A Look Ahead to Our 2018 Market

Interest rates, the new tax plan, inventory levels, and rate increases for both vacancies and rentals will all have a significant impact on our market in 2018.

There are a few factors that will impact how our market performs in 2018 that you need to be aware of.

The first is interest rates. If the Federal Reserve raises interest rates four times like they’re predicting, it will reduce buyers’ purchasing power and reduce the steady price increases we’ve been seeing. With this reduced affordability among buyers, home values may dip a little bit.

The second factor is the tax plan that was approved last December. It will be especially interesting to see how this will affect Californians in the move-over market.

"If you’re a buyer, you have to be ready to write an offer on something you like as soon as you come across it."

The third and most important factor is the inventory levels. Currently, we have a 1.5-month supply, which means if you’re a buyer, you have to be motivated and ready to write an offer on something you like as soon as you come across it. You might also find yourself in a multiple offer situation, so make sure you work with an agent who’s experienced in that scenario.

Lastly, you have rate increases for both vacancies and rentals. There is very low inventory in the rental market. Back in November 2017, we had the fourth-largest price increase for rentals in the entire country.

If you have any more questions about our market or you’re interested in buying or selling, don’t hesitate to reach out to me. I’d be happy to help you.

Loan Limits Are Changing in Washoe County

Loan limits are being increased in Washoe County, which is good news for both buyers and sellers. Here’s why.

Big changes are happening with loan limits in Washoe County this year.

Basically, these changes will give you more of an opportunity to secure an FHA, VA, or conventional loan at higher price points.

Currently, the maximum loan limit for Fannie Mae and Freddie Mac is sitting at $424,100, and they’re increasing that limit to $453,100. Now, you can start looking for homes in the $475,00 price range and still only put 5% down. If you don’t have as much to put down as you like, you’ll be able to get into a market you’ll be happy with.

The FHA loan limit will increase from $345,000 to $370,300, so they’re starting to build back up to that $403,000 price point they were at in 2008 and 2009. If you need an FHA loan to get back into the market because you’ve perhaps had a foreclosure or a short sale in the past, this will help get you a home you’re happy with.

"These changes give buyers more options on the loan side."

With the direction of home prices trending upward, these changes give you more options on the loan side. If you’re a seller, this is also good news because it increases buyers’ affordability.

If you’d like to get pre-approved for a loan or you have any questions regarding any of these changes, don’t hesitate to reach out to us. We’d be happy to help.

What Items Will You Need to Get Pre-Approved?

Today, Michelle from New American Funding will discuss both rates and what items you’ll need in order to get pre-approved to purchase a home.

Today I have with me a special guest, Michelle from New American Funding, to talk about rates and the items you’ll need in order to get pre-approved.

Michelle, how are the rates?

The rates are good! I feel like every time I’m here, I’m always talking about how rates should be going up, but we’re still not seeing that. Rates are still trending in the mid-to-low fours. For a buyer right now, it’s amazing to say that we’re almost to the end of 2017 and rates aren’t in the 5% range as was predicted.

I don’t know if we’re going to see a drop into the low threes like I know everybody wants, but take advantage of the fact that we’re still in the fours. A first-time homebuyer with good credit can still get a really good rate right now.

"The standard deduction has increased to $12,000."

What items will a potential buyer need in order to get pre-approved?

Basically, we’re going to require your first-born and a blood sample.

I’m kidding! But it does feel very, very intrusive. The reason is that we are now in a mortgage arena that we have to document every piece of information that is relevant to your file. We’re looking at your income, your assets, and any properties you may own. We’re going to need pay stubs, tax returns, and similar documents to make sure that you can qualify to pay the mortgage, and we need to check your bank statements to make sure you have the funds available.

A lot of people confuse pre-approval with pre-qualification. Pre-qualification is essentially where you tell someone your information and that’s it. They don’t verify it. A seller and their listing agent will need to know that I’ve verified everything the buyer has given me and that I’m not just saying, “Okay, let’s go!”

We want you to understand that we’re here every step of the way, and we’re going to ask you these questions and collect this documentation so that you are a truly qualified buyer and you’re ready to go.

If you have any questions about buying, selling, or getting pre-approved, feel free to contact us. We’d love to help you.