Snapshot of the market in Solano County and interest rates

We are seeing a very unusual dynamic in Solano County’s Real Estate Market here over the last few years. The biggest question I get is, “What is going to happen to the housing market, is it going to crash like 2008 and what will happen to interest rates?” to a payment buyers can afford, it is just a matter of time. As long as the inventory stays tight, and interest rates stay high, the lower end SFR’s will slowly move down in price, and the upper end prices, will fall a bit faster. mine when a home was built or most recently renovated simply by looking at the front door. Steel and glass doors are popular in modern homes, so homeowners with front doors with ornate designs and oval glass inserts can likely benefit from an upgrade to their entryway. A modern front door can make a statement and real estate experts note how popular updated front doors are among buyers.

Well, let me tell you my opinion. I think prices will continue to ease down, not plummet, as long as interest rates go higher and or stay higher. Our inventory remains tight. Why? Because of the many people we refinanced into 2% and 3% loans are reluctant to sell and move into substantially higher payments, caused by higher property tax payments and higher interest rates.

· Unsightly landscaping

It’s not only the physical components of the home that may suggest an update is necessary. Homeowners without a green thumb may have exterior land- scaping that has seen better days. If a spring or summer day spent tending to your landscaping is not your ideal weekend pastime, then consider replacing unsightly landscaping with low-maintenance plants or hardscaping. These alternatives to more needy plants can create curb appeal without requiring any extra work for homeowners.

· Cracked driveways/walkways

If the driveway looks like a busy road at the end of snow plowing season, chances are that’s adversely affecting the impression people have of your home. In addition, cracked walkways indicate a need for renovations, as these areas are front and center when welcoming guests. Updating a home’s exterior can restore curb appeal and help homeowners feel better about their properties.

It simply puts them into an uncomfortable monthly payment bracket, so they are staying in their current homes and renovating or freshening their homes up. The builders are not building as fast as they can because they do not know what lies around the corner, Higher Rates and Economic instability are two big factors that drive their decisions, both of which are difficult to predict right now.

We are seeing big time competition in the lower end of the Single Family Housing, SFR, market because of first-time buyers and investors, who are getting all time high rents, are both bidding on them. Once you push up over 750K price, it becomes very difficult to sell unless you can catch a buyer who has all cash or a big cash down payment, so that market will come down more till we get buyers who can afford the payments bidding on them, the market will correct its self

Interest rates are another story, as I type this, VA and FHA are in the lower to mid-6s and Conventional is in the upper 6 to 7% range depending on down payment and FICO Scores. I expect the FED to take another .25% increase in the FED Funds rate in June, which is rate that they charge banks to borrow from them. This will push the prime rate up .25% and will push up credit card interest rates, which are currently at all time highs and savings balances are close to all time lows.

If our congressmen can keep the dept ceiling at a low enough number and if they take the .25% increase next month, it is possible the bond traders could feel comfortable enough that inflation could start to go down, thus improving mortgage interest rates. If not, we would need to wait till the economy starts to slide downwards, just a matter of when and how much, till we see lower rates in the future.

One other last comment: There are some good first-time buyer programs out there, one recent one is an FHA loan, and they supply a 3.5% second loan, that you MUST make payments on, which covers your down payment, so on a $425K home if you can get $10K from the seller for closing costs, you could come in with less than $5,000 to close the deal

See Kalis, Page 19