Is Mortgage Debt Out Of Control?
The housing crisis of the last decade was partially caused by unhealthy levels of mortgage debt. Homeowners were using their homes as ATMs by refinancing and swapping their equity for cash.
When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home). As a result, they walked away. This caused prices to fall even further.
Headlines are again talking about record levels of mortgage debt, making the comparison to the challenges that preceded the housing crash. However, cumulative debt is not an important data point. If we look at the debt as a percentage of disposable personal income, we are at an all-time low.
Here’s a visual representation of mortgage debt as a percent of income:Furthermore, according to a new report from ATTOM Data Solutions, more than 1-in-4 homes with a mortgage have at least 50% equity. The report explains:
“[O]ver 14.5 million U.S. properties were equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value — up by more than 834,000 from a year ago to a new high as far back as data is available, Q4 2013.”
Bottom Line
Unlike 2008, homeowners have a comfortable level of mortgage debt and are sitting on massive amounts of home equity. They will not be walking away from their homes if the housing market begins to soften.
Millennials Are Increasing The Demand For Condominiums
I know a lot about the Condominiums in St. Helena and Yountville in Napa County and have seen an uptick in the interest to purchases. Condominiums are more affordable in a lot of ways which makes them a great starter home, second home or downsize.
When deciding to buy a home, people are presented with many different options. The type of home you buy depends on your needs, budget, and in many cases, the desired maintenance level. For many millennials, their choice has been buying a condominium!
According to CoreLogic,
“Last year about 43% of all condo home-purchase mortgage applications were submitted by FTHBs… Similarly, the data show condos were more popular with young homebuyers and empty nesters. For instance, 21% of all condo home-purchase mortgage applications were submitted by buyers aged 18 to 30, compared with just 17% of all single-family home-purchase mortgage applications by the same group in 2018.”
With home prices increasing year-over-year, it makes sense millennials are buying condos instead of a single-family house. As a result, the demand for this type of home has been increasing.As this graph explains,
“The younger millennials are the largest cohort and are likely to drive much of the condo demand in the coming years”.
Bottom Line
If you are a millennial considering buying a home, understand that there are many options available. You may find yourself in a condominium as your first home. If you would like to determine which type of home best fits your needs, sit down with a real estate professional that can help evaluate your options! I’m happy to help if you are in northern California.
kate.spadarotto@compass.com
c. 707.321.6231
Setting Your Listing Price
If you have ever tried to sell something you understand the importance of setting the asking price. When consulting your local experienced Realtor keep these tips in mind:
We have calculation methods through cross market analysis of similar properties in your area and any improvements, etc you’ve made to your home.
Location, Location, Location: proximity to schools, town, local attractions…all of these will influence your listing price.
Don’t set your price too high: Across all our markets, homes selling after price reductions sell for substantially lower average dollar per square foot values, i.e. overpricing loses sellers money.
We have local knowledge regarding trends in the area. These elements combined with our gut instincts from being on the front lines of property transactions creates the ideal real estate team.
If you have any questions, I’m happy to help. Email me at kate.spadarotto@compass.com or call me at 707-321-6231
Safety Tips and Napa Valley Events for the 4th of July
With the 4th of July fast approaching it is always good to revisit safety tips. In our area we are not allowed to have personal fireworks for fire safety reasons. An average of 18,500 fires are caused by fireworks each year, according to the National Fire Protection Association. Such fires cause an average of three deaths, 40 injuries and $43 million in direct property damage.
Here are some standard tips to keep you and your family (including pets) safe:
If you are going to be outside in the sun be sure to pack lots of water and sunscreen. Wear hats and/or sit under an umbrella if possible.
Do not bring your pets if possible.
Lights and noise may frighten pets. Animals may fair better if kept inside during the display. Playing music or turning on the television can help distract animals from fireworks noise.
The noise can cause your animal to either run or possibly bite someone or another animal because they are scared. Both Animal Control and the Humane Society see an increase in lost animals around this time of year. Have your pet microchipped if you have not already. This way, if they do run away it will be easier to return them to you.
Do not allow children to handle fireworks - Children younger than 15 accounted for 36% of fireworks-related injuries in 2018.
Sparklers — can reach temperatures of 1,800 degrees, the city says. Don't let children play with them.
Follow all local and state laws regarding the possession and use of fireworks.
For more information, visit fireworks.com/education-and-safety/safety-tips
Events on July 4th
NAPA
Napa’s 4th of July Parade & Fireworks | 2019
Thu, 10 AM – 10 PM
Downtown Napa Association, 1290 Napa Town Center
Red, White & Rosé
Thu, 1 – 4 PM
850 Bordeaux Way
Fourth of July Dinner & Fireworks
Napa General Store, 540 Main St Ste 100
AMERICAN CANYON
American Canyon Fourth of July Celebration
American Canyon Planning Department, 4381 Broadway St # 201
ST. HELENA
4th of July Bluegrass-Fed Live Music + BBQ:
Live music, bites and wine. Doors 5:00 PM | Show 7:00 PM
Farmstead at Long Meadow Ranch, 738 Main St
St. Helena’s 4th of July Fireworks Show | 2019
Thu, 5:30 – 10:00 PM
Crane Park, 360 Crane Ave
CALISTOGA
2019 Calistoga 4th of July Parade, Star-Spangled...
Thu, 11 AM
N Oak St
Calistoga’s Napa County Fair, Free Rides ...
12 – 11 PM
Napa County Fair Main Office, 1435 N Oak St
Have a Safe and Happy 4th of July!
11 Ways to Avoid Being Scammed
There are thousands of new scams every day, trying to get your money and/or your identity. Follow these tips to help protect you and your families.
If you are involved in a Real Estate transaction be aware of wire fraud. I have a disclaimer on the bottom of my signature stating: “If you receive an email / text providing wire instructions or requesting personal financial information that appears to come from me or any Compass representative, do not respond, send or wire any funds. Instead, call me immediately. Be advised such instructions may be fraudulent. To ensure authenticity contact the escrow/title company to verify the authenticity of the wire instructions. Do not call the number provided with the wire instructions. There have been instances of wire fraud in connection with real estate transactions, observe this protocol to protect yourself.”
These other tips are very helpful and were supplied by the Better Business Bureau:
Never send money to someone you have never met face-to-face. Seriously, just don’t ever do it. And really, really don’t do it if they ask you to use wire transfer, a prepaid debit card, or a gift card (those cannot be traced and are as good as cash).
Don’t click on links or open attachments in unsolicited email. Links can download malware onto your computer and/or steal your identity. Be cautious even with email that looks familiar; it could be fake.
Don’t believe everything you see. Scammers are great at mimicking official seals, fonts, and other details. Just because a website or email looks official does not mean that it is. Even Caller ID can be faked.
Don’t buy online unless the transaction is secure. Make sure the website has “https” in the URL (the extra s is for “secure”) and a small lock icon on the address bar. Even then, the site could be shady. Check out the company first at bbb.org. Read reviews about the quality of the merchandise, and make sure you are not buying cheap and/or counterfeit goods.
Be extremely cautious when dealing with anyone you’ve met online. Scammers use dating websites, Craigslist, social media, and many other sites to reach potential targets. They can quickly feel like a friend or even a romantic partner, but that is part of the con to get you to trust them.
Never share personally identifiable information with someone who has contacted you unsolicited, whether it’s over the phone, by email, on social media, even at your front door. This includes banking and credit card information, your birthdate, and Social Security/Social Insurance numbers.
Don’t be pressured to act immediately. Scammers typically try to make you think something is scarce or a limited time offer. They want to push you into action before you have time to think or to discuss it with a family member, friend, or financial advisor. High-pressure sales tactics are also used by some legitimate businesses, but it’s never a good idea to make an important decision quickly.
Use secure, traceable transactions when making payments for goods, services, taxes, and debts. Do not pay by wire transfer, prepaid money card, gift card, or other non-traditional payment method. Say no to cash-only deals, high pressure sales tactics, high upfront payments, overpayments, and handshake deals without a contract.
Whenever possible, work with local businesses that have proper identification, licensing, and insurance, especially contractors who will be coming into your home or anyone dealing with your money or sensitive information. Check them out at bbb.org to see what other consumers have experienced.
Be cautious about what you share on social media and consider only connecting with people you already know. Be sure to use privacy settings on all social media and online accounts. Imposters often get information about their targets from their online interactions, and can make themselves sound like a friend or family member because they know so much about you.
Joe Montana's Rustic Ranch in Calistoga FOR SALE for $3.1M
Access to this beautiful two legal parcel site, totaling 87.25 +/- acres, is over a private gated bridge entrance. The parcels boasts spectacular vineyard views, a lake, 11 stall breezeway barn with tack room, covered arena, round pen and ranch office with arena activity viewing, bathroom and storage. Also listed as MLS #21915527
Click here for more information!
Joe Montana's Rustic Ranch in Calistoga FOR SALE for $3.1M
Access to this beautiful two legal parcel site, totaling 87.25 +/- acres, is over a private gated bridge entrance. The parcels boasts spectacular vineyard views, a lake, 11 stall breezeway barn with tack room, covered arena, round pen and ranch office with arena activity viewing, bathroom and storage. Also listed as MLS #21915527
Bloomberg's Real Estate Report-The Housing Market and Affordability
Mark Fleming, Chief Economist at First American was interviewed today on the podcast by Bloomberg Radio’s Denise Pellegrini and had positive things to say about the Housing Market. According to Mark Fleming:
Affordability is increasing and fastest in certain cities including but not limited to Portland, Seattle, San Francisco and Los Angeles.
Interest rates remain consistently low.
The labor market is improving.
Wage growth continues to grow.
House prices nationally, in our concept of real buying power adjusted terms, are 18% below the year 2000.
All of these bullet points bode well for millennials. We just have to be patient and allow them to get educated so they become future home owners.
15 Things to do in Napa Valley in July 2019
If you are planning on visiting the Napa Valley during the summer or fall months visit this site for a complete list which includes the following JULY events (for fees and more specific details please click on the links):
Food Truck Fridays at Vista Collins Resort every week on Friday until October 04 from 4:00 pm to 7:00 pm
Smoker Sundays at Vita Collins Resort every week on Sunday until October 06 from 12:00 pm to 3:00 pm
Red, White & Rosé at Vista Collina Resort on Thursday, July 4th from 1:00pm to 4:00pm
Locals' Night Food Truck Showcase Feat. PICO Modern Taqueria at St. Clair Winery & Brewery Thursday, July 4th from 4:00pm to 8:00pm
Locals' Night Food Truck Showcase Feat. Platanito Pupusas Latin Cuisine at St. Clair Brown Winery & Brewery on Thursday, July 11th from 4:00pm to 8:00pm
Cuvaison’s 50th Anniversary Celebration at Cuvaison on Saturday, July 13th from 11:00am to 3:00pm
Paella Party & Syrah Release at Bell Wine Cellars Saturday, July 13th from 12:30 pm to 4:00 pm
CIA Farm Dinner at Greystone at the Culinary Institute of America at Greystone Saturday, July 13th from 5:30pm to 9:30pm
Summer Fun: Barbecue and Beer at the Culinary Institute of America at Greystone on Friday, July 19th from 5:30pm to 8:30pm
Live Fire Guest Chef Dinner ft. Ryan McCaskey at Long Meadow Ranch and Winery on Saturday, July 20th from 6:30pm to 9:30pm.
Wishes on the Vine at Charles Krug Winery Saturday, July 20th at 6:30 pm
Beer Boot Camp with Brewmaster Elaine St. Clair at St. Clair Winery & Brewery Cellar Sunday, July 21st from 9:00am to 5:00pm
A Day in the Vineyard at Grgich Hills Estate on Saturday, July 27th from 8:00am to 11:30am
Crush MS Summer Celebration and Symposium at Reid Family Vineyards Saturday, July 27th from 2:00pm to 6:00pm
2019 Festa Italiana – A Mid-Summer Italian Festival at V. Sattui Winery on Saturday, July 27th from 6:00pm to 9:30pm.
Now You Know! 5 Myths About Wine
This article was in Wine Spectator and too interesting not to share.
Misinformation on wine and health is all around us, so we talked to the experts (actual health professionals, not your aunt's friend's know-it-all neighbor) to separate fact from fiction, breaking down five of the most popularly perpetuated wine-and-health myths, and revealing the truth behind each.
Alcohol Kills Brain Cells
Though your brain may feel fuzzy after a couple glasses of wine, it's not actually a sign of cell death. Ethanol (the kind of alcohol found in wine, beer and spirits) does have the ability to damage cells, but the human body has ways of processing it to curb major long-lasting destruction, including in brain cells. Typically, what you experience after drinking are short-term symptoms, which will go away once the alcohol is cleared from your system.
What can happen when you drink, however, is the damaging of dendrites, which are extensions of nerve cells that carry messages between neurons. While this effect of alcohol, which was discovered in 1999 by scientist Roberta Pentney, can alter the structure of a neuron, it does not totally destroy cells, and is believed to be mostly reversible.
Of course, there are serious concerns when it comes to drinking and long-term brain health. Exposure to alcohol during critical periods of development (such as in the womb or during teenage years) can cause lasting damage, as can binge drinking during any stage of life.
Specifically, heavy drinkers are at risk for developing a neurological disorder called Wernicke-Korsakoff syndrome, a chronic memory disorder that is caused by a deficiency of the vitamin thiamine.
On the other hand, recent studies have pointed to potential benefits of moderate wine drinking on brain health. As with most alcohol and health concerns, it appears moderation is key.
Verdict: False
Red Wine Is Healthier than White Wine
Red wine tends to get all the attention and praise when it comes to health benefits, mostly thanks to its polyphenolic content. Polyphenols such as resveratrol, quercetin and ellagic acid are all found in grape skins, and therefore are more abundant in red wine than in white. But while these compounds do have beneficial properties, they're not the only elements of wine that have health-boosting potential.
Whether red wine or white wine is "healthier" for you might depend on what aspects of your health you are focused on. A 2015 study, published in the Annals of Internal Medicine, showed that while red wine drinkers enjoyed boosted levels of HDL cholesterol (the good kind), white wine drinkers enjoyed better blood sugar controls.
There is also still much to be discovered about the health benefits of both red and white wine. "Many studies indicate that the type of alcohol—red wine, white wine, beer or liquor—likely matters less, and that the alcohol itself is what drives these observed benefits," Dr. Howard Sesso, a researcher at Brigham and Women's Hospital, told Wine Spectator in 2017.
Verdict: Not necessarily
A Glass of Wine Before Bed Is a Good Sleep Aid
Sure, drinking alcohol can make you feel sleepy, but it’s not a good idea to use booze to help you snooze. Thanks to alcohol’s sedative effects, a tipple before hitting the hay will help you fall asleep faster, and there is even evidence that some wine grapes contain high amounts of the sleep aid melatonin.
But that sleep is less likely to be restful and restorative. A study published in 2015 in the journal Alcoholism: Clinical and Experimental Research revealed that subjects who drank alcohol experienced an increase in deep sleep early in the night, but then experienced sleep disruption, greater numbers of awakenings and more time spent awake later on in the night.
While you probably won’t cause any major sleep problems if you drink moderately in the evening, it is not recommended to use wine as a sleep aid.
Verdict: False
Men and Women React the Same to Alcohol
A 5'9" 160-pound woman should be able to process three glasses of wine consumed over three hours identically to a man of the same proportions, right? Wrong.
Alcohol affects women and men differently, in ways ranging from metabolism to hangover recovery. This is why the U.S.D.A. Dietary Guidelines recommend up to two drinks a day for men and up to only one for women.
We've all been told that our body size plays a big role in the way alcohol affects us, and this is true. But it also has to do with our chemical makeup, which differs. For example, according to women’s health expert and author Dr. Jennifer Wider, women do not have as much alcohol dehydrogenase activity as men do, meaning they’re unable to process the same amount of alcohol before it reaches the bloodstream. This means women generally grow more intoxicated more quickly than men.
Verdict: False
Sulfites Cause Headaches and Hangovers
Sulfites are probably the source of wine's biggest myth. They're naturally occurring, and most winemakers also add supplemental sulfites to wine to help protect it against spoilage and oxidation. Sulfites are also frequently blamed for headaches and hangovers. But, according to science, this is not a fair accusation.
Per the FDA, only 1 percent of the population is sensitive to sulfites. And even if you are among the small set of people who do have reactions to sulfites, these substances are not to blame for your hangovers. Instead, they might cause an allergic reaction.
Though there is no one answer as to what, scientifically, causes hangovers, we do know that the severity of a hangover can be directly correlated to how much alcohol was consumed and how rapidly. Dehydration also plays a big role, as does the amount of congeners that a person has consumed through their beverages.
Verdict: False
By Lexi Williams June 25, 2019
3 Things to Know About the Housing Market
A lot is happening in the world, and it’s having a direct impact on the housing market.
Three areas of the housing market should be kept in mind: interest rates, building materials, and the outlook for an economic slowdown.
1. Interest Rates
Interest rates are currently at a 21-month low and according to the latest information from Freddie Mac the rates appear to be here to stay.
Daily Mortgage Rate Survey
30YR - 3.80%
15YR - 3.63%
FHA30YR - 3.60%
Jumbo30YR - 3.87%
5/1ARM - 3.69%
2. Building Materials
Talk of tariffs could also affect the housing market. According to a recent article, the National Association of Home Builders reports that as much as $10 billion in goods imported from China are used in homebuilding. Depending on the outcome of the tariff and trade discussions between several countries, there could be as much as a 25% boost in the cost of building materials.
3. Economic Slowdown
We began the year with many economic leaders thinking we could expect a recession in late 2019 or early 2020. As spring approached, the economists had started to push that projection past 2020.
Bottom Line
We are in a strong housing market. Wages are increasing, home prices are appreciating, and mortgage rates are the lowest they have been in 21 months. Whether you are thinking of buying or selling, it’s a great time to be in the market.
Investors Impact on Housing Market
The investor purchases are the highest on record and nearly twice the levels before the 2008 housing crash. The investor interest poses a challenge for millennials and other first-time buyers who are increasingly looking to buy starter homes and are forced to compete with deep-pocketed cash buyers.
Purchases of single-family homes by investors are at an all-time high. Strong rental demand, technology that facilitates buying homes online and low interest rates that make other investments less appealing have fueled investor appetite. Investors purchased with cash one in five homes in the bottom third price range (typical first time buyer homes) in 2018, according to the CoreLogic analysis, up 5 percentage points from the 20-year average of less than 15%.
Investors are swooping in, offering all cash (above asking price), no contingency and small close windows so they can flip the home into single-family rentals.
So-called iBuyers, such as Opendoor, Zillow Offers and RedfinNow, which snap up homes in cash for a fee to help sellers avoid the hassle of putting their homes on the market, comprised less than 2% of investor purchases last year, according to CoreLogic.
The biggest markets for investor purchases in 2018 were Detroit, followed by Philadelphia and Memphis, Tenn., where home prices are still low enough for investors to profit by renting them out. Investors bought nearly half the starter homes in Philadelphia last year and about 40% of lower-priced homes in Detroit, according to CoreLogic.
Google is committing to donating $1 Billion dollars to housing in Bay Area
With debts are increasing, so are home prices which makes it very difficult to purchase and/or rent homes especially in certain markets. With that being said, Google is trying to help their employees.
Google Representative Ro Khanna (D-CA) indicated this morning that Google plans to give $1 billion toward affordable housing efforts in the San Francisco Bay Area. $750 million of the funds will go toward rezoning Google-owned property from commercial to residential use.
Google CEO Sundar Pichai announced the investment in a blog post on Tuesday, saying it is the company's responsibility to be a good neighbor in the area where it originated 20 years ago and where it is one of the largest employers. Across the region, he said, "One issue stands out as particularly urgent and complex: housing. The lack of new supply, combined with the rising cost of living, has resulted in a severe shortage of affordable housing options for long-time middle and low income residents."
Google's investment won't come in one big check. Pichai said over the next ten years his company will repurpose at least $750 million of its land from its current office/commercial zoning into residential housing. This should support the development of at least 15,000 new homes. These will be for all income levels including options for middle-and-low income families.
Next, they will establish a $250 million investment fund for use as incentives for developers to build at least 5,000 affordable housing units across the market. An additional $50 million will be available through Google.org as grants to nonprofits focused on the issues of homelessness and displacement.
In addition, Pichai said the company will continue to work with local municipalities to make changes that allow residential developers to build quickly and economically. "Our goal is to get housing construction started immediately, and for homes to be available in the next few years. In Mountain View, we've already worked with the city to change zoning in the North Bayshore area to free up land for housing, and we're currently in productive conversations with Sunnyvale and San Jose," he said.
Numbers: May 2017-2019 Napa Valley Real Estate
The belief is that Napa Valley prices are at an all time high however the numbers say something different. These numbers are across Calistoga, Saint Helena, Rutherford, Oakville, Yountville and Napa.
