If you're a homebuyer or seller, you may have heard about a 2/1 buydown. But what exactly is it, and how can it help you save money on your mortgage payments?

A 2/1 buydown is a financial arrangement where the home seller (or a third party) pays an upfront fee to a lender to lower the interest rate on the buyer's mortgage for the first two years of the loan. This reduces the buyer's monthly payments during the early years of the mortgage, making it easier to manage their finances and save money.

For example, let's say you're buying a home with a 30-year fixed-rate mortgage. Without a buydown, your interest rate might be 6%. But with a 2/1 buydown, your interest rate could be 4% for the first year and 5% for the second year, before returning to the original 6% rate for the remaining years of the loan. This lower interest rate means lower monthly payments during the early years of the loan, which can be especially helpful if you're a first-time homebuyer with limited income.

If you're a home seller, offering a 2/1 buydown can make your property more attractive to potential buyers. It can help you sell your home more quickly and at a higher price, by making it easier for buyers to manage their mortgage payments during the early years of the loan.

Navigating the 2/1 buydown process can be complex, so it's important to work with a trusted real estate professional who can help you understand the costs and benefits. Keep in mind that the upfront fee paid to the lender can be a significant expense, and it may not always be the best option for every buyer or seller.

In addition to the upfront fee, there are other costs to consider, such as closing costs, origination fees, and prepaid interest. It's important to factor in these costs when deciding whether a 2/1 buydown is the right choice for you.

Overall, a 2/1 buydown can be a smart way to save money on your mortgage payments and achieve your real estate goals. Contact a trusted real estate professional to learn more about how to navigate the process and find the best option for you.

The housing market experienced a slowdown in activity last year as mortgage rates rose, resulting in fewer offers and longer market times for homes. However, the tides are turning as rates are now beginning to drop and buyers are starting to re-enter the market. In fact, the Mortgage Bankers Association reports a 7% increase in mortgage applications last week compared to the previous week.

This shift presents a unique opportunity for those who have been considering selling their homes. As we approach spring, the market is poised for a return of buyers and experts are forecasting the favorable conditions that will drive this trend.

Mike Fratantoni, SVP and Chief Economist of MBA states, "Mortgage rates have reached their lowest level since September 2022, and the beginning of the spring buying season presents an increased affordability for first-time homebuyers with the combination of lower rates and a greater number of homes on the market."

Lawrence Yun, Chief Economist of National Association of Realtors, also highlights that "mortgage rates appear to have already peaked and have been declining since mid-November, signaling a return of buyers in the upcoming months."

Thomas LaSalvia, Senior Economist at Moody’s Analytics, predicts a robust labor market with rising wages, allowing for increased opportunities for homeownership as interest rates stabilize. And Sam Khater, Chief Economist of Freddie Mac, adds that "homebuyers are waiting for further rate decreases and a strong job market, along with a large demographic tailwind of millennial renters, will support the purchase market."

So, if you are ready to take advantage of this shift in the market, it's time to take action. Get in touch with a local real estate professional to gain a deeper understanding of buyer demand in your area and the optimal time to list your home. Don't miss out on this exciting opportunity to sell your home at a favorable market condition.

In conclusion, with the combination of lower mortgage rates, a return of buyers, and a robust job market, the housing market is primed for sellers to take advantage of favorable conditions. Stay ahead of the game and get your home ready to sell now.

Prop. 19: Transferring Low Property Taxes in Monterey County

Prop. 19, also known as the "Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment," is a new law that affects property taxes in California. In Monterey County, it has the potential to significantly impact the way that property taxes are transferred between generations. This article will provide you with a comprehensive overview of the pros and cons of Prop. 19 and how it may affect you if you're considering buying or selling a property in Monterey County.

Pros of Prop. 19:

1. Flexibility in location: One of the key changes brought about by Prop. 19 is the ability for homeowners over the age of 55, severely disabled homeowners, or those affected by wildfire or natural disaster to transfer their primary residence's property tax base to a replacement residence anywhere in California. This is a significant change from the previous law, which only allowed for transfers within the same county.

2. Cost savings: This change can be a huge benefit for homeowners in Monterey County who are looking to downsize or move to a different area of the state, as it allows them to keep their low property tax base when purchasing a replacement residence. It can also be a great option for homeowners who have been affected by wildfire or natural disaster, as it allows them to move to a new area without having to pay significantly higher property taxes.

Cons of Prop. 19:

1. Limitations: There are some limitations to this new law. The replacement residence must be of equal or lesser value than the original residence, and the property tax base can only be transferred once every three years. Additionally, certain types of property, such as vacation homes, are not eligible for the transfer.

2. Complexity: The law is complex and can be difficult to navigate. It's important to consult with a tax advisor or a real estate agent with the proper knowledge of the law to evaluate if this law affects you and if it is a good option for your specific situation.

3. Impact on the County's revenue: Prop. 19 also allows certain homeowners to transfer their property tax base to a replacement residence of equal or lesser value anywhere in California, which may cause revenue loss for the county and the state.

Overall, Prop. 19 is a new law that can provide a great opportunity for homeowners who are looking to move or downsize, and for those affected by wildfire or natural disaster, with the ability to transfer their property tax base to a replacement residence anywhere in California. However, it's important to understand the limitations and evaluate if this law affects you and if it is a good option for your specific situation. It's always recommendable to consult with a professional to help you navigate the complexity of this new law.

Frequently Asked Questions:

1. Who is eligible for the property tax transfer under Prop. 19?

• Homeowners over the age of 55, severely disabled homeowners, or those affected by wildfire or natural disaster are eligible for the property tax transfer.

2. Can I transfer my property tax base to any location in California?

• Yes, under Prop. 19, homeowners can transfer their property tax base to a replacement residence anywhere in California.

3. How often can I transfer my property tax base?

• The property tax base can only be transferred once every three years.

4. Are vacation homes eligible for the property tax transfer?

• No, vacation homes are not eligible for the property tax transfer.

5. Will Prop. 19 impact the county's revenue?

• Prop. 19 may cause revenue loss for the county and the state, as it allows certain homeowners

During my years as a licensed real estate broker in Pacific Grove CA, I've met many first time home buyers. Everyone dreams of buying their first home and the road to buying a home is not always smooth or straight. Despite what you hear on HGTV, it's a lot more than just submitting an offer and signing some paperwork- sellers have to be convinced to accept your offer, you have to have enough money for a down payment, you have to get pre-approved for a loan, etc. 

There are so many road blocks that keep people from being able to buy the home they want. In this video, I share some common red flags that can pop up during the process and why it could impact your loan approval:

Have questions about the process of buying or selling in the current market? Let us give you a hand. Reach out today for a local opinion of value - benottmar@gmail.com or (831) 601-1370. 

Pacific Grove is home to one of the most picturesque drives in California, the 17-Mile Drive. This scenic route takes you through some of the most beautiful and exclusive residential areas in the country, as well as offering breathtaking views of the Pacific Ocean and the natural beauty of the coastline. Whether you're a local looking for a new way to explore the area or a visitor looking for a unique experience, 17-Mile Drive is a must-see destination.

The 17-Mile Drive starts in Pacific Grove and winds through several towns along the way, including Pebble Beach,Carmel-by-the-Sea, and Spanish Bay. Along the way, you'll have the opportunity to take in the natural beauty of the coastline, as well as visit some of the area's most iconic landmarks and attractions.

One of the most famous stops on the drive is the iconic Lone Cypress Tree. This tree has stood tall on a rocky outcropping for 250 years and is considered a symbol of the rugged beauty of the California coast. The tree is located along 17-Mile Drive and is a popular spot for visitors to take photos.

Another highlight of the drive is the Pebble Beach Golf Links. This public golf course has hosted the U.S. Open and other major tournaments and is considered one of the most beautiful and challenging courses in the world. Even if you're not a golfer, it's worth taking a drive through the course to see the stunning views of the ocean.

Carmel-by-the-Sea is also a must-see destination on the drive. This charming town is home to many art galleries, shops, and restaurants, and is known for its picturesque streets and Mediterranean-style architecture. The town is also famous for its many dog-friendly policies, so don't hesitate to bring your furry friend along for the ride.

Another notable stop on the 17-Mile Drive is Spanish Bay. This beautiful and peaceful beach is surrounded by scenic cliffs and offers visitors a chance to relax and enjoy the natural beauty of the area. It's also a great spot for tide pooling and beachcombing.

If you're looking for a guided tour of 17-Mile Drive, there are many tour operators that offer guided tours by bus or car. These tours offer an in-depth look at the history and natural beauty of the area and are a great way to make the most of your visit.

The drive is open year-round, but the best time to take it is in the spring or summer when the weather is mild and the scenery is at its best. There is a fee to drive on 17-Mile Drive, but if you plan on doing several things in the area, such as visiting Pebble Beach Golf Links or The Lodge at Pebble Beach, you can get reinbursed if you spend $35.

Don't miss out on the opportunity to explore one of the most beautiful drives in California. 17-Mile Drive offers something for everyone, from the iconic Lone Cypress Tree to the Pebble Beach Golf Links, and the charming shops and restaurants in Carmel-by-the-Sea. With its stunning views of the Pacific Ocean and the natural beauty of the coastline, it's a must-see destination for anyone visiting Pacific Grove. So, plan your visit and make the most of your time on 17-Mile Drive, whether you prefer a self-guided tour or take a guided one, it's worth the experience.

The real estate market in Carmel, Ca saw a decrease in the number of homes sold in November 2022, with a total of 8 sales, compared to the 12 sales that occurred the month before. This represents a 33% decrease in sales activity from October 2022 to November 2022.

Despite the decrease in the number of homes sold, the median sale price for the 93923 area saw a significant increase in November 2022. The median sale price is the price point at which half of the homes sold for more and half sold for less. In October 2022, the median sale price was $2,155,000, but it rose to $2,750,000 in November 2022, representing a 28% increase. This suggests that there may have been a higher number of higher-priced homes sold in November 2022 compared to October 2022.

There was also a decrease in the days on market (DOM) in November 2022, with an average of 16 days, compared to 19 days in October 2022. The DOM is the number of days that a home is listed for sale before it is sold. A lower DOM can indicate that homes in the 93923 area are in high demand and are selling more quickly.

On average, sellers in the 93923 area received 97% of their asking price in November 2022. The asking price is the price that the seller originally lists their home for sale. Receiving a high percentage of the asking price can indicate that the market is strong for sellers, as buyers are willing to pay close to the listed price for homes in the area. This can also indicate a high level of competition among buyers, as they are willing to pay higher prices in order to secure a home in the 93923 area.

The real estate market in Monterey, Ca experienced a downturn in November 2022, with a 31% decrease in the number of homes sold compared to the previous month. In total, 11 homes were sold in November 2022, down from the 16 sales that occurred in October 2022. This decrease in sales activity could be due to a variety of factors, such as changes in economic conditions, shifts in consumer demand, or seasonal fluctuations.

The median sale price of homes in Monterey also saw a significant decline in November 2022, falling by 18% from $1,195,000 in October 2022 to $980,000 in November 2022. This decrease could be the result of a decrease in demand for certain types of properties, a shift in the mix of properties being sold, or other market conditions. It is worth noting that the median sale price can be influenced by a number of factors, including the type and location of the properties being sold, as well as the overall health of the housing market.

In addition to the decrease in sales volume and median sale price, the Days on Market (DOM) for homes in Monterey also increased in November 2022, rising from 12 in October 2022 to 28 in November 2022. This could indicate that homes are taking longer to sell or that buyers are taking more time to make decisions about purchasing a home. It is possible that the increase in DOM could be related to the overall decline in market activity, as fewer buyers in the market may result in longer selling times for homes.

Despite the overall downturn in the market, sellers in 93940 were still able to achieve relatively high prices for their homes in November 2022, receiving an average of 96% of their asking price. This is a decrease from the 98% that sellers received on average in October 2022, but it is still a strong result and suggests that the real estate market in 93940 remains competitive. It is important to note that the percentage of the asking price that sellers receive can vary widely depending on a number of factors, including the condition of the property, its location, and the overall strength of the housing market.

The Pacific Grove housing market had a slow start in November 2022, with only 5 homes being sold in the 93950 area. This is a significant decrease from the 14 sales the previous month, representing a 64% drop in activity. Despite the decline in sales, there was some good news for sellers in Pacific Grove. The median sale price for homes in the area increased 17% from $1,125,000 in October to $1,315,000 in November. This is a promising sign for homeowners looking to sell their property, as it shows that demand for homes in the area is still strong.

However, the days on market did see an increase in November. The average number of days that a home stayed on the market rose to 66 from 13 in October. This may be due to the decrease in overall sales, as there are fewer buyers in the market to make offers on properties.

Despite this, sellers in the 93950 area still received a good return on their investment, with an average of 97% of the asking price being received in November. While this is slightly lower than the 99% received in October, it is still a strong showing in the current market. Overall, the Pacific Grove housing market had a mixed month in November 2022, with some ups and downs in the performance of the market.

The rise in mortgage rates to more than 7% earlier this year had a significant impact on the housing market, causing it to come to a sudden halt. However, recent reports from the Mortgage Bankers Association (MBA) indicate that rates are now dropping and are well below the 7% mark. The decrease in mortgage rates is being attributed to a number of factors, including a decrease in demand for home loans. According to the MBA, mortgage applications decreased by 2% in the week leading up to Thanksgiving, despite rates continuing to trend lower. This decrease in demand for home loans has caused lenders to become more competitive in order to attract borrowers. In order to make their loans more attractive, lenders have been offering lower rates.

Another factor contributing to the decrease in mortgage rates is the increased demand for mortgage-backed securities by investors. These securities are created when lenders pool together a group of mortgages and sell them as a package to investors. The increased demand for these securities has helped bring down rates, as investors are willing to pay more for them when rates are lower. The MBA reports that investors began buying up mortgage-backed securities recently, locking in the 7% rate and helping to bring down rates overall.

In addition to the decrease in demand for home loans and the increase in demand for mortgage-backed securities, there is also currently more money available for mortgage loans. This increase in available funds has helped to ease rates even further. Finally, the yield on the Treasury's 10-year bond has decreased over the past six weeks, which also impacts mortgage rates. The lower the yield on this bond, the lower mortgage rates can go. The MBA reports that the yield on the 10-year bond has decreased from its recent high of 4.3% to about 3.5%.

Overall, it remains to be seen how low mortgage rates will go and how long they will stay at these low levels. Experts have different predictions for what rates will be in 2023, with some forecasting rates as low as 5.5%-6% if the Federal Reserve is able to bring inflation under control. However, it is worth noting that the average mortgage rate is still about 3% higher than it was at this time last year. It is possible that rates could continue to fluctuate in the coming months and years as various economic factors continue to impact the housing market. Despite the recent drop in rates, potential homebuyers may still be wondering if rates will drop enough to make homes more affordable. Only time will tell how the market will continue to evolve and what the future holds for mortgage rates.

If you're looking to buy a house but don't have the traditional 20% down payment, don't worry! There are still options available for you. As a realtor with Bay Homes and Estates, I've helped many clients navigate the process of buying a home without a large down payment. Here are five ways to do just that:

1. Look into government-insured loan programs. The Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) offer loan programs that only require a small down payment, often as low as 3.5% for an FHA loan and 0% for a VA loan for qualified buyers.
2. Consider a conventional loan with private mortgage insurance (PMI). While conventional loans typically require a 20% down payment, you can still get one with as little as 3% down and pay for PMI, which will protect the lender if you default on your loan.
3. Use a piggyback loan. This is a combination of a first mortgage and a second mortgage or home equity loan. The first mortgage covers most of the purchase price, and the second mortgage covers the rest of the down payment.
4. Look into down payment assistance programs. Many states and local governments offer programs that provide grants or low-interest loans to help buyers with their down payment.
5. Use your retirement savings. If you have a 401(k) or IRA, you may be able to borrow from it to use as a down payment on your home. Just be sure to carefully consider the potential tax implications and potential loss of future retirement income before making this decision.

With these options in mind, it's possible to buy a home without a 20% down payment. If you're ready to start the process, contact me, Ben Ottmar with Bay Homes and Estates. I have personally vetted a handful of mortgage brokers that can assist you.