Let me break the economy down for you:
Inflation leads to a higher cost of goods, it is bad for fixed investments like mortgage bonds, and it decreases the buying power of the fixed rate of returns of bonds. As inflation rises investors seek a higher return to mitigate the faster rate of erosion. All of this causes interest rates to rise to the levels seen this year.
As expected, the Federal Reserve has raised the Fed Funds rate by 50bps, noting that ongoing increases will be appropriate. The Fed is set to begin asset sheet reduction on June 1st, beginning with $47.5B a month through August. This tightening up by the Feds should hopefully stabilize inflation and mortgage rates.
“The first look at GDP for the first quarter showed that growth was down 1.4%. This is significant because an old textbook definition of a recession is two consecutive quarters of negative GDP. Note that we will get two more revisions to this figure before getting the final reading in June. In addition, a recession will not be confirmed until September once the final readings for both the first and second quarters are reported.” (MBS Highway , 2022)
You may see frightening news surrounding a potential real estate bubble. Currently, the available data does not support this fear. The issues…negative amortization loans, sub-prime lending, loose regulations etc. which led to the earlier bubble are not here today.
There is still pent-up buyer demand existing despite higher interest rates and home values.“The National Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices rose 1.7% in February and 19.8% year over year, which is an increase from 19.2% in the previous report. The top three performing cities were: Phoenix: 33% Tampa: 33% Miami: 30% (MBS Highway , 2022)
Being a globally desired location, Santa Barbara home values continue to outperform softer markets in the past. Based on data received from reports from First American Title for the first 3 months of the year, cash buyers accounted for 30 -36% of home purchase transactions. For new home buyers this can be defeating
and depressing, especially when you may have been priced out of your former, pre-approved price range with the rise of interest rates and home values. I encourage you to reach out to me or your local real estate agent for strategies to overcome this fear. If you do not have a Real Estate agent you trust, reach out to me for a recommendation.
HOME IS WHERE THE OFFICE IS
“60% OF WORKERS WITH JOBS THAT CAN BE DONE FROM HOME SAY THEY’D LIKE TO STAY REMOTE ALL OR MOST OF THE TIME ONCE THE PANDEMIC FADES, UP FROM 54% IN 2020” (PEWRESEARCH.ORG, 2022) ii
On March 10, gasoline at U.S. pumps hit a record for highest average price, with regular gas costing $4.32 a gallon and diesel $5.06 a gallon, according to the American Automobile Association. If a worker earning minimum wage were to fill a 12-gallon tank of gas today, it would cost them almost an entire day's pay.
(KATHERINE FUNG, 2022)
Assume you live in Fargo, N.D., have a seven-mile commute and your car gets 26 miles per gallon. A week of driving to work would have cost $3.74 in May of 2020, $7.50 in May 2021 and $10.25 with average prices as of March 8. If you live 30 miles away from work, a week of driving would have cost
$16.04 in May 2020, $32.20 the year after and $43.97 on March 8. A typical family in the Fargo area will spend about $2,500 more on gas this year, based on how the price trends look. (InForum, Fargo, N.D.)
This means homeowners will be placing more value on their homes and home-office set ups than ever before causing an increase in buyer demand. We will also see industries suffer from less workers willing to commute for the pay available. Reach out to me if you are interested in tapping into your home equity to build out a home office or revamp the one you have now.
REALTOR SPOTLIGHT – KATIE MALENOIR-EVANS
"KATIE WAS AMAZING TO WORK WITH! AS FIRST TIME BUYERS, THERE WAS A LOT FOR US TO LEARN AND KATIE WAS THE PERFECT PERSON TO HELP
US! SHE WAS VERY KNOWLEDGEABLE ABOUT THE PROCESS AND EXPLAINED EVERYTHING IN THOROUGH DETAIL -- WE HAD NOHESITATIONS AT ALL ABOUT ASKING HER QUESTIONS AND KNEW WE'D RECEIVE A PROMPT RESPONSE. WE FELT SO SUPPORTED THROUGHOUT
THE ENTIRE EXPERIENCE AND TRULY THANKFUL THAT WE ENDED UP WITH A HOME WE LOVE." - MALAPHONE PHOMMASA (GOOGLE REVIEW)
Whether you are looking to sell or purchase a property, Katie Malenoir- Evans is ready with insightful knowledge of today’s current market to put you on the right path for a successful sale. Katie is a member of the Education Committee of the Santa Barbara Association of Realtors and is a reliable resource for buying, selling, or investing. Katie is also a certified First Time Home Buyer Specialist. She takes pride in helping her clients understand the home buying process and realizes how important of a decision it is to not only sell a home, but to purchase one too.
Originally from Jacksonville, Florida, Katie developed a strong work ethic who can handle any situation by working as a full-time fashion model in New York City for six years with top brand designers such as Marc Jacobs, Calvin Klein, Gucci, and Narciso Rodriguez. From there, she moved from the Big Apple to Santa Barbara. Katie decided to pursue her real estate passion full-time. She instantly fell in love with the city, culture, lifestyle, architecture, and community Santa Barbara offers. Katie is always dedicated to making sure her clients are informed and satisfied. Her social media presence keeps her seller’s and buyer’s needs in front of clients and agents alike. As a part of the expansive global network Sotheby’s International Realty has to offer, Katie can ensure her clients’ needs are fulfilled.
In her spare time, Katie loves being a part of Santa Barbara’s community-driven city. She has volunteered with the local organization Hearts Therapeutic Equestrian Center and has a love for all animals. Katie loves to be near the water at the beach, watching a polo game at the Santa Barbara Polo & Racquet Club, or taking advantage of new events that are happening around town.
Stay In Touch, Keep Up, Keep Using Me As a Resource.