Navigating the Real Estate Market

By M.C. Dwyer

Although 30 year mortgage rates were in the mid to upper 6s in January, rates rose back to around 7% in February. Historically, 8% mortgage rates were not unusual, but home buyers got spoiled by the extraordinarily low mortgage rates available during the pandemic. Industry experts are betting that the Federal Reserve will lower their rates later than initially hoped: perhaps by May. Still, even when mortgage rates were 15%+, people continued to buy and sell homes for all the usual reasons – for example, a new job location or job loss, growing or shrinking household size, etc. Sometimes in the case of divorce or death, home sales can even involve the courts.   

Probate

Probate is a legal process where the courts review the will (if any) and determine who the rightful heirs are. The cost is about 5%  of the sum of all the assets, and the process is public. It can take a year and a half for the grieving family to complete the probate process. During that time, the mortgage, taxes, and insurance bills (among others!) still need to be paid. This can put a financial strain on the heirs to preserve the assets, until the executor or executrix gains access to banking – assuming there’s extra money available.

According to attorneys, the best way to avoid probate – eliminating delays and publicity – is by putting one’s assets into a trust. There are other legal documents to help decide in advance who has power of attorney and who can make medical decisions, for example. One year, we invited our clients to a workshop with a trust attorney. One of my friends (and a repeat client) called me to say he was sorry he couldn’t make it, but knew this was something he should do…someday. Being relatively young, it didn’t seem terribly urgent to him. A few years later, he was killed in an accident. Unfortunately, his new widow had to go through the probate process.

Dreaming about buying a different home, but don’t know where to start? 

A couple of years ago, I had the pleasure of working with a couple who were dreaming about finding a retirement retreat in the mountains. They’d owned their home on a busy street corner in Silicon Valley for 30 years! They envisioned being surrounded by greenery and serenity. They wanted some extra space (that could be upstairs or downstairs from the main home), so their kids could come home from college and careers and stay for a while. I helped them understand and prepare for the challenges of living in the mountains, including getting a generator and a fully enclosed kennel attached to the garage for their dogs’ safety. Shortly after they moved in, their game cameras filmed a sizable mountain lion strolling down their driveway.

While many people give themselves a few months, this couple gave themselves about a year to get their home ready to sell: to make the process less stressful. They eliminated a lot of their stuff, making the move smaller and easier. The price difference between the two homes left plenty of money for shopping and savings. The concept of moving to a smaller home may feel overwhelming, after accumulating a lifetime of possessions.  This leaves many people daunted, maybe even procrastinating. One easy way is to start in your least used room. Or if that’s even too mind-boggling – start with a closet or even one drawer. Create piles: Keep / Donate / Recycle / Trash / Garage Sale. Want help? We Realtors® know people who specialize in this process – or can host an estate sale. I give my sellers detailed cost effective property improvement suggestions along with a timeline. Realtors® also have lists of choice vendors to help address repairs, paint, install new fixtures, etc. Pinched for funds? Through eXp Realty I offer a company that will loan sellers money and even supervise the contractors. I haven’t experienced a dollar limit on the loans yet; although there must be enough equity in the property. There’s no interest charges and they are repaid out of the sales proceeds.

Our Rebuild 

I’m relieved to say Mark has nearly completed the long journey of rebuilding after the August 2020 CZU Lighting Fires. Because of IRS rules, he had to rent out his brand-new house for the first two years; fortunately he found what we hope are great tenants. What’s left? Getting the final loan money from the SBA to finish paying everyone. Unfortunately and awkwardly, this is taking months. Homeowners – please check your policies because it’s risky to be underinsured while construction costs have been pushed dramatically higher due to inflation.

According to the County’s recovery permit dashboard, 64 homes have been completely rebuilt; the total percentage rebuilt stands at around 7% of the homes lost. 

   

Send your questions & topic requests to “M.C.” (MaryCatherine) Dwyer, MBA, REALTOR®
(831) 419-9759    E-mail: mcd@mcdwyer.com   Website: https://mcdwyer.exprealty.com
CA DRE License 01468388   EXP Realty of California, Inc.
Serving San Lorenzo Valley and Scotts Valley since 2005                                                                                               

Sources: California Association of REALTORs, CNN, MLS, Mercury News, Mortgage News Daily, National Association of REALTORs, Reuters as of 2/14/2024

The statements and opinions contained in this article are solely those of the individual author and her sources, and do not necessarily reflect the positions or opinions of eXp Realty, LLC, or its subsidiaries or affiliates (the “Company”). The Company does not assume any responsibility for, nor does it warrant the accuracy, completeness or quality of the information provided.    

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(https://www.santacruzcountyca.gov/FireRecovery/RecoveryPermitCenter/RecoveryPermitCenterDashboard.aspx)

Featured photo: 125 Old Mill Road in Felton

Photo contributed