February 5, 2019 | Fernando Sandoval
Our lending partners at Geneva Financial Published this article which offers an accurate description of what is going on in our market today. Please contact Geneva Financial for any questions or for any lending needs (tell them we sent you)




  Home sales in December increased a dismal 1.2% year over year according to data provided by Redfin. That market the slowest increase since March 2012; nearly seven years ago. The market has put on the brakes, which is good for homebuyers.

  Home sales are slowing, and home prices fell in nine of the largest markets; and they fell at 10.9%, which is the fastest drop in over three years (housingwire.com). The silver lining, homes are slowly but surely becoming more affordable. Home prices have been outpacing wages for nearly seven years which is unsustainable. With long term rates at the lower point in over a year, and falling home prices, buyers now have inventory to choose from, at a lower cost than just months earlier.

  With the US and global economy cooling, consumer confidence has dropped. Although the opportunity to take advantage of lower prices, higher inventory and lower borrowing costs may be short lived. Today is a good day to buy. Don’t forget to negotiate lower prices and seller concessions.


  The U.S. housing market has kicked off the new year with a…. whisper. New data from Realtor.com shows that 15% of listings have already had a price cut in January.
  Homes are also staying on the market longer. In the nations highest priced markets, days on the market grew substantially.
  • San Jose: 27 additional days
  • Seattle: 19 additional days
  • San Francisco: 15 additional days
 We are now in a buyers’ market. With falling interest rates there will be good opportunities aplenty.

 The unemployment rate rose to 4% in January. – US Bureau of Labor Statistics.
  While the job market is strong, and unemployment is a near 50-year lows, wage increases are not keeping pace with housing. Not even close. With home prices falling, and interest rates declining, the gap is closing, but the spread is wide.

 $4 Trillion; with a T! Consumer debt, which does not include mortgage debt, has hit an all time high at a staggering $4 Trillion. Say that out loud. Yes, consumer debt, despite unemployment at a 50-year low, is $1 Trillion higher than it was during the Great Recession. The people are simply spending more than they are earning.
  Not to beat a dead horse (or feed a full horse), but there has never been a better time to rectify the situation. Consumer debt is at an all time high, but so is home equity. With the recent drop in interest rates, there has never been a better opportunity to pull out some equity and consolidate debt. Even if you currently have a low rate on your current mortgage, with calculated debt consolidation, you may obtain a mortgage at an even or slightly higher rate but save hundreds or even thousands over the life of loan(s) due to proper consolidation. Meet with a licensed mortgage professional today to see if you would benefit from a strategic refinance.


  In a move that surprised many in the industry, JPMorgan Chase raised their loan-loss reserves by more the $300 million in the fourth quarter in preparation to a slowdown and potential loses. Jaime Dimon, JPMorgan’s CEO, warned that the market has shifted, and they do not want to get hit with a potential downturn.
  “We tell our management that we have no problem seeing loan books shrink,” Dimon said during the call with analysts and investors. “Sometimes … you’re better off telling your sales force to play golf rather than to make new loans. We’re not going to be stupid.” – Jaime Dimon
  “We stay in a business knowing there’s going to be a cycle and we’re not going to be children in this cycle,” Dimon said. “We know the losses are going to go up.” (housingwire.com)
 From 2011-2018, home pricing in Seattle, WA jumped a staggering 96%; while median income only rose 34%. Not a problem for Seattle alone, but exaggerated by the enormous success of tech giants like Amazon and Microsoft. Microsoft alone employees more than 50,000 people in the Seattle market; and has contributed to rapid housing appreciation.
  Now, Microsoft has committed to helping the home affordability issue in the Seattle housing market by pledging $500 million to fund construction of affordable housing. $475 million will go to affordable housing construction and $25 million will go to grant programs to assist with the housing of the homeless.

 While the U.S. city does not hold a number one position, the U.S. does have four cities on the top ten list of least affordable housing markets.
  1. Hong Kong
  2. Vancouver
  3. Sydney
  4. Melbourne
  5. San Jose
  6. Los Angeles
  7. Auckland
  8. San Francisco
  9. Honolulu
  10. London
  11. Toronto
  The median home price in all cities was approximately 9 times the median household income. (Bloomberg.com)

 Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin 
30 YEAR FIXED 4.750% 4.896%
15 YEAR FIXED 4.250% 4.378%
  APPLY ONLINE:  www.genevafi.com

Interest rates as of 02/02/2019. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $484,350. Loan to value not to exceed 80%. 740+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote.
Office: 480-368-2000
Cell: 602-793-6383
Fax: 480-304-3344
Email: aaron@genevafi.com
Web: www.genevafi.com
Linked In: www.linkedin.com/in/vantrojen
3155 S Price Road Ste 105, Chandler, AZ 85248
NMLS License: 42056 / LO NMLS License: 15420 / BK-0910215

Fernando Sandoval and the rest of The Saltwater Ventures Team at RE/MAX All Star are always available to answer your questions in English or Español.

Text or call 727.344.9139 or send us an email by filling out the contact us form on our website. We look forward to working with you.

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Author: Fernando Sandoval

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