Q: What’s Prop. 19, and Why Should I Care?

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See how real estate remains stable even when the stock market dips, giving homebuyers confidence to move forward. Are you wondering if the stock market has any impact on the real estate market? It’s a question I get a lot, especially when the stock market takes a hit—which it just did! With a recent 10% pullback, I’ve seen more buyers holding back from buying a home. Some even ask if they should wait for a possible recession. Big financial shifts can really make anyone second-guess a major purchase. But let’s take a step back and look at the bigger picture. I’m breaking down how stock market activity can potentially impact real estate. Stock dips don’t stop real estate growth. The stock market may have dipped recently, but it’s still far higher than it was in 2020 and remains n ear record highs. The same is true for real estate, as home values in Sacramento have nearly doubled over the past five or six years. This shows that a 10% to 15% drop in stocks is normal and hasn’t historically caused home prices to fall. Even though a major crash could impact decisions, smaller dips like this are common and don’t mean home values are at risk. Both markets follow long-term growth trends despite short-term fluctuations. "Even though a major crash could impact decisions, smaller stock market dips are common and don’t mean home values are at risk." How the stock market can impact home-buying decisions. Even though home prices don’t change directly with the stock market, there are two main ways it can affect real estate. First, some buyers use their investments or retirement savings for a down payment. If the stock market is down, they might not want to sell their investments. Doing this could delay their home buying. Second, when the stock market is unstable, people feel unsure about their finances. They opt to wait before making big decisions like buying a home. Real estate is a long game. After all, most people don’t buy a home for just a year or two—they plan to live there or hold the investment for a decade or more. Over time, both the stock market and real estate tend to go up. That’s w hy short-term market swings shouldn’t be the deciding factor in a home purchase. Stock market corrections are a normal part of investing, just like ups and downs in real estate. What matters most is looking at the long-term tr ends. If you have questions about how today’s market conditions could affect your real estate plans, give me a call at 916-436-SELL , or check out HomesbyElevate.com to learn more. I’m happy to help.

Learn how Prop 19 allows eligible homeowners to transfer their low property tax rate to a new home. In California, property taxes are based on your home’s purchase price, so longtime homeowners often pay much less than new buyers. But what if you want to sell and move to a new home without your tax bill skyrocketing? That’s where Proposition 19– or simply Prop 19– comes in. Let’s break it down. How does Prop 19 work? Prop 19 lets eligible California homeowners transfer their current property tax rate to a new home anywhere within the state. This means you can sell your home, buy a new one, and keep your lower tax rate instead of paying based on today’s higher values. "Prop 19 provides the flexibility to move without facing a massive tax increase." Who qualifies for Prop 19? This program is available to California homeowners who are 55 years old or older, people with disabilities, and those affected by wildfires or natural disasters. If you’re downsizing, you get to keep your lower tax rate. If you buy a more expensive home, your tax basis adjusts, but you still receive some savings. For many longtime homeowners, high property taxes are a major reason they feel stuck in their current homes. Prop 19 provides the flexibility to move homes without facing a massive tax increase, making it easier to relocate, downsize, or find a home that better suits your needs. So if you’re moving soon and need some advice, reach out to HomesbyElevate.com or call 916-436-SELL . I’m happy to talk anytime!

Why home insurance companies are losing money, leading to rising costs. Why are insurance rates increasing? If you've recently reviewed your home insurance bill, you may have experienced some serious sticker shock. Rates are rising rapidly, with some homeowners facing increases of 80%, 110%, or even 126%. It’s an alarming trend that leaves many wondering what’s driving these sharp increases. Let’s take a closer look at the key factors behind the surge in insurance rates. 1. Weather-related losses are at an all-time high. Natural disasters have always played a role in insurance costs, but in the last few years, the situation has gotten worse. It’s not just major hurricanes and wildfires, but also smaller events like hail storms and flooding are happening more frequently and causing widespread damage. The Midwest is seeing more hail, the East Coast is dealing with stronger storms, and in California, wildfires have increased by up to 40%. More weather-related claims mean insurance companies are paying out more money, which leads to higher premiums for everyone. 2. Construction costs are driving up claims. The cost of rebuilding has nearly doubled in the past seven years and is therefore another major factor in the rising insurance rates. Materials and labor are more expensive than ever, which means insurance companies are paying out significantly more when covering claims. As a result, they’re adjusting premiums to keep up with rising costs. 3. Insurance companies are losing money: Despite what some might think, insurance companies aren’t making massive profits. The truth is they’ve been losing money for years. In 2023, analysts estimated that insurers needed to raise rates by at least 35% just to stay financially stable. For every dollar they collected in premiums, they were paying out $1.36 in claims. That’s not a sustainable business model, and major disasters only make things worse. "If premiums become unaffordable, it could cool off the housing market in high-risk areas. " 4. Regulations are making things even harder: In some states, like California, strict regulations limit how quickly insurance companies can raise premiums. While these laws aim to protect homeowners, they’ve also led some insurance providers to pull out of the market entirely. When fewer companies offer coverage, competition decreases, and costs rise even further. 5. Reinsurance companies are passing down their costs: Most people don’t think about reinsurance companies, but they play a huge role in the industry. Large insurers—like AIG—act as a safety net for smaller providers by covering major claims when disasters strike. But these reinsurance companies are also losing money, so they’re increasing their rates. Those added costs eventually get passed down to homeowners. Unfortunately, this isn’t just a temporary spike—more price hikes are coming and it’s turning into a full-blown crisis. States like California, Florida, and South Carolina are at risk of losing access to affordable home insurance altogether. If premiums keep climbing—potentially reaching $15,000 a year—it could even affect home values. Buyers take insurance costs into account when purchasing a home, and if premiums become unaffordable, it could cool off the housing market in high-risk areas. While this situation isn’t ideal, there are steps you can take. First, understand that this isn’t price gouging because insurance companies are simply trying to stay afloat. If your policy is up for renewal, lock in your rates now because prices are only going to rise over the next year. If you need help finding a reliable insurance provider, we can help you find one. Just call us at 916-436-SELL or send an email to  steve@homesbyelevate.com  .

Learn how lower mortgage rates are improving affordability for homebuyers. Have you been waiting for interest rates to come down before making your next move? We just saw one of the biggest drops in 30-year fixed mortgage rates in over a year, which brings them back to 2022 levels. Let’s break down what’s happening, why it matters, and what it means for buyers and homeowners. Positive movement in interest rates: Mortgage rates have dipped to their lowest levels in the past 12 months, now hovering around 6% - 6.5%. That’s a significant shift, especially in a market like California, where interest rates have a huge impact on affordability. Even though the Fed hasn’t officially lowered rates, the mortgage market is already responding. That’s because mortgage rates tend to move based on the 10-year Treasury yield, which predicts where rates are headed in the future. Right now, the market is signaling that lower rates are coming. Stock market & interest rates: One major reason for this shift is the stock market. As stocks trend downward, investors are betting that the Fed will ease up on rate hikes, which puts pressure on mortgage rates to drop. It might seem counterintuitive, but when the economy slows down, interest rates often follow. "Rates will likely continue fluctuating, but the overall trend seems to be moving in a positive direction." Implications for buyers & homeowners: For buyers, lower rates mean more affordability. If you’ve been waiting for a better time to buy, this could be it. If you purchased a home in the last year with a 7%-8% mortgage, it’s also a good time to start looking at refinancing options. Future predictions & market volatility: Rates will likely continue fluctuating, but the overall trend seems to be moving in a positive direction. The market is always looking ahead, and right now, it’s predicting that rates will keep easing. If you’re considering refinancing, keep an eye on the market and check in with your lender to time it right. If you’ve been on the fence about buying, now could be a great time to jump in. For sellers, demand is still strong, and homes are moving quickly. The market remains competitive, and this shift in rates could bring even more buyers back. If you have any questions, don’t hesitate to call us at 916-436-SELL or visit www.HomesByElevate.com to get started.

A homebuyer’s guide to PMI: what it is, who it’s for, and why it matters. If you’re looking to buy a new home or have bought a home in the past, you’ve probably heard of private mortgage insurance. There are many misconceptions about PMI, like how it’s impossible to get rid of or that it’s better to avoid it altogether by saving for a 20% down payment instead. However, is it really better to put off homeownership just to avoid PMI? In my opinion, the answer is no, and if you understand what PMI is, you’ll understand why. That’s why today, I’m explaining what PMI is, how it works, and why you shouldn’t let it stop you from purchasing a home and building equity. Is everyone required to pay PMI? No. PMI is an insurance policy that you pay to protect the lender if you stop making mortgage payments, and it’s required only when you put down less than 20% on your home. If you're putting in more than 20%, then you won’t need PMI. How do you drop PMI? The good news is that PMI can be removed once you’ve built up 20% equity in your home. Even if you didn’t put 20% down, you might already have 20% equity in your house if you’ve owned it for a few years. You can then contact your lender and ask them to remove PMI, but they may need an appraisal to confirm it. "It’s quicker and easier to manage PMI than to wait until you’ve saved up a full 20% down payment for your home." On the other hand, if you don’t want to wait for your home’s value to increase, you can make a lump sum payment to reduce your loan balance. This will boost your equity and allow you to ask your lender to remove PMI right away. Dropping PMI can save you $200 to $400 a month. That’s money you could use for other things or put toward paying off your mortgage faster. However, is this cost work putting off your home purchase? In my opinion, the answer is no. The reality is it’s often quicker and easier to manage PMI than to wait until you’ve saved up a full 20%. Home values rise over time, so if you wait, you might miss out on equity. Often, the equity you’ll gain will more than make up for your PMI payments. I hope this information was helpful. But if you still have more questions, or better yet, ready to take the next step in buying your home, give us a call at 916-862-5463 . We're here to help guide you through the process.

Real estate showed resilience in 2024—what's next with rates and inventory? 2024 has been a year full of unexpected events. From political turmoil and global economic shifts to crypto fluctuations and escalating international conflicts, it has certainly been a turbulent time. However, despite all the chaos, one sector has remained surprisingly resilient—the real estate market. Let's look back at what happened in real estate in 2024 and what is expected for 2025. What happened in 2024? 1. Market resilience amid chaos. The year was marked by global uncertainty, from geopolitical conflicts to economic fluctuations. Despite these challenges, the real estate market remained steady. Home values increased by approximately 3% to 4%, providing stability for homeowners and investors. 2. Low inventory and low sales. High interest rates played a significant role in shaping the market. These rates made it difficult for buyers to afford homes and discouraged sellers with low-rate mortgages from listing their properties. As a result, inventory remained tight. 3. Sales trends • We are likely to see home sales staying below 4 million, similar to 2023. Meanwhile, Sacramento saw a significant improvement, with sales increasing by 10–15% compared to the previous year. • Many buyers who had been waiting on the sidelines due to high rates decided they could no longer delay their purchases, contributing to slightly improved sales figures. 4. Inventory is creeping up. Inventory levels are beginning to creep up, leading to homes staying on the market longer and more frequent price reductions. Despite these changes, inventory levels in several areas remained below pre-pandemic norms. "Waiting will hinder your net worth and economic security." What to expect in 2025 1. Sluggish 2025. Looking ahead to 2025, the market is expected to remain relatively sluggish, particularly during the first half of the year. With a new administration implementing pro-growth policies, there are hopes for economic stimulation and increased investment, which could boost consumer confidence. What this means: This shift could encourage buyers to make significant financial decisions, such as purchasing a home, once they feel more secure in the economy. However, the outcome of these policies remains uncertain, and the impact on the housing market will depend heavily on how these economic changes unfold. Interest rates will still be high. Interest rates are projected to remain stubbornly high, likely hovering around 6 to 7% throughout 2025. While the Federal Reserve is unlikely to aggressively lower rates, any slight dip in interest rates could create a surge in buyer demand. Should this happen, we could see a 10% increase in home sales compared to 2024. Home prices are expected to appreciate at a more typical rate of 2 to 4%, consistent with historical trends. Economic chaos. Global economic uncertainty is expected to continue. Despite this, there is hope for a positive employment outlook, with jobless claims likely to remain steady. The U.S. economy may also see an influx of investments, leading to job creation and further economic growth. These developments, however, remain speculative, and the future remains unpredictable. The great news The real estate market should remain relatively stable in 2025, with minimal changes in interest rates. Although the global economic situation may present challenges, the housing market is expected to continue its steady course, with home values gradually appreciating over time. If you've been putting off buying a home, you're limiting your financial growth. Waiting will hinder your net worth and economic security. Compound interest is an incredible tool, but its key is time. By waiting for rates to drop, you're costing yourself a lot of money. The message is clear : if you don’t own a home, buying one will set you on the road to financial security and the middle class. If you need proper guidance, contact me at 916-862-5463 or email me at Steve@HomesByElevate.com . Let's work together for a successful 2025!

Learn about lender-required vs. cosmetic repairs and how to negotiate them. As the year comes to a close, a common question among buyers and sellers is: What repairs is the seller required to make, and how does the repair negotiation process work? Here's what you need to know. First, sellers are not obligated to make any repairs . Repairs are part of the negotiation process and can be categorized into two types: lender-required repairs and cosmetic or deferred maintenance. Lender-required repairs are necessary for buyers seeking financing, and the seller must complete them for the deal to close. Cosmetic repairs, such as dry rot discovered during the inspection, are negotiable and typically involve minor issues that arise once the buyer is under contract. When entering negotiations, buyers should only request repairs that were unknown before the offer was made. Buyers should not assume they can ask for repairs on issues that were visible before the offer was submitted. Doing so can complicate negotiations. Additionally, your deposit is protected by an inspection contingency, which provides a set period—typically 12 to 14 days—to request repairs based on the inspection results. "As a seller, my advice is to handle necessary repairs before listing the home." Once repairs are agreed upon and the contingency is removed, the deposit is no longer protected. This makes repair negotiations a critical point in any real estate transaction. The primary reason deals fall out of escrow is when the buyer requests legitimate repairs, and the seller refuses to make them, or when the seller demands more money than the buyer is willing to pay for those repairs. As a seller, my advice is to handle necessary repairs before listing the home. This generally leads to fewer repair requests and a smoother transaction. For buyers, it’s essential not to overreach and request repairs that do not significantly affect the home’s value or livability. In the long run, many minor issues will not matter once you've moved in. Key takeaways: 1. Only request repairs that are required by the lender or are urgent, legitimate issues. 2. Home prices often reflect deferred maintenance, and repairs should align with that. 3. Approach negotiations with grace, understanding the other side’s perspective to reach a win-win outcome. Repair negotiations are often the reason deals fall apart. By understanding which repairs are necessary, addressing them early, and approaching negotiations thoughtfully, both buyers and sellers can ensure a smoother process. If you need guidance, don’t hesitate to call me at  (916) 862-5463  or email me at  steve@homesbyelevate.com  . Let’s make sure your deals don’t fall apart!