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Moving Checklist: RealtorKJ

The whirlwind of moving can quickly take on the effects of a hurricane when you add in kids, pets, or special circumstances. As is the case with most things in life, planning is key!

Whether you have six months, or six days to get it all done, just take a deep breath, prepare and let’s get planning!

Once you have decided to move, and established a loose timeline, its time to prep, prioritize and pack. Knowing what you touch and use daily as opposed to items in closets, storage and in the very back of cupboards makes it easier to start packing early on. If you are able to spread the work out, you, your family, and your pets will all feel at ease.

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Luxury Insider: 2016… READY, SET, GO!

Luxury Insider: 2016… READY, SET, GO!

Luxury Insider: 2016… READY, SET, GO!

Another year. What are we in for this time? Want to make a bet? I will: it will be a good year. Why? Because of 2 good reasons, one based on facts (I’ll get there) and the other one based on needs… My needs. After all, I have a role to play to insure that I fully take advantage of the market conditions, whatever they may be. You do the same. I don’t want to preach psychology 101 but, let’s face it, we are in charge, we are accountable to ourselves (not to mention others) to try hard to win, sometimes against the odds. The market is always good for someone. This one will be great for most. It’s going to be a fun ride.

OK, back to cold business thinking now. 2016 will be good because, first & foremost, there is no good factual reason, today, to think otherwise. We are coming out of a year when unit sales across the 4 regions increased from the previous year, up to nearly 8% in the Northeast. And this happened at a time when the listing inventory was at a level which may very well have been an all-time low.

As far as price appreciation, same “positive” picture (for the sellers that is). When the final 2015 numbers are released, they will show that housing prices rose over 3% nationally. The West, as a whole, led the pack with about 5%. Pretty much what we thought would happen when we posted our prognostic a year ago.

We are in a good place, today, as we start 2016. The economy is strong. Finally. The agonizingly long/slow recovery from the 2007-2009 financial crisis produced stability & growth. We are looking at 2.5-2.8%% growth this year and an unemployment rate down in the neighborhood of 4.7%. Combine that with a strong consumer confidence (steady improvement since 2009)…. And the fact that housing formation (creating needs in the real estate sector) surged with 1.7 million new households in 2015 …. And the fact that vacancy rates in the commercial/business arena are as low as I have seen them since the late 90s (15.6% for offices, 13.2% for retail & 7.1% according to NAR)…. And the fact that there is a backlog of a few hundred IPOs in the pipeline after a disappointing 2015 (tech/internet IPOs were down 53% in number y/y and raised 77% less than in 2014)….. All that bodes well indeed for the US economic outlook.

It is expected that home sales, this year, will be in the neighborhood of 5.5M units. If this comes true, it will be roughly 3.5% better than last year and 30% more than in 2010. Prices will continue their slow and moderate rise, between 3% and 4.5% nationally. Like it. No dark clouds on the 2016 horizon, which does not mean that the sky will be solid-blue. It never is more than a day at a time. So, let’s take a look at the very few & small clouds that we need to keep an eye on this year.

  • Interest rates: The Fed did it; it raised rates for the first time in nearly 10 years. It is not the beginning of the end, just merely the end of the doubt. Frankly it will make no difference to speak of on the real estate activity. The rise should not exceed 1% by year-end. Business as usual.
  • Home ownership: it has dropped and there is a question mark as to whether the decline will continue. Aside from the over 65, all other age groups are down. The Millennials, as we wrote here a few weeks back, are not “doing their part”. They now account for 30% of home sales while they historically were good for 36%. We are counting on them in 2016.
  • Length of home ownership: If we use the CAR stats for California, where the turnover is known to be fast, we notice that from 4 years in 1989, the number of years people owned a home before selling jumped to 8 in 2013 and now stands at 10.
  • Investors: They were slow to buy over the last 2 years. Distressed sales are all but gone and prices have skyrocketed to the point where the cost and the risk are too high. With the economy growing, the picture is likely to improve all year.
  • Cash buyers: their numbers are shrinking. With the cost of mortgage money going up a notch, the downtrend may be reversed in 2016.
  • International buyers: CAR reports that their 2015 share (4% of all sales) was the lowest in 8 years. Don’t worry. Even a strong dollar and a weak global outlook will not stop or even slow wealthy foreign investors from rushing to buy US real estate. Quite the opposite. Will be a good year, thanks particularly to the insatiable appetite of Chines and Indian Nationals for our land & property.
  • Affordability: Not expecting great news for first-time buyers. One suggestion though. If you are one of them, buy now, even if it hurts. It will not get any easier anytime soon.
  • It’s an election year… Whatever that means.

To a good year in 2016!

Thinking about moving in 2016?

One of the most important decisions you will make when moving is deciding on your real estate agent. Kristen Jurevich is here for the most important person of all…YOU. Kristen is committed to helping home buyers and sellers make the right investment decision. She shows clients the hidden gems of San Benito, Santa Clara, San Mateo, Monterey, and Santa Cruz counties having been a lifetime resident of the Bay Area.

Ask your local real estate agent Kristen Jurevich for homes that fit your lifestyle or ask about a free home value analysis.


Luxury Insider: Where Are Those Millennials Everyone Is Talking About?

Seems like we’ve been talking about the expected Millennials’ buying tsunami for so many years now that I am both surprised and disappointed that a tsunami… it is not. In fact we can hardly see a wave. Still waiting though. It has got to happen sometime. We cannot disregard the buying potential of 79 million individuals!

To better understand the topic, let’s try to define “Millennials”. According to the experts, the appellation covers those of you (and others) who are in between 18 and 35 years of age. Those who are just now aspiring to a successful professional life and many who are already enjoying it. At the end of this year, they will represent the largest generation in the workforce, slightly ahead of Boomers (76M).

The Millennials, as we have been told, are free-spirits, fast moving, ambitious, mobile, fun lovers, job hoppers, independent, irreverent, relationships activists, social media fanatics, idealists, hedonists… Anything else comes to mind? Frankly, these traits do not look much different from those that characterized this age group through the last decades, except for one thing: now the Millennials have an iPhone, use Facebook, and live in a world that is evolving around the clock.

OK, there is another thing, one that we alluded to in the first paragraph: the Millennials are not exactly waiting in line to buy real estate these days. At least not the way we expected them to, and not the way their predecessors (in the same age group) did in years past. What’s going on?

Last month, as a coincidence, a bunch of docs about Millennials landed on my desk or my computer screen. Well written studies or articles published by serious entities such as NAR (National Association of Realtors), the WAV Group and the San Francisco Magazine. I read them all and learned quite a bit more about why Millennials are not buying homes right and left. Take a look.

  • They don’t have enough money. You cannot argue with that one. Times, they are tough in the Millennials’ world. Many of them, victims of the Great Recession or the slow recovery, are still looking for a job, or looking for better pay. Many of them are still paying for student loans and they cannot come up with a down payment. Many of them have a lousy DTI (debt to income) and consequently too low a credit score. When they qualify for a loan, they get hit with a higher interest rate, which pushes the mortgage payment to painful levels. At a time when property values, from one coast to the other, have skyrocketed, home ownership is a financial challenge many cannot master.
  • They are not necessarily placing home ownership on top of their list of needs & wants. Remember, Millennials are not conventional. Many don’t share the American Dream. Not that they just want to have fun, but they may attach more importance to the moment than to the future. The future will come soon enough. Travelling and partying with friends may have a priority over fighting to get a mortgage and then fighting to pay it.
  • They are not ready to think about “unnecessary” obligations, constraints and responsibilities like, you know, a spouse, a kid, a dog… Life is good, why complicate it. Life in the burbs, as it has been illustrated in Hollywood movies, is not fast enough, exciting enough for lots of Millennials. They want the big city pulse, the busy streets, noise, traffic, eateries, clubs and all other venues that create social opportunities.

With such a state of mind and financial limitations, you may wonder whether greater numbers of Millennials will ever want to buy a home, just like Mummy & Daddy. Wonder no more: they will, and this is why:

  • They are getting richer. The economic recovery, however slow it has been, has replenished many of the Millennials’ bank accounts. More jobs, better jobs, better-paid jobs. What do you do when you have a better income and deeper savings? You buy real estate. That’s what you do. Wasting good money renting no longer makes sense when you can buy your own place, build equity and perhaps end up paying less per month.
  • They are getting older. Wait-Wait-Wait: life goes on and pretty soon you are young no more and your needs are different. You are more accountable to others, professionally and socially. You may even show your ambition to move up in the world. How conventional! You may have a family. You want a house. You want to own your own home. Imagine if 10% (or even only 5%) of the 79 million Millennials were house-hunting next year!… Now you’re talking about a true buying tsunami! Hold your breath!
Senior Vice President, General Manager of Intero Prestigio International

How Green Was My Valley?

by Alain Pinel
General Manager of Intero Prestigio international

Did you see the movie? A big hit from 1941, signed John Ford. Beautiful drama. Another drama, unfolding now in sunny California, could use the same title. The green valleys and lush lawns from years past are not so green anymore. They are turning yellow, if not brown. The sun has a lot to do with this. The lack of water even more.

Every year is somewhat of a gamble around here. Will it rain enough to fill the reservoirs and produce lots of snow in the Sierra? If yes, we’ve got another year to turn the faucets and the sprinklers as we wish to enjoy grass, plants & flowers. If not, well, we’ve got to deal with the drought, somehow.

We had one of those years in 2014, and so far, this year, the picture is pretty bleak. How bleak? Well, California is about to begin its 4th consecutive summer of drought. Winter 2015 turned out to be the driest on record, ever. Many areas have not seen any rainfall to speak of in months and the snowpack water content, measured on April 1st, was at only 5% of average: 1.4 inches instead of 28. That’s how bleak it is.

State, counties and towns are on alert. Tough mandatory restrictions on water use and voluntary cutback programs are being implemented. In some communities, the hunt for violators has begun. In some others, Local or State officials are leaving it up to water companies to play cops and require at least 25% conservation measures in potable urban water. Significant rate hikes are spreading (but don’t represent much of a deterrent in the multi-million dollar price range).

Californians are taking the instructions and the orders seriously…. Well, more or less. Depends who; depends where. You can drive one block and see nothing but brown front yards, and a block further you see healthy green grass. Some people did not get the memo. My own backyard lawn looks badly neglected, and most of the flowers are gone. Redwood bark and synthetic turf have never been more popular, in residential as well as commercial properties. We may have to get used to this new picture.

The question now trotting fast in people’s mind is: what effect will this have on property values? In the land of plenty, in Northern California and Southern California, the question has not been answered yet. The concern is especially vibrant in the priciest zip codes where luxury estates stretching on one acre or more and looking gorgeous thanks in part to beautiful lawns and flowerbeds, will likely look a lot less colorful the balance of the year.

Frankly, I do not believe that, in the short term, the effects of the drought on the usually manicured landscaping of high-end properties will have a measurable impact on home prices or, for that matter, on the number of sales. It is not as if some regions or towns were spared from this calamity; the whole State is concerned. All properties are affected the same way. So, unless some out-of-State buyers decide to skip California for the sake of playing in grass, it will take a lot more than that to stop or even slow the real estate activity.

Long term, say 2 years from now and moving forward, it’s a different story. People in Sacramento better understand the meaning of urgency. Lots of talks about alternative solutions, but not much to show for it. Seems to me that it’s about time, among several options, that we get serious about using sea water in a big way.  Some say that it would be too expensive. No kidding. The cost is always a concern but it is not the main problem here, the main problem is…. Water!

Meanwhile, what can and probably will change, is the way homeowners landscape their properties going forward. No choice in the matter. I can see a lot more “desert landscaping” in the California future. Why not? It can be beautiful actually. If you like Arizona, you will love California. No more thirsty plants. No more expansive lawns. Elegant frugality may become the new normal in the backyard.

There are many other ways to decorate a yard and leverage space without sacrificing beauty or even functionality. I bet a lot of homeowners are going to build bigger but shallow swimming pools to bring color and use up a good fraction of the rear property. Others may decide to put a tennis court. Bocce ball or petanque pads are pretty popular too these days. Your call, depending on your taste, your needs & your means. Think about it quickly though, the “rainy season” is still more than six months away, and, if the past 4 years are any indication, it is not very dependable.

7 Steps to Take Before You Buy a Home

By: G. M. Filisko

By doing your homework before you buy, you’ll feel more content about your new home.

Most potential homebuyers are a smidge daunted by the fact that they’re about to agree to a hefty mortgage that they’ll be paying for the next few decades. The best way to relieve that anxiety is to be confident you’re purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.

1.  Decide how much home you can afford.

Generally, you can afford a home priced two to three times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.

2.  Develop your home wish list.

Be honest about which features you must have and which you’d like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top five must-haves and top five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.

3.  Select where you want to live.

Make a list of your top five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR® to help you identify three to four target neighborhoods based on your priorities.

4.  Start saving.

Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies.

However, the lower your downpayment, the higher the loan amount you’ll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get.

Finally, if your downpayment is less than 20%, you’ll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.

5.  Ask about all the costs before you sign.

A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area — including home inspections, attorneys’ fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.

6.  Get your credit in order.

A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. The minimum credit score you can have to qualify for a loan depends on many factors, including the size of your downpayment. Talk to a REALTOR® or lender about your particular circumstance.

You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn’t up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.

7.  Get prequalified.

Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.

If you’re self-employed, you’ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage (ARM) offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.

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Contact real estate agent Kristen Jurevich with INTERO Real Estate Services a Berkshire Hathaway for Bay Area real estate informations such as list of homes for sale, automatic email system set-up, open home lists, and more exclusive reports for serious home buyers.