September 15, 2023

We want to share two of our recent real estate sales representing buyers in the East Bay.

In San Leandro, our buyers faced fierce competition from multiple other buyer groups vying for a home priced well-below asking in a premier neighborhood. Utilizing our expertise, we conducted a comprehensive comparative market analysis, collaborating closely with our clients to craft an offer that not only met their needs but also appealed to the seller. Our diligence paid off as we emerged as the chosen offer, securing a fantastic property for our clients.

Meanwhile, in Oakland, we strategically pivoted our approach. We had showed our clients a spacious home in the Lincoln Heights area that they found very appealing, but they believed it might be out of their price range given the intense competition in the area. An exciting opportunity unexpectedly arose when the listing agent informed us of a surprising lack of expected offers on the home. We quickly regrouped with our clients, and they were able to make a successful offer on the spacious home they had fallen in love with, all without the stress of competing offers.

These transactions highlight our commitment to finding the right opportunities for our clients and securing their ideal homes at favorable terms in this current unpredictable real estate market.

Timing can play a crucial role in a successful offer on a home. While a buyer may be hesitant to borrow money with a mortgage loan due to rates that are much higher than they were last year, waiting could bring more problems. See the article BY ANGELICA LEICHT below for why.

In March of 2020, we had the pleasure of meeting an incredible couple from San Francisco and their journey to find their first home in the CV-San Leandro area has been nothing short of inspiring.

Despite the challenges posed by the pandemic, we embarked on a house-hunting adventure together, viewing over 30 homes throughout that year. With the ever-changing Coronavirus rules affecting our ability to visit properties, it was no small feat, but our clients' determination never wavered.

As the real estate market heated up, our couple decided to take a break at the end of 2020 to regroup. But they didn't give up on their dream!

Fast forward to May of this year, they reached out to us, eager to resume their home purchase search. After viewing many homes, the stars finally aligned, and their offer was accepted (out of 8!) for a San Leandro home that is ideal for them!



We couldn't be happier for this wonderful couple and are thrilled to have been a part of their journey to homeownership.

Living in their cozy 1-bedroom condo, both working from home, our San Francisco friends realized it was time to make a change. They needed more space, more nature, and a community to grow with. After an extensive search, they discovered their perfect haven in Oakland.

Now, they are basking in the California sunshine in their own sunny backyard, ready for their little one to take those first steps. Oakland has welcomed them with open arms and they've already made many new friends while strolling through the vibrant neighborhood.

We couldn't be happier for this lovely family and their newfound happiness. This is what real estate is all about - finding not just a house, but a place to create memories and build a future.

Rates could increase in the future

Mortgage interest rates are influenced by a range of economic factors, including inflation, Federal Reserve policies and overall market conditions. Historically, rates have shown a tendency to fluctuate, and while they've already increased significantly this year, there's a chance they could climb even higher in the future.

By locking in a mortgage rate now, you can shield yourself from the potential rate hikes down the road. This can provide you with peace of mind, knowing that even if rates rise, your mortgage interest rate will remain unchanged. And, given the impact that higher rates have on your monthly mortgage payments, this proactive step can save you a substantial amount of money over the life of your loan.

Refinancing is always an option if rates drop

One of the advantages of locking in a mortgage rate now is that, should rates drop significantly in the future, you still have the option to refinance your mortgage loan. When you refinance, you replace your existing mortgage with a new one at a lower interest rate, leading to reduced monthly payments and long-term interest savings.

By locking in a rate today, you're protecting yourself against potential rate increases while keeping the door open for refinancing if rates become more favorable. And, you're also not passing up on homes that fit what you want or need in hopes that rates will drop. That's a big benefit in today's market, considering that housing inventory is still lacking in most markets.

If rates drop, competition will be steep

The housing market might be relatively competitive right now, but it could become even more so in the future if rates drop. There are already ongoing issues with limited housing inventory, and as we've seen in recent years, lower rates typically lead to more buyers competing over the available homes. That, in turn, can lead to higher home prices — and lost opportunities to purchase your dream home. 

Given these what-ifs, it makes sense to lock in a mortgage rate right now, especially if the perfect home has come along. You don't have to stay tied to that rate forever, but if you wait, you could miss out on a home that fits your specific requirements. And who knows when another one will become available.

The Bottom Line

Given the unpredictable nature of the housing market, and the ongoing inventory shortage, locking in a rate can provide you with the opportunity to buy a home when the right one comes along — and then adjust your loan as necessary in the future.

With the economy looking stronger than what was anticipated six months ago, interest rates will remain elevated for a little longer. The economy will likely show more signs of slowing later this year and the Central Bank will have no choice but to cut rates starting in the first quarter of 2024. Mortgage rates will decline starting in the fourth quarter of this year and will further improve next year. The decline will likely be gradual though.

The resilience of the U.S. economy continues to surprise economists to the upside and the chance of falling into a recession has been lowered again. Goldman Sachs expected the Fed to pause rate hikes in September and believes that “very gradual” cuts of 25 bps per quarter will begin in Q2 2024. Goldman Sachs also predicted that the slowdown in economic activity resulting from monetary policy tightening will slowly diminish and eventually become a non-factor by early 2024. Real disposable income will pick back up next year as solid job growth continues.

Spending time with friends who were clients first is extra-special. We helped both couples each buy investment properties and the next sale was a lovely home in Pleasanton for a very happy family!

Von Roll Team

Re/Max Accord

3327 Castro Valley Blvd.

Castro Valley, CA 94546

www.vonrollrealestate.com

510.919.1234

Ted Von Roll & Liz Dunbar

DRE #00370936 & DRE #01994756