In today’s real estate market, low inventory and high demand are driving up home prices. As many as 54% of homes are getting offers over the listing price, based on the latest Realtors Confidence Index from the National Association of Realtors (NAR). The past two homes sold by The Ransom-McKenzie Team sold for over 10% of the asking price. We’re seeing this trend on average for our buyers as well. Shawn Telford, Chief Appraiser at CoreLogic, elaborates:
“The frequency of buyers being willing to pay more than the market data supports is increasing.”
While this is great news for today’s sellers, it can be tricky to navigate if the price of your contract doesn’t match up with the appraisal for the house. It’s called an appraisal gap, and it’s happening more in today’s market than the norm.
According to recent data from CoreLogic, 19% of homes had their appraised value come in below the contract price in April of this year. That’s more than double the percentage in each of the two previous Aprils.
The chart above uses the latest insights from NAR’s Realtors Confidence Index to showcase how often an issue with an appraisal slowed or stalled the momentum of a house sale in May of this year compared to May of last year. If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the house’s appraised value. That means there’s going to be a gap between the amount of loan the buyer can secure and the contract price on the house.
In this situation, both the buyer and seller have a vested interest in making sure the sale moves forward with little to no delay. The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home. That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market. In fact, it has become the norm to waive the appraisal with the offer in order to get it accepted. Many sellers will not even consider an offer without the appraisal being waived.
We are Your Ally
Whether you’re buying or selling, The Ransom-McKenzie Team is your ally. We’re with you throughout the process and are here to help you navigate the unprecedented market we are currently working in. Including potential appraisal gaps. If you’re thinking of buying or selling a home, give us a call today!
Even in a normal market, it’s good to have an experienced guide coaching you through the process of buying or selling a home. That person can advise you on important things like pricing your home correctly or the first steps to take when you’re ready to buy. However, the market we’re in today is far from normal. As a result, an expert isn’t just good to have by your side – an expert is essential.
Today’s housing market is full of extremes. Mortgage rates hovering near record-lows are driving high buyer demand. On the other hand, an absence of sellers is creating record-low housing inventory. This imbalance in supply and demand is leading to a skyrocketing rate of bidding wars and more houses selling over their asking price. This is driving home price appreciation and gains in home equity. These market conditions aren’t just extreme – they can be overwhelming. Having a trusted expert like The Ransom-McKenzie Team, to coach you through the process of buying and selling a home gives you clarity, confidence, and success through each step.
Here are just a few of the ways a real estate expert is invaluable:
- Contracts – We help with the disclosures and contracts necessary in today’s heavily regulated environment. Contracts are constantly changing, and understanding the disclosures needed for each transaction can be complicated. Make sure you are working with someone who can protect your interests.
- Experience – We’re well-versed in real estate and experienced with the entire sales process, including how it’s changed over the past year.
- Negotiations – We act as a buffer in negotiations with all parties throughout the entire transaction while advocating for your best interests. With over 20 years of experience behind us, we’re ready for any challenge that comes our way.
- Education – We simply and effectively explain today’s market conditions and decipher what they mean for your individual goals. Being intimately familiar with the local market means we are aware of what is happening locally vs national trends. Every market is different.
- Pricing – We help you understand today’s real estate values when setting the price of your home or making an offer to purchase one. If you don’t want to leave money on the table, or miss out on your dream home because you do not know where the market values are going, you’ll want The Ransom-McKenzie Team on your side.
We will be your essential guide through this unprecedented market, but truth be told, not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding the right agent should be your top priority when you’re ready to buy or sell a home and the Ransom-McKenzie Team has a proven track record of working with buyers and sellers in Riverside and the surrounding communities.
So, how do you choose the right expert?
It starts with trust. You’ll have to be able to trust the advice your agent is going to give you, so making sure you’re connected to a true professional is key. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. As true professional experts we can, however, give you the best possible advice based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will help you plan the steps to take for success, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions toward your goals. That’s exactly what you want and deserve.
The Team For You
It’s crucial right now to work with real estate experts who understand how the market is changing and what that means for home buyers and sellers. In Riverside, that is The Ransom-McKenzie Team. We can answer your questions, give you the best advice, and guide you along the way. We are in the trenches every day, full time, which is what you need most in today’s market. If you’re planning to make a move this year, contact The Ransom-McKenzie Team. We are here to help you.
The Hays-Pattee Home
3611 Mount Rubidoux Drive
In November of 1903, It was discovered that Tom Hays had embezzled over $95,000 from the organization he worked with, the Orange Growers National Bank. He was swiftly arrested, but before his arrest, he spent a portion of what today would be 2.8 Million dollars, on the construction of a home for him and his family, the first home to be built on the slopes of Little Mt. Rubidoux. Like years past, this neighborhood was one of the most prestigious and sought-after neighborhoods in the City of Riverside. Tom and his family never lived in the home, and the scandal that rocked the City of Riverside was all the rage in the social circles for years to come.
Today, the majestic Hays-Pattee house is for sale with The Ransom-McKenzie Team at Coldwell Banker Realty.
Comfortably nestled into the Little Mount Rubidoux hills close to the heart of Riverside with a wonderful view of both the sprawling city of Riverside and the Nature found within the Santa Ana riverbed, this home is still an attention grabber. The scandalous history of the home’s original owner has faded but is not forgotten. Tom Hays was a tall, handsome young man who impressed everyone with his graciousness and friendly manner. He and his family moved to Riverside in 1890. At that time he had little money in his pockets and no name for himself. Over the next 13 years, he managed to move from a small bookkeeping job at the city’s only bank, to become the manager of the city’s biggest bank, owner of important real estate and oil property, and the political boss of Riverside’s Republican party. He was a mover and a shaker in town and no one questioned how he had the means to live his lavish lifestyle on his $200 a month bank salary.
It would seem that Tom’s move to Riverside happened at just the right time. The citrus industry was just beginning to grow, as was the city. This provided the perfect atmosphere for an industrious and charismatic Tom Hays to move up the ranks of the social ladder of Riverside. Over the years he was a leader with the Riverside County Republican Party, was president of the Riverside Chamber of Commerce, Lead the first Elks Club in Riverside, and was known for his singing and musical talent.
Tom’s real estate transactions included 24 acres purchased in the spring of 1902 which was soon graded for grand homes sitting on large lots. As a prominent player in Riverside’s politics, Hays played a major role in the planning of Riverside’s new county courthouse and the first library in town. As a result, he became well acquainted with architects Burnham and Bleisner. It was no surprise when Hays announced his intention to build a house at the top of Little Mount Rubidoux in the local paper in August of 1903, that the architect of choice was Franklin Burnham. Burnham designed a bungalow that would conform to the rocky hillside of the site. The foundations, wide verandas, and fireplace all featured blue and white marble stone from a local quarry. Just as Tom and his family were preparing to move into the home, the local paper announced Tom had resigned as cashier of the bank.
On November 16, 1903, it was discovered that Tom had been skimming money from the Salt Lake Railway with crooked land deals. Then, four months later the discovery of the nearly $100,000 embezzlement from the Orange Growers National Bank became public through a surprise audit of the bank’s records, Tom was arrested for the crime.
Ultimately, the Citizens Bank absorbed the defunct Orange Growers National Bank and few depositors lost their deposits. But what of the magnificent home on the hill? The Hays home, which had completed construction in November of 1904 at a cost of $8,000, was acquired by the bank while Tom was in jail. The bank sold the home to W.P. Lett who was on the board of directors of the defunct bank. In 1908, Lett’s daughter, Lela, and her husband Harry Pattee moved into the home and the home would stay in the Pattee family until Lela’s death in 1968.
Because Tom Hays was so socially prominent when he went about building the house, it is quite welcoming to guests and was designed to entertain. The front door features an original Stickley screen door, a precursor to the feelings of warmth and style Hays likely originally desired the home to have. This “openness” in the center of the house extends from the front of the home well into the back and shows off the natural hardwood floors. In the living room, the stone and clinker brick fireplace is a focal point and the natural hardwood floors, custom wainscoting, continuous plate rails, and iconic egg and dart molding throughout the living space transports you back to a bygone era. The “music” room off of the living room has original wall sconces and ceiling light fixtures, as well as a view looking towards downtown Riverside. The formal dining room has a custom built-in china cabinet and views facing the Santa Ana River and Mount Baldy. The kitchen, which was redesigned when the home was featured as a Riverside Art Alliance “Designer” home, has updated cabinetry, custom tile, and a built-in refrigerator. The large circular bedroom downstairs that was probably the original master bedroom is currently being used as an office.
The second floor was added after the birth of the Patee’s family’s son, William, in 1912 as they needed more space for their growing family. Designed by architect Garrett Van Pelt of Pasadena, this portion of the home blends seamlessly with the original structure and includes antique roof tiles imported from Italy. Today, this floor features leaded glass windows which are in all of the upstairs rooms, and offer views from both sides of the home. A spacious primary bedroom runs the entire width of the home front to back. It also has a ductless mini HVAC unit, which can be expanded to the entire second floor. The walk-in closet of the main second story bedroom is amazing in its sheer size! There are two additional bedrooms and two bathrooms upstairs as well.
The grounds of the home conform to the mountainside with boulders, fountains, grassy knolls, and trees melding together to create a private retreat in the heart of the city. Sitting on the veranda you can hear the water features of the front landscape and relax while enjoying the view of the stately palm trees which lead up the long driveway with the city of Riverside in the background. The back side of the home has a second driveway off of Ladera Lane and a large parking area that could be used for RV storage. You’ll love living in the heart of Riverside’s Downtown Historic neighborhood. Being close to entertainment, shopping, transportation, and Universities is a plus.
Give The Ransom-McKenzie Team a call today if you are interested in this home, or if you’re interested in finding a new place to live in Riverside. For more details regarding this home online, view 3611 Mount Rubidoux Drive on our website.
THE STEPHEN MAGEE HOUSE
4529 Sunnyside Drive
PALM HEIGHTS HISTORIC DISTRICT
In 1888 the Inland Empire was a sprawling region laid out with groves of Washington Navel orange trees. The newly connected Santa Fe Railroad was delivering boxcars full of fruit all over the nation. Acres of orange groves were creating a citrus boom that would soon make Riverside the richest per capita region in the country. The groves were peppered with Queen Ann Victorians, stately California Craftsman Bungalows, and grand Farmhouses, the residences of the grove owners. Times have changed since 1888, the groves have faded away but many of the grand old homes still stand. What were once homes nestled within rows of navel oranges are now celebrated reminders of our region’s history.
Period details make this home a unique example of Victorian architectural style.
One of these grand old ladies is currently listed for sale by The Ransom-McKenzie Team with Coldwell Banker Realty. The Stephen Magee House, built in 1888 by Riverside pioneer Dr. Stephen Magee, sits in the Palm Heights Historic District of Riverside. It is one of the two remaining original Victorian homes in the neighborhood. When the Magee family built the home, it was situated on a 20-acre orange grove and faced Palm Avenue. The surrounding groves were owned by prominent Riverside founders including the Tibbets family who introduced the Washington navel orange to the region. In fact, the Parent Navel Orange Tree still stands just blocks away from the home. In the late 1920’s the post war population boom hit Riverside and the city experienced large scale residential development as a result. It was during this time that the Magee House was aligned with a new streetscape on Sunnyside Drive. The development of this neighborhood continued over the 1930’s & 40’s as Tudor, Spanish Colonial, Craftsman, Classical Revival, and Minimal Traditional homes filled in to create a typical Southern California suburban neighborhood. Today this neighborhood has been designated as the Palm Heights Historic District.
THE HOME’S RESTORATION
In the heart of this historic district the Magee House stands proud as a lovely reminder of days gone by. Since purchasing it in 2007, the current owners have taken care to lovingly restore every inch of this beautiful home. Over the years they have found period hardware, wallpaper, fixtures, and paint colors to bring this lovely Queen Ann back to its original glory. As you approach the home, take a moment to appreciate the intricate spindle work, and design detail of the home’s exterior from the ship wheel corner brackets on the front porch to the rising sun above the second story balcony.
Original interior features abound, including ceramic tiles, balustrade work on the staircase, multiple pocket doors, and hardwood flooring.
Upon entering the home, you will be presented with true Victorian style and décor. The high ceilings and prominent baseboards, together with white oak hardwood floors and multiple pocket doors dividing each room are all features that have not changed over time. Even the pocket doors’ push button hardware has been painstakingly restored so that each set of doors works perfectly. Looking up, you’ll notice several original Edison light fixtures, (converted to electric, of course) as well as period balustrade work on the staircase. Multiple fireplaces in the home feature incredibly detailed surrounds which incorporate custom glazed tile and detailed carved wood mantels. The downstairs fireplaces have been converted to gas for convenience of use.
There are six bedrooms and three bathrooms in the Magee home including a full bathroom and bedroom downstairs. The second-floor features four spacious bedrooms and a large common bathroom. The main bedroom boasts, oversized sash windows and a full walk-in closet. All the other bedrooms on this floor are large with high ceilings and oversized windows. The front bedroom has a fireplace and access to the second-floor balcony through a unique sash window style door. The third floor has been converted to a complete en-suite apartment / studio (Many Victorians do not have a finished 3rd floors). This is the perfect attic retreat for your office, art studio, teenager hang out or whatever else you can dream of. There is a whole house fan in this space, as well as supplemental air conditioning to keep the space comfortable in the summer.
MODERN UPGRADES ABOUND
While the home has been restored to reflect its rich history, there are modern amenities that have been added to bring this home into the twenty-first century. The kitchen has a 6 burner Viking cook top & hood, a Bosch dishwasher, refrigerator, and an oversized farmhouse double sink, and custom cabinetry with soft close hinges.
There are 2 separate HVAC systems, one for the first floor of the home and an additional system to control the upper two floors. The entire HVAC system, including the ducting, has been updated in the past 10 years. A whole house fan on the top floor works to help cool the entire house down on summer evenings. The electrical panel was updated to accommodate an electric car charging station as well. The home got a new roof in 2018, which included reflective insulation over the attic room. The exterior paint was also completed in 2018.
Situated on a double lot, this home offers multiple amenities for outdoor enjoyment.
The exterior of the home offers room for numerous activities from patio dining to swimming, and gardening. The back yard has multiple sitting areas, including an outdoor living room shaded by a wood gazebo. An above ground pool offers relief from the warm summer days and a custom spa on the west side of the house is the perfect place to enjoy evening sunsets. The long side driveway offers room for multiple cars, and the carriage garage has been enhanced with interior features such as updated electrical, and lighting.
CALL US TODAY TO VIEW THIS BEAUTIFUL HOME
Located close to all that the lovely city of Riverside has to offer, you’ll be able to enjoy easy access to the Riverside Plaza, as well as Downtown Riverside’s museums, entertainment, and restaurants. Come see all Riverside and the Stephen Magee house has to offer by giving The Ransom-McKenzie Team a call today. We live in Riverside, We love Riverside, and we sell Riverside.
THE RANSOM-MCKENZIE TEAM | 951.237.2044 |CalBRE #01721257
“Newly pending sales are up 25.5% compared to the same week last year, the highest year-over-year increase in the weekly Zillow database.”
Whenever there is a shortage in supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. CoreLogic’s latest Home Price Index reports that values have increased by 5.5% over the last year.
This is great news if you’re planning to sell your house; on the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. However, purchasers should realize that the price of a house is not as important as the cost. Let’s break it down.
There are several factors that influence the cost of a home. The two major ones are the price of the home and the interest rate at which a buyer can borrow the funds necessary to purchase the home.
Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.87%. At this time last year, the rate was 3.73%. Let’s use an example to see how that difference impacts the true cost of a home.
Assume you purchased a home last year and took out a $250,000 mortgage. As mentioned above, home values have increased by 5.5% over the last year. To buy that same home this year, you would need to take out a mortgage of $263,750.
How will your monthly mortgage payment change based on today’s lower mortgage rate?
Even though home values have appreciated, it’s a great time to buy a home because mortgage rates are at historic lows. The Ransom-McKenzie Team can help you find your next home. Working with a local real estate agent is the most effective way to search for a home. Especially in a market where there is a tight inventory. Call us today to find out why.
As shelter-in-place orders were implemented earlier this year, many questioned what the shutdown would mean to the real estate market. Specifically, there was concern about home values. After years of rising home prices, would 2020 be the year this appreciation trend would come to a screeching halt? Even worse, would home values begin to depreciate?
Original forecasts modeled this uncertainty, and they ranged anywhere from home values gaining 3% (Zelman & Associates) to home values depreciating by more than 6% (CoreLogic).
However, as the year unfolded, it became clear that there would be little negative impact on the housing market. As Mark Fleming, Chief Economist at First American, recently revealed:
“The only major industry to display immunity to the economic impacts of the coronavirus is the housing market.”
Have prices continued to appreciate so far this year?
Late last month, the Federal Housing Finance Agency (FHFA) released its latest Home Price Index. The report showed home prices actually rose 6.5% from the same time last year. FHFA also noted that price appreciation accelerated to record levels over the summer months:
“Between May & July 2020, national prices increased by over 2%, which represents the largest two-month price increase observed since the start of the index in 1991.”
What are the experts forecasting for home prices going forward?
Below is a graph of home price projections for the next year. Since the market has changed dramatically over the last few months, this graph shows forecasts that have been published since September 1st.
The numbers show that home values have weathered the storm of the pandemic. We are certainly seeing home prices rise here in the Inland Empire. There is still very low inventory and it is a seller’s market. If you want to know what your home is currently worth and how that may enable you to make a move this year, contact the Ransom-McKenzie Team today to see how we can help.
Homebuying has been on the rise over the past few months, with record-breaking sales powering through the market in June and July. Buyers are actively purchasing homes, and the momentum is continuing into the fall. It is, however, becoming harder for buyers to find homes to purchase. If you’ve been thinking about selling your house, the coming weeks might just be the timing you’ve been waiting for.
According to the Pending Home Sales Report from the National Association of Realtors (NAR):
“Pending home sales in July achieved another month of positive contract activity, marking three consecutive months of growth.
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 5.9% to 122.1 in July. Year-over-year, contract signings rose 15.5%. An index of 100 is equal to the level of contract activity in 2001.”
This means that for the past several months, buyers have signed an increasing number of contracts to purchase homes – well above where the market was at this time last year. Lawrence Yun, Chief Economist at NAR notes:
“We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market…Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings.”
Below is a graph that shows the impressive recovery of homes sales compared to previous years. The deep blue v marks the slowdown from this spring that turned into an exponential jump in sales that followed through the summer, skyrocketing above years past:
What Does This Mean for Sellers?
If you were thinking about putting your house on the market in the spring, but decided to wait due to the health crisis, it may be time to make your move. Buyers are in the market right now. With so few homes available to purchase, homeowners today are experiencing more bidding wars, creating an optimal time to sell.
Is This Trend Going to Continue?
As CNBC notes, there are no signs of slowing buyer demand this fall:
“The usual summer slowdown in the housing market is not happening this year. Buyers continue to show strong demand, spurred by the new stay-at-home world of the coronavirus and by record low mortgage rates.”
Danielle Hale, Chief Economist at realtor.com, concurred:
“In a typical year in the housing market, buyer interest begins to wane before seller interest causing the usual seasonal slowdown as we move into the fall. Due to a delayed spring season and low mortgage rates, we could see buyer interest extend longer than usual into the typically quieter fall. Whether this means more home sales will depend on whether sellers participate or decide to stay on the sidelines.”
As Hale mentioned, homeowners who are willing to sell their houses right now will play a big role in whether the trend continues. The market needs more homes to satisfy ongoing buyer demand. Maybe it’s time to leverage your equity and move up while eager home shoppers are ready to purchase a house just like yours.
Are You Thinking of Selling?
If your current home doesn’t meet your family’s changing needs, contact The Ransom-McKenzie Team, your local specialists, to help you sell your house and make the move you’ve been waiting for all year.
The residential real estate market has definitely been the shining light in this country’s current economic situation. All-time low mortgage rates coupled with a new appreciation of what a home truly means has caused the housing market to push forward through this major health crisis. Let’s look at two measures that explain the resilience of the real estate market.
The number of buyers getting a mortgage to purchase a home is a strong indicator of the strength of a housing market. Below is a graph of the week-over-week percent change in that number, as reported by the Mortgage Bankers’ Association:The number dropped dramatically in March and mid-April when the economy was shut down in response to COVID. It increased substantially from later in April through the middle of June. The strong increase in May and June was the result of the pent-up demand from earlier in the spring along with the normal business that would have been done during that time.
Since July, the market has remained consistent on a weekly basis, but still reflects a double-digit increase from the levels one year ago. The August 12 report shows a whopping 22% increase over last year.
Like purchase mortgages, pending contracts are also a powerful indicator of the strength of the real estate market. Zillow reports each week on the percent change in the number of homes going into contract. Here’s a graph of their data:The graph mirrors the one above, showing a drop in early spring followed by a strong recovery in late spring and early summer. Then, in July, it settles into a consistent level of deals. That level, like the one for purchase mortgages, is well ahead of the level seen last year. The last report revealed that pending deals were 16.9% greater than the same time last year.
Both indicators prove the housing market recovered quickly from the early setback caused by the shelter-in-home orders. They also show that Americans have realized the importance of their homes during this time and are buying more houses than they did prior to the pandemic. We are seeing record sales in the Inland Empire too. Give the Ransom-McKenzie Team a call today to see how we can help you.
Here’s why. As we continue to work through the health crisis that plagues this country, more and more conversations are turning to economic recovery. While we look for signs that we’ve reached a plateau in cases of COVID-19, the concern and fear of what will happen as businesses open up again is on all of our minds. This causes confusion about what an economic recovery will look like. With this in mind, it’s important to understand how economists are using three types of sciences to formulate their forecasts and to work toward clearer answers.
- Business Science – How has the economy rebounded from similar slowdowns in the past?
- Health Science – When will COVID-19 be under control? Will there be another flareup of the virus this fall?
- People Science – After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a sporting event, or flying).
Sam Khater, Chief Economist at Freddie Mac, says:
“Although the uncertainty of the crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward, we should see a recovery starting in the second half of 2020.”
This past week, the Bureau of Economic Analysis released the advanced estimate for Gross Domestic Product (GDP) for the first quarter of 2020. That estimate came in at -4.8%. It was a clear indicator showing how the U.S. economy slowed as businesses shut down and consumers retreated to their homes in fear of the health crisis and of contracting COVID-19.
Experts agree that the second quarter of 2020 will be an even greater slowdown, a sign more businesses are feeling the effects of this health crisis. The same experts, however, project businesses will rebound, and a recovery will start to happen in the second half of this year.
What Does This All Mean?
As time goes on, we’ll have more clarity around what the true economic recovery will look like, and we’ll have more information on the sciences that will affect it. As the nation’s economy comes back to life and businesses embrace new waves of innovation to serve their customers, the American spirit of grit, growth, and prosperity will be alive and well. Give The Ransom-McKenzie Team a call if you have questions about our local real estate market as we work through this time.