Now that more homes have come on the market for sale this spring, the low inventory blues are behind us. Better weather is bringing buyers back out shopping to take advantage of our historically ultra low interest rates. The level of offer activity is less frenetic than last year, meaning fewer bidding wars and more balanced ratios between asking price and final selling price. In fact, for the month of May, the 26 single family homes sales across the San Lorenzo Valley sold at an average of 100% of asking price: neither above nor below. The average price of $692,035 in May was 0.87% higher than April. Our stable economy with low unemployment and decent wage gains is supporting a growing trend: More single women are buying homes. While married couples still account for the majority of home sales at 63% of all buyers, according to the National Association of REALTORs (NAR), the next largest group is single women at 18% of all buyers. Many of these single women are younger, in the millennial generation, but baby boomers are actively buying as well. NAR doesn’t give any explanation for the fact that single women are buying homes at nearly twice the pace of single men: just 9% of all buyers are single men. Regardless of relationship status, multiple studies have shown that home ownership contributes to financial security over time. Corelogic recently did a study of the cost of renting versus owning since 2005. Rent costs rose 36% nationwide since 2005, while the monthly cost of a mortgage actually fell 4% over the same timeframe. A big driver of the mortgage cost savings is the drop in interest rates which at the end of May had fallen to around 4%. Many mortgages are designed to stabilize the monthly cost of housing, while it seems like rents often go up. Now let’s look at wealth creation and home ownership. Net worth is a measure of your financial picture: add up all your assets and subtract your debt. The Washington Post reported on a federal study of renters nationwide and found that on average, renters have a net worth of about $5,000. This $5,000 figure has been relatively flat all the way back to 1989. Homeowners on the other hand, had a net worth of about $195,000 in 1989, which has grown to over $230,000 on average. Homeownership is like a forced savings plan: Every month part of your payment goes toward paying off the principal portion of your loan. For a free real estate consultation, contact MC Dwyer (CA DRE#01468388) today at mcd@ mcdwyer.com, (831) 419-9759, or www.SLVHomes.com
2019-06-21