For a variety of reasons, the predicted recession of 2020 never affected the real estate market segment anywhere in the United States, but particularly in California.

Back in March there was much “gloom and doom” with a tsunami of foreclosures expected as we sheltered in place.  Instead, a housing boom has emerged in many of the top counties of California including Sonoma County, San Francisco and the Peninsula areas of San Mateo & Santa Clara Counties.  All with appreciation exploding and homes being swept up in record time!  You just need to ask a homebuyer from this past year how easy it was to find and procure a home, given the stiff competition and lack of inventory.

We have definitely seen a V-shaped recovery in the real estate market as opposed to the other shaped recoveries, i.e., U-shaped, W-shaped, and    L-shaped.   Even early in the pandemic, the WSJ polled its economists and found that 68% predicted a V-shaped recovery for real estate.  Nevertheless, some naysayers persisted in believing and predicting a real estate crash akin to the last one.  And yet August sales for both existing and new homes hit their highest mark since 2006.

This winter, when we generally expect to see a slowdown in real estate sales given the holidays and bad weather, instead we saw an increase of 30% in mortgage applications for home purchases.  Also surprising was the increase of 11.4% in home values nationwide and an even greater increase in California.

While the stock market has seemed like a dizzying rollercoaster ride this past year, the real estate market has had a steady ascent.  Investors looking for a haven for their wealth, have turned to the real estate market in greater numbers than ever.

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Recession?  What recession?  This word has alluded the real estate market since early spring.  We have only to look at December’s North Bay market numbers to see that there has been little to no effect on the real estate segment in Sonoma, Marin, and Napa Counties.  Here is proof based on data points from the North Bay MLS as it relates to single family homes:

SONOMA COUNTY:

• Sold:  355 (up 35% from 2019)
• New Listings:  179
• Closed Escrows:  421 (up 31% from 2019)
• Remaining listings December 31:  500 (down 22% from 2019)

MARIN COUNTY:

• Sold:  146 (up 68% from 2019)
• New Listings:  57
• Closed Escrows:  238 (up 35% from 2019)
• Remaining listings December 31: 154

NAPA COUNTY:

• Sold:  79
• New Listings:  38 (down 22% from 2019)
• Closed Escrows:  128 (up 42% from 2019)
• Remaining listings December 31: 183

These statistics would seem to confirm the trend toward deurbanization that we have witnesses since the spring this year.  More homeowners in the core Bay Area metropolises are seeking space and homes that allow for work-at-home and remote schooling.   Add to this wish list the desire for more outdoor space and you have the directions to the North Bay real estate market.

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If there was ever a question regarding the health of Sonoma County’s real estate market, it was answered during the 2nd week of January 2021.

Based on information obtained from MLS data, here are some solid facts to confirm the upward trajectory of the market just as the year is jetting into 2021:

• Active Listings:  557 over the 554 the previous week.
• Sold:  78 over the 71 the prior week.
• Coming Soon:  20 over 17 in the previous week.
• Santa Rosa Active Listings:  256 which is just about level with the previous week of 257.

With strong demand from buyers, sellers can be assured of a quick close to their listing.  Call your real estate agent soon to get started on your way to finding a path to financial security and a better life.

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Even the experts were surprised by the growth in the California housing market during 2020.  Almost every county had rising real estate values & sales including Sonoma County, Napa, Marin, Monterey, San Mateo and San Francisco. The big question now is:  What will the market look like in 2021?  Here are some of the facts that drove the market this past year and how they may play out in 2021:

• One of the driving forces this year has been the low interest rates.  The good news is that rates will remain low for the foreseeable future.
• Home sales are predicted to grow by 7% in 2021.  Some of this increase will be the result of a stronger inventory supply.  Homeowners who hesitated to sell this year will feel more confident once the pandemic restrictions are loosened.
• Home prices are projected to appreciate 3-4%.  The somewhat slower pace of appreciation compared to 2020 may be the result of a more balanced market.  When inventory rises, prices will accelerate at a steadier pace. And with many new homes being in both Northern California and Southern California, you can bet this will be the case.
• Foreclosures should not lead to price declines.  The new year 2021 should see some improvement as businesses get back to a more normal condition.  Experts don’t expect to see the foreclosure crisis we saw in 2008.   According to Lawrence Yun, Chief Economist at NAR:
  “Any foreclosure increases will likely be quickly absorbed by the market.  It will not lead to any price declines.”

Despite everything that happened this year, the real estate market not only survived but thrived and played a big role in our California economic recovery.  The next 12 months are just as promising.  Buyer traffic is predicted to stay high and inventory levels are expected to rise.

If you saw your FICO score decline during these past months, or are self employed with difficult to prove income or having some other difficulty with mortgage approval to or refinance property, give Sun Pacific Mortgage a call at 707-523-2099.  We offer private money financing on real estate to borrowers who want fast financing or do not qualify for conventional loans at the moment.  We may be able to help you, too.

In November, real estate continued to surprise and elate homeowners of  Napa and Marin Counties.  There was no problem getting homes sold, but finding a home was still a problem because of the lack of inventory.

Here are some of the single family home statistics found for each county:

MARIN COUNTY:

• New listings:  101
• Into escrow:  215 (37% increase over 2019)
• Closings:  245 (188 in 2019)
• Listings remaining at beginning of December:  243

NAPA COUNTY:

• New listings:  91 (44% increase over 2019)
• Into escrow:  112
• Closings:  100 (25% increase over 2019)
• Listings remaining at beginning of December:  251

The effects of deurbanization has been evident in all the North Bay counties since the pandemic began.  With 2020 almost behind us, the wildfire season abated and real estate maintaining its strength, we can expect to find real estate booming into 2021.

If you want to get into the market but have difficulty qualifying for a conventional loan, give Sun Pacific Mortgage a call at 707-523-2099.  Our specialty is finding private money funding for purchasing and refinancing homes, rentals and commercial property.  We are one of the few remaining brokers who still lend on owner-occupied properties.  We look forward to your call.

Remember back in March when it was all gloom and doom relative to the economy?  The predictions were downright apocalyptic not just for California but most of America!  It was even going to be another Great Depression.  Fast forward to September…while the country is still a little unstable, it is evident that we will not face the total devastation projected by some soothsayers.  The Wall Street Journal just reported:

“The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected…Business and academic economists polled by WSJ expect gross domestic product to increase at an annualized rate of 23.9% in the 3rd quarter.  That is up sharply from an expectation of an 18.3% growth rate in the previous survey.”

The question remains, what shape will this recovery take?  Historically, recoveries have taken the form of one of four letters:  V, U, W, or L

• V-shaped recoveries are all about the speed of the recovery.
• U-shaped recoveries are characterized by a sharp fall into a recession but remaining depressed for a longer period than a V, possibly even for several years.
• W-shaped recoveries begin like a V-shaped recovery, but plunge into a second, often smaller depression before fully recovering to pre-recession levels.
• L-shaped recoveries are the worst-case scenarios.  Although the economy begins to grow, it remains at a much lower base than before the recession and can last several years.  The 2008 recession was an example of this type of recovery.

The Wall Street Journal asked the same economists as in the previous survey which letter this recovery will most resemble.  The results give us reason to hope:

• 68% believe it will be a V
• 11.1% believe it will be a W
• 3.7% believe it will be a U
• 1.9% believe it will be an L

From this report we can see that while the economy has a long way to go, so far, we are doing much better than most experts predicted.  And one of the reasons we seem to be coming out of this recession so quickly here in California is the real estate market.  It is hot hot hot and continues to surprise everyone.

So, if you ever thought about adding real estate to your retirement portfolio, this may be the time to do it.  Give us a call at Sun Pacific Mortgage 707-523-2099 if you don’t quite qualify for a conventional loan or need a fast close.  We have helped thousands of buyers just like you over the past three decades.