Already strong spring home buying season in sight.
Following a winter lull, forward looking market indicators suggest we may be seeing a strong spring home-buying season. Data on pending home sales shows a 23 percent increase in activity between December and January. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually become closed sales transactions one to two months later.
Where is demand coming from? There has been a significant pent-up demand for homes. Following the recession, household formation in California fell dramatically. The latest estimate from California Association of Realtors (CAR) shows that some 575,000 fewer households were formed in California between 2008 and 2012 due to economic hardship. If the household formation trends continued at the pace seen before the recession, California would have not only that many new households, but 60 percent of those households would be homeowners. That means we are missing about 345,000 new homeowners in California. With improving economic conditions and solid employment growth across the state. Pent-up demand for homes is evident in the pending sales index for January that CAR recently released.
There are obstacles, however, that potential buyers may be facing. For one, inventory of homes listed for sale is still at historical lows. Despite an increase in inventory in January by 12.1 percent from December of 2013 and by 6.7 percent from a year ago, the supply of homes in the lower segment of the market continues to fall, while inventory of homes prices at million dollars and higher went up.
Why is the inventory so low? There are several reasons worth mentioning. On one hand, following the collapse of the housing markets, home prices along with historically low interest rate led to a very affordable housing market. Those that were able to take advantage certainly did and absorbed a great share of the low-priced inventory. In the meantime, the supply side of inventory did not see any progress. Secondly, there are still about 15 percent or nearly 1.3 million of California’s 8.65 million homeowners being underwater. Thirdly, foreclosure pipeline which comprised a large share of home sales over the past few years has dried up and not many foreclosures are available for sale. Lastly, investors od both large and small scale, who recently bough properties are renting them instead of selling them. That may change as prices continue to improve. The low inventory market, however, may be good news now for sellers. Potential sellers who have been contemplating putting their home up for sale may want to take advantage o f the low inventory of homes available for sale and list their homes.
Source: March 2014 Market Snapshot California Association of Realtors
Home Insurance with a Skateramp, Pool, Trampoline
Enjoying Southern California Weather is easy all year long!
Fortunately, we can enjoy our outdoors well and often. It’s not uncommon for our homes to have pools and slides, jungle gyms and swing sets, skate ramps and trampolines, all getting plenty of use throughout the year. We certainly get our monies worth out of them! But, do you ever stop to consider the great deal of financial exposure behind these fun recreations? They are risks meant to be taken. Never the less, we need to protect ourselves from their potential exposures. It is important to be aware that you could be held liable for an accident or mishap on your property such as a slip and fall, an injury on a jungle gym or in a pool, your dog getting a little unfriendly with someone, and so on. Fortunately, there are easy and affordable ways of accomplishing this financial protection.
The easiest and most obvious example is your homeowners insurance policy. Most homeowners policy products automatically include a liability insurance endorsement, which protects your financial security. Your homeowners insurance includes a limit on this coverage, usually $300,000 per incident.
At a glance, you might be comfortable with that limit, however, a lot of expense can go into a liability claim, all of which accumulate towards that limit including attorney fees, medical expenses, punitive damages, and settlements. If your limits don’t cover the claim, your assets and equities may be liquefied, and wages garnished from your own pocket. As an advocate for peace of mind, you may want to consider raising your limit to $1,000,000 or more, depending on your net worth and wages, which can cost as little as $250 per year. Now, that’s some easy relief to relax with this summer!
Source: Jennifer Stanford, Stanford Insurance Agency. Ca license #E334471072