can pass strong environmental legislation with bipartisan support that brought together the environmental and business communities.”
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very year, Californians discard 123,000 tons of plastic bags, with far too many of them ending up as waste in our ocean. Today, the North Pacific Gyre has 100 million tons of garbage. According to Environment California, plastic outnumbers plankton in some parts of the Pacific 6 to 1.
plastic packaging—beginning January 1, 2028. The law targets not only manufacturers but also distributors of single-use covered packages. This law will apply to the proprietor or licensee of the name or logo used to sell or import the covered product into California by wholesalers or retailers. This law will apply to the proprietor or licensee of the name or logo used to sell or import the covered product into California by wholesalers or retailers.
WHAT THE S.B. 54 ENTAILS The groundbreaking Plastic Pollution Producer Responsibility Act (S.B. 54) will impose fees and regulations to ensure that manufacturers of plastic food containers and single-use packaging must ensure that their products are recyclable or compostable by the year 2032. Additionally, it calls for a 25 percent decrease in plasticcoated materials released onto the market over the next ten years and a 65 percent recycling rate for all single-use
Producers of “covered material,” which is defined as “certain single-use packaging” and “plastic single-use food service ware,” are required by the law to participate in a producer responsibility organization (PRO) by January 1, 2024, or else they risk having their ability to sell, offer for sale, import, or distribute such covered materials in California restricted. Through registration, reporting, recordkeeping, and monitoring requirements, such a PRO aims to adopt specific techniques of source reduction, collection, processing, and recovery of the covered material. By compelling local governments and recycling service providers to include covered material in their collection and recycling
operations, the law also requires the construction of state-mandated municipal recycling programs. While recycling and composting operations and facilities must report information on the types and volumes of materials disposed of, sold, or transferred to other facilities, end users, or international buyers, brokers, or transporters inside or outside of California, landfilling facility operators are supposed to submit data to CalReycle on disposal tonnages by the jurisdiction that are disposed of at each disposal facility. Similar data must be sent to CalReycle by exporters, brokers, self-haulers, and carriers of recyclables or compost regarding the kinds, quantities, and final destinations of the items they handle. ITS ORIGIN S.B. 54 expands on earlier international and national rules and agreements relating to plastic trash, such as the European Union (E.U.) developed a plastics strategy in 2018. According to Sidley, the act aims to reduce waste associated with plastics, enhance plastics’ ability to be recycled, encourage innovation, and come up with global solutions through the creation of plastics-related international standards. AUGUST 2022 | 9
ECONOMICS NEWS
Fed Analysis:
A strong economy will handle the rising rates On June 15, 2022, the Federal Reserve increased interest rates by 0.75%, making the highest increase in four decades- seen last in 1994. This move by the Federal Reserve is to counter rising inflation rates amid fears of an upcoming recession.
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ichard Kelly, head of global strategy at T.D. Securities, put the odds of a recession by next year at 50%. That outcome is likely because of three probable risks, rising gas prices, a general downturn of the economy, and the actions that the Federal Reserve will take. “The odds of a recession in the next 18 months are greater than 50%,” Kelly told CNBC’s “Street Signs Europe.” Conversely, according to Fed’s Bullard, the U.S. economy shows little signs of a recession and could even handle another rise in interest rates. That remains even after interest rates have risen for the third time this year. Esther George, the president of the Federal
10 | AUGUST 2022
Reserve Bank of Kansas City, is also hesitant about the decision to raise interest rates. She was the only member of the Fed’s policymaking team to disagree with the Fed’s rate increase in June because she thought it was too significant and might cause problems.
“I’m certainly sympathetic to the view that interest rates need to increase rapidly, recognizing that current rates are out of sync with today’s economic landscape,” she said at a labor conference in Lake Ozark, Missouri. “However…policy changes transmit to the economy with a lag, and significant and abrupt changes can be unsettling to households and small businesses as they make necessary adjustments.”
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The Federal Reserve’s decision to raise interest rates was defended by Raphael Bostic, president of the Federal Reserve Bank of Atlanta. He claimed that despite inflation being sparked by an overheated economy, the Fed’s rate is currently at a level that stimulates growth, so the increases are necessary. Bullard, like Bostic, favors the Fed raising its benchmark short-term interest rates by 0.75 percentage points at its upcoming meeting later this month. As of July 11, rates ranged from 1.5 percent to 1.75 percent. Though a recession is unlikely, the U.S. economy is expected to take a downturn. It is unclear when this is expected to happen, but Bullard projects that it could be some time next year. The downturn will be marked by two consecutive quarters of negative growth as soon as the second quarter of 2022. Additionally, according to a report by PBS News Hour, the Federal Open Market Committee has reportedly been actively deciding how much and how quickly to raise its benchmark interest rates in the
coming months to combat inflation. To bring inflation down to its target of 2 percent, Bullard said in an interview with the Associated Press that it was unlikely that the central bank would intentionally push the economy into a recession or significantly increase unemployment. The government’s jobs report showed employers added 372,000 jobs, a healthy increase. At the same time, the unemployment rate stayed at 3.6 percent for the fourth consecutive month, further demonstrating that the economy was much stronger than it appeared. Just before the pandemic, the number was at a five-decade low- figures that are in contrast to indications that the economy is softening. Additionally, with real-time data for the past two quarters showing a decline in home sales, factory production, and consumer spending, meeting the National Bureau of Economic Research’s official definition of a recession, the organization looks to a larger set of data to determine whether a recession has arisen. AUGUST 2022 | 11
REAL ESTATE NEWS
Why are homebuyers canceling deals at high-interest rates since the start of the pandemic?
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onfronted with higher mortgage rates, several homebuyers are canceling their homeownership deals. That according to a new report released by Redfin showing that just under 15% of all properties under contract had their selling agreements on existing homes annulled in June. Consequently, almost 60,000 home purchase agreements were canceled alone in June. Figures that have not been recorded since the beginning of the pandemic, back in March and April 2020. When according to Inman, the proportion of contracts that failed to materialize reached 17.6% and 16.4%, respectively. In comparison, 11.2 percent of contracts failed in June 2021, and 12.7 percent of contracts failed in May 2022. According to the report, real estate agents have also reported a real estate slowdown as the Federal Reserve has increased interest rates in response to inflation in recent weeks. The high number of cancellations resulting from the high mortgage rates have made it so that would-be-home homeowners who qualify for loans no longer qualify. The point and case are that previously, lenders required the debtto-income ratio to be about 28%. The current market has seen that ratio go up to 31.5% in the second quarter, according to a report by Attom, a data provider. “Rising mortgage rates are also forcing some buyers to cancel home purchases. For example, if rates were at 5% when you made an offer but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home, or you may no longer qualify for a loan,” Redfin Deputy Chief Economist Taylor Marr said in a statement.
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That, coupled with the rising inflation rate, has made homebuyers reconsider their purchases, with most deciding to back out of deals. Moreover, the housing market has been shifting dramatically. And as a result, homebuyers no longer consider it urgent to purchase a home as it may depreciate in the coming year.
“The slowdown in the housing market competition is giving homebuyers room to negotiate, which is one reason more of them are backing out of deals,” said Marr. “Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That allows them to call the deal off if issues arise during the home buying process.” Cancellations have not only hit existing homes but also newly built homes. According to the nation’s largest homebuilder, D.R. Horton, 24% of its contracts in the recent quarter were canceled. Because of this, homebuilders have started to reduce the number of homes they construct and are even providing incentives to keep their inventory moving. Separately, a survey of builders by John Burns Real Estate Consulting showed that even before the increase in cancelation rate in June, the rates in May jumped to 9.3%. The jump is considerably higher than the 6.6% jump in May 2021. “Buyer’s remorse and cancellation shortly after the contract is increasing builders state buyers are nervous about a potential recession, struggling to get comfortable with higher payments, or expecting home prices to decline, “said Jody Kahn.
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MORTGAGE NEWS
How mortgage rates are affecting your pockets and this is how to adjust your housing budget
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t’s becoming more and more difficult for prospective homeowners to afford homes. Homeowners find it harder to qualify for loans due to rising mortgage and interest rates. Coupled with the high prices of homes, homebuyers are caught between a rock and a hard place, and many opt out of the market. According to the Mortgage Bankers Association, mortgage applications are down more than 15% from last year, and refinancings are down more than 70%. According to Mortgage News Daily, a 30-year fixed mortgage rate has increased from 3.29 percent to 5.65 percent. And according to Realtor.com, the median listing price reached a record high of $450,000 in June.
“As mortgage rates go up, it raises the cost of buying a home with a mortgage,” explained Danielle Hale, chief economist at Realtor. com. “For many homebuyers, higher mortgage rates equal a higher monthly cost, especially for those taking out a large mortgage.” Though the market has shifted, it is not entirely impossible to buy a home. More inventory is coming into the market, easing competition. Homebuyers, however, have to make some adjustments in their housing budget to make homeownership happen. And here’s how: 14 | AUGUST 2022
REEVALUATING YOUR OVERALL BUDGET You’ll have to reign in your expenses, cutting back where you can. Understanding your financial situation and where your money is going will help you create a spending plan that will work best for you. Your overall financial status might benefit from even the little improvements you make. For example, you may want to dine out less, wash your car, find cheaper ways to pay, shop smarter, and use transport means when possible. “The No. 1 thing for buyers to make sure [of] is that the monthly payment is comfortable and fits their budget,” Glenn Brunker, president of Ally Home, told Michelle Fox, CNBC. SHOP AROUND FOR BETTER INTEREST RATES Your goal when purchasing should be to obtain credit at the lowest interest rate possible. Throughout your loan, doing this will cost you less money. It’s critical to consider the total of your mortgage—the greater the down payment, the cheaper the overall borrowing cost. Obtaining a more affordable interest rate can help you save money over time. To get a sense of how your monthly payment would vary with future rate rises, work through several scenarios with your lender. Mortgage calculators from lenders or websites like Bankrate or NerdWallet let you experiment with different payment amounts. CONSIDER THE TERMS OF YOUR MORTGAGE. The duration of time the applicant has to repay the mortgage term, often known as the loan term, has a substantial impact on how expensive a mortgage is. A larger down payment lowers your monthly payments by preventing you from borrowing as much on home purchases. That may work for someone selling a property with a lot of equity, but first-time buyers will likely struggle with this alternative.
An important sector of the economy, the property market, appears to be slowing down due to rising mortgage and interest rates. For the third consecutive month, home sales in the United States decreased in April as rising mortgage rates increased the cost of borrowing for prospective purchasers at a time when housing prices were surging. So, aside from saving and shopping for the best interest rates, make sure you have a real estate agent who will work with your budget.
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Similarly, investing money in what are known as “mortgage points” ahead of time may lower your interest rate. According to Bankrate, each point costs 1% of the loan amount and often reduces the rate by 0.25 percent. But, again, this technique may or may not be suitable for your financial situation.
TECHNOLOGY NEWS
Behind The Hype: What 5G Means for Real Estate Although the pandemic may have kept us from paying attention to the technology transition from 4G to 5G, 5G could change the game. The fifth generation of mobile networks, or 5G, follows 1G, 2G, 3G, and 4G networks, a new international wireless standard. However, in order to connect practically everyone and everything, including machines, objects, and gadgets, 5G enables a new type of network.
SMART HOMES More gadgets, such as home thermostats, security cameras, and lightbulbs will be able to link over 5G for simultaneous monitoring. Adding more devices to a home will eliminate latency or overload problems prevalent with 4G or Wi-Fi networks. In addition, commercial building owners 16 | AUGUST 2022
may discover that 5G enables immediate monitoring of their structures’ mechanical and electrical systems, enabling quicker reactions when issues arise, as predicted by the real estate magazine. IMPROVED AUGMENTED REALITY Augmented reality, which
includes superimposing text and images onto a real-world space, may become increasingly popular as a more interactive way to see homes now that almost all property investment shopping begins online. While seeing homes with a headset or smartphone, buyers might swap out furniture and decor elements in 3D. For instance,
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The 5G wireless technology goal is to provide more users with faster multi-Gbps peak data rates, extremely low latency, enhanced reliability, vast network capacity, and a more consistent user experience. According to QUALCOMM, new user experiences are enabled by increased performance and efficiency, which also connects new industries
RealAR, an augmented reality business with an Australian base, provides an app that can transform building plans into 3D houses so customers can virtually tour residences. IMPROVED CONSTRUCTION PROCESS The capacity of 5G to advance Building Information Modelling (BIM) will likely be the biggest benefit for the building sector because it will increase the possibilities for completely confederated 6D Models and make it possible to create a cloud-based “digital twin.” Throughout the building lifecycle, from concept design to decommissioning, this will promote more effective delivery, integration, and better decisionmaking. Additionally, earlier in the delivery process, clients will be able to “see and feel” their projects thanks to the construction of these models. When combined with more bandwidth, improved network speeds could significantly improve the construction process. For instance, the remote usage of V.R. could help project teams communicate ideas in an
agile environment, according to Deloitte’s 5G projection report. OFF-SITE MANUFACTURING Additionally, the advent of 5G may see a rise in the usage of off-site manufacturing, the opening up of A.I. to optimize quality control and risk escalation procedures, and the expansion of 3D printing to produce common building components. It might enhance data storage, progress monitoring, and automated project management. Additionally, monitoring and tracing supply chain operations could promote “just in time” delivery and reduce corruption. NEW SOURCES OF REVENUE. Because 5G signals cover less ground than 4G ones, more antennae and boosters are needed. Therefore, commercial real estate investors, especially in big cities, may be able to open up new revenue streams by leasing rooftops. According to Julio Gonzalez, CEO of Engineered Tax Services Inc., a company that assists in creating these leasing agreements, national and local telecom operators are seeking to install transmitters on rooftops over more blocks to expand the delivery of 5G services. Depending on the population in the area, the monthly rent per rooftop and carrier might range from $2,500 to $20,000; Gonzalez notes that most of these leases have annual escalations of 2 percent to 4 percent. The leases might be for a period of 10 to 30 years, generating a consistent source of income. AUGUST 2022 | 17
The steps Biden has taken to protect reproductive rights On June 24, 2022, the US Supreme Court overturned the fifty-year-old Roe V. Wade. Ruling that the right to abortion was not “deeply rooted in this Nation’s history or tradition” nor considered a right when the Due Process Clause was ratified in 1868 and was unknown in U.S. law.”
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decision that saw the American reproduction rights go back half a century. With millions of people around the world sympathetic to the American woman who was longer in control of her reproductive health and basic privacy. The U.S. president, Joe Biden, on the day of the ruling, described it as a “sad day” for the nation. In a speech delivered after the verdict, the president promised that his administration “will use all of its appropriate lawful powers” to protect Americans’ right to body autonomy and privacy. In the time since, the president has taken steps to safeguard these fundamental rights. Friday, July 8, Biden passed an executive order. The Executive Order Protecting Access to Reproductive Health Care Services: 18 | AUGUST 2022
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intends to expand access to emergency contraception, protect access to FDAapproved abortion drugs,
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The Department of Health and Human Services (HHS) must find strategies to raise awareness of reproductive rights as well as how to acquire free or inexpensive reproductive services,
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HHS to develop strategies to ensure that all patients “receive the full protections for emergency medical care afforded by the law, such as by considering updates to current guidance on obligations specific to emergency conditions and stabilizing care.”
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the attorney general, Merrick Gallard and the white counsel, Dana Remus, organize volunteer attorneys to handle anticipated legal difficulties. Including traveling to a state outside one’s own to get an abortion
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Biden gave HHS Secretary Xavier Becerra instructions to deliver a report outlining how to safeguard reproductive health services within 30 days.
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in response to concerns that state officials may try to find and prosecute them, the order includes a how-to guide for consumers that will detail procedures to guarantee they are securing their data on mobile apps.
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the Chair of the Federal Trade Commission (FTC) to take into account what steps are necessary to safeguard the rights of consumers to privacy with relation to data on reproductive health care services
The order seeks to mitigate possible implications that will be brought on by repealing the right to safe abortion. The Biden Administration acknowledges that many communities lack access to essential reproductive healthcare services due to the forced closure of women’s health clinics, including those that provide additional preventative healthcare services like contraception.
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HEALTH NEWS
Buying a house “as is” in Texas? Here are some red flags to watch! By Sharon Bartlett
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and thus its condition is always considered. Sometimes, severe problems with the foundation make the buyer reconsider buying a given property.
FAULTY FOUNDATION Cracks in the foundation indicate severe issues which may cost over ten thousand dollars to repair. Before buying a home, prospective buyers include qualified home inspectors to check if the foundation has any problems. If present, they ask contractors to bid on the repair project and reduce the offer made for the property by the cost of repairs to avoid overpayment. Foundations are fundamental since they reflect the home’s structural stability,
POOR ROOFING When buying a new home, it is crucial to check the condition of the roof since repair or replacement of the same means an additional cost to the home value—repairing a roof costs up to about ten thousand dollars which is a considerable amount of money. Before getting a home, one should check roofing from safe distances to see if there are possible damages and the attic to see if there are problems on the roof from inside the home. Poor roofing, if not checked, might damage property after moving in due to leakages.
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ome people prefer to buy a home since it is cheaper than when the homeowner first repairs it. However, whenever one intends to buy a home as it is, there are always essential issues to check on a property to avoid extra expenses in the future. They include;
AUGUST 2022 | 21
FLOOD ZONE PROPERTY Before purchasing a home as it is, check out the area’s climatic conditions by asking neighbors and the homeowner if the site is prone to floods. If the answer is yes, a prospective buyer proceeds to ask the owner for completed repair reports. It is also necessary to converse with insurance on the cost of flood insurance which is otherwise expensive. Buyers are encouraged to check for flood risk through flood risk rating before purchasing a given home. Note that if the findings do not satisfy a given buyer, they have a choice not to buy the property. PRESENCE OF MOLD Mold is an unseen issue that might be forgotten, especially among first-time home buyers. Infestation of mold is both expensive to remove and also considered a health hazard. The presence of mold is tricky to find, but bathrooms, basements, attics, and other wet areas are ideal for inspecting mold by using professionals in the area. Lenders are also particular about mold in a property, and severe issues might result in denial of a mortgage since a specific home is considered substandard. CONDITION OF THE SEPTIC SYSTEM Problems with the septic system are hard to detect since it is underground. However, suppose a specific home has weird smells and soggy leach fields. In that case, it becomes necessary to ask the home seller about the age of the septic system and the disclosure statements for complete background access for septic issues. In most cases, lenders do not grant mortgages on a property with septic problems unless replaced. Note also that the replacement charges vary
between ten thousand dollars and fifty thousand dollars. A property must have good septic since it also prevents any health issues. SKIPPING A HOME INSPECTION Purchasing a home means a buyer cannot renegotiate the sale prices, which is okay in a competitive market. However, if a seller denies a home inspection, the buyer has enough reason to reconsider purchasing the property since it indicates that the seller is hiding something. Buyers should also know that it is their right to see the property’s condition since they could be future homeowners and prevent any additional expenses in the future. Therefore home buyers should make a home inspection a ‘must-do before making payment to the seller’s account. ADDITIONS TO THE HOME Before purchasing a home, it is advisable to ask sellers about any addition to the house and, if present, if they were permitted to do so. Having additions to a home can be fun but very expensive to resolve. Also, there are possibilities of poor quality on a property. Therefore, before purchasing the house, have a property inspector who will check out any flaws and substandard construction works. First-time home buyers are discouraged from purchasing home with any additions, especially those sold on an ‘as is ‘basis. POOR TILING Before purchasing a home, always check that the tiling work in the whole house. Any uneven gaps on the floor work do not look good and increase the maintenance cost on a given property.
Before investing money in a given property, due diligence is critical to ensure that any additional costs in the future are as low as possible. In a highly competitive market, buyers should think twice about a given property, especially when a seller refuses a home inspection, among other unsatisfying issues. Property is a considerable investment that necessitates proper research and involvement of professionals.
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Maryland real estate market overview: Appreciation trends and Q3 forecast
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By Emerick Peace
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aryland is a small coastal town amid Atlantic state and with a lot of cultural diversities. It location along the coast favors water sport activities, boat riding and old bay seasoned feasts. It has its largest city Baltimore home to Brewer Hill and the common home of Guinness’s brewery. The state is an attractive place to live leading more home buyer there. HOUSING MARKET SUMMARY It is arguable that Maryland is a neutral state with home selling lower than their actual state though the instance is limited by inventory Like many other states in the U.S it is characterized with high inventory levels and overwhelmingly high number of buyers. Few new home listing is evident in the market since pandemic outbreak. Today’s current home price is $513,500 and the average home value is $403.070. In 2022 the
state experiences a 0.85% home value increase monthly. More to that there are 8270 homes in the market indicating a 0.8 inventory. Mortgage rates today are at 5.52% which is to be paid by worker with an annual income ranging from $80,000 to $90,000. HOME MARKET PRICE By June 2022, housing market was higher at and at 8.9%. The number of homes for sell was 13.2% less than the previous months and those sold 22.8% lower. Total numbers of homes sold were 7933. The less number of available home show that tighter inventory level will be evident in the third quarter of 2022. LOW INVENTORY Low supply of homes is among the major reason of higher home prices seen in every year. In AUGUST 2022 | 25
2022, median sale price was 8.3% higher than last year. Baltimore had the highest sale price surpassing other cities by over 60% since it is the largest and also home to big breweries. By June 2022, annual increase of home prices was 5.74% in the city contributing a 25.4 percent to the annual appreciation. MEDIAN MARKET DAYS Maryland has 6 median market days just as last year. However Harford sold home fastest with only 4 market days Montgomery County sold the most home in in April with 1227 units sold out whereas Kent was the least with only 30 units sold. In Q2 sales went down in most counties apart from Somerset, Wicomico and Caroline. INVESTMENTMENT AN EMPLOYMENT Maryland has investment opportunities and employment rates are increasing slowly as a result of economic recovery from the pandemic. Higher employment rates boost the amount home sale price and with increasing job opportunities that are emerging more people are expected to avail themselves ready to buy homes in the state. Good agriculture, coastal sport activities and cultural diversities create hospitality investment opportunities attracting investors. 26 | AUGUST 2022
MARKET DEMAND In Maryland, the number of homes sold above list price is 54.4% which was at 3.7 points increase in year over year. Consequently home sold at a price less than the one listed was at 33.7% showing a positive value of 10.2 points year over year. Sale to list housing demand was finally the highest with 102.2% with an increase of 0.1 points by June 2022. Currently real estate experts indicate that low mortgage interest rates and decreasing sale prices is a good time to buy a home in the state. Individual are encouraged to find home in densely populated counties such as Baltimore which where there is hope for home value appreciation. However home ownership in such areas requires a lot of financial preparedness and careful selection of suitable homes by using legit realtors with a lot of experience in the field.
MEDIAN PRICES IN MARYLAND Median rental market in Maryland increased in 2022 by 11.1% settling at roughly $1600. Rental increase is boosted by the many buyer who flood the market. High buying price of homes reduces the affordability of homes and also due to low supply of homes many offers are rejected which increases the number renters in the market. Rent market thus faces an imbalance between supply and demand increasing the rental price. High rental payments will be seen in the third quarter of this year and probably over to next year. Maryland’s rental charges are above that on the whole U.S nation with a difference of 28.4%. Overall in the U.S the average renter pays $1320 while in Maryland the average renter pays $1600. The difference in rent in Maryland will be evident even in Q3 and possibly widen.
FORECLOSURE TRENDS AND STATISTICS A report carried out in Maryland indicates that over 25,000 home had a fore closure filing by February. It is the month that had the largest number of foreclosures. Such high rates show that the housing market is stabilizing from the two year disruption caused by the pandemic. However foreclosures today are down which shows the government aid is decreasing and delinquencies is increasing on the other hand. In 2021, Maryland had the lowest foreclosure in the whole of U.S with 81% decrease. Since Maryland has had low foreclosures. There are possibilities that the occurrence will spill to Q3 but hopefully they will increase.
Where Starting Over happens every day!
We’re Starting Over, Inc. - a 501(c)(3) organization dedicated to supporting and uplifting people experiencing the effects of mass incarceration, systemic racism, housing insecurity, substance addiction, and mental health issues. We believe that people impacted by these issues are the ones closest to the solutions, which is why we are a Black-led and criminal justice-impacted organization engaged in this work. From experience, we’ve learned that housing is critical, but alone, it is not enough to support those exiting prisons or the streets. We not only provide transitional housing, but also include holistic services such as peer support, case management, employment, wellness, and reentry services. We also work to address the root causes of our houseguests’ difficult situations, leading grassroots organizing and policy initiatives in the Inland Empire region and statewide. Established in 2009, we’ve served over 1,400 men, women, and families in Riverside and Los Angeles Counties through the reentry and transition process. We believe that the past does not define our future. We’re invested in creating safe and equitable opportunities for all members of our community, and especially those with past convictions. Housing opportunities are crucial for our community members and directly affect their ability to thrive. Starting Over, Inc. is committed to reducing and eliminating the many barriers to life after incarceration. We have a deep commitment to identifying and implementing evidence-based approaches to strong communities and families. We seek to creating program/project solutions where the need exists in our community. We do lots of things at Starting Over, Inc. - but our primary goal is to address the immediate effects and root causes of incarceration, be it through housing, employment, legislation, or community organizing. To get involved with our initiatives, access our services, or support our work through donations, you can reach us at (951) 898-0862 or office@startingoverinc.org.
www.startingoverinc.org
6355 Riverside Ave Suite 100, Riverside, CA 92506
Our programming and projects include, but are not limited to:
Transitional Housing
We currently operate eight homes in LA and Riverside Counties open to men, women, and children, with options for sober living or harm-reduction housing. All of our services are available to our houseguests, many of whom have been unable to obtain housing after being released due to their conviction histories. Case Management
Our Case Management specialists provide support to our guests with obtaining necessary documents/identification and accessing insurance, education, healthcare, clothing, food, & more. Peer Support
Our houseguests are not alone - our support specialists, having experienced incarceration, addiction, and homelessness themselves - understand our guests' needs and the barriers they face. We’re here to meet our guests wherever they are in their journeys and to support them moving forward through empowerment, support with recovery, referrals, and mentorship. Family Reunification, Equity, & Empowerment (FREE) Project
Mass incarceration affects not just individuals, but families - many of our community members and guests experience family separation at the hands of the child welfare system. The FREE Project is system-impacted led and organizes parents and family members in a non-judgemental space, advising on best practices and dependency court procedures. We recently sponsored and passed a statewide bill that eliminates major barriers to child placement and allows family members with criminal convictions unrelated to caring for children to be considered as placement options allowing for suitable family members with criminal convictions to step up in times of crisis. Employment
Through our Path to SEED program, we connect guests and community members with employment opportunities and provide training & support regarding obtaining and retaining employment, often a major hurdle for formerly incarcerated individuals. Marshall Legal Clinic
Our free clinics provide relief for expungements, wills/trusts, immigration, and more with the support of local legal organizations. Policy Advocacy
In the past year, we’ve co-sponsored and/or supported nearly a dozen statewide bills to reduce the scale of mass incarceration and its collateral consequences. We’ve also worked locally to influence Riverside County to reduce criminal history look-back periods from 7 years to 3 years in 2017 and to enable youth coming out of probation to be able to stay with their family members in subsidized housing. Grassroots Organizing & Civic Engagement
Our Participatory Defense organizing model (based on Silicon Valley De-Bug) empowers family and community members in the courtroom to positively impact their loved one’s outcome and to bring them home. As fiscal sponsor and start-up organization of Riverside All of Us or None (a chapter of a national initiative of formerly incarcerated people, family members, and allies advocating for the rights of the currently and formerly incarcerated people) we ensure that system impacted leadership remains at the center of the fight to keep our community together and address the social problems that incarceration purports to solve. Our community outreach team also disseminates voter registration and public health information regarding COVID-19, and we organize food and clothing relief for community members in need.
(951) 898-0862 office@startingoverinc.org
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Peak hurricane season is almost here This is how to prepare yourself! By Adriana Montes
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urricanes are strong winds accompanied by storms commonly experienced in the Caribbean. Such currents require adequate preparation, such as; PLANNING Planning is one of the most important things to do. If you live near the coast or in a mobile home, it is necessary to identify the nearest shelter. Before hurricanes, the local government informs people to help them make an evacuation plan. One might need to look for a hotel that is friendly to pets or a relative’s place which is safe for pets. Also, people gather all necessary contacts and put them at a place you can quickly see or even have the emergency lines saved on the phone.
HAVE A SUPPLY KIT In case of a storm, the supply kit must be at a place of easy reaches, such as a kitchen counter or coffee table. The supply kit includes canned food, a gallon of water for each person, and pets for at least three days. It should also have alternative energy sources like a batterypowered radio and torch, first aid kit, whistle, local maps, and even phone chargers. Garbage bags, duct tapes, and pliers are also essential and must be included in the supply kit. GET YOUR CAR READY Those with vehicles must have them filled with the fuel required and in the garage. Those with no garages put cars in a safe place under cover and must have an emergency kit. People with no vehicles usually are encouraged to make plans AUGUST 2022 | 31
with their neighbors or friends with cars to help them move in case they need to evacuate. Get your home ready
issued that people vacate, people must be ready. Homeowners sometimes need to relocate to their neighbor’s place in case of damage.
Before hurricanes set in, one needs to clear the yard. Ensure that there are no properties that will harm the home during flooding. Clear off all furniture and grill, and place them safely. Propane tanks and building materials such as paint should also be put in a safe place to prevent hazardous chemicals. Having water tanks filled is also crucial since the water supply is sometimes cut off. Also, switch off the power cable and cover window frames with plywood to protect window frames and glass chipping into the building. People often check the condition of carbon monoxide detector batteries to prevent carbon poisoning.
KNOW WHO TO CONTACT It is critical to have emergency contacts in case of an emergency. For instance, if lifethreatening instances occur during hurricanes or spills of hazardous chemicals, one must call the authorities to assist in the issue. Different emergency lines are essential to reach the most appropriate one in times of need.
BE READY TO EVACUATE OR STAY AT HOME Authorities advise on whether vacating or being at home is safer. Driving conditions are sometimes harsh, or the storm is too strong even on well-built homes. DURING EVACUATION People should carry an emergency supply kit and other necessities like a phone, license, and passport. If there is enough time, one should unplug all the appliances, turn off the gas and water supply and disconnect the electricity. During the evacuation, only the roads recommended are used even if there is traffic. Other routes may be flooded or blocked. At times one requires contacting the local emergency office to confirm whether they offer accommodation to pets and even people. WHEN STAYING AT HOME The emergency supply kit should be at a place of reach and ease. People should constantly listen to the radio or TV to get hurricane updates. Also, nobody should get outside even if the weather is calm until the local authority issues a notice. Nobody must stay close to the window to protect themselves from flying debris and, if possible, get a safe room with no windows. If an order is 32 | AUGUST 2022
SPREAD THE WORD It is essential to share with friends and family how to prepare for hurricanes. Also, inform them where to get the necessary resources; with that done, people stay safe. VISIT AN ATM One must have hard cash at all times during an emergency. It enables one to maneuver when the local government asks people to move immediately and cater for any costs which arise during a hurricane. BE AWARE OF YOUR SURROUNDING Especially for people who reside in areas close to a dam or oceans, it is essential to listen to news updates and follow the necessary instructions from the local authorities. It enables locals in a given place to stay safe. TAKE INVENTORY OF WHAT YOU OWN A home inventory ensures that an individual has enough property insurance to replace possessions in case of destruction. It is essential since it speeds up the claim process. People are encouraged to apply for a federal or disaster aid Also, people prepare by reviewing insurance policies to confirm what is covered in the insurance package. Checking enables one to buy insurance that fits their situation best.
Scottsdale real estate market appreciation data market summary By Yvonne McFadden
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cottsdale is a city in Arizona known for its spa resorts and golf courses. In June, the city had 2541 homes available for sale. In May 2022, 2142 homes were sold compared to 1325 in May 2021. The city has quite a significant number of homes sold out than other cities in the United States of America. The median price of homes was $964K in May 2022, while in May 2021, the median price of homes was $864k. There is a change in the market day as in May 2022, and homes stayed in the market for approximately 33 days, while last year, homes stayed for 29 days. The schools in Scottsdales are 125 in total, with 57 being elementary,40 being middle, and 28 high schools, which shows that the town does not have any schooling deficit. Scottsdale has a rating of 7 out of 10 schools by excellent schools. WWW.THEPINMAGAZINE.COM
Out of the 2541 homes that are currently available for sale, 323 are new homes,124 are open to being seen, and 622 homes have reduced prices. Scottsdale is a seller market since many people want to buy homes, while fewer houses are available for sale. It shows an imbalance between demand and supply, thus leading to increased home prices in the town. MARKET TRENDS AND STATISTICS In June 2022, there was an increase in a market trend whereby homes sold at an average of $975 from $964 last month. Also, homes were sold at an average of $875 last year. There are possibilities of Scottsdale experiencing increased prices in Q3 of 2022. There also has been noted l
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an increase in the median price per square foot because the current price is at $441 while last month the price was at $440, and last year in May, the median price per square foot of homes was $363.However, the median home size in June has reduced to 2314sqft from 2323sqft in May 2022. Last year in May, the median home size was large, being 2525sqft. After careful research, the home prices of Scottsdale have increased by 29.3% year over year between 2021 and 2022. The real estate market was steady from 2013 but started snowballing in 2022 when the market growth increased sharply. Covid 19 virus brought awareness and encouraged most people to own their homes to protect themselves from the pandemic that might be there in the future and allow parents who work from home to have enough office space and also enough rooms for the family. MARKET TRENDS FOR SINGLE-FAMILY HOMES The median listing price was $1.297M in May 2022, increasing from $1.250M in 2021. In 2022, the market prices of homes have been fluctuating over the last six months. February had the highest median list price, which was $1.4M.The price went down in March, rose again in April, and recorded lower median listing prices in May and June. June’s 2022 listing price is approximately $1.25M.
In May 2021, the median home size was 3364sqft. The home size has reduced significantly to 2945 one year later, and data proves the home size square foot will continue to dwindle. June currently has the lowest home size being slightly above 2900. Last year in May, the median market days were 31, and the number has reduced in May 2022. Those market days will continue to go down in June and the rest of Q3. MARKET TREND FOR CONDOS/ TOWNHOMES The median listing price of condos in May 2022 is $624,520, an increase from $499,900 last May. As of June, the price was reduced to $610,000. In 2022, the median listing price was highest in April 2022 at $640,000 and lowest in March at $601,000. The median price per square foot in May 2022 was $396, while last year, May, it was $334. June 2022 recorded a slight increase in median prices per square foot, $398. Up to June 2022, the price was lowest in March 2022 and highest in February.
The price per square foot in May 2022 was $472, while last year, in May, the price was $378. However, there has been a decrease in cost per square foot as in June, the price per square foot is $461, whereby the trend might persist in Q3 2022.
May 2021, the number of houses available for sale was 413, whereas 12 months later, the number increased to 747, and the number of homes available for sale continue to increase. There has been an increase in the median home size per square foot from 1473 in May last year to 1729sqft in May 2022. The median home size was lowest in February 2022 and highest in April 2022.
There are 1550 single-family homes for sale; in May last month, 1395 homes were available for purchase. At the same time the previous year, only 912 homes were sold. Between January and February 2022, homes available for sale were the lowest, but from May, the number continued to increase steadily.
CONCLUSION The median list price of homes in Scottsdale is 1% between May and June 2021, and inventories increased by 8% in June 2022. Competition in the real estate sector in Scottdale is stiff as people look forward to buying homes every day.
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How do I find the perfect home in Payson? By Tamra Lee Ulmer
A perfect home in Payson varies and entirely depends on the buyer’s interest. Aspects such as market trends, home values, schools present, and the homes available in the market are critical when choosing a house. The best months to live in the area are April, May, and October, while July and August are the least comfortable months in Payson. There are 54,300 people in
Payson, a decrease of 0.2% since 2020, and an employment rate of 6.7. since the number of jobs increased by 2.0%. In the last ten years, the median home increased by 7.8%, the current home price is $282,000, and the available schools are affordable. THE KIND OF PERFECT HOME ONE WOULD WANT Selecting a perfect home is engaging. It involves the kind of home one would feel more comfortable in. It could be a single-family home or a condominium. To make work much more manageable, one should write down a list of what one would want in a home. Variables such as an open kitchen in a modern house, backyard space, and the number of bathrooms are included in the AUGUST 2022 | 39
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ayson is a town in Arizona, United States. The city is also called the Green Valley and is among the oldest towns in the U.S., surrounded by the Tonto National Forest. There are a lot of activities all year round, making it an excellent place to settle, especially for the lovers of outdoor activities. It is also worthwhile noting that most homes are made of cabins.
list. Other items such as a fireplace, garage for more than one car, office, and sliding glass doors are also added on a separate paper since they are not essential. With the lists well written, it becomes much easier to get a good home that will make the buyer comfortable. HOUSING BUDGET AN INDIVIDUAL HAS Purchasing a new house is an investment that needs a lot of commitment. If one is not a cash buyer, one must get pre-qualified for a loan to know an individual’s price range. There is also a need to have funds put together for the down payment and closing costs which are additional expenses met. Buyers then consider their lists of must-haves and “good to have” items and the prices set aside for the cabins in Payson. Consider also the moving cost to Payson and the kind of appliances available in the area. Putting finances together prevents an individual from overspending. LOCATION OF HOME TO BE BOUGHT Payson being among the oldest towns in the U.S, it is critical to know where you would love your home situated. Whether an individual wants a location close to the shopping center, the Tonto National forest, or even the rivers located in the locality, if home buyers have school-going kids, then the home should be close to a school. Generally, a home should be close to amenities that an individual frequently uses, such as a workplace. In selecting homes, individuals need to know more about the place’s neighborhood. As a home buyer, one should consider the neighborhood’s security and, if need be, speak to neighbors about the area. Typically home buyers create a list of pros and cons to make the search more effective. Payson, however, is known to have good people and favorable weather with many fun activities every month. Shops and many other resources are easy to find and locate with reasonable living costs making homes in Payson comfortable. 40 | AUGUST 2022
RESEARCH IS ESSENTIAL In Payson, most homes are cabins; thus, before settling on one, it is critical to do background research on the home. Home buyers might need to find out the period on which the house has been on the market and the foreclosures in the neighborhood. Other research aspects are the home prices, neighboring homes already sold out, and the amount one expects to pay in property taxes. FIND A REAL ESTATE AGENT Finding a good home is difficult, especially when one is not knowledgeable about market trends and many other things about real estate. It thus becomes essential to have a real estate agent who has been in the industry for several years to make the home buying process easier for first-time home buyers. These agents handle the necessary paperwork and negotiate with the seller on behalf of the home buyer. THE BUYER SHOULD BE FLEXIBLE By being flexible, the buyer should imagine living in the place, how furniture fits in the home, and what the cooking experience in the cabin will be like in the new house; suppose the buyer is comfortable about being on the premise. In that case, he should proceed to make an offer and, if accepted, eventually purchase, creating an individual homeowner of the Payson home.
If priced out of the single-family home market, can you buy a condo? By Walter Huff
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n recent years, the real estate market has had higher home prices, leading to buyers being stocked out or considering getting a condominium. In over 70% of U.S countries, condos are cheaper than single-family homes, which is essential for home buyers, especially those interested in getting homes but can’t afford stand-alone dwellings. However, owing a condo has different aspects that the buyer should also take into concern, such as; SINGLE FAMILY HOME VERSUS CONDOMINIUM Purchasing a condominium is different from a single-family home in that most condos do not qualify for government-backed loans such as Federal housing association and veteran affairs loans unless listed as approved projects.
Mortgage rates for condominiums are higher than those of single-family homes by about 0.75% since lenders consider it riskier and not all condominiums qualify for loans. When purchasing a condominium, buyers should be aware of the homeownership associated costs, which are extra expenses to be catered for every month or annually, depending on the HOA. BUYING A CONDOMINIUM DEPENDS ON WHETHER AN INDIVIDUAL LOVES COMMUNITY LIVING Community living is the most considerable disparity between single-family homes and condos. There are several advantages associated with condos: an individual does not cater for exterior wall repainting, landscaping, and snow removal since the HOA pays for the AUGUST 2022 | 43
WHEN TO BUY A CONDOMINIUM: IF YOUNG OR RETIRED Condominiums are suitable for people at a certain age, favorably young people or retired folks who find it tiresome to maintain a yard and other exterior maintenance. According to Shaun Martin, a real estate and land developer, condo owners have the luxury of staying at their homes without worrying about any hassles that would otherwise be related to a single-family home. A condominium reduces loneliness in a vast space because of the neighbors and makes them feel safer. BUY A CONDO AFTER YOU HAVE THOROUGHLY VETTED THE HOMEOWNERSHIP ASSOCIATION Homeownership association fees are significant since they are fees that you will incur as a buyer after a certain period. It is crucial to the financial stability of the neighborhood, primarily to ensure that the prices are not too expensive to handle. Also, buyers check whether the regulations favor their interests, such as pets. Typically, buyers ask for a financial statement from property management to ensure that there is enough money in the reserve. Also, buyers are encouraged to ask about potential projects that the HOA will undertake and how the projects will affect the buyer and also get prepared if there will be cost sharing of such tasks. CONDOMINIUMS ARE NOT SUITABLE FOR INVESTMENT People buy homes for different purposes. It might be a place to live, but to others, it might be a form of investment. Investors are not encouraged to buy condominiums since they appreciate much lower rates than detached homes. It is 44 | AUGUST 2022
important to note that the land belongs to the buyer for a detached house which is not the case with condominiums. Also, land appreciates as structural value lowers, thus the reason it is better to invest in single-family homes. With real estate, the land purchase price is attributed to land value. CONDOMINIUMS HAVE CHEAPER INSURANCE Having a condominium is usually by far cheaper than a single-family home. The deal gets better when insurance is involved. In most cases, since condominium owners mainly insure possessions, the insurance becomes more reasonable. However, one should confirm the exact price via the homeownership association insurance policy and ensure that the package is responsible for necessary coverage gaps. DO NOT BUY CONDOS WITH PROBLEMS When buying a condominium, the potential buyer must ask people in the neighborhood if they are satisfied with the homeownership association. The buyer often needs to attend board meetings with the HOA or ask for minutes from recent conferences. In addition, buyers asses the litigation history for taxes and other general issues. Check also whether the HOA has any accrued debts you do not want to be associated with such problems as a new potential homeowner. It is also essential for a home buyer to know that if a given HOA has large debts in the bank, lenders may refuse to provide a mortgage which affects the buyer. BOTTOM LINE Home buyers have the choice to consider getting a condominium at the right location when times are difficult and probably after one misses out on a chance to own a single-family home. However, buyers are urged to do due diligence and ensure that the house is in the buyer’s best interest. Having enough savings is also necessary if the condo does not qualify for HOA or VA loans.
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bills. Condominiums also have tremendous advantages because those condos have swimming pools, gyms, and clubhouses. Condominiums would be a good option for people who love interacting with others if they miss a chance to purchase a single-family home.
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Is it advisable to ‘try before buying?’ How pre-inspection could end up hurting you
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By Heith Mohler
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n typical cases, people request a home inspection after making an offer. It is good to note that there are instances where a buyer makes an offer before making an offer. The methods help the buyer make a realistic offer on the house and focus on properties that fall within their requirement. The technique, however, seems awkward for various reasons, and sellers are less likely to consider an offer for people who make offers before listing. Several risks associated with pre-inspection on home buyers include; Setting aside time for an inspector to check on the home makes most sellers uncomfortable. In some instances, they even refuse pre-inspection to be done on their home, and most probably, after a pre-inspection chance of winning an offer is close to zero.
Buyers should note that pre- inspections do not bind an offer to a seller. Even after a preinspection seller may decide to sell the home to another buyer. Having too many conditions discourages the seller and complicates the process that others wisely would appear smooth. That is why an offer with waived contingencies attracts most sellers. Pre-inspection is an expensive option, especially if the buyer is unsatisfied with the home after the inspection. A buyer pays many pre-inspectors since it is always advisable that a buyer makes more offers to increase the chance of winning a house. Remember that you may not have the chance to own the home after paying inspectors. Pre-inspection leads to more harm than good because not many sellers allow strangers in their homes. Besides, suppose any unaccepted AUGUST 2022 | 47
occurrences occur such as damage on the property. In that case, the seller cannot be paid since there is no money in an escrow account, and there is no evidence of interest to purchase a house by a buyer. Pre-inspection of the home reveals possible defects that the selling agent must list. Sellers not willing to indicate possible defects will not allow a pre-inspection, and the buyer should be ready to lose the offer if it is done. Defects lower the price of a home which is not the intention of any sellers. Why would a seller consider a lower request when more buyers are willing to give a higher offer and close the selling process faster? A pre-offer inspection is not so typical. Also, the seller and listing agent conduct a home inspection before putting the home on the market. However, not all sellers do so. It is unnecessary to carry out a pre-inspection on a house that has already undergone the process, and any possible defects are indicated. A seller might think that you do not trust them as a buyer, making them less interested in considering the offer. Note also the disturbance one causes on the house already inspected.
The pre-inspection conflicts with the seller in that a pre-inspection by the buyer is likely to reveal problems that the seller knew nothing about. To guard the interest of the seller, the offer is rejected. Sellers, in many cases, would want the buyer to follow their listing but not the other way round. Note that a seller controls the home, and there is no way an individual would allow a buyer to guide them on the right price to sell a home. In general, pre-inspection has more disadvantages compared to merits. Consider the buyer’s frustration after spending so much money and time to get the best inspector only for an offer to be turned down. The real estate market being a seller requires a buyer to note that a seller has control over his property and that any activities that seem to disrespect his listing discourage a seller from considering the offer. In most cases, the best way is to have inspections after a request is made. Even the seller feels more comfortable and willing to sell the home to a particular buyer. In a housing market buyer and his agent work together ensuring they use the best possible means to win an offer and is of benefit to both buyers and sellers.
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Sellers feel they are being tricked into something when a proposal of pre-inspection is made, and they become suspicious. Typically when a preinspection is done before making an offer, it is not done again. Also, old homes always have some issues, whether minor or significant, that discourage and lower the value of a home. A seller, for instance, may be required to make
repairs worth thousands of dollars, and probably that was not in the seller’s mind, which is why the seller rejected such proposals. Some people believe that in a hot market, making a pre-inspection is a method that makes an offer unique which is a very wrong assumption. Not with the many buyers flooding the real estate market daily.
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Riverside market update and market appreciation data for Q3, 2022 By Ruby Frazier THE HOUSING MARKET IN RIVERSIDE Riverside is a city named after the Santa Ana River in California, the USA. The city remains a seller market as home prices increase daily and the number of home buyers continuously floods the market. Twenty-six neighborhoods surround it; the best are La Sierra, Orangecrest, and Canyon. Compared to other cities in the USA, Riverside is affordable. It hosts about 3 million residents. In the last decade, the town has experienced massive growth. In 2008, the United States experienced losses, and most towns went down in the real estate sector. It was again hit by the Covid 19 virus that affected almost every part of the world. However, Riverside portrays a remarkable improvement in the real estate sector. After the virus, employees are quickly recovering their jobs and finding it best to buy homes in the area.
Riverside records high inventory levels as few sellers are willing to put their houses on the market, and in the last years, many people from the outskirts have been flooding in. Home costs between $12.9K and $14M.In April 2022, home prices increased by 20% year over year, where homes went for about $639K median price. Markets days for homes are 15 days compared to 16 in the last year, showing a slight difference. However, this year in May, the real estate investors sold fewer houses because 257 homes were sold last month, while at the same time the previous year, 340 houses were sold out by investors. In 2022 compared with last year, Riverside has experienced high home price interest rates, limiting most buyers. Real estate investors concluded that in the third quarter of this year, home prices will go up again and that there will be constant interest rates. Market days will reduce, and more houses sold in the three months. AUGUST 2022 | 51
Single-family homes in May went for an average of $642,500.In the month, there was an increase of 19.8% compared to May last year, when the median home pricing cost was slightly below $550,000.It indicated an increase of about $100,000. Houses in May were priced at $507,500, recording a 29.3% increase. Riverside has not only shown a price increase in townhouses and single-family homes but also recorded a significant increase in price in condos. The median sale price for condos was $403,500 and, like other types, recorded a rise year over year percent, which was 20.4 in May last month. Last year May, the median sale price was approximately $280K. MEDIAN MARKET DAYS As mentioned, homes last month stayed for about 15 days before being sold, a decrease of 1% yearly. Since last year, the median market days for allfamily homes have been 16. It is an improvement in the second quarter of 2022. However, for townhouses, the median market days last month were 37 showing a 17% increase year over year, while the median market days were 12 in May 2022, indicating a decrease of 8% year over year. The home market in Riverside is very competitive as a home receives more than one offer, and some buyers give offers with waived contingencies. Average homes sell for 3% above the listing price and go pending for around 17 days before selling. Homes on high demand sell at 7% above the listing price and pend for about one week before selling. In the third quarter of 2022, home prices will likely remain the same or have minimal changes. The statistics also show a decrease
of 2% from May to June this year, whereby the price per foot of a home is $353 from $352 last month, indicating a slight difference. Riverside experienced 11% in June this year compared to the previous month, with only 806 houses available for sale. It could be a reason for the increase in house prices resulting from the imbalance between supply and demand. Another reason that leads to the housing gap in Riverside is the proximity of the city to Los Angeles and San Diego, whereby Los Angeles is a busy port and San Diego is a dynamic city. THE MEDIAN PRICE PER SQUARE FOOT OF A SINGLE-FAMILY HOME IN RIVERSIDE In May last month, the median price was $355 per square foot; the same month the previous year, it cost about $307 for a single-family home. February this year, the median price was lowest at $335, while in June, the price was slightly above $355, showing a possibility of an increase in cost per square foot in the third quarter of 2022. THE MEDIAN PRICE PER SQUARE FOOT FOR A CONDO IN RIVERSIDE In May 2022, the median price per square foot for Condos was 4334, while in May last year, it was $307. However, in June, the cost per foot decreased slightly above $325. CONCLUSION Generally, the median list price for all homes in Riverside is slightly lower at $633K from $650 in May 2022. The median home size decreased in June 2022 to 1805sqft from 1849sqft last month. However median price per square foot has increased from $352 in May to $353 in June.
COVER STORY
Labrescia Dawson President, Founder and CEO of Dawson’s Management
Ms. Labrescia Dawson is the president, founder and CEO of Dawson’s Management, a certified 8(a), HUBZone and Economically Disadvantaged Woman-Owned Small Business (EDWOSB) currently headquarters in Atlanta, GA. The company operates its subsidiary, Dawson’s Realty & Mortgages (which Ms. Dawson opened in 2006), and this real estate vertical oversees real estate, asset management, and property preservation. Ms. Dawson’s original work as a real estate broker in Dawson’s Realty & Mortgages led to the creation of Dawson’s Management.
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s. Dawson realized that the asset management services her company provided for entities such as the Department of Housing and Urban Development (HUD), the Department of Veteran Affairs (VA), hedge funds, and banks were being subcontracted to manage government-owned properties. This realization led Ms. Dawson to pursue certifications such as the 8(a), HUBZone, EDWOSB, and others which would position her to receive state, commercial, and federal contracts as a prime contractor. But one would ask, how did she get started in all this? Well, a thousand’s step journey starts with just one step and the determination to get to your destination. And while Labrescia doesn’t come from a real estate background, she did possess sales skills that elevated her business to what it
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is today. Ms. Dawson started out her career in customer service at Gwinnett Place Ford before later transitioning to the car sales department, where she became extremely good at selling cars.
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One day, this guy walks in, and he was like what are you doing working here you’re going to be just like them, and that bothered me when he said that I’m like what do you mean ‘just like them, so a seed was planted…I didn’t know that people associated with car salesmen were being sleazy, so that thought stayed with me. Another guy walks in and says hey you should try real estate. That thought also stuck with me. It wasn’t a year later I went to real estate school.
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As soon as she became a broker, Ms. Dawson opened up her own company and luckily, her brother knew about the REO, which he taught her. Seeing some big-time brokers in her state of Georgia selling close to and sometimes even more than 500 homes motivated her a lot. “I taught myself how to do BPOs and we were also doing the preservation, and every time i would get to the places someone’s sign was already in the yard, i said I want my sign in that yard, so I joined all of these organizations, learned about REO. It’s just been a learning curve for about 15 or 20 years, but I’ve enjoyed it, and here we are today as an asset Management company.” GETTING STARTED AS A REO BROKER While doing preservation, she noted all the An REO (real estate owned) listing agent signs in the yards and got really interested. She sells homes on behalf of the bank or an asset reached out to some companies and not long manager after the property has been foreclosed. after that; she got her first assignment. Soon Foreclosures on the other hand happens in case after that, she got contracts with Fannie Mae a homeowner defaults on his/her payments on opening a whole different chapter in her career. the property in which case the bank repossess the property. As such, after the repossession, the bank owns that home or that lot and enlists While at one of the the help of an REO conferences, people listing agent to sell it to kept asking Labrescia Attending the conferences NAREB, whether her company a new owner on behalf NRBA, hanging out with the best of the was a Woman-owned of the bank. The REO best getting the certifications, learning. small business certified, listing agent will work I have not partnered with anyone; I just which intrigued her. closely with the buyer’s I love to learn and I sat there and taught agent to complete myself how to do that BPO; if you get transactions and close “You can’t just ask me a listing, you have to know what to do, on the property. This something and i just so I’m like, what is a BPO what are they rest on that there’s a is what Ms. Dawson talking about when I got that listing. I started with early on in reason someone wants bet you I figured it out, so I just kind of her career. to know if you’re woman figured it out on the go. on certified so me being a real broker when i got Getting into this line of work is particularly back home i figured out that HUD gives contracts challenging for new agents, but Labrescia notes to asset managers. We’re what you consider that attending conferences and becoming a local listing brokers so in essence you are a part of the different organizations and trade subcontractor on a prime contract, but we don’t associations helped her a lot get a footing in this associate the two. Most real estate agents don’t new arena. even understand that they are subcontractors The experience of getting the first REO Account on a federal contract once. I was able to connect was thrilling and a learning opportunity for those dots, then went to get my certifications and Labrescia, who was always looking for various it would take me 14-15 years to figure it out, but ways to learn and familiarize herself with the here we are today; we finally figured it out.” different concepts in the real estate industry.
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Labrescia credits her success to the different organizations that helped her scale up her business. She notes that these organizations are a pool of resources many people take for granted. She says, “…don’t just join the organization see what they’re saying in the blog some of us just want to brag about who we belong to, but what about the information they’re sharing nuggets in just the blogs, but some of us won’t read the blogs, we don’t want to pay to go to conferences, and it’s our own fault. The information is where all of this lies. You have to execute on what you learn; that’s the only thing i can see persistence
and execution to me is a game changer, and it made a big difference in my life meeting all those wonderful people that have accounts that you don’t even know these companies exist, going to conferences; NRBA conferences and NAREB conferences, i didn’t even know anything about all these different REO banks and clients and hedge funds. You will not know. You don’t know what you don’t know until you rub shoulders with those that do.” The future of Dawson Management looks strong. Ms. Dawson noted that in the next
six years, her company will graduate from the SBA 8(a) program and pursue even greater contracts. Recently she noted that they were able to secure contracts with government entities such as the National Guard, the Army Corps of Engineers, and the CDC. AUGUST 2022 | 57
Georgia NEED A REAL ESTATE AGENT?
Labrescia Dawson President /CEO Dawson's Management
Call today : (678) 558-7822
Or send mail : labresciadawson@yahoo.com
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Georgia market overview: Where is the market moving? By Labrescia Dawson
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eorgia is also referred to as the peach state. It is in the south-eastern parts of the United States, and its capital is Atlanta, a metropolitan city with over six million people. The total population in Georgia is over ten million. Georgia is among the states with low living costs, and the real estate market is slightly lower than that of the United States. It is essential to note that it is the eighth most populated state in the whole U.S
with the obstacle of price variance over the last decade. For instance, the home prices in Georgia in 2012 were slightly above $105,000, and today the home prices have risen by over 140% to the current price. Consequently, home prices in the United States rose 7% in the last ten years. The tremendous increase in prices over the previous ten years is due to the growing economic strength in the area, availability of jobs, and high inventory levels.
REAL ESTATE MARKET OVERVIEW FOR GEORGIA MEDIAN HOME PRICES Georgia is a seller market as more people are willing to buy a home than the available number of houses. Today the cost of a home goes in Georgia is approximately $262,710. The price is higher than ever in the state; however, slightly lower compared to the rest of the United States. The high home prices in Georgia are associated
MEDIAN RENT PRICES The median rent prices in the last 12 months increased by over 22% and now ranges at around $1,345.In recent years the high real estate market restricts many people from buying homes, leading them to settle in rental homes. At the same time, the rental market faces high inventories compared to the surpassing number of renters flooding in, and thus, landlords have more power resulting in frequent increases in AUGUST 2022 | 59
prices. Also, it is worthwhile noting that the rental market prices for Georgia are slightly higher than those of the whole of the U.S. and that as long as there are high inventories, renters will always justify high rental charges. GEORGIA’S REAL ESTATE MARKET FOR INVESTING Investors focus more on distressed properties so that they can fetch higher prices. Buying a
distressed property is a win-win situation for both the buyer and seller. Investors also mainly focus on creating rental structures since the area has more people willing to rent. Investing in Georgia is also very favorable due to the low-interest rates on mortgages which range at about 2.9% for a 30-year payment plan. It shows that for an investor in the real estate market, one can pocket more money while still paying for the mortgage.
GEORGIA’S MARKET PREDICTIONS The real estate market for Georgia depends on various items; however, soon; SECONDARY CITIES WILL RECEIVE MORE ATTENTION. The Covid 19 pandemic brought new strategies that were previously not used. For instance, it is possible to maintain a job while working from home. With that in mind, most residents move from the high-cost area in Georgia to more remote areas such as Warner Robins. Investors are foreseen to put more concern in such sites. HOME PRICES WILL GO UP Georgia is expected to have a home price increase in the following years. There are still more buyers in the market, and the inventory levels are tight. Thus most homeowners take advantage of the situation by escalating the prices, and until inventory levels lower, home prices will remain high. Other drivers of the real estate market in Georgia are; INCREASED JOB OPPORTUNITIES Job opportunities grew by almost 50% since 2021 and 1.17% since 2020. The GDP of Georgia is more than $600 billion. Today the state has a labor force of more than 5 million people and barely 5% of unemployed people. Employment opportunities in Georgia come from transport employing over 300,000 workers, and other big companies such as coca cola, technology, and real estate.
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QUALITY OF LIFE Georgia’s quality of life is ranked the best place to work and live in the whole of U.S by the U.S news and world report. Proper infrastructure, fiscal ability, a suitable economy, and good living conditions lead to a robust real estate market. TOURIST ATTRACTIONS Georgia has beautiful attraction sites such as the Okefenokee swamp, romantic antebellum squares of Savannah, the exquisite architecture of Savannah, and the mountainous landscapes of Georgia. Such attraction sites increase shortterm rental prices since the state is prone to receiving both international and local tourists. POPULATION GROWTH In recent years Georgia experienced population growth whereby between 2020 and 2021, there was about 114,000 new resident in the state. With that rate, it prospects that by 2030, there will be over 1 million more people in Georgia. Population increase indicates that the housing market will remain strong since the number of people increasing is far more than the number of houses built. In summary, the home value in Georgia will rise higher for the next several years. The rental market is strong, and the trend will remain for several years. Investors have the chance to put their money in the real estate sector, especially the rental market and are sure to make good profits.
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Culturally-appropriate multimedia resources and pathways to care.
INTRODUCTION CAL-ALHFA (California Association of Local Housing Finance Agencies) was established in 1989 to represent local housing agencies and professionals in the California State Legislature and State housing programs. We also work on housing issues at the federal level. CAL-ALHFA is a non-profit organization with a broad-based membership including public and private agencies that develop, finance, and administer programs to create affordable housing in California. Our core membership is small and medium sized local agencies that have to follow state mandates, but often lack the personnel and financial resources to do so.
PURPOSE From the beginning, the founders of CAL-ALHFA felt that local government agencies interested in affordable housing matters needed better representation at the state level because their concerns were often not addressed in the development of single family and multifamily housing programs and policies. The purpose of CAL-ALHFA is to provide that representation, based on input from all our members, including our lenders, investors, developers, and consultants. It includes participation in the California State Legislature’s legislative process and participation in program and policy development in all the State’s affordable housing agencies.
ONGOING ACTIVITIES ▪
Legislative Advocacy. Sponsoring, supporting (or opposing), and tracking housing legislation including fair housing; bond financing; state program development and administration; relocation; land use law, including planning and zoning; housing element law; and other legislation which affects affordable housing development. Program Advocacy. Tracking program developments in CalHFA, HCD, the Tax Credit Program, and the Debt Limit Allocation Program. Assisting in the development of program policies and procedures.
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Education. Sponsoring webinars, conferences, symposia, and workshops to provide information on new developments in the field of affordable housing.
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Newsletters and Legislative Alerts. Preparing and distributing regular newsletters and as-needed legislative alerts to inform members of current activities.
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Individual Member Services. Providing advocacy and advice on district or agency matters as requested.
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Professional Networking. Providing a forum for industry activists to share ideas, information, and expertise with their colleagues.
RECENT ACTIVITIES Return to the Capitol – April 2022 For the first time since 2020, advocates can attend legislative hearings in person, and testify on bills of interest to the affordable housing community. We can now meet our colleagues face-to-face on an impromptu basis. have a lobby in which we can do our work as lobbyists.
In other words, we now
Middle Income Housing Webinar – November 2021 Bond Purchase of existing market rate multifamily housing and converting them to lower rent middle income (workforce) housing. Presentations included: Discussion of the pros and cons of this program Examples of successful conversions Potential legislation needed.* *AB1850 – Ward. Establishes minimum standard for JPA acquisitions and is currently moving through the legislature. CAL-ALHFA is a supporter of this bill, which was at least partially written on the recommendations that came from this webinar.
Single Family Symposium – October 2021 Discussions included: Increasing Minority Homeownership with a presentation by The Power Is Now Innovators in Down Payment Assistance Rural Broadband Expansion Closed Loop Pump Storage – Wildfire / PSPS Prevention
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CAL-ALHFA Annual Meeting – October 2021 Keynote Speaker – Senator Scott Weiner Discussions Included: State Programs Update Legislative Update
UPCOMING Density Bonus Webinar – May 18, 2022 Following a presentation by leading density bonus expert Jon Goetz, two cities, the City of Pasadena and the city of San Jose will describe how they developed their density bonus ordinances and how they administer them.
Single Family Symposium – October 24, 2022 In Person – Sacramento Holiday Inn Cosponsored by The Power Is Now, the Symposium will cover all aspects of minority home ownership programs, updates on Fair Housing activities, and presentations by state, regional and local homeownership programs.
CAL-ALHFA Annual Meeting – October 25, 2022 In Person – Sacramento Holiday Inn CAL-ALHFA’s Annual Meeting summarizes the major events of the year in Sacramento, and features key State legislators, Senior Staff from all major housing agencies, and a discussion of future legislative actions, presented by the Chief Consultants of the Senate and Assembly Housing Committees
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Corona Market Overview Where is the market moving? By Jenny Gonzalez
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he impact of Covid 19 was felt in most areas of business, right from the Stock market to the Real estate market. Effects experienced during Covid 19 pandemic are compared to the great recession of 2008 to 2009, when there was an economic and financial downturn. Consequences will be there even in the long term. For instance with stock market part of Romania experienced a downturn while the Europe stock market had positive results. In the real estate market, the number of homes for sale in the market reduced. Real estate was significantly affected due to health issues and lockdown. Likewise, many sellers disliked the idea of inviting strangers into their homes. Work from home orders led many to create office spaces in their places of residence too. Other aspects that led to the decline of homes sold were the fact that many people lost their jobs during the period.
REASONS WHY THE HOUSING MARKET FACED A DOWNTURN The real estate market decreased sharply in the first few months after Covid 19 was declared a pandemic. Most sellers who already had put their homes on the market delisted them. The high cost of building materials decreased the number of new homes by more than 40%. All these factors led to low inventory levels at the time. Buyers also reduced during the period. It was also evident that online home search was relatively lower than in previous years. Several months later, in an attempt at economic recovery, local authorities issued lower mortgage rates to maintain steady home prices during the pandemic. WHERE IS THE MARKET HEADING? The demand for homes increases while supply is low. AUGUST 2022 | 67
At the beginning of August, more home buyers got into the market. Realtors sold more homes, and pending sales increased by over 30%. The sellers allowed buyers to visit their homes to check if their house was in good condition as per the buyer’s qualities. With an increase in the number of buyers and fewer homes available for sale, there was an imbalance between supply and demand. New home listings increased only slightly in the inventories. More sellers become hesitant to sell their homes because of economic uncertainties and fear that one may not afford another. Up to date, there is less supply and more demand for homes. MORTGAGE RATES In the last three years, the home market has faced fluctuations with mortgage rates adversely affecting the home buyer’s purchase power. For instance, In March 2020, mortgage rates fell from 3.75% to lower values. Every time an economic stipulation is announced, Mortgage rates increase. An increase in employment also leads to higher mortgage rates. Home buyers, especially those that depend on loans, are affected the most. Higher mortgage rates discourage sellers from the market, as evident in 2018 when mortgage rates increased from 4% to 4.6%, and most people could not afford it. In recent years however low mortgage rates have encouraged more people in the home-buying market. HOME PRICES Most homes in the U.S are expensive today, with an increase of more than 10% year over year. The high cost of homes results from low supply and many buyers in the market. Research shows that after the Covid 19 pandemic, the high rate of home price increase had not been experienced since 2006 before the great recession in 2008. San Francisco is among the most expensive places to buy a home in the U.S.A today. There are claims that most homes have been overvalued in the last two years by a 5.5 % increase. An increase in home prices favors the sellers, but for first-time home buyers 68 | AUGUST 2022
affording a home becomes a challenge. More than 60% of American households cannot afford a new median-priced home. Recently the cost of building materials has been higher than in the pre-pandemic times. The slow employment rates sometimes discourage some people from buying homes and consequently weaker affordability led to lower sales this year. A great merit of high home prices is the increased equity among the people. Homeowners are classified as house rich; thus, they can remodel the house and add additional features such as offices. HOUSING SHORTAGE One of the significant issues that led to the home shortage is the reduced number of new home listings in the market. Such low supply is considered the most inadequate ever experienced in U.S markets. Research also indicates that builders face many challenges today as materials and labor costs are higher. Flight from Urban areas. After the Covid 19 pandemic, most people are moving from urban areas to the suburbs, which are relatively more affordable. San Francisco is among the cities that had more people vacate. Also, the ability to work remotely led more people to move from smaller homes to larger ones where one can create an office. Younger families with kids prefer to be in a single-family home since there is a backyard for kids to play and even study from home. The need for more single-family homes could be why they have higher prices than townhomes. The housing market was greatly affected by Coronavirus disease. It is an issue that erupted, and no one had ever thought of it. As a result of the pandemic, real estate experienced overrated home prices, mortgage rate fluctuation, and a low supply of homes which affected most Americans positively and negatively, and the market is still unpredictable.
How to save for homeownership in a hopeless market? By Ian batra
MARYLAND MORTGAGE PROGRAM Such programs are evident with the 30-year fixed rate and other financing programs that enable an individual to pay closing costs and down payments. FHA, loans are an excellent example for individuals with a lower than 20% down payment. The kind of loan one receives on income. People with higher income get more loans. To qualify for such loans, it is necessary that the home buying is a person’s primary residence. A good mortgage program helps buyers save and smoothens the home buying process.
SMART PURCHASES The method allows people with a student loan worth $1,000 to purchase a home comfortably after clearing the student debt. Maryland local authorities have a sound system that enables potential home buyers with student loans accumulating to 15% less than the home purchase price to get an opportunity for a home purchase. Saving thus includes ensuring that over 85% of student loan is cleared. MARYLAND HOME CREDIT It is necessary that long before buying a home, credit scores are kept right as it is among the ways used to receive credit certificates. Improving credit score is possible by making savings account active by constantly putting money in and out. Credit certificates are essential when purchasing a home because AUGUST 2022 | 71
PHOTOS FROM 123RF
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he number of homes sold last year was less than those in 2022. The real estate market in 2022 is outrageous; thus, for one to own a home, proper saving plans must be considered.
they allow individuals with income limits to comfortably acquire income tax credits to a maximum of 25%. Home credit allows home buying, which initially seemed impossible to people with less income, to become more practice. The credits are also friendly to most home buyers. The credits impeccably boost the real estate economy. PARTNER MATCH Partners in the strategy include employers and local government, which give funds matching the offer consumed in the Mortgage premier loan program of Maryland. Such funds add up to a maximum of $2,500 in closing costs and down payment. HAVE A LENDER In the first-time purchase process, an individual requires a lender who helps take one through the process. They advise on the need for prequalification and an individual’s affordability based on credit card reports and assets. In case of poor credit card reports, lender advice on necessary steps. Lenders advise their clients on the best loans to take and work in their favor. COMPARISON OF GOALS TO FINANCIAL POTENTIAL Home ownership requires a lot of sacrifices. It does not come easy. Thus, motivated buyers work hard to get a 72 | AUGUST 2022
home of their own. Increasing financial potential includes performing several jobs to earn more and reducing the amount of spending money. Saving is crucial in home buying, primarily if you target to pay the 20% down payment without any loan. One may need to get a home in the neighborhood but bidding wars and a low home supply hinder potential buyers. In such occurrences, one looks for a suitable home at a manageable price in other places. MOVING TO LESS EXPENSIVE PLACES It is easier and cheaper to move to a more affordable place. Today, people in the United States move from costly cities such as San Francisco to Austin, Manhattan to Montclair, and other cities. As people move from their workplaces to different places, their willingness to incur commuter costs shows how home ownership is essential to most U.S citizens. If a potential buyer gets a location that is less competitive and cheaper, then it is worth buying property there. BUYERS SHOULD HAVE LOW EXPECTATIONS First-time buyers especially should note that. It is sometimes better to buy a non-upgraded home and do all the necessary repairs and remodeling yourself. When the seller upgrades the house, it
automatically fetches higher prices. However, doing the repairs yourself is cheaper, and the percentage of profit that would go to the seller is saved. With a limited-budget buyer getting home, the good thing is that upgrading may be done at later stages. SEEK ASSISTANCE FROM PARENTS Younger home buyer rarely has enough down payments for their new homes. Averagely 20% of a parent in the U.S assist their children in paying a down payment. Also, Maryland citizens use the technique to ensure a smoother closing process. There are instances where parents help indirectly. For example, children sell off a particular home left to them as inheritance and use the money to cater to the home buying process Also, there are instances where one talks to their parents about moving back in so that they save enough money for a down payment. Such chats are difficult but necessary if need be. MOVE TO A SMALLER HOME Saving involves many processes. Moving from a larger home to a smaller one is essential if one is serious about home buying. It helps minimize the money spent on rent and put the extra cash in a savings account.
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Corona Market Update: Market overview and forecast for Q3, 2022 By Kamesha Keesee
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Covid 19 outbreak brought many businesses to a standstill, and two years later, the world is struggling to get back the economy to where it was. Both buyers and sellers have faced various challenges and adopted some methods that are now the new norm not to change any time soon.
IS THE MARKET CONDITIONS A BUYER’S OR A SELLER’S MARKET? As indicated earlier, buyers and sellers have been affected by the pandemic. For instance, during the last two years, most people have shifted to sourcing goods and services online to protect against the virus. The new norm is here to stay as people prefer it for safety and privacy. Buyers and sellers prefer digital self-serve and remote human engagements over face-to-face interactions. The buyer’s online interaction enables them to place orders and view details of products. More so they also have the benefit
of fast delivery. On the sellers, they can put their market online and advertise to a large group of potential buyers. Generally, the market is a buyer one because most consumers have capital, but they are faced with a scarcity of commodities. The reason is that most business people are faced with high inventory due to Covid 19. Some market statistics include inventory levels, sales activity, and the number of days properties stay on the market. As a result of economic recovery, 2021 and AUGUST 2022 | 75
APPRECIATION DATA In the last year, commodities prices have increased due to the Corona crisis, which might continue next year. For instance, the GDP of many countries dropped in 2022 compared to the previous years. For example, the United States drooped from 5.7 in 2021 to 3.3 in 2022. Also, the global fuel price went up, adversely affecting most parts of the world. Skyrocketing prices are also with many other commodities in the market. In the real estate sector, there are high demands o houses making housing expensive. The economic recovery is also said to face growing imbalances and risks. An ineffective vaccination among the people now that new variants are emerging among the reasons leading to poor a condition. Appreciation data in Q3 2022 remain low due to labor shortage and scarcity of raw materials in the market. Variant s such as Omicron also hinder the growth of the market greatly FORECAST FOR Q3,2022. The stock market in Q3 2022 is deemed at 31255 as opposed to Q2 2022 being 32067. Currency and government bonds will increase in Q3. Other sectors forecast to be higher in 2022 are GDP growth rate, GDP annual growth rate, Non-farm payrolls, inflation rates, and the interest rate. It shows that there are possibilities of good 76 | AUGUST 2022
economic growth in the third quarter of 2022 and, consequently, in the following years. However, the Ukraine war continues to affect the high energy cost in different parts of the world. The war has resulted in an expensive humanitarian crisis that peaceful resolutions must meet. Consequently, annual economic growth has also come up due to the war. It decreases from 6.1 % in 2021 to 3.6 % in 2022. Furthermore, this value is estimated to decline to 3.3 percent in the year’s third quarter. In the global economic prospects report, the World Bank declared a potential slow down of economic growth. Global growth is said to decrease from 5.5 percent in 2021 to 4.1 percent in the Global growth. Reasons fostering this are; debt, inflammation, and gender inequality which is mainly common in developing countries. COMMENTARY. As seen earlier Covid 19 effects may continue to affect the economy even after the disease is gone. The care there is thus a need to come up with policies by the government to help countries get back to their economic place as soon as possible. Some problems came up as a result of the Covid 19 variant, and the effects were dire mainly because of ignorance as it mostly affected those that did not have the vaccine. Thus, people must have the vaccine and more to safeguard themselves against future uncertainties. Q3 and generally the whole of 2022 has experienced an economic decline in terms of economic growth. Business people and investors are thus encouraged to have a good inventory level to prevent a shortage of goods in the marketplace. They will eventually lower the prices of commodities in the market. Covid 19 pandemic also served to teach most countries to prepare for a potential future crisis by having proper strategies.
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2022 have recorded business growth, benefiting entrepreneurs and workers. The rise in business evident is due to the savings most people put in during lockdown. Businesses continue to thrive and add more workers as sales activities increase daily. Businesses such as hotels and restaurants are trying to reopen as tourism is slowly getting back to normal. Economic growth comes with challenges such as low inventory levels, and not being taken care of will lead to running out of stock, especially with large and complex businesses.
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Should I waive home inspections? By Serina Lowden
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n recent years, Sacramento has greatly grown due to the high cost of living in neighboring cities making most residents flee to the city because housing was quite affordable, but this is continuously changing. House value is increasing significantly without sacrificing for demand. It should, however, be noted that home values started to increase with real estate, and prices are increasing each month in 2022. Increasing house prices makes real estate a lucrative business if investors know market trends. Another key reason for Sacramento’s growth is that it is centrally located and cheaper than neighboring cities. Sacramento was ranked number 48 on the national top housing market in 2022, indicating its rapid growth, and hence most investors are eyeing the city. the median price of houses as of February 2022 was at $540,000
WHY IS A HOME INSPECTION IMPORTANT? When buying a property, the buyer must inspect the property to determine the general condition of the house. The California real estate association explains home inspection to be “a noninvasive, physical examination, of real property, of the mechanical, electrical, or plumbing systems or the structural and essential components of a residential dwelling of one to four units designed to identify material defects in those systems, structures, and components.” Inspection show more about a house that probably the buyer did not notice when taking a house tour. Home inspections are done by qualified personnel at a price of between $315 and $400, depending on the size of the property. AUGUST 2022 | 79
Home inspection over the years proved to be an important aspect because it gives the true condition of a house and enables the buyer to budget for repairs that are supposed to be undertaken. It also serves as an advantage to the buyer because, in case of default, the buyer can negotiate for the price, and if the house has serious conditions, then they have a chance to look for property elsewhere. A home inspection also faces several challenges. First, buyers are tempted to waive the inspection to increase the chances of a seller’s offer to get a house. More so, if several people are eying on the property, most buyers want to be the most appealing, thus the tendency to skip the inspection and increase the chances of a buyer being chosen. Buyers are encouraged to adapt to other means of beating up the competition, such as going through an underwriting process before house hunting other than waiving inspection, which would make buyers incur unexpected costs in repair in the long run.
TOP FIVE REASONS WHY YOU SHOULD NOT WAIVE HOME INSPECTIONS
1. A HOME INSPECTION PROVIDES AN OUT. By this, it means that all information about a house is detailed. It also informs the buyer of costs that must be undertaken on property repairs and maintenance. The buyer can decide whether or not to take the property with the information. If the buyer eventually decides to buy the house and has critical issues that need to be repaired, then they have the right to bargain and get the house cheaply. 2. IT REVEALS ILLEGAL INSTALLATION ON THE PREMISES Some repercussions come with buying houses not built according to the building codes. Thus inspection reveals whether houses were built correctly. House wrongly built to affect a house’s insurance, tax, and overall value. Illegally putting up houses puts a buyer at financial risk because of unexpected future occurrences. The insurance will not cater to the costs. Poor installation and poorly built-up houses deteriorate the value of houses, and buyers should be aware of this before making any purchases.
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3. FORECAST FUTURE COSTS. A qualified home inspector can determine the duration fitting has been used in a house as every fitting has its shelf life. Also, appliances such as heaters and plumbing fitting are investigated to determine how long they will work to tell on the type of insurance cover. In the process, the inspectors can also determine the quality of fitting in a home. 4. SAFETY One of the most important reasons to carry out a house inspection is to check the house’s safety. A House inspection should determine if the house emits gas such as carbon monoxide and if it has mold and radon to some extent. It is important that when buying a home, one ensures that the contract has on offer to reject a house if it is hazardous. 5. HELPS LEARN TO PROTECT THE INVESTMENT A home investor is regarded as a resourceful person and advises on how to maintain property which in the long run help in saving money. They give tips on how to cheaply protect property, ensuring the house is in good condition for a long time. Property protection also enables one to resell the property in the future, driving in many buyers since the house will still be in good condition.
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A home inspection is more important to the buyer. There are several reasons why it is important to carry out inspections, such as;
What are the risks of selling your home through iBuyer
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By Briana Frazier
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n ibuyer is an instant buyer. It is a new strategy used when one wants to sell a home fast, and the selling process is usually more streamlined. The method of selling a home is generally associated with a lot of risks which include; LOWER PROFITS An individual selling a home through an ibuyer will likely make less profit. The reason is that ibuyer charges 6% to 8% depending on how long they think the house will take in the market. ibuyer generally buy a home at a discount because they also need to make profits. When one wants to sell a home quickly, it fetches lower profits. Home sellers who sell to ibuyers make 10% less profits than those who sell homes using traditional means.
THERE IS LIMITED AVAILABILITY The method got into the market in 2013, and thus it is still new. ibuying is only practiced in selected cities of Atlanta and Phoenix, among others. ibuying firms buy homes that meet certain qualities and are decent, thus creating a limit for those who use the method. Additionally, ibuying is challenging because the buyers only buy ordinary homes with no special features such as fountains and pools. Also, sellers cannot sell a well-maintained historic home through an ibuyer. In addition, the method does not include a price tag for variables such as beautiful mountain views and beaches, depending on the home’s location. ibuying affects not only home sellers but also the firms involved in the process because, at times, they cannot estimate the accurate cost of selling the home after remodeling. ibuyer market is, however, relatively new in the market.
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IS SELLING A HOME AT A DISCOUNT A GOOD IDEA At the time, the ibuying companies buy a home at a price lower than it actually is or way below the seller’s listing price. An individual who wants to make a maximum profit does not benefit from the method, but a seller who does not have time to repair the home would opt to sell to an ibuyer. Other factors that lead to the lower purchase price is that ibuyer firms give an all cash offer and close the house within the shortest time possible. Further deductions depend on the home’s condition, leading to meager profits. IBUYING IS A PURE BUSINESS TRANSACTION The process involves selling the house to the firm concerned and vacating the premise. Sellers differ; some prefer to converse with a potential buyer before selling. Others would like to sell to a specific person—sellers lose power over their preference on selling when they choose an ibuyer. The companies buy the homes make repairs, and finally, resell them to an individual they find more suitable. The process is far different from selecting a real estate agent because, with traditional methods, the buyer and seller have a one-on-one conversation. THERE ARE NO NEGOTIATIONS WITH IBUYING Unlike using realtors, ibuying companies do not negotiate. On the other hand, realtors arrange the home price during the closing process. Buyers request lower prices and while sellers seek higher ones. Eventually, they agree on the right price to sell or buy a home. When an ibuying firm is involved, they usually value the accurate cost of a home and do not give room for bargaining. During such times, the seller typically has no power over their house. 84 | AUGUST 2022
THERE IS NO ROOM FOR RENTING ibuying firms only deal with buying and selling of homes. An individual thus looking for renters does not use ibuying companies. However, looking for people to rent your home through realtors is possible. ibuying companies only buy houses, make necessary changes and resell to make profits. Another critical issue about ibuying is that it does not involve using an expert in the business. That is, there is no representative of the seller or the ibuyer. Only the two parties are invoved during the whole process; thus, an individual can quickly make mistakes since there is nobody to lead the parties. IBUYING HAS UNCERTAINTIES, AND IT IS ALSO NOT INTERACTIVE Sometimes ibuyers are selective and may decide not to purchase a given home. The truth is that most sellers consider themselves lucky when ibuyers select their home. Essentially ibuying is a non-emotional process and there are normally no face-to-face interactions, unlike traditional means, which make individuals feel more confident about themselves. RECOMMENDATIONS Generally, using an ibuying company might not be an excellent idea, from low-profit margin to non-interactive nature. Before one decides to sell a home to an ibuyer, one should first conduct various assessments as to whether the home is worth the price they give. Also, people research different ibuying companies and even seek reviews from people who once used an ibuying company. With the information in mind, an individual can make the right choices in the home selling process.
Frazier Group Realty Inc. 3739 Sixth Street Riverside, CA 92501
“Your Real Estate Navigator” www.fraziergrouprealty.com rubyfrazier@fraziergrouprealty.com O: (951) 686-5261 F: (714) 908-7298 Lic# 01751773
The risk buyers face buying a house with a sight unseen By Edwin Engelke
MAKING SNAP DECISIONS It is frequent for most people to give up after losing five to ten offers. However home buyers are encouraged to get preparing to losing up to a maximum of ten homes. Realtors emphasize on buying a home after visiting the place since pictures can make an unsuitable home appear really nice. Most home sellers emphasize on capturing on the better parts of a home omitting
any possible defects. According to real estate developers if one intends to buy a property unseen, buyers should representatives to inspect the home such as friends and family member or even real estate professionals. SKIPPING THE CONTINGENCY Foregoing a home inspection is tempting to a buyer and is the reason some people buy their new home without having any inspection. The case becomes worse when the property in subject is bought sight unseen. Potential buyers might end up paying more money for repair costs associated with the home at a later stage. It is thus important to visit the home accompanied by a home inspection professional to identify any problem associated with the home and renegotiate home price with the seller if need be. At times home inspection may not be taken seriously if the prospective buyer is absent or omit some problems that if the buyer was AUGUST 2022 | 87
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urchasing of property sight unseen is mostly evident with folks who have probably lost on several offers. In the recent years, real estate is a seller market having many buyers some of them cash buyers and others skip contingencies for their offer to be accepted. In such a market, some people prefer to buy a home without physically visiting the property. Purchasing sight unseen has its own advantages and risks associated. Some of the dangers of buying a home sight unseen are;
present would have seen since it is the buyer who knows what best fits him. BUYERS DO NOT GET A SENSE OF LIGHTING In videos one can tell whether a certain bulb works well or not. However it is important to note that selling agent tend to put out the better part of lighting and focus less on any problems. Buyers physically visiting the premises enjoy the viewing where the sun rises from and sets to which is not possible if assessing the home online. IT IS DIFFICULT TO TELL THE SIZE AND HEIGHT OF A BUILDING When assessing a home through pictures and videos the size and heights are told but in most tell one cannot tell how big or high a home is. Visiting a property enables one to completely see the dimensions of a home and also one can comfortable imagine himself in the home or even determine how the furniture will fit in the new home.Virtual tours at times mislead on the dimension also since seller want to sell off the property and perharps use the money for something else. Being physically present is essential to ensure the home is worth the home value as indicated by the seller.
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VIRTUAL TOURS DO NOT CAPTURE FOUL SMELLS It is obvious that one cannot detect bad odor I assessing the property on line. Bad smell is caused by problems with the septic system and presence of mold. It is worthwhile noting that repairs of such issues are very expensive and if not detected early, the buyer incurs additional costs. Bear in mind also that not all videos will show the actual condition of the attic and basements which is necessary on homes having them. A poorly built basement affects the structure of a home making a home value to go down. VIRTUAL TOURS DO NOT CAPTURE SOUND In most instances one cannot tell exactly where the home is located and the types of neighborhood. That is if the place is noisy or not. It is crucial for people really concerned about the neighborhood to be physically present so as to inspect the neighborhood and tell if it has the serenity as per his interest. Also they are able to know if the home is located in a high traffic area or not. Buying a home sight unseen is considered as a blind process since a buyer is unable to detect presence of mold, structural problems
and pest infestation since cameras do not show such occurrences. Such issues are either caused by neglect by the previous owners or deliberate destruction of the home so that the bank takes time to find a buyer or is sold for a lesser price and if online buyers are not careful thy fall in the trap of purchasing substandard homes. Buying a home sight unseen is relatively a new process but the processes are more similar to physical purchase of a property. Scenarios that necessitate buying a home sight unseen require a buying to involve a highly qualified realtor agent. However the process does not require one but to avoid being frauded realtors come in and smoothen the home buying process and also makes sure that the home bought is in good quality and furthermore its home value is worth its price. The buyer then requests for pre approvals and makes offer on a property upon which after acceptance, they send people they know and trust to go and check the condition of the home. After the buyer us is satisfied he proceeds to the later processes of home ownership and finally the buyer is handed over the keys and becomes the new home owner.
Mississippi real estate market in 2022:
Forecasts + Trends By Francine Marsolek
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ississippi is a town known for good blue music tones and catfish availability. Green Ville, Jackson, and South haven, a small town where residents enjoy the place. It has a sub-tropical climate that boosts its agriculture economy all year round Mississippi is among the most affordable places in the U.S., Just like any other state, prices are set higher daily. Mississippi is a seller market; thus, home prices are higher. Recently, there have been high inventory levels and many buyers in the market. The U. S housing economy saw people over from cities with a higher cost of living to more affordable cities. Covid 19 pandemic also led people to buy more homes and is thus a reason for the increase in home prices. Low mortgage interest rates are a reason for many buyers to get into the market.
MISSISSIPPI MEDIAN HOME PRICE Today the median price of a home is $161,160 as opposed to the $129,000 that was the home price before the pandemic. In the last twenty-four months, Mississippi has had a 24.7% increment in rent. However, in the U, S housing economy, the local home value is still less than the national home value, which is $344,400, with a 35% increase. The median home price in Mississippi will continue appreciating, although not at the high rate seen in the last two years. MISSISSIPPI MEDIAN RENT PRICES High home prices are evident in home ownership and the rental market. Due to the high inventory levels, rental charges today are higher than last year. High rents affect renters because they sometimes cannot move into home ownership. Today the median rent is $1005, and as long as there are more people in the market, landlords AUGUST 2022 | 91
have the right to increase rental charges. It is an excellent opportunity for investors because the rise in rent will proceed in the future. FORECLOSURE TREND AND STATISTICS Foreclosure in 2022 rose by 1% from last month and 120% annually. Foreclosure increase is not only in Mississippi, but in most parts of the U.S. Foreclosures result from government policies and local industries to guard the buyer against defaulting. Today there are 130 foreclosures out of over one million homes available. MARKET OVERVIEW Last month’s median sale price of homes in general was $262,100, with an addition of 15.3% year over year. Averagely 1650 homes were sold, a 3.3% increase by June 2022. HOUSING SUPPLY By June 2022, the number of homes sold was less than last year, creating a tighter inventory level. June last month, the number was 4359, indicating a decrease of 21.5%. HOUSING DEMAND Most homes in Mississippi today sell at a price above the listing. Competition is growing by the day.. MISSISSIPPI REAL ESTATE INVESTING Investors highly depend on distressed homes to make profits. As the name suggests, distressed homes are sold by the seller because they do not need them anymore. It also means buying a non-upgraded home, catering for the cost, and later reselling to make profits. There is a seller who depends on foreclosure, but it is worthwhile noting that currently, foreclosures are low; thus, investors cannot depend on them much. With the low-interest rates associated with 92 | AUGUST 2022
borrowing, investors have more cash flow, encouraging them to invest more in real estate. REAL ESTATE MARKET PREDICTIONS Up to date, most of Mississippi has higher home prices than during the pre-covid times. It is a good idea for investors and home buyers to look into the market’s future before investing. It is done by studying previous trends by reading realtor magazines and consulting an experienced friend who has more knowledge about a particular topic of interest. It is foreseen that; APPRECIATION RATES WILL FALL BEFORE THE NATIONAL AVERAGE Mississippi is not very productive, and thus unemployment rates are likely to cause a slow increase in home prices. Even in previous years, Mississippi always falls below the national average, which might be long-term depending on Mississippi’s growth rate. LOW SUPPLY OF HOMES Various factors lead to low supply. Since Covid 19, building materials costs went higher meaning, adversely leading to a low supply of homes. On the other hand, the pandemic brought the need for people to own homes leading to more buyers in the market. Since then, there has been an economic imbalance between supply and demand, and this recovery will consume a lot of time. New listings are few today, and bringing new homes to the market will take a long time. High inventories only result in higher home prices, leading unprepared buyers out of the market. Mississippi is a good place for investors and more favorable than high-cost cities such as San Francisco. The place has affordable deals, and different investors look for a particular aspect in investing soon.
ONLINE HOMEBUYER SEMINAR
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FIRST BANK WISDOM ®:
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MEAGAN HARRIS
Program Coordinator Golden State Finance Authority Office: (855) 740-8422 Fax: (916) 444-3551 mharris@rcrcnet.org
Real Estate Market Data:
New York’s tough bidding wars means a crazy season for buyers By Harriet Robertson
Buyers must make their offer appear the best among the many presents, sometimes leading an individual to make big mistakes. Desperate buyers offer to buy a home at a price way above the listing price or skip the home inspection process, which may affect the buyer later. Middle-class buyers at a time are not able to buy a home quickly. You can imagine yourself in a show house, and immediately someone shows up with a classy land rover. The person might give a higher offer, and you will have to start the search again. It is frustrating when one makes more than 30 unsuccessful offers and desperately wants to own a home. A newly
wedded couple shared their experience about how difficult it was to buy their first home due to the hot real estate market and that every time they visited, a listing agent told them that the house had more than ten offers. When bidding wars are high, most people maneuver in the market by giving offers above the listing price. The scenario is also common in the renting market. People who offer below the listing price are less likely to be considered. The housing market today is hot in that there are fewer homes being supplied, and there are many buyers. In such instances, homes are overpriced, and only a few buyers can meet the costs. The bidding war trend is evident from Chicago and Atlanta to the great New York City. There are more home buyers in the New York market because, over the last 12 months, rent AUGUST 2022 | 95
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ue to more buyers in the market and low supply, bidding wars are skyrocketing, making buying more challenging and almost impossible for most people.
Since the Covid 19 pandemic, most people need to own homes. People give various reasons for that. For example, there is uncertainty among most people about whether there is a likelihood of another pandemic. The pandemic came with a lot of unemployment, making most people feel unsafe about renting a home since there are chances of job losses. The pandemic also brought new trends like the work-fromhome strategy. With that in mind, most people look to buy a home, especially a single-family home with enough office space and a backyard for kids. That is why single-family homes have more prices and receive more offers In the last two years, real estate has been slowly recovering. Since 2019 building materials costs have gone up, and thus few new homes are listed on the market compared to previous years. High inventory levels in the market are also a reason for bidding wars in the available homes. A seller market in New York City negatively affects the buyer, and those who do not have an excellent
financial plan overspend on a home in the current times. Two years after the pandemic, companies are opening up and employing more people. It thus means that people are flooding the city and have the option to either buy or rent. New York City is associated with high-income paying jobs, and such areas have higher home prices. With that, buyers face stiff competition regarding who will win the house. Potential buyers often get to the extent of writing a letter to the seller indicating why the home is essential to the buyer and praising the seller for maintaining the home. Such competition is also seen in the rental market, where people offer to pay more rent. Times are tough for buyers, and only the best offer is taken. The best offer does not necessarily mean the highest bid but rather one which favors the seller. Although on rare occasions, does one have cash other than a mortgage. A cash buyer is extensively considered, and if not so, buyers are encouraged to have a prequalified loan so that the seller sees that the buyer is serious about getting the home. A good credit score also boosts the offers. Most buyers may be prequalified and with good scores; thus, it is a buyer’s responsibility to ensure your request stands out to win bids. Times are tough for buyers in the real estate market. Buyers should make as many offers as possible to increase the chances of home ownership.
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in the city has increased by 12%. Recently authorities involved with rental charges in New York passed an additional 3.25% rent increase. Fluctuations in rental changes make renters want to own a home. Also, the builder typically reduces their rate of putting up homes since loans have high-interest rates. The situation drives more people in the housing market in search of lovely cottages to buy, leading to multiple offers on a single home.
Homebuyer’s education:
Who pays the real estate commissions when buying a home? By Janet Petrozelle
WHO PAYS REAL ESTATE FEES Real estate fees are a commission both buyer and seller’s agent get when a home is sold. It varies from 4% to 6% of the total home price and is split into two. Technically it is the seller’s responsibility to pay both the agents, but buyers end up paying since it is included in the home price without the buyer’s knowledge. However, there are instances where buyers decide to pay to make their offer appear more appealing to the seller. Most times, during the closing, only the buyer makes payments, and if the seller does not sign the agreement to pay real estate fees, the home price is lowered, which is not the wish of any seller. The seller thus makes a payment, creating an illusion that they paid and then included in the home sale price.
WHY IS THE REAL ESTATE COMMISSION IMPORTANT Buyer real estate agents spend most of their time driving potential buyers around during house hunting. It is by going through several properties that the team can identify the most suitable home and bid offers. It is worth noting that buyer’s agent spends most of their time driving around open homes and making offers. A commission fee is thus crucial since it helps agents recover paperwork, fuel charges, and other extra costs incurred during the process. As for the seller’s real estate fees, part of the money is used to pay for advertisements on the home. The seller agent also spends a lot of time reviewing multiple offers and selecting the best, necessitating some commission. Overall real estate charges cater for resources used and activities involved in the home transaction. AUGUST 2022 | 99
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FLAT FEE REAL ESTATE
ARE BUYERS REWARDED The Internet has made work easier for buyer’s listing agents because they do not need to move from house to another in search of the best one. Technology serves to the advantage of consumers and agents through online valuation home models, aerial maps, and real estate search maps, which reduces the tedious work involved before the introduction of the Internet in the market. Therefore some agents reward buyers by slashing the cost by half since, as buyers, they do most of the house hunting. That is in case the seller and buyer agree that each pays their agent. VALUE OF AN AGENT In-home buying, both buyer and seller need to have agents who are more skillful in home selling. However, it is unnecessary if the seller and buyer are family or friends. New home buyers need realtors to help them look for a house worth their price range. 100 | AUGUST 2022
Also, realtors connect potential buyers to the best mortgage brokers and home inspectors due to their expertise in the real estate sector. When the bidding wars are high in Denton, agents help a buyer negotiate and protect them from overpayments where the potential buyers are many. Seller agents, on the other hand, help agents have the best price for their homes. In-home selling, several variables are included, such as determining the cost of a neighborhood home. Seller agents are also involved in referring to the best people who remodel homes at a fair price and all the necessary steps in staging a home before inviting potential buyers to assess the property. Seller agents help sellers put their homes on the market in the best condition. If the seller is unwilling to remodel the house, they put up fair prices that attract buyers in their situations.
Common instances are that real estate fees range from 4% to 6%. However, some agents offer a flat price of $100,000 to $200,000. A flat rate may seem appealing to many, but there are chances of limited services. For sellers, a flat rate limits the stages involved in making a home ready for sale, such as staging, advertising, and hosting multiple houses, reducing the number of bids on a particular home. Buyer agents, on the other hand, perform various tasks to ensure that the buyers get the best home at the best price. Limiting their duties means that they do not participate in some of the activities in the home purchase process, which causes adverse effects to home buyers, especially those not used in the market. Typically, individuals are advised to be very careful about a flat fee rate. If you consider the decision, it would be better to conduct proper research on the best agents available in the market with the best quality services. The real estate agent commission is negotiable for those concerned about high fees. However, such costs are not necessarily payable if the buyer and seller know each other. Real estate websites also help with home selling and buying without involving an agent.
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The pros and cons
of financing a home in retirement By John Costigan
PAYING INTEREST TO ONESELF It mainly happens with 401k loans. Administrators give reasonable rates. Paying interest to oneself means that since 401k assists in value lost by removing money from your 401k for a few years. The method is also classified as reverse paying o paying mortgage rates. ONE CAN AVOID PAYING PMI Buying a home without a 20% down payment leads to costly PMIs. However, older couples may have money in their retirement savings account, which enables them to have the minimum down payment required. Thus, seniors
must start saving early for their retirement home to avoid strains at old age. A HOME IS A GOOD INVESTMENT Getting a home is an investment worth considering. A house situated in a hot market leads the buyer to make considerable profits in the later years. Also, people think leaving behind an inheritance for their children makes homeownership a good idea. It is also worthwhile considering that home appreciation value also depends on the real estate market of a given state. STABILITY AND CONTROL OF A HOME With a rental home, there are chances of rent increment, and the renter has no control over the issue. Also, one cannot remodel a house according to how one would want it unless one AUGUST 2022 | 103
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ome people opt to get home way after they retire. Doing so may be of an advantage or disadvantage. Merits include;
has permission from the landlord, but there are limits also. Buying a home thus allows one to pay fixed interest rates for the agreed-upon period. An individual also can move to other places without any necessary restriction from the landlord. BUILDS HOME EQUITY Refinancing a home at retirement is good as it assists in building equity. Equity is necessary when one wants to either take a loan or have a reverse mortgage. Senior citizens with homes have several advantages when the house gains more value. Homeownership also boosts an individual’s net worth compared to a renter’s. TAX BENEFITS In some states, tax benefits are set aside for older citizens refinancing home ownership. It also includes mortgage points that reduce the overall cost of a home. However, a bill issued in 2017 reduced such benefits. They still exist, but it depends on the state one is situated. Refinancing a home in old age, however, is accompanied by several hindrances such as; Reducing earning potential of retirement account It primarily occurs when an individual removes money to buy a home from retirement savings. More money in a retirement saving account leads to more money in the budget; thus, when senior citizens withdraw considerable amounts to buy a home, the account reduces its earning potential. DIFFICULT TO CATCH UP WITH RETIREMENT SAVING It becomes challenging since most senior people use retirement savings, and getting back to where the account was before cashing out becomes a monumental task, especially if it was bought on a mortgage payment. RISK Paying for a mortgage at old age is also relatively cumbersome since most senior people have 104 | AUGUST 2022
reduced income and small mistakes lead to huge debts which might even lead to one selling the home to pay huge accumulated debts. Refinancing a home after retirement exposes not only a home but also assets and other additional investments. Risk exposure deteriorates an individual’s financial life and leads to a downward fluctuation of income on investment. Such scenarios are hardly manageable, and no person would want to be in such a situation. Not in old age. MAINTENANCE COSTS Buying a home is followed by various maintenance costs to make the home more suitable for a buyer. There is a possibility that the buyer is also required to pay home ownership associations more so if the home buying is under one. Depending on the amount required every month, the cost may be expensive for especially older people. A HOME IS ILLIQUID In an emergency, it isn’t easy to sell the property immediately. When refinancing, much paperwork is involved, and many other processes delay the selling process. The time a home takes in the market is a factor in addition to remodelling the house so that it is sold in good condition. PROPERTY TAXES They are taxes paid for public services such as schools and firefighters. All costs are high, and the buyer may not afford them due to the reduced salary. Other factors are that one may not live long enough to see the return on investment, whereas seeing a return is every investor’s dream. Various reasons lead to people buying retirement homes. An individual at times needs to downsize or even get a second home. A senior individual must be aware of the pros and cons involved to prevent surprises in later stages.
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Homeownership for seniors: buying a home at 65, pros and cons By Norman Green HOME OWNERSHIP BUILDS EQUITY In case seniors purchase a home and hopefully the home value increases then there is more equity created. Equity is very essential in case of an emergency since one taps it or at times lives on payment from a reverse mortgage. When purchasing a home, people need investigate whether the home is likely to have more value in few years to come. HOME OWNERS HAVE A HIGHER NET WORTH The average home owner has a net worth of more than $250,000 while that of a renter is at $6200. The data is based on the 2019 consumer finance. Net worth is not normally classified by the level of education or gender of an individual but rather the amount of assets one has. More AUGUST 2022 | 107
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or people who intend to get a house after retirement, they are normally required to consult a realtor to help them make the right choice of home they would like to have with all possible features that the individual may require and probable proximity to social amenities such as health centers. It is also of significant essence to find a financial advisor to help with making an appropriate budget for your new house to be. Senior home buyers also determine the type of home they would want to buy. That is whether it is a single family home or condo to narrow down the search. Home buying process among the seniors is accompanied by a list of advantages and disadvantages. Some of the merits involved are;
SECURITY Owning a home further has merits in that an individual can improve a home, apply paint of choice and even renovate. One further is able to customize a home with various upgrades. Advantages are different depending on the type of home a buyer wants to get. For instance buying has benefits such as no exterior paint required and that landscaping and maintenance of outdoors is well taken care of by the home ownership associations. Town homes are smaller and thus less work is needed to maintain them which retirees manage easily. Retirees who normally travel a lot are encouraged to get condos since such homes are more secure. Buying a home by retirees in as much as it has merits, there are also various demerits that discourage senior citizens from home buying. Some of the cons related to home buying among senior citizens include; When buying a home at old age it is unpredictable to determine whether one will live long enough to see the return on investment. Individuals risk putting up their assets in home ownership due to the unpredictable housing market. The fact that most senior individuals receive less income than in their productive years also affect modes payment and in times of crisis, an person may sell off the house due to accumulated debts. PROPERTY TAXES Home ownership among older individuals may be quite expensive as compared to buying a home at a younger age. Home purchase process involves paying of property taxes and several insurance which become too much for older 108 | AUGUST 2022
individuals with relatively low income. It also involves several repairs and remodeling which require huge amounts of capital in making the house comfortable for the new home owner. Although there are some states that reduces property taxes for older home buyers, it is worthwhile to note that it does not occur in all states. THERE ARE LIMITED MOVEMENTS Unlike renting where by one can easily pack belongings and leave, moving from a home one owns takes some time since it involves selling the house and relocating. The selling process may take longer since for a home to be put on the seller market since the home needs to be upgraded first before calling in potential buyers and depending on various other aspects the home may take long for a buyer to show interest in the home. Home ownership among older people thus leads to limited mobility. Another factor is that in old age, one’s time to see the value of a home appreciate is unpredictable or other wisely not enough. There are also several disadvantages involved in settling for a condominium. Among them are; ADDITIONAL FEES Owning a town home requires one to pay extra fees which cater for the maintenances of the condominiums. Home ownership associations that govern the condominium add the monthly costs of being part of them. Town home however are not an option for every senior citizen. Mostly those that buy the home are buyer that travel a lot and need to ensure that their home is safe even in absentia.
Senior citizens interested in home buying should carry out careful research and get what is best for them. When the right processes are followed, home buying becomes a lot easier. It is also considerable if one varies between renting and buying which is the better option just to ensure that an individual is on the right track.
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to that owning a home is generally cheaper than renting. Especially in situation where by property taxes are low or the home buyer is a cash payer. Some states further have favorable conditions in that they give tax reductions to senior citizens.
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Are sellers allowed to relist a house when earnest money hasn’t been returned? By Steven Rivkin
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here are instances where an individual sees a home, is attracted to the home, makes an offer, and luckily the seller accepts the offer. Then few days toward closing arises, a dispute between the seller and the buyer, and closing does not occur. Generally, in such scenarios, the seller is supposed to give back earnest money to the buyer and proceed to relist the home. Earnest money is a percentage of the actual home price that a buyer deposits into the seller’s escrow account to indicate that they are serious about purchasing the home. Otherwise, sellers do not take buyers seriously. Earnest money ranges from 1% to 3%, depending on the real estate market—disputes between the buyer and seller regarding whether a buyer is supposed to get his money back. If a buyer fails to meet the deadline, then the money is not refunded, but if it is not the buyer’s fault, then it is legal for the buyer to be refunded the earnest money. Whether sellers can relist a home depends on why a contract was not closed. However, it is always advisable to consult an attorney general. For instance, if it was the buyer does not meet the deadline terms and conditions and confirms in writing AUGUST 2022 | 111
that he will not buy a particular property. The seller proceeds to put the home on the market after the cancellation of the offer. Other instances where a buyer backs out of purchasing a home is if his home is yet to be bought and the buyer does not have enough capital to cater for the closing costs. In the current market, few people afford to own two residential homes even if the other home is completely paid off. For most homes, a 20% down payment is required before the closing. Buyers are thus encouraged to have a plan B if the first plan fails. There are also instances where a buyer has emerging cost that must be met with immediate effects, such as an accident or natural disaster. During such instances, the buyer is advised to pull out from purchasing within the time frame and cancel an offer in writing. If the deadline is already reached, then there is a chance that the buyer will not get back the earnest money. The offer will be canceled, and the seller will proceed to relist the property. Sellers should be conscientious 112 | AUGUST 2022
when relisting a property if the buyer still insists on buying the home. Buyers are sometimes denied loans, but if they communicate with the seller and inform them they have found another mortgage lender, the seller shouldn’t relist the property. The seller might find himself in trouble after an offer on a house whereby previous offers were not canceled. Both buyers might sue the seller, and clearing off the mess is expensive for the seller. There are also instances where a seller does not meet the deadline of closing. Suppose the contract indicated that he should make repairs and has not met them, then the buyer has a right to get earnest money back. In that case, the seller can be sued for breach of contract, relisting the home, not paying back earnest money, and consequently, face adverse judgment. Sellers should note that it is the right of a buyer to get their money back if they notice some problems during an inspection that lead them to back out of the purchase process. So long as the buyer informs the seller about his intention timely, he
receives the money back, but if a buyer reports to the seller after the deadline is met, the seller keeps the earnest money and has a right to do so. After giving back the money, a seller proceeds to put the property back on the market. However, it is worth noting that a seller can only relist a property after both parties cancel an offer. Otherwise, the seller faces harsh judgment if the matter is taken to court. If the buyer is yet to receive earnest money after one month, and it was his right, then the buyer has the right to take action. First, the buyer is advised to report the matter to the company or broker responsible for marketing the home to stop the process and solve the disputes. Other methods buyers use to resolve disputes over earnest money is by talking to real estate agents who helped them or involving an attorney at a cost. So that they file a cancelation offer after that, consult the broker holding the escrow account with the money for it to be sent back to the buyer. The process work even in the absence of the seller.
Let’s talk about Real Estate closing costs:
Find ALL the fees you’ll pay By James Joseph
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ees are incurred over and above real estate costs during a real estate transaction. The prices are customarily paid to third-party accounts like mortgage lenders, and the buyer pays expenses associated with new homeowners. Such charges include property taxes, tax service fees, and others. Sellers also pay closing costs such as tax transfer and attorney fees, among others. The expenses vary with the location of the home to be bought and the mortgage lender. Several examples of closing costs by the buyer in detail are such as; HOME INSPECTION FEE Before closing on a new home, it is essential to associate a home inspector who assesses any problems the house might have. If there are any, the buyer can negotiate with the home seller. Such costs range from $280 to $510, depending on the size of the home. The fees are optional, but typically buyers are encouraged not to omit the process. The inspector checks for the home’s condition, and if it is in a bad state, it might lead buyers to withdraw an offer to look for a better home. PROCESSING FEE When an individual applies for a mortgage, there usually are fees charged to the borrower to cater for processing, improving of credit scores, and running credit checks. Processing or application fees also cost around a few hundred dollars and depend on the mortgage lender. ORIGINATION FEE An origination cost is 1% of the total cost and
caters to all mortgage paperwork. Such fees are necessary since they facilitate the buyer to get the loan at the right time. It covers the cost the lender incurs while processing the paper works. PREPAID INTEREST ON A MORTGAGE Buyers usually are encouraged to pay these fees towards the end of the month. Prepaid interests are part of the monthly mortgage interest and cover the duration between the closing date and the first scheduled mortgage payment. APPRAISAL FEE Lenders involve third parties well conversant with home valuation. Valuing is necessary since they prevent one from buying an overcharged home. To the lender, home valuation determines the amount of money a borrower will receive for a given home. They also check whether the home is ready to move in, among other aspects. The appraisal fee is typically between $300 and $600, but in some instances, the price may be higher. ATTORNEY FEES Depending on the state one is, attorney fees are essential. When closing, the attorney prepares and reviews contracts and agreements. The amount paid depends on the buyer and local rates, but real estate attorneys are unimportant in some states. DISCOUNT POINTS Sometimes, the lenders allow one to pay money upfront to reduce mortgage interests. Paying upfront involves buying discount points. A single AUGUST 2022 | 115
discount point is typically 1% of the loan amount. Fees for discount points are typically indicated on the loan estimates under origination charges. HOMEOWNER INSURANCE The type of insurance caters to any damages on the property. At times it is necessary to have insurance that caters to activities in one’s home. That is, if a person is injured within the individual’s premise. Different lenders require a borrower to have a certain number of insurances in case of any problems with the home.
PRIVATE MORTGAGE INSURANCE Private mortgage insurance is payable by borrowers who give a less than 20% down payment deposit. PMI protects the lender if a buyer defaults from paying a given mortgage. In most instances, private mortgage insurance costs around $30 to $70 for every $100,000 borrowed. On the closing date, a borrower pays for private mortgage insurance for one month.
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PROPERTY TAXES The taxes are paid to the local authorities to cover public services. The amount of tax to be paid depends on the location’s home and its
value. People who buy houses from their friends or family members ask the amount paid in the previous years so that they can find the range. Lenders typically require one to first pay property taxes for at least one year before closing. Generally, property taxes cost slightly higher than 1% of the home value every year.
CLOSING COST FOR SELLERS TRANSFER TAX FEE Such fees are payable for home ownership and title transfer to the new homeowner. The amount paid depends on the state, but there are states where title transfer is not charged. ATTORNEY FEES In case the home transfer of home ownership is in the presence of an attorney, both the buyer and sellers pay the attorney.
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REAL ESTATE AGENT COMMISSION FEE Sellers who use realtors pay roughly 6% of the total home sale value. The cost is divided between the listing agent and the buyer’s agent. However, there are instances where the seller negotiates to only pay for the listing agent; in other cases, a buyer decides to take the cost to stand out competitive. Before home buying or selling, it is essential first to research all the processes involved and estimate the total amount required before the purchase since it makes the process easier.
Menifee market overview: Where is the market moving?
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By Monica Hill
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hinking about a home in California? Menifee might be the place for you. Menifee has 16 elementary schools, 13 middle schools, and nine high schools. It is a part of the Riverside County R-1 School District. According to GreatSchools, all institutions received a 6 out of 10 grade. Houses in Menifee are better priced and have a lot of places at different price points—making it easier to find your dream home without making too many concessions. But before then, here’s a quick round-up of what the Menifee market is like now: COST OF HOMES IN MENIFEE According to Movoto, the median list price of homes in Menifee, California, in June 2022 was $598,000, up from $540,000 in 2021. The average sale price per square foot in June was $265/Sqft.
Menifee, California, single-family homes’ median list price in June 2022 was $599,000, up from $540,900 in 2021; the median sale price per square foot was $266. In Menifee, California, the typical list price for condos and townhomes was $327,999 in June 2022, up from $235,000 in 2021, while the median sale price per square foot was $236. STILL A SELLER’S MARKET The Menifee housing market is still sizzling. This is despite inflation and interest rates going up in the country. According to Redfin, the Menifee market scores a strong 76 out of 100 in June 2022. With homes having multiple offers, some buyers waive contingencies to stand a better chance of accepting their offers. Houses in Menifee are selling 2% over the list price, lasting only 18 days on the market. On the other hand, really hot homes are selling 4% over AUGUST 2022 | 119
the list price and spending only seven days on the market. As the Menifee housing market is still competitive, 68% of homes sold well above the list price. However, the sale-to-list price by -2.8% year-over-year, settling at 101.5%. INVENTORY Compared to May and June last year, many more houses are coming onto the market. This is much to homebuyers’ relief as they now have more negotiating power than last year. Four hundred eighty-five homes came onto the market in May 2022, up from 168 in May 2021. In June, 244 homes went onto the market, a small leap from last year’s 212 homes. HOME SALES A total of 244 residences were added to the market for sale in Menifee, California, during June, bringing the monthly total to 404 homes for sale, an increase of 18% from May. In Menifee, California, 170 residences were sold in full for the month, down 15% from the previous month, according to data from Historical Housing Market Report.
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HOME SALES PER SQUARE FOOTAGE With a total of 167 sold, detached homes led
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the way in terms of sales (down 14% from May), while concluded sales of attached homes totaled 3 (down 67% from May). For June, there were 47 detached homes under 1500 square feet sold, 50 homes between 1500 and 2000 square feet sold, and 26 homes between 2000 and 2500 square feet sold. In contrast to the 28 homes sold in the 2500– 3000 square foot area, the 14 sales in the 3000– 3500 square foot range, and the single home sold in the 3500–4000 square foot category. There was one sale of houses between 4000 and 4500 square feet. The following standalone home price ranges had no sales: 4500 to 5000, over 5500, as the Historical Housing Market reported. INFLATION NOT WITHSTANDING Despite the federal reserve raising mortgage rates for the third time in the first half of the year, May 2022 and June 2022 recorded the highest sales in 12 years. With an average of 142 sales per month in 12 years, the months of June 2021, March 2022, and May 2022 saw the highest home sales numbers, with 189, 210, and 195, respectively.
COMMUNITY NEWS
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Should racism be declared a public health crisis? acial health disparities in the US have been linked to racism. In particular, state and local governments have created legislation, resolutions, and declarations that have discriminated against people of color.
There is ample evidence of racial disparities in well-being and health. For instance, there are persistent racial disparities in chronic illness (such as diabetes and hypertension), COVID-19 instances, hospitalizations and deaths (1-6), maternal and infant health (such as maternal mortality and preterm delivery), and chronic disease. These racial injustices are a product of subjugation throughout history and the present. WHY ARE THESE DECLARATIONS IMPORTANT? Declaring racism to be a public health crisis can advance effective anti-racist legislation and repair long-standing rifts between decision-makers, community organizers, healers, and public health professionals, according to Frontier. The active involvement of organizations and groups led by Black and Indigenous People of Color (BIPOC) is essential to holding governmental institutions accountable for making statements. Last year, CDC Director Dr. Rochelle Walensky declared racism “a serious public health threat” highlighting new CDC efforts “to accelerate its work to address racism as a fundamental driver of racial and ethnic health inequities in the United States.” 122 | AUGUST 2022
These partnerships make sure that declarations fight for change from the perspective of those most impacted and authentically connect with the demands of communities and their legacies by sharing power, focusing their voices, and working together. WHAT IMPACT WILL THESE DECLARATIONS MAKE? To eliminate oppressive institutions and behaviors that not only impede health and well-being but also contribute to racial health disparities, racism must be acknowledged and recognized as a public health concern. Other critical health systems, such as education, food systems, housing, and employment, may be impacted by racism’s identification as a public health concern. By providing politicians unwarranted publicity and impeding the achievement
of health equity, the announcements kill or inhibit popular enthusiasm for antiracism structural reform. The tool of declaring racism a public health emergency must be used with caution and precision. IN CALIFORNIA Last year, CDC Director Dr. Rochelle Walensky declared racism “a serious public health threat” highlighting new CDC efforts “to accelerate its work to address racism as a fundamental driver of racial and ethnic health inequities in the United States.” In California, San Bernardino, San Diego, Santa Barbara, Santa Clara, Santa Cruz, Mono, and Ventura counties have made such a declaration. And recently Oakland made this bold move. To check what steps your government has taken in declaring racism as a health crisis go here.
LEGAL NEWS
Let’s talk about shared equity:
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How California Legislators want to help Californians buy houses with the down payment Raising the down payment needed to get a mortgage can prove difficult for would-be homeowners. Though there are numerous state-run down payment assistant programs, they are not accessible to all. And that is why California legislators want to help you raise your down payment.
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he state’s legislators are proposing the creation of a billion-dollar fund that will help first-time homebuyers raise the down payment in its entirety or an amount close to that. It’ll achieve this through shared equity.
equity makes it so that the lenders are the ones that enjoy any tax advantages and any mortgage rate deductions. Programs such as these prove especially helpful in high-cost real estate markets.
WHAT IS SHARED EQUITY Investopedia defines a shared equity mortgage as a contract that divides property ownership between a lender and borrower. The borrower must use the property used by the borrower. Each part gets a portion of the equity when the property is sold based on their equity contribution. Any losses incurred from the property are likewise split equally between the parties.
HOW WILL THIS SHARED EQUITY WORK? The million-dollar fund will raise money by issuing a billion-dollar revenue bond for ten years. The budget for this initiative includes $50 million and $150 million for this year and the next to cover administrative costs and revenue bond interest payments.
Offered by different lenders in the U.S., shared 124 | AUGUST 2022
Under this program, the Californian government aims to help at least 7,700 borrowers annually. The program, if approved, would start issuing interest-free second mortgage loans for up to
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30% of the cost of a home. However, lawmakers anticipate most loans will only cover 17% of the price, requiring borrowers to contribute 3% of their funds or combine the loan with other first-time buyer programs. When the house is sold or a larger mortgage is obtained through a cash-out refinance, the interest-free loans would be repaid into a state fund. For instance, according to Cal Matters, if the fund contributed 20% of the home’s purchase price, it would receive a 20% share of the home’s appreciation in addition to its initial investment. The fund would be able to issue fresh loans for qualified participants thanks to the program’s reinvestment of those proceeds, even if prices had dramatically increased. WHY IS THIS FUND IMPORTANT? California has the second lowest homeownership rate in the country, with only 44% of Californians in homeownership. In a high-cost housing market, it is especially difficult for first-time homebuyers to raise their down payment. The program will help bridge the gap, helping more and
more people achieve their American dream of homeownership. “The California Dream for All program will give more people the chance to break free from the cycle of renting, become the first in their families to own a home and make it possible for more people to set their children and grandchildren on a path to success. This can change people’s lives,” Senate President Pro Tem Toni Atkins (D-San Diego) said in a statement. And since the program will mainly target low-income areas, people of color will greatly benefit. It will be a step closer to financially empowering people who have been for so many years been oppressed by housing policies. It is the hope of those that draft this program, that it will help people of color and low-income earners begin to build generational wealth. “We cannot wait until more housing is built for these communities to begin to build the generational wealth that they were locked out of and deeply deserve,” said Micah Weinberg, chief executive of the nonprofit group California Forward, which oversaw the drafting of the proposal. AUGUST 2022 | 125
SPECIAL NEWS
California first time home buyer:
t can be exceedingly difficult for first-time homebuyers to make a down payment, especially in high-cost real estate markets such as California. The low homeownership rates in California are a result of both this and the scarcity of cheap housing. At 44%, it ranks second lowest nationally.
CONVENTIONAL 97 You may be eligible for a loan from Freddie Mac or Fannie Mae with a 3 percent down payment and a credit score of at least 620. After a few years, you can typically stop paying private mortgage insurance.
Home assistance programs and grants make homeownership more accessible for many low- to moderate-income families. In particular, for people of color who have historically been shut out of the housing market, one method for closing the wealth gap between races.
A VA LOAN Only veterans and active military personnel are eligible for the VA mortgage’s no-down-payment option. Depending on the lender, a minimum credit score of 620 is typical. After closing, there is
WHAT LOANS ARE AVAILABLE FOR FIRSTTIME HOMEBUYERS With one of these mortgage programs, Californian homebuyers can frequently purchase a new home with just 3% or even no down payment:
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FHA LOAN With a 3.5 percent down payment and a minimum credit score of 580, you may be eligible for an FHA loan, which the Federal Housing Administration insures. But unless you switch to a different sort of mortgage, move, or pay off your loan, you’re still responsible for paying mortgage insurance.
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2022 Programs and Grants
no more mortgage insurance required. Apply if you qualify for one of these mortgages because they’re perhaps the greatest. USDA LOANS Loans from the USDA are available to buyers in certain rural areas who have low to moderate incomes. There is no deposit necessary. Lender criteria differ, but often 640 is required. Low prices for mortgage insurance PROGRAMS FOR CALHFA MORTGAGES: The California Housing Finance Agency offers both traditional and government-backed mortgages. Provides first mortgages with 30-year fixed rates as well as house buyer support.
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WHAT PROGRAMS ARE AVAILABLE FOR FIRSTTIME HOMEBUYERS •
California Housing Finance Agency (CalHFA). For $99, CalHFA offers an eight-hour online course on homebuyer education. Participation is required if you want to be eligible for financial assistance from the organization. Additionally, it makes private counseling sessions for property purchasers possible, either in person or virtually. However, costs differ based on the service you select. If you need financial assistance, there are income and purchase price restrictions set by the agency. Additionally, depending on a few other circumstances, you’ll need a strong credit score of 660-680 or higher. Use the CalHFA website’s wizard to
WHAT GRANTS ARE AVAILABLE FOR FIRST-TIME HOMEBUYERS CalHFA MyHome Assistance Homeowners must be first-time homebuyers, buying a single-family house, reside in it as their primary residence, attend homebuyer education counseling, and meet income requirements to be eligible for the MyHome down payment assistance program. Homebuyers who met the criteria might obtain a loan of up to $11,000 for their down payment and closing costs. Forgivable Equity Builder Loan It is a more recent California home buyer
check your eligibility. •
California Department of Veterans Affairs (CalVet) services Veteran homebuyers in the Golden State can benefit from the agency’s specific VA financing options. Veterans, active military personnel, and members of closely related organizations are the sole participants in the CalVet program.
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Low Income Purchase Assistance (LIPA) and Mortgage Credit Certificate (MCC) First-time buyers in Los Angeles have access to both of these. Low-income borrowers can receive delayed payment loans from the former of up to $90,000. These loans are due and payable when you relocate or remortgage and have no monthly costs.
program that tries to make it easier for firsttime homebuyers to purchase real estate. With the help of this program, purchasers can obtain a loan for up to 10% of the purchase price, which is forgiven after five years if the buyer continues to occupy the home as their primary residence. Any first-time home buyer in the state of California should be able to receive free help from any of the organizations we’ve listed above. The US Department of Housing and Urban Development (HUD) offers a few lists for local, regional, and state resources in addition to our selection. AUGUST 2022 | 127
Home Ownership by Eric Lawrence Frazier MBA Home ownership brings stability to individuals and families who have never had a dwelling place that they could call their own. There is something special about owning real estate that is unlike anything else on earth you can own. Real Estate you own is not like cars that decay over time and you have to replace them. Real Estate you own is not like clothes that go out of style and you have to buy new ones. Real Estate you own is not like expensive vacations or experiences that only last a moment in time. Real Estate you own is not like an apartment where the landlord may increase the rent until it’s no longer affordable. Real Estate you own is not like staying at your parents house where you know can’t stay forever.
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Home ownership is the beginning of wealth that increases over time and becomes your estate & legacy Home ownership is the pride of a mother nurturer and the kitchen her domain Home ownership is the pride of a father provider and protector of his territory and family. Home ownership is the foundation of permanence and the place where life happens, birthdays celebrated, deaths mourned. Home ownership is the place you build memories that can never be taken from you. Memories etched in walls and concrete, experienced in rooms and floors, Memories living in trees and shrubs planted by your hand. Howe ownership is the manifestation of you - your style, your colors, your smell, your stuff, your junk, your memories, your yard and your spaces, your life.
It’s the height markers on your first child’s bedroom wall. It’s the hearts drawn in the concrete slabs when you pour your patio floor It’s the birthday parties, and anniversaries in the living room and kitchen. It’s the back yard barbecue with friends, neighbors and family contentions it’s the high school and college graduation, and wedding receptions Its’ the family nights and block parties and the fellowship of family connections
Home ownership It’s more than real estate. Land, brick and mortar, wood frame construction and chicken wire. It’s more than money saved, gifts recieved and grants obtained It’s more than the debt you incur to buy it. It’s more than the payments you make to own it. It’s more than the appreciation that comes with keeping it over time. It’s memories, it’s family, and it’s life that can happen in one place Until you say it’s time to move.