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How Is The Recession Going To Affect Real Estate & Mortgage Markets?

How Is The Recession Going To Affect Real Estate Mortgage Market

Lately, we have been bombarded with the doom-and-gloom messages about the “inevitable” Recession at our doorstep.  As professionals, we have the obligation to inform and educate our clients about the financial climate, and this means giving them the “real scoop” as it affects their investments.  

Steve Harney, a spokesman for Keeping Current Matters, delivered a podcast recently on this very subject, and offered some valuable insights into the approach recommended for realtors and brokers.  Safe click link to recent “Will A Recession Affect The Housing Market” webinar and graphs & statistics about real estate markets in past recessions: 


Steve pointed out that we have enjoyed the longest run of economic recovery in our history, but as it has been with history trend, all good things must come to an end.  The definition of “recession” is two consecutive quarters where the GPA decreases. Given this definition 42% of consumers think a recession will happen in 18 months. Experts postulate that it will occur in the second half of 2019 or the first half of 2020. The most important fact to keep in mind is that a Recession does not mean a housing crisis.  

Unlike the last Great Recession, mortgages have been strictly regulated and most homeowners are in a great place financially relative to their home ownership.  In fact, it has been pointed out that smart people are buying up real estate now because it is much more stable than other markets. Wise investors see this period as a great opportunity to add to their real estate investments. 

As professionals it is our obligation to clear up any confusion floating out there.  It is well known that confusion equals paralysis, and that could spell disaster for the real estate economy.  Aspiring home buyers hoping that home prices will crash are in for a rude awakening. The lack of housing and the demand for single-family homes by the giant millennium generation points to no drop-off in demand any time soon.


On the other hand, real estate professionals will likely meet up with worried potential sellers that may decide to postpone listing until they can get top dollar for their properties.  Some experts believe the number of home sales will remain flat or possibly even dip. The priciest parts of the country, like California, could see price corrections, but sales might only decline 10%-20%.  On the upside, if interest rates continue to fall, it could give the housing market a boost, since lower rates mean some buyers can afford a bigger house with a bigger mortgage.

So, the message at the end of it all: the news isn’t always factual. The Real Estate Market has held up throughout past recessions and its high time to let any and all current and potential home buyers and home sellers know that now is the time to buy and sell!

Home Improvement Ideas That Won’t Break the Bank

Home Improvement Ideas That Won’t Break The Bank

Keeping costs down while improving your property is a definite “must”, especially for a rental.  Some of the more cost-effective ways to achieve the best return on your investment may be the following:

Paint:  You can change the entire perception of a property with the right paint color choice.  For example, paint can make a small room look larger or a dark space look brighter.

Hardware:  Replacing hardware like doorknobs and hinges or cabinetry handles can make a considerable difference to a space.

Fans:  These go a long way in giving a room an inexpensive facelift, especially if the existing fans are outdated.

Flooring:  Ripping out carpet and replacing it with vinyl plank, laminate or a less expensive prefab wood, can be done for quite an affordable price today.  Most renters would prefer an easy-to-clean floor covering.

Blinds:  Replacing older “apartment like” blinds with newer, modern versions is cost effective and can make a room pop.

Appliances:  Purchasing used appliances in nearly new condition can make any rental unit more appealing and possibly get you more rental income or increase home value. 

Countertops/cabinetry:  While this may be a more expensive upgrade, there are sources of countertop choices that are both economical and durable.  Cabinetry can be updated with paint or door replacement.  

Backsplash:  Believe it or not, this is a game changer for many renters and can transform a kitchen for well under $500.

Bottom line is even when on a tight budget, homes and rental units can be upgraded and updated to realize a higher value.

7 Useful Things You Might Not Know About

7 Useful Things You Might Not Know About

  1. Arrow by your gas gauge:  Next to the gas gauge of nearly every car that’s been manufactured since 2010, there is an arrow that either points to the left or the right. A lot of people might never have noticed it, but it identifies the side of the car where you will find your gas tank.  This is especially helpful when you drive a rental car!

  2. Holes in pot handles: There is a very practical reason for the hole at the end of the handle.  If you have a stirring spoon, you don’t just want to leave it in the pot or set it on the counter. But with the hole at the end of the handle, you can slide the utensil in it so the spoon just sits up and drips back into the pot. Try it out next time you want to impress people with your cooking skills.

  3. Black Grating in Microwave WindowThis is called a Faraday shield, and it’s not an aesthetic choice, it’s super important. The Faraday shield is in place to prevent electromagnetic fields from leaving the microwave and causing harm to people who are waiting for their hot pocket to heat up. Without it, not only would your safety be at risk, but your food wouldn’t cook effectively.

  4. Keyboard Bumps:  If you look at a computer keyboard, any keyboard, you’ll notice two little bumps on both the F and J keys. If you ever took a class in high school on how to type, you probably know why those bumps exist on those keys. For the rest of you, those bumps are there so users can find their way on the keyboard while keeping their eyes on the screen. If you are correctly typing with two hands, your hands will be set up so that your left pointer finger is on F and your right pointer finger is on J.

  5. The Hole in the Cap of a Ballpoint Pen:  This is done on purpose, not to dry out the ink faster so you will be forced to buy a new one, but for safety reasons. These holes are there so that air can flow through in the event the cap is swallowed accidentally by a child or adult.  Remember, a lot of adults have the bad habit of putting pen caps in their mouth and it only takes one big breath in, to bring the cap to the back of one’s throat.

  6. Detachable Headrests in Cars:  You may have noticed that your headrest can completely come out of the seat, and no, it is not a flaw in the design.  It is meant to be used in an emergency. If you’re trapped in your car, you can pull out the headrest and use the long metal bars to break the window so you can get out. Another potential life-saving tip!

  7. Alt-A Hard Money Loans: For Borrowers who just miss qualifying for those “A-paper” conventional real estate loans, there’s a brand-new alternative financing program for them!  Only one of its kind – Sun Pacific Mortgage & Real Estate offers low Hard Money rates just for this California program. Check out the website at www.Sunpacificmortgage.com or call 707-523-2099 for more information. 


Hope you found this interesting and useful – I know I did when writing it! 

The Housing Market In The Next Economic Slowdown

The Housing Market In The Next Economic Slowdown

Recent reports seem to hint at the dreaded economic “Big R” [Recession].  According to the 2019 Zillow Home Price Expectations Surve, released June 5, 50% of the surveyed economists, investment strategists and housing market analysts believe the next recession will begin in 2020, with 19% predicting it will begin in the third quarter.  When asked what might trigger a recession, these same experts replied: trade policy; stock market correction, geopolitical crisis. Notice the absence of the housing market in their analysis. 

Since the real estate market was a major target in the last recession, there is reason for concern.  The good news for property owners is that these same experts continue to see reasonable appreciation into 2021.  Specifically, they forecast 4.1% this year, 2.8% in 2020 and 2.5% in 2021.

Because of the restrictions placed on lending since 2008, the “under water” state of homes is largely a thing of the past.  While housing isn’t expected to be problematic on a national level in the next recession, some markets will likely take bigger hits than others. 

Experts say that most homeowners are in a good place with the predicted slow-down of the economy.  Even if home values experience a dip on a national scale due to the slowing economy, it would not instantly lead to foreclosures.  The housing crisis in the Great Recession was caused largely by the fact that job loss was combined with the fact that most homeowners did not have much equity in their homes.  For the most part, homeowners aren’t making the same mistakes as a decade ago, and they have more equity in their homes, especially if prices drop. Unemployment rate is also at an all-time low.

Bottom line:  Relax! If you can continue to make your mortgage payments, you are in a good place.  Yes, there may be some minor real estate adjustments in housing values, but we are not looking at any severe drop in home equities.

No Surprise! Pet-Friendly Homes Are in High Demand

No Surprise Pet Friendly Homes Are In High Demand

In a recent study, it was reported that $72 billion (with a “b”) was spent on pets in the U.S. in 2018.  This statistic makes it easier to understand that when someone buys a home, they are considering the needs of their whole family, and that includes the family pet(s).  89% of pet owners say they would not give up their pet due to a housing restriction.

Most of us consider the comfort and ease-of-living with our pets when we are considering buying a new home.  It makes sense then, that when we list our home, we emphasize the pluses of living in the house with our furry friends.  

So, if you are a homeowner looking to sell in today’s pet-friendly environment, it could be a good idea to point out the features of your home that will attract pet owners.  Some of these features would include: a fully fenced backyard; nearby dog parks, walking paths or pet-friendly beaches; proximity to veterinarians, groomers and pet supply stores.

As a seller, considering the pet-friendliness of your home can be a key criterion in marketing your real estate today.  Take advantage of this love for pets to promote your home accordingly, getting an edge over the competition!

How Effective Are Your Negotiating Skills?

How Effective Are Your Negotiating Skills

There is no better way to secure your effectiveness as a negotiator than by truly being the guy in the “white hat”.  To distinguish yourself from the “black hats”, you must communicate your honesty and integrity to potential clients. You prove your dependability by quickly returning phone calls, turning around paperwork in a timely manner, and generally, providing value and making your client’s experience a little less stressful.  

Initially, nothing wins over a client more than a salesperson who listens intently to what they have to say.  Understanding the client’s problems and wishes achieves a favorable communication breakthrough in the negotiation process.  Your first conversations should help you distinguish what the client’s needs really are in relation to your dealings with him.  It is essential that you make no commitments that you cannot keep. It is always better to “under commit” and “over perform” rather than the reverse.  

Don’t be afraid to acknowledge that you do not have an answer to a question but be prompt in finding the solution/answer and getting back to the client.

There is truth to the statement: “Either you control the deal, or the deal controls you”.  Clearly defining the clients’ needs and listening to their concerns are helpful in controlling the direction of the deal.  

Bottom line for any successful negotiation is that both parties go away feeling that they have been heard and the resolution has been a “win-win”.   Both parties must believe that the agreement is satisfactory.

If you are looking for an alternative financing real estate lending partner, look no further than Sun Pacific Mortgage.  We specialize in hard money loans and loans that just verge on being a conventional loan but need a fast funding. If you have a client that needs our expertise, please call us at 707-523-2099 to discuss your situations.  We have assisted and partnered with thousands of mortgage brokers over the last 31 years and we look forward to working with you.

Tips To Get Your Home Purchase Offer Accepted

Tips To Get Your Home Purchase Offer Accepted

Real estate availability may be loosening up, but if you encounter a good buy and want to strengthen your chances of snagging it, here are some tried-and-true tips to remember when presenting your offer:

  • Increase Your Budget:  First-time buyers may be looking in a lower price range, which is one of the most competitive markets.  By getting approved for just a few thousand dollars more, it can make a substantial difference in closing the deal, but only a slight difference in your mortgage payment.
  • Eliminate Some Expenses:  Homeowner’s association dues can heavily impact your budget.  Look for property that does not require this additional expense.  Looking for property closer to your job can save you time and money too.
  • Contingencies Are Your Enemy:  The cleaner your offer, the better the chance of securing the home.  Don’t ask for the seller to foot the bill for expenses such as a home warranty, closing costs, or minor repairs.
  • Flexibility Wins:  When presented with a multiple offer situation, the more flexible you can be, the better.  Defer to the seller’s preferences regarding closing, for instance. Offer to rent back if that is an option they would prefer.  The easier you make it for the seller, the better your chances are of moving into your new home.
  • Write a Letter:  While the letter shouldn’t bring tears to the sellers’ eyes, a bit of pandering wouldn’t hurt.  Sellers like to hear that the new buyer loves their house as much as they do and will continue to care for it.  You don’t need to tell them about all the improvements you intend to make. Remember, you are selling yourself as much as you are trying to buy their house.

Above all, be patient and be prepared to negotiate.  Don’t take offense if your first offer is rejected, and don’t insult the sellers with a ridiculously low-ball offer.  Buying and selling real estate can be a stressful experience, but in the end the rewards will be well worth your pain.

Looking for alternative financing or turned down elsewhere by banks and other lenders? Sun Pacific Mortgage can help! A Hard Money loan is considered an “all-cash offer” and could help you get approved faster. Call today and see if we can help with your home financing needs (707) 523-2099.

Accessory Dwelling Units: Do Your Homework First!

Accessory Dwelling Units Do Your Homework First

The housing crisis, especially in California, has worsened over the past decade.  There is a report that states California is short three million housing units. This accounts for the additional pressure on home and rent prices.  To alleviate this disparity some cities are reducing the red tape required to build these attached or detached structures on an existing residence. This type of building (ADU) might be called a granny flat, backyard home, casitas, or in-law suite. 

If, as a homeowner, you are considering this type of addition, it is imperative that you do your homework before embarking on this investment.  Each city employs different ordinances and regulations. Don’t depend on the city’s website to inform you regarding the most up-to-date information because it is changing so quickly.   

With this warning in mind, it is best to run your design plans through your city’s planning department before you begin your project.  Although ADUs are small, generally 400-1000 square feet, the cost to build them can be astronomical. Why? Because they include the two most expensive rooms in the house: a kitchen and a bathroom.  Check out size restrictions, set-back requirements, and zoning issues that could sabotage or change the scope of your project.

There may be restrictions on who your renter can/will be.  There is pending California legislation that will affect whether there is an owner-occupancy requirement.  There may also be restrictions in certain municipalities regarding vacation and short-term rentals. Some cities are restricting them or prohibiting them entirely.  

As if all the above is not daunting enough, you must still deal with the utilities.  They have been known to grind more than one project to a halt. Don’t forget to ask about utility incentives or rebates for energy efficiency upgrades.

Bottom line:  Expect the unexpected.  Rules are changing and timelines are typically longer than planned.  Take the time to do the research required to mitigate your risk and put you in the best position to be successful.

And for those who need additional financing to build an ADU, you will want to contact a licensed and trusted Lender.  In fact, you may want to check out a few different types of lenders as some offer different programs with different terms & rates.  Find the best one that fits your needs, to execute your expansion!

Bay Area Second Quarter Home Prices

Bay Area Second Quarter Home Prices

Except for San Francisco and San Mateo Counties, home prices in the Bay Area remained relatively flat according to data provided by local Multiple Listing Services.  Year-over-year prices flatlined across the Bay Area, except in Santa Clara and Sonoma Counties where prices retracted. All four of these counties, however, have reached historically high real estate values.  

It appears that the latest tax reform has put the brakes on the market by curtailing sales of homes priced between $1 million and $2 million.  84% of the decline in sales was found to be in this dollar range. Homes below $1 million remained flat compared to last year. The gains that were reported happened in Alameda, Santa Clara, Sonoma and Napa Counties.  These increases would have been greater if the inventory had been available.

It is not surprising that California has felt the impact of the last tax reform.  The cost of owning a home in California has significantly increased. We have only to look to the cap on state and local deductions to $10,000 and reduced mortgage interest deduction of a loan up to $750,000 to determine a key reason for the slow down in real estate sales. 

Going forward, home buyers could be facing an easier time.  Mortgage interest rates have eased and seem to be trending downward so potential Home Buyers find your local, trusted Lender and find out what you qualify for!  For anyone not quite qualified for traditional or conventional financing, you have alternative financing options such as short-term Hard Money loans. Sun Pacific Mortgage has rolled out a new program for those borrowers who fall just below the “Qualified Borrower” classification for conventional lenders, called Alt-A Hard Money.  This will enable borrowers with both good credit and suitable property, but who just don’t quite meet the qualifying criteria for a standard loan, to obtain a real estate loan for purchase of refinance.  

Take advantage of the decreasing rates and increasing real estate value.  Call us and get qualified to buy a home today! (707) 523-2099 

Multigenerational Homes Are in Greater Demand

Multigenerational Homes Are In Greater Demand

In 2018 the Pew Research Center released a report showing that almost 1 in every 5 Americans lives in a multigenerational home.  In fact, the numbers of two or more adult family members living under the same roof increased from 26.8 million in 1960 to 64 million in 2016.  Why the increase in this type of living arrangement?

Generally, two reasons prompt the move to a home that can accommodate this type of family living.  It either comes down to cost savings or a way for families to provide help to aging parents. Since the average life expectancy in the United States is 78 years old, this concern has become more of an issue.  Children want to take care of their aging parents or just want to spend time together. 

The benefits of being part of a multigenerational household extend to both grandchildren and grandparents: The University of Oxford did a study that found that children who are close to their grandparents have fewer emotional and behavioral problems and are better able to cope with traumatic events in their lives.  Boston College reported on a study that revealed emotionally close ties between grandparents and adult grandchildren reduced depressive symptoms in both groups.

This is not to say that there are no challenges in this type of living arrangement.  It may be difficult to meet privacy needs, and responsibilities regarding chores and financing can cause issues if they are not discussed before the move.

Besides the reasons stated above, some other factors that prompt the move to this housing arrangement include college grads who find it difficult to pay for their own apartment and still pay off education loans; millennials who “fail to launch”; immigrants who find living together as a blended family a natural way of life; suddenly single parents who need help starting over; and finally, some people just love the idea of living with family.

Whatever the reason for multigenerational living, today’s house seeker has an increased likelihood to consider this option when shopping for their next home.  

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