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Since the number of homes for sale is low today, especially across the North Bay Area, it can feel challenging to find one that checks all your boxes. But if you know which features are absolutely essential in your next home and which ones are just nice bonuses, you can land a home that fits your needs.

Danielle Hale, Chief Economist for realtor.com, explains it like this:

“Focus on the goal you set out for yourself, like your list of must-haves and nice-to-haves and your budget, . . . Stick to that. Be persistent.”

So how do you go about creating your list of desired features? The first step is to get pre-approved for your mortgage. Pre-approval helps you better understand your budget, and that plays an important role in how you’ll craft your list. After all, you don’t want to fall in love with a home that’s too far out of reach.

Once you have a good grasp of your budget, you can begin to list all the features of a home you would like. Here’s a great way to think about them before you begin:

  1. Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
  2. Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender (examples: a second home office, garage, etc.).
  3. Dream State– This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).

Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.

Bottom Line

Crafting your home search checklist may seem like a small task, but it can save you time and money. It’s also one of the keys to being successful in today’s competitive market here in the Northern Bay Area. Throughout San Francisco, Marin County and Southern Sonoma County, we’re working hard to ensure our clients are as buyer ready as possible. This means getting them positioned to move quickly as soon as the right opportunity presents itself. If you’re thinking about making a purchase this year we’d love to connect so that we can work together to find a home that fits your wants and needs. 

Every year, many renters ask themselves the same question: Should I continue renting, or is it time to buy a home? If you’re a renter in the Northern Bay Area, chances are you’ve asked yourself that question at least once, and it’s likely because you’ve faced an increase in your monthly housing costs over time. After all, according to Census data, rents have risen consistently for decades.

To make an informed and powerful decision, the first step is understanding what’s happening in today’s housing market so you can determine which option is the better long-term financial decision for you.

Rents Are Going Up Again This Year

Rents across the country continue to skyrocket and the Bay area is proving to be no exception to this trend. Data from realtor.com shows just how much rental prices are surging throughout the United States. The graph below highlights rental unit price increases over the past year:

If you’re a renter in Marin or Sonoma County and plan on signing a new lease, your monthly costs are likely to go up when you do so. Those rising costs can have a big impact on your financial goals, including any plans you’re making to save for a home purchase.

Homeownership Offers Stable Monthly Costs

Of course, one of the key benefits of owning your home is that you’re able to lock in and stabilize your payments for the duration of your loan. That’s not the case when you rent. 

While rents are already on the rise, there’s a good chance many people will see their rental costs increase even more this year. As Danielle Hale, Chief Economist at realtor.comsays:

With rents already at a high and expected to keep going up, rental affordability will increasingly challenge many Americans in 2022. For those thinking about making the transition from renting to buying their first home, rising rents will remain a motivating factor. . . .”

So, if you’re ready to become a homeowner, waiting any longer may not make financial sense. Instead, escape the cycle of rising rents and enjoy the many benefits that come with homeownership today. 

Bottom Line

Starting your JOURNEY towards homeownership can pay off significantly this year. Our team at Journey Real Estate takes pride in understand each of our client’s unique circumstance so that we can help them personalize a winning strategy. Collectively, our team has several decades worth of experience serving San Francisco, Marin County, Sonoma County, and the greater Bay Area. We study the nuances of the Bay Area housing market and are fluent in the latest trends. If you’re thinking about purchasing a home, we’d love the opportunity to work as your trusted real estate partner. 

Financial benefits are always a key aspect of homeownership, but it’s also important to understand that the nonfinancial and personal benefits are why so many people genuinely fall in love with their homes. When you own your home, you likely feel a sense of emotional attachment because of the comfort it provides, but also because it’s a space that’s truly yours.

Over the past two years, we’ve learned to love our homes even more as we’ve stayed home more than ever due to the ongoing pandemic. As a result, the personal and emotional benefits our homes provide have become even more important to us.

As the most recent State of the American Homeowner from Unison puts it:

“Despite the upheaval and uncertainty of the past year, one thing has stayed the same: the home continues to be of the utmost importance and a place of security and comfort.

When the health crisis began, the world around us changed almost overnight, and our homes were redefined. Our needsshifted, and our shelters became a place that protected us on a whole new level. The same study from Unison notes:

  1. 91% of homeowners say they feel secure, stable, or successful owning a home
  2. 64% of American homeowners say living through a pandemic has made their home more important to them than ever
  3. 83% of homeowners say their home has kept them safe during the COVID-19 pandemic

It’s no surprise this study also reveals that homeowners now love their homes even more as our emotional attachments to them have grown:

That sense of emotional connection genuinely reaches far beyond the financial aspect of homeownership. Because they’re our shelters – ones that we can genuinely call our own. Our homes touch our hearts and can also positively impact our mental health.

As JD Esajian, President of CT Homes, LLCsays:

“Aside from the financial factors, there are several social benefits of homeownership and stable housing to consider. It has long been thought that buying a home contributes to a sense of accomplishment. Still, most individuals fail to realize that homeownership can benefit your mental health and the community around you.

Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, take a moment to reflect on what Mark Fleming, Chief Economist at First Americannotes:

“Buying a home is not just a financial decision. It’s also a lifestyle decision.

Bottom Line

There are so many reasons to fall head over heels for homeownership, especially here in the Bay Area. Your home will provide a place to customize and call your own, in addition to stability and security. We love working with buyers from San Francisco, Marin County, and Sonoma County and have resources all over the globe. If you’re ready to fall in love with homeownership, let’s connect so you can get started on your homebuying JOURNEY today.

If you were thinking about buying a home this year, but already pressed pause on your plans due to rising home prices and increasing mortgage rates, there’s something you should consider. According to the latest report from ATTOM Data, owning a home is more affordable than renting in the majority of the country. The 2022 Rental Affordability Report says:

“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.”

Other experts in the industry offer additional perspectives on renting today. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November each year (see graph below):

Molly Boesel, Principal Economist at CoreLogic, stresses the importance of what the data shows:

Single-family rent growth hit its sixth consecutive record high. . . . Annual rent growth . . . was more than three times that of a year earlier. Rent growth should continue to be robust in the near term, especially as the labor market continues to improve.”

What Does This Mean for You?

While it’s true home prices and mortgage rates are rising, so are monthly rents. As a prospective buyer, rising rates and prices shouldn’t be enough to keep you on the sideline, though. As the chart above shows, rents are skyrocketing. The big difference is, when you rent, that rising cost benefits your landlord’s investment strategy, but it doesn’t deliver any sort of return for you.

In contrast, when you buy a home, your monthly mortgage payment serves as a form of forced savings. Over time, as you pay down your loan and as home values rise, you’re building equity (and by extension, your own net worth). Not to mention, you’ll lock in your mortgage payment for the duration of your loan (typically 15 to 30 years) and give yourself a stable and reliable monthly payment.

When asking yourself if you should keep renting or if it’s time to buy, think about what Todd Teta, Chief Product Officer at ATTOM Data, says:

“. . . Home ownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.”  

If buying takes up a smaller portion of your pay and has benefits renting can’t provide, the question really becomes: is renting really worth it?

Bottom Line

If you’re weighing your options between renting and buying, it’s important to look at the full picture. While buying a home can feel like a daunting process, having a trusted advisor on your side is key. Let’s connect to explore your options so you can learn more about the benefits of homeownership today. At Journey Real Estate, we aim to educate, inform, and empower our clients to make smart financial decisions.

1. How do I pick a contractor?

Ideally, you want to build the same kind of relationship with your contractor as you do with your real estate agent: one built on trust that makes you want to go back to that person for any future needs. Your contractor should be a very good listener and communicator. You want them to “get” your vision for your home, and to keep you in the loop every step of the way. Do your due diligence by checking out contractors’ reputations, talking with other clients, and looking at work they have done previously before you make your selection.

2. How much will my project cost?

Of course, the answer depends upon the scope of your project, but in order to get the best estimate from your contractor, take time to write down each detail of your plan so that the contractor can include everything in their estimate. Renovations are famous for taking longer and costing more than originally planned, but this is often because the homeowner makes additions or changes along the way, or they don’t realize that, for example, if you move a wall in your home, you may have to then reroute electricity and outlets. One item often leads to another, so you have to look at everything piece by piece.

3. How long will renovations take to complete?

As we said above, this depends on the amount of work being done– and how many changes are made along the way. The more pre-planning you do, the better estimate your contractor can give you.

4. How do I prioritize projects?

If you are living in your home during renovations, you may want to plan out the project in phases, so you can live out of some rooms while others are being worked in. You may also need to phase projects based on cost and availability of funds. If a sale is in your future, our team can help weigh in on which updates will provide you with the best return on investment. This is something we do often at no cost. 

5. Where do I begin?

You begin by conducting a lot of research. Start a look book for your home, either in a notebook or online, collecting pictures of the look and finishes you want. Talk to different contractors, and visit kitchen, bathroom, appliance, and flooring showrooms to get ideas on selections and pricing.

6. Do I need permits?

Your contractor will know what projects require permitting. Make sure that you do abide by permitting regulations, as failure to secure proper permits can come back to bite you if further work is needed down the road.

7. How much will renovations increase my home value?

Every homeowner hopes that making improvements will increase their home’s value, and this is usually the case, but sometimes what homeowners view as improvement can turn out to be liabilities to future buyers. For example, don’t put so much money into the house that it becomes more expensive than the rest of the neighborhood. And be careful not to add personal style preferences that can’t be easily changed, like ornamental fixtures, radical architecture, or unusual landscape features. Again, this is something the team at Journey Real Estate is happy to weigh in on, so don’t hesitate to reach out. 

8. How should I pay for renovations?

If you have the cash to pay for your renovations, that’s certainly a good way to go. Otherwise, you might consider a home equity loan with a manageable monthly payment or a revolving line of credit that you can use for renovations as well as emergencies that may arise later.

When it comes to making renovations prior to a home sale, we often tell our clients – “All we need is a key!” We partner with wonderful contractors and have extensive experience in determining where to draw lines. We also work closely with contractors ranging from handyman to general contractor and have great connections with all of the trades. If you’re looking to sell here in the Bay Area, it’s never too early to start the conversation. 

Also noteworthy – we offer a program called Revive, where you can have all of your renovation expenses paid for up front and the contractors are then paid from the proceeds of the sale. There are so many relatively easy things one can do to put $1 in and get $2 back. Maximizing value for our clients is our job and we love it! 

 If you have a home to sell, you’re probably excited to get the process started. There are many things you need to consider when selling your property, and it’s hard not to feel overwhelmed by the task. The good news is we’ve done extensive research about what you need to know about selling your home – and we’ve answered the questions you’re probably wondering:   

How will you determine my home’s value?

To determine your home’s value and set a listing price, I will complete a Comparative Market Analysis. The CMA uses recent sales of homes close in geography, age, size, and features to yours. (A CMA is not the same as an appraisal, which a licensed appraiser can perform.) Once we have a CMA, we can discuss pricing strategies to maximize value. 

Is it a good idea to start high?

Many sellers like the idea of “starting high” to see if they get higher offers, but this strategy isn’t usually practical. First, buyers may not see your listing if they use a price filter set to what they expect prices in the area to run. Second, you run the risk of the appraisal coming in lower than your contract price, which will require your contract to be renegotiated or canceled. Third, if your listing price puts your home higher than your neighborhood value, your home will likely sit on the market longer as buyers wait for you to make a reduction. It’s best to set a realistic listing price that will bring you buyers quickly. My goal is always to get you the highest possible price in the shortest amount of time. 

What percentage of the listing price can I expect to get?

The list-to-sell ratio is determined by dividing the selling price by the listing price. The ratio is largely market-driven. In a sellers’ market, which is when inventory is low, sellers may get close to 100% or over 100% if the home sells above list price. In a market with a large inventory of homes, a buyers’ market, buyers have more negotiating power, so the list-to-sell ratio may be closer to 90%. My goal is to get you as close to a 100% list-to-sell ratio as the market will bear. There are a lot of variables to take into consideration, so we can give you a better idea once we see the property. 

How soon can I get my home on MLS?

Once we agree to work together, I will begin entering your home information on the MLS system. I will also schedule a time for a professional photographer to take photos of the property. As soon as all the information and pictures are uploaded items, your listing can go live on MLS. It really depends on our client’s situation and how much prep work is required. It’s never too early to start the conversation. 

What do I need to do to get ready to list?

For your part, it’s a good idea to begin cleaning out or organizing storage spaces, closets, and drawers and putting away some of your décor or belongings. You may also want to have the exterior pressure washed, and the landscaping cleaned up. We do an in depth ROI analysis during our consultation and can bring in painters, stagers, etc. as needed. Depending on location and price point, we will help to draw lines and make sure every $1 dollar you put in, you’ll get $2-$3 back. Don’t stress, we can handle ALL of the pre-listing prep work. Our partners at Revive have an option to cover all up front renovation costs, which would then be repaid at the close of escrow. We can talk further about specific things that will help your home show better.

How will showings be conducted?

You and I will agree on the terms you are comfortable with for showings. We want to make the home accessible to buyers without too much disruption to your personal life. We can use a showing schedule, and unless we agree otherwise, I will notify you in advance of showing requests. We typically use electronic lockboxes that only active members of our local Realtors association can access. We can set the lockbox on a schedule, if necessary. Any time the lockbox is accessed, I receive a notification. We ensure safe showing protocols that you are comfortable with. 

How will you market my property?

Marketing your listing is of utmost importance. Most buyers find their properties online through MLS (via their agent,) Realtor, Zillow, or other search engines. Listings in our MLS system automatically show up on these sites within a day or two of becoming active. In addition, I share my listings with the agents in my network, on my website, and on my social media. We can discuss additional opportunities such as hosting open houses and marketing within your neighborhood. We have a standard of excellence when it comes to photography and videography, so rest assured, we will display your property in its best light. 

How long will it take to find a buyer?

Several factors influence the time it takes to find a buyer. These include the market conditions, price range (higher-priced or luxury homes typically take longer to sell,) location (whether your home is in a desirable neighborhood or a unique location,) and the condition of the home (is move-in ready or in need of renovations?) In a balanced market, most houses, when priced accurately and without significant damage or extenuating circumstances, go under contract within thirty days. Homes sell faster in a seller’s market, while buyers take more time to look when inventory is high. Most of the Bay Area is still a strong Sellers market, so as long as it’s priced appropriately, it should sell within the first 2-3 weeks. 

Will you qualify the buyer?

When an offer is received, I will work with the buyer’s agent to vet the buyer. All offers should be accompanied by either a pre-approval from a mortgage lender or, if paying cash, by verification of funds available to cover the purchase price. Once you accept an offer, the buyer must put down the agreed upon escrow deposit, schedule any inspections as stipulated in the contract, and, if financing is involved, their lender will initiate the loan approval process. I will stay in close contact with the buyer’s agent to make sure due process is followed. We know most of the local productive agents personally, which plays a factor as well. 

What are the costs involved?

The seller usually pays for the real estate agent fees, which are divided between the buyer’s agent and the seller’s agent. The seller also pays their share of the property taxes and HOA dues. If the full annual amount has been paid, the buyer will repay their portion back to the seller at closing. Often the seller elects to pay a portion of the buyer’s closing costs to help make the transaction work for the buyer.

Is your commission negotiable?

The commission is not negotiable. Keep in mind that the commission is split between the two sides, and both agents must abide by the structure their brokerage follows. If we were to reduce the commission upfront, buyers’ agents might be less likely to advocate for your property. I will work very hard to represent you honestly with full loyalty and integrity to earn the designated commission. This work is my livelihood, and I often go above and beyond the call of duty to earn my pay and close transactions for my clients.

Will you also represent the buyer?

If I happen to find the buyer for your home, be assured that I am trained and experienced in handling both sides of the transaction fairly. As a professional, I respect the confidentiality and loyalty required in dealing with both parties. On the plus side, communication is easy when I am representing both sides. Working on both sides of the transaction is hard work, but it would not be a problem. If there was a competing offer, I would hand over the buyer to a colleague and represent the seller exclusively. We only represent both sides when it is a true win-win and there are no conflicts of interest. 

Can I cancel if I find my own buyer?

The listing agreement is a contract between you and me and/or my brokerage. It stipulates the terms for cancellation, which you are encouraged to review. Once we have signed the listing agreement, a prospective buyer that approaches you directly should be redirected to me.

How often will we communicate?

Communication is key to an easy and successful sale. I will keep you appraised of events every step of the way. You are welcome to reach out to me with questions or concerns. When we go over the listing information, we will discuss our preferred means of communication and schedules to make sure we know each other’s availability and boundaries.

Thinking of selling? I’m here to help! Shoot me a message or give me a call today.

The last 18 months changed what many buyers are looking for in a home. We saw a ton of people relocate from San Francisco to the suburbs of Marin and Sonoma Counties. If you’re wanting to stay in the same city, but your housing needs have changed, we can help guide you towards making an informed decision whether to stay and renovate or move. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3 2021. The survey reveals the following:

If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:

  1. A possible desire to relocate
  2. The difference in the cost of a renovation versus a purchase
  3. Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)

In either case, you’ll need access to capital: the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of equity.

Home Equity Is Skyrocketing

The record-setting increases in home prices over the last two years dramatically improved homeowners’ equity. The graph below uses data from CoreLogic to show the average home equity gain in the first quarter of the last nine years:The Big Question: Should You Renovate or Move? | MyKCM

Odeta Kushi, Deputy Chief Economist at First American, quantifies the amount of equity homeowners gained recently:

“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”

As a homeowner, the money you need to purchase the perfect home or renovate your current house may be right at your fingertips. However, waiting to make your decision may increase the cost of tapping that equity.

If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.

Mortgage rates are forecast to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the Federal Housing Finance Agency (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.

First Step: Determine the Amount of Equity in Your Home

If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:

  1. The current mortgage balance on your home
  2. The current value of your home

You can probably find the mortgage balance on your monthly mortgage statement. To find the current market value of your house, you can pay several hundreds of dollars for an appraisal, or you can contact one of our Journey Real Estate local real estate professionals who will be able to present to you, at no charge, a professional equity assessment report. We are all about empowering our clients to make well-informed decisions.

Bottom Line

If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home. Let’s start the conversation today.

Journey Real Estate ~ “The road best traveled!”

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