This is the week most Americans have anticipated with dread and apprehension. The election takes place on the 5th, and if the polls are correct, at least half the country is going to be sorely disappointed, one way or the other. Perhaps even devastated.
Whoever wins, there is much work to be done on the ground. This is certainly true for the housing market — it’s a mess. And there are no easy solutions.
NBC Bay Area reports that nearly half of Bay Area residents are thinking of moving out. According to a survey from Joint Venture Silicon Valley and Bay Area News Group, people feel they simply can’t afford to live in this area.
“The answer here is housing. Housing is out of reach. It used to be out of reach for some, now it’s really out of reach for most of the people that are living here,” said Russell Hancock, CEO of Joint Venture Silicon Valley.
To be sure, there are other reasons prompting people to consider looking elsewhere — including quality of life, taxes and homelessness. But housing is the biggest concern.
This is an issue for the rest of the country as well. According to a Redfin report, America’s renter population is growing as the cost of homeownership climbs; mortgage payments are up 90% from before the pandemic, while asking rents are up 23%.
The country’s affordability crunch isn’t as severe in the rental market because the U.S. has been building a lot of apartments. Still, many renters struggle to cover housing costs. As a matter of fact, according to a Redfin study, renters are nearly twice as likely as homeowners to say housing affordability impacts their choice for president.
Will that pick make a difference?
“While the president has some tools to combat the housing affordability crisis, they can’t fix it on their own,” explained Redfin Chief Economist Daryl Fairweather. “It’s going to take a coordinated effort by the federal government and local governments over the course of many years, focused on incentivizing more homebuilding to ease a housing shortage that has been brewing since the Great Recession.”
Meanwhile, in San Francisco, the real estate market was rather flat this fall. In September for example, the number of listings was down 3.3% from September 2023, and the number of sales was down 8.8% from the previous year.
In late September, mortgage rates came down when the Fed reduced the benchmark federal funds rate by half a percentage point. Just a couple of weeks later, mortgage rates shot back up over 6% when a jobs report came out higher than expected. A lot of people — buyers and agents alike — were hoping that lower mortgage rates would improve prospects for would-be homeowners. We’re not there yet, and for many, the holding pattern continues.
What’s more, insurance still presents a problem in San Francisco, and again, throughout the country. A report in Redfin said the average annual U.S. home insurance rate is expected to rise 6% this year to $2,522, after surging 19.8% between 2021 and 2023. In Florida, the average annual rate is $10,996 — higher than any other state. And this was before Hurricanes Helene and Milton. Intensifying natural disasters in Florida and California have prompted many property insurers to simply stop doing business in these states.
“So far I haven’t heard of anyone being unable to get insurance,” said Eileen Mougeot, an agent with Corcoran. “But there are fewer options these days, and it is more difficult. Buyers and sellers both need to know this can be a problem.”
Finally, the Business Journals said in a recent report that if there’s a primary consequence real estate agents expect from the National Association of Realtors’ commissions lawsuit settlement announced earlier this year, it’s that it will pressure agents to quit their jobs.
A new survey by real estate firm Clever Real Estate found that 86% of agents surveyed believe the settlement will lead to agents leaving the industry. Additionally, 48% of the agents surveyed said they are more pessimistic about their careers since the settlement announcement; just 16% feel more optimistic.
“There are a lot of challenges right now for real estate agents, especially for new ones,” said Mougeot. “But I just say, ‘Hang in there’. It’s still a great business! You get to put people into a new home or assist them when they need to sell. You really are helping people move on to the next chapter in their lives. I’ve always loved that about being a real estate agent.”
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