Silicon Valley Real Estate Market Update 8/10/2023


 


Here's the weekly round-up of news. Check it out, save it for later, and/or share it with your friends. 


US banks wrote off $19B in loans in Q2 US banks have reported loan charge-offs of nearly $19 billion for the second quarter, the most in almost three years. Drivers of the charge-offs include rising defaults on commercial real estate debt and on consumer revolving credit. Full Story: Financial Times (8/9) 


6 ways to help home buyers compete with investors With cash deals accounting for more than a quarter of the real estate market, these tips can make your client's offer more compelling. Full Story: REALTOR® Magazine


Cities see conversion of office space as response to housing affordability US cities, faced with vacant office buildings and an ongoing housing crisis are looking to residential conversions as a way to ease the strain. Full Story: PBS (8/8) 


Fed officials weigh in on course of future monetary policy Federal Reserve officials are continuing to discuss what comes next for the central bank, with Fed Governor Michelle Bowman saying that additional interest-rate hikes may be needed. Meanwhile, New York Fed President John Williams commented that "we've got monetary policy in a good place, it is definitely restrictive, but we have to watch the data." Full Story: MarketWatch (tiered subscription model) (8/7),  The New York Times (8/7),  Bloomberg (8/6) 


Migration from Bay Area to Sacramento creates “megaregion” More people moving to Sacramento from the Bay Area than anywhere else in the country, according to Redfin data. People moving from the Bay Area to Sacramento isn’t a new phenomenon, but COVID-19 sped up a process that experts say was inevitable, and it could have long-lasting effects on the state.  In 2020 alone, migration between San Francisco County and Sacramento County grew 70% from the previous year, a CBRE report concluded. The Sacramento region is projected to grow another 4% in the next 5 years, largely buoyed by this continued migration. Full Story: SF Gate


What not to do before closing on a home If you’re about to close on a home, making major changes to your finances could derail the closing process, and even prevent you from getting a mortgage. For example, don’t make a big purchase including furniture or appliances because it can affect your credit score. Opening a new credit card or closing an existing one can affect your standing, too. Another major mistake to make is changing jobs when you’re about to close on a home purchase. Mortgage lenders examine your employment history for consistency, and providing additional documentation on employment to a lender can delay the closing. Full Story: Yahoo Finance


CA could pay homeowners $40k to build a tiny home in their backyards California is planning to pay homeowners to build housing in their own backyards, thanks to $50 million in the state budget to incentivize more people to build accessory dwelling units, also called ADU. It's a revival of a previous program that distributed funds through 2022, aiming to increase ADU construction amid a housing shortage in the state. Through that previous program, homeowners received grants of up to $40,000 to develop at least one additional housing unit on their property. Full Story: Business Insider


Market Update Mortgage rates stay close to their recent high nearly two weeks after the Fed announced another rate hike in late July. Elevated rates have been affecting buyers and sellers’ sentiment and the market will continue to observe low sales in July and August as a result. While the labor market is easing, wages continue to grow well above pre-pandemic levels, and it will take some time before the Fed is convinced that the economy is truly cooling. As such, rates could remain elevated and volatile throughout the rest of the third quarter before gradually coming down in the winter season. With the economy slowing but showing signs of mild growth, home sales could pick up in the fourth quarter as rates begin to show a more consistent declining trend. Full Story CAR Market Minute Write Up

 

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