Fall Market Update: Housing Resources for Those in Need

It’s officially fall and there’s a quite a lot of uncertainty going on in the world today. With sky high inflation, tech companies announcing layoffs, the crypto crash, a war in Ukraine and Hurricane Ian wreaking havoc, many people in the Bay Area are now feeling the shift and are forced to adjust their priorities. In what seems like a blink of an eye, the heydays of 2021 have come and gone and reality of what the economy is really doing has now reared its head. The stock market is down 30% YTD (for most people) and interest rates have continued to rise, creating a double whammy for would-be homebuyers now priced out of the housing market. Down payments that were tied up in stocks /crypto have deflated and doubling interest rates have decreased loan affordability.

Notice of Defaults on mortgages are slowly starting to rise in San Mateo, Contra Costa and Alameda counties as more and more homeowners are behind on their payments. Unfortunately, those living paycheck to paycheck are the ones feeling it the most now that cost of living has risen so much due to inflation.

(If you are in need of some housing assistance, below is a list of resources that may be able to help. Many non-profits are providing temporary assistance to families in need. If you are in need of a more permanent solution, contact us and we can brainstorm options).

In regards to the real estate market, real estate inventory has steadily risen since interest rates have gone up. The good news is that homes are still selling, there are now choices for those who can afford it, and the overbidding craze is over. As a matter of fact, more homes are selling with transparent pricing than ever before, and properties sitting on the market for over 30-45 days are seeing price reductions as sellers get more in tune with a balanced market.

Another change in the real estate market is that some sellers (and Home builders) are offering rate buy-downs rather than reduce their prices in order to counteract the Fed rate hikes. It’s much less expensive for a seller to buy-down a buyer’s rate than to reduce the sales price enough to make it affordable.

Small banks are also getting creative to try and keep business flowing. For example, I recently saw Bank of SF offer portfolio loans at jaw dropping rates for A+ buyers. They had a 3.8% 10-year arm product with one loan origination point, which, in comparison to Chase Bank’s offering of 6.25% on a 30 year loan looks like a no-brainer. With that being said, adjustable rate mortgages are also on the rise. Buyers beware. Let's not get back into the same predicament as the housing crash of 2008. My advice is to stay away from very short term ARM products (10 years is ok) if you are buying a home to live in. With the uncertainty in the market, you want to be able to secure your position for long enough to weather a downturn. In my opinion, there’s definitely going to be a downturn. As a matter of fact, some cities like Daly City and Pacifica have seen an average $200-$300k price drop from a few months ago. However, I’m not sure how long it will last. I feel like what we are going through is more of a market correction than a crash. My hope is that although a little depressed, things remain stable so those sitting on the sidelines can now have their chance and sellers can still capitalize on the incredible equity gains these past 2 years.

Feel free to reach out if you have any questions or concerns about a specific market or scenario. As always, we are here to help!

-Monica Sagullo
Broker, President

Financial Help for Homeowners and Renters

The California Mortgage Relief Program
The California Mortgage Relief Program uses federal Homeowner Assistance Funds to help homeowners get caught up on past-due housing payments and property taxes. The program is absolutely free and the funds do not need to be repaid.

Whether they have a mortgage, a reverse mortgage, or are mortgage-free, the program can help homeowners with past-due housing payments.

Alameda Season of Sharing
The Chronicle SOS Fund provides annual funding to the Alameda County Social Services Agency to assist eligible households in Alameda County who demonstrate a critical need arising from emergency circumstances beyond their control. The Social Services Agency collaborates with numerous community partner agencies to screen and process applications for assistance.

The primary categories of assistance considered under the Alameda County Season of Sharing Program are:

Housing Assistance (HA)

Security deposit for permanent housing
Delinquent rent or mortgage

Critical Family Needs (CFN)

Utilities (electricity, gas, or water) under threat of shut-off or already shut off at current residence
Limited furniture items under specific circumstances including fire/catastrophe, extended homelessness, and domestic violence
Limited medical equipment and mobility aids (deemed medically necessary and not otherwise covered by insurance)

The Society of St. Vincent DePaul: Homelessness Prevention
To prevent families from having to experience homelessness, plus the emotional trauma and “life recovery” challenges that go with it, we provide one-time assistance for rent, mortgage and utility bills.