The Covid-19 pandemic has affected some industries adversely. The housing market has seen several shifts in the pandemic season. From few houses on sale to the issuance of moratoriums by various state laws, it begs for a keen eye to forecast where the housing market is headed. In this article, you’ll get the housing market predictions for 2020. Let’s dive in.
Pent-Up Purchases Will Spike Sales
Before the Covid-19 pandemic, the mortgage rates were already low, and supply was lagging. Clients who were ready to buy homes between March, April, and May still need houses. The terms for securing mortgages are even more favorable as mortgage rates have dropped significantly— currently at 2.9%.
The significant drop in the mortgage rates has seen mortgage applications rise dramatically. According to the Bankers Association, the first week of July saw an increase of 33% in mortgage applications compared to the same time last year.
Though the housing market is a volatile one, there is hope that pent-up purchases, low mortgage rates, and the growing desire by millennials to own homes will lead to a spike in sales.
Home Sales Rebounded in June
After the dip in sales that occurred earlier in the year as a result of the pandemic, June saw home sales rebound significantly. According to the National Association of Realtors, the sale of existing homes rebounded by 20.7 % in June.
The rebound in sales spans across different types of property from single-family homes, condos, and townhomes. Interestingly, first-time buyers accounted for 35% of the sales in June—a good sign that the millennial demand for homeownership can fuel home sales considerably in the coming months. Second-time homebuyers also rose to the occasion, buying 9% of the existing homes in June.
Home Prices Have Hit A Record High
Though the year began with a dip in sales, house prices haven’t gone down an inch— it’s been rising steadily. June saw the rise in the median in existing-house prices increase by 2.8%. This is the highest it has ever risen.
The fact that the price of houses has been on the rise for 100 months straight is a clear indication that the housing market could flourish significantly after the downturns caused by the pandemic.
The Demand for Homes Will Rise Post Pent-Up Purchases
Currently, the demand for homes has risen beyond what the market supply can satisfy. Thanks to low mortgage rates, which lure the renters to purchase— the low monthly mortgage is attractive, especially to first-time buyers.
Though experts agree that the demand will come down after the pent-up purchases, research indicates that the millennial demand for homeownership keeps growing, and that can sustain the industry through uncertain times.
More Supply Brews
Low inventory has created a predicament on both sides. Homeowners are enticed to sell, expecting top dollar for their home, but given the low supply on the market, finding their next home has created a problem in itself. Even though the demand is high, people may hold off listing properties for sale.
However, more supply looks promising as homebuilders’ sentiment has risen to 72%. That’s the highest it has ever been since 1999.
Also, most states classified construction as an essential service, and that has seen most builders proceed with the work. The development of new homes will ease the pressure and shake the market for upgrades.
Research by Meyers indicates that 5% of construction firms hired more workers in May. Homebuilders that took a break are resuming work, and that’s a good sign for America’s housing market.
In conclusion, the housing market might have suffered the ravages of the Covid-19 pandemic. However, these predictions point to a promising future for the housing business in general.
W Real Estate Announces Acquisition of the Windermere Real Estate offices in Cloverdale & Ukiah
Santa Rosa, CA (February 12, 2020) – W Real Estate, the largest locally founded and independently owned real estate brokerage in the North Bay is pleased to announce the acquisition of Windermere Platinum Real Estate Services which has two offices in Cloverdale and Ukiah. The addition of the Cloverdale office will bridge the gap between its current offices in Windsor, Healdsburg, and Ukiah.
“W Real Estate offers a wealth of resources and innovative support to agents, which will be an incredible asset to my team,” said David Ryan, Owner of Windermere Platinum Real Estate Services. “Joining W Real Estate will ensure they have everything they need to be successful.”
Since launching in 2007, W Real Estate has steadily grown into one of the top 500 real estate brokerages in the country. The 200-agent brokerage has 10 offices in Northern California. This deal to acquire Windermere Platinum Real Estate Services comes just weeks after W Real Estate launched offices in both San Francisco and Healdsburg.
“We are pleased to welcome David and his skilled Windermere Platinum Real Estate Services Team to the W Real Estate family,” said Todd Schapmire, Vice President of W Real Estate. “The addition of this group of progressive and like-minded agents brings an abundance of market knowledge, long term local relationships, and expertise to our network.”
W Real Estate is a full-service real estate brokerage, offering expertise in residential, commercial, luxury, wineries and vineyards, lots and land, renovation projects, and subdivision/new home sales.
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SANTA ROSA December 11, 2019 — W Real Estate has been selected for the 2019 Best of Santa Rosa Award in the Real Estate Agency category by the Santa Rosa Award Program.
Each year, the Santa Rosa Award Program identifies companies that they believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Santa Rosa area a great place to live, work and play.
Various sources of information were gathered and analyzed to choose the winners in each category. The 2019 Santa Rosa Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Santa Rosa Award Program and data provided by third parties.
About Santa Rosa Award Program
The Santa Rosa Award Program is an annual awards program honoring the achievements and accomplishments of local businesses throughout the Santa Rosa area. Recognition is given to those companies that have shown the ability to use their best practices and implemented programs to generate competitive advantages and long-term value.
The Santa Rosa Award Program was established to recognize the best of local businesses in our community. Our organization works exclusively with local business owners, trade groups, professional associations, and other business advertising and marketing groups. Our mission is to recognize the small business community’s contributions to the U.S. economy.
SOURCE: Santa Rosa Award Program
April 15th will be here before you know it, now is the perfect time to review the latest changes to the tax laws to be sure you don’t miss out on the many tax benefits available to homeowners.
1. Property Taxes
You may deduct up to $10,000 ($5,000 if married and filing separately) of property taxes in combination with state and local income taxes or sales taxes.
2. Mortgage Interest
You can deduct a portion of the interest you paid depending on when you took out the mortgage:
- Dec.16, 2017, and later: You can deduct the interest on up to $750,000 of mortgage debt (or up to $375,000 if you’re married and filing separately).
- Oct. 14, 1987, through Dec. 15, 2017: You can deduct the interest on up to $1 million of mortgage debt ($500,000 if married and filing separately).
If you refinanced a mortgage, the limit depends on your old loan’s origination date.
- If the mortgage predates Oct. 14, 1987, all the mortgage interest may be deductible.
3. Home Equity Loan interest
Interest on home equity loans and home equity lines of credit can be deducted only if you spent the borrowed money on home improvements.
- If your first mortgage is over the deductible limit, the home equity loan interest won’t be deductible.
4. Discount Points
If you’re within the limit to deduct all your mortgage interest, you may also be able to deduct discount points you paid when the mortgage closed.
5. Home Office Expenses
if you’re self-employed and use part of your home regularly and exclusively for your business, you can take a tax deduction of $5 per square foot, for up to 300 square feet of office space, to a maximum deduction of $1,500.
- See the IRS website to determine whether your home office qualifies for a tax deduction or play it safe and consult with a tax professional.
6. Medically Necessary Home Improvements
You can deduct the cost of installing medically necessary home improvements that benefit you, your spouse or a dependent:
- Permanent improvements that increase your home’s value are only partly deductible. The deductible cost is reduced by the amount of the property value increase.
- However, many accessibility improvements, such as entrance ramps, widening doorways or installing railings, usually don’t increase the value of a home and can be fully deducted.
7. Solar Energy
- Between January 1, 2017, and December 31, 2019 – 30% of the expenditures on solar energy are eligible for the credit.
- Between January 1, 2020, and December 31, 2020 – 26% of the expenditures on solar energy are eligible for the credit.
- Between January 1, 2021, and December 31, 2021 – 22% of the expenditures on solar energy are eligible for the credit.
8. Tax benefits to selling your home
If you’ve lived in your primary residence for two out of the five years before you sell it, you’re excluded from paying taxes on any profits up to:
- $500,000, if you’re married
- $250,000, if you’re single.
Claiming these tax deductions may only be worth the trouble if all of your itemized tax deductions exceed the IRS standard deductions, which were raised in 2017 with the passing of the Tax Cuts and Jobs Act.
The standard deductions for the 2019 tax year:
- $24,400 for married couples filing jointly
- $12,200 for singles and married individuals filing separately
- $18,350 for unmarried heads of households.
To decide whether to itemize, add up homeowners and other tax deductions you qualify for:
- If the sum is more than the standard deduction, then itemize.
- If not, take the standard deduction.
Homeowner costs that are not tax-deductible
- Insurance premiums, including for mortgage insurance.
- Homeowner association fees.
- Transfer taxes or stamp taxes.
- Cost of utilities.
- Rent for living in the home before closing.
- Costs for getting or refinancing a mortgage, such as a loan assumption, credit report and appraisal fees.
- Forfeited deposits, down payments or earnest money.
- Wages for domestic help.
Although Northern California is blessed with some of the nation’s mildest winters, there’s still some home maintenance you can do to prepare your home for the cold winter months and occasional heavy rains ahead and help reduce your overall energy bill and heating costs.
Make Sure Your Heating System is Ready
If you have a high-efficiency heating system, it is recommended that PVC vent pipes be cleared of any obstructions yearly. For a gas system, cleaning is recommended every three years.
Cut Down on Heating Costs
As the weather turns colder, heating can account for over half of your gas bill if you have a gas heater and up to 40% of your electric bill for those with an electric heating system.
Below are some tips from the California Public Utilities Commission to help you get your home ready for the cold winter months and reducing that electric/heating bill:
- Program your thermostat lower when you’re sleeping or away from home.
- Clean or replace furnace filters once a month or as recommended.
- Keep warm-air registers, baseboard heaters and radiators clean and clear of furniture, carpeting, and drapes.
- Eliminate trapped air from hot-water heaters every season; you might want to call a professional for this one.
- Place heat-resistant radiator reflectors between exterior walls and radiators.
- Turn off kitchen and bath exhaust fans when you are done cooking or bathing.
- Open draperies and shades on your south-facing windows during the day to let sunlight in your home and close them at night to retain the heat.
Clear the gutters along the roof of your home of sticks, leaves, and other debris so the rainwater can drain properly.
Check the gutters in front of your house as well to be sure they are free of accumulated leaves from neighboring trees. This will keep the water in front of your house draining when that first big rainstorm hits and reduce the chance of your street, driveway, or home flooding. Direct the downspouts of your home’s gutters away from your home’s foundation.
Check the Fireplace and Chimney
If you use your fireplace, you should have it cleaned by a professional chimney sweep. Check for cracks in the chimney, creosote buildup, and debris, such as leaves or bird nests, which may become a fire hazard.
Check the Roof
Look for loose or missing roof shingles that may result in leaks during heavy rain. Check for any broken seals around vents and the chimney. Be sure to clear leaves and other debris from flat roofs with a rake or leaf blower.
Reverse Ceiling Fans
Check your ceiling fan for a switch to reverse the fan’s rotation from counter-clockwise, which produces cool air, to clockwise, which will push the warm air that rises to the ceiling back down into the room.
Caulk Around Windows and Doors
If you can see any sunlight between your door or window frames or you can feel air seeping through, your home isn’t properly sealed. Places to check for drafts include windows, doors, lighting, plumbing fixtures, switches, and electrical outlets. Replace caulking and weatherstripping as needed.
Draft stoppers, which became popular during the Depression, are a cheap way to keep the cold out of the house. These days, you can find draft stoppers online in just about any shape, size or animal variety.
Protect Patio Furniture
Keep your patio furniture clean and dry by covering your furniture with a heavy tarp or storing furniture in a shed or garage.
Check Batteries in Smoke and Carbon Monoxide Detectors Monthly
Make sure all smoke and carbon monoxide detectors are working in your home. The California State Building Code requires one smoke alarm be placed on each floor in non-sleeping areas, and one smoke alarm must be installed in each room where sleeping occurs, as well, one smoke alarm should be located in each hallway that leads directly to sleeping rooms. In addition, as of 2011, the California Health and Safety Code requires the owner of every single-family dwelling, as well as all dwelling units intended for human occupancy, to maintain a carbon monoxide device in each dwelling. It is recommended to check the batteries in all alarms once a month to ensure they are in good working order.
As the New Year approaches and goal setting begins, here are some New Year’s Resolutions to help put potential home buyers on the road to owning their dream home:
1. Make a list of your new home wants/needs.
2. Do your research on school districts and homes that are for sale in locations you like.
3. Save for a down payment, as well as closing costs, moving costs, home repairs/maintenance and other homeowner expenses.
4. Check your credit score.
5. Pay down credit card balances; avoid big credit purchases like new cars or furniture.
6. Prepare Federal Tax returns & W2s for the past 2 years.
7. Prepare bank statements for the past 6 months.
8. Prepare proof of any investment income.
9. Prequalify for a loan.
10. Start mortgage shopping to get the best rate.
With the holiday season underway, many of us are looking forward to exchanging gifts with our loved ones. For children, this is an especially exciting time. However, many kids do not have families who can afford to purchase gifts for them.
This is why we are excited to announce W Real Estate will be hosting a Holiday Gift Drive to benefit the Boys & Girls Clubs of Sonoma-Marin and Ukiah. Five of our offices will serve as drop-off locations where we will be accepting donations Monday, Dec 2nd through Friday, Dec 13th.
- Coats and Raincoats (The following sizes Youth: M, L, XL, and Adult: S & M)
- Hats, Gloves, & Scarves, Shoes & Socks (Youth – Adult sizes)
- Blankets (any size)
- Gift Cards (Target, Walmart, Old Navy, Shoe & Grocery Stores)
- Sports Equipment: Soccer Balls, Basketballs, etc.
- Art Supplies
- Science Kits
- Board Games
Please do not leave gifts outside if the office is closed.
W REAL ESTATE – SANTA ROSA
500 Bicentennial Way, Suite 310, Santa Rosa, CA 95403
W REAL ESTATE – SONOMA
539 Broadway, Suite B, Sonoma, CA 95476
W REAL ESTATE – WINDSOR
9240 Old Redwood Hwy, Suite 114, Windsor, CA 95492
W REAL ESTATE – KENWOOD
9200 Sonoma Highway, Kenwood, CA 95452
W REAL ESTATE – UKIAH
101 North State Street, Ukiah, CA 95482
A small contribution on your part can make a world of difference for a child in need.
For more information, contact Laura Hart 707-295-7362.