The already dizzying Los Angeles housing market is poised to reach new heights, as the latest data from Zillow suggest that the median home listed in the city will soon cost more than $1 million.
As of June 30, the figure was $975,333, more than a 30% increase from five years prior. Statewide, six other cities were even more expensive and had already crossed the million-dollar mark: San Jose, Santa Maria, Santa Cruz, Salinas and San Francisco.
In Santa Cruz and San Diego — the major markets with the largest increases — median listing prices were up more than 40% over the last five years. Inflation over the same period was 21%, according to the U.S. Bureau of Labor Statistics.
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“Even if it is an arbitrary number, it’s an astounding one,” Michael Lens, a professor of urban planning and public policy at UCLA, said of the million-dollar median.
“A signature way that generations have built wealth in this country is through the housing market,” he said, and the figure “puts in pretty sharp focus the barriers to entry in that housing market in building wealth and having a predictable and stable home over your head.”
The rising prices are not just a headache for those seeking to buy a home, either. “Rents and home prices are typically going to move in the same direction,” said Lens, noting that such prices are driven by same issues of “scarcity and high demand.”
“If it’s that lucrative to sell a home, you’re going to be less likely to rent out that home,” he said, “or you’re going to command a very high rent because your other opportunity is to sell something for a million dollars.”
For home buyers and renters alike, Lens said, the solution is the same: more housing.
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Although government programs exist to assist first-time home buyers, those programs are “not gonna help a nurse buy a million-dollar home,” he said.
In California, Zillow’s Home Value Index for June 2023 was $743,361, the second highest of any state. That was almost five times the estimated value of the median home in West Virginia, which had the lowest figure in the nation at $155,773.
The index “reflects the typical value for homes in the 35th to 65th percentile” in a given region, and is connected to but distinct from the actual price at which homes are listed.
By another measure — the median home listing price — California homes have increased by 36.3% to $777,000 in June, according to the Federal Reserve Bank of St. Louis. That up from $570,000 in June 2018.
The top 10 major metropolitan areas in America for median listing price in June were all in California, according to a Times analysis.
Only Hawaii, with a median home value of $837,324, had a figure higher than California’s.
Several Southern California cities are close behind L.A. and will likely soon see their median list prices top $1 million as well.
San Diego, Oxnard and San Luis Obispo are also over $900,000 and have each seen more than 30% growth in median home list price in the past five years.
Lens pinpointed several steps the state is taking to increase the housing stock, but said that it won’t be enough.
His proposed solutions included “getting rid of single-family zoning and upzoning those neighborhoods,” removing “onerous parking requirements” and scrapping rules on minimum setbacks and floor to area ratio.
Altogether, the state should fix “a lot of boring zoning things that together make the cost of building more housing more expensive or put blanket bans on certain housing types,” Lens said.
“We are not on a fast track to building the kind of housing necessary.”
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The top five states in the ranking have an average effective real-estate tax rate of 2.17%. The average annual tax rate in these states on a $244,900 home — the median home value in the country as of 2021, the year of the most recent available data — is $5,310.
Scroll through to see which states are in the top 22 and how they compare.
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The top five metropolitan areas in the ranking have an average five-year median home value appreciation of 48.49%. The average homeownership rate in these metros is 67.89%.
Scroll through to see which metros are in the top 20 and how they fared.
The American dream of homeownership is getting further out of reach for many Hoosiers.
As pandemic-era supply shortages began to return to normal, home prices fell, giving prospective homebuyers hope they could find something affordable. But those hopes were dashed for some who found they could not pay the high mortgage rates, which are currently more than double pandemic lows.
According to Paul Schwinghammer, former president of the Indiana Builders Association, markets will bounce back eventually. But when prices return to “normal,” many will still be unable to afford the investment that sustained previous generations.
“The days of a brand new home at $200,000 are probably very much in our rearview mirror,” Schwinghammer said.
As potential homeowners are pushed into becoming renters due to high mortgage rates, Schwinghammer said the thriving rental market is not the silver bullet to the housing market some think it is.
“That’s not the American dream,” he said.
Homeownership is increasingly expensive
Housing has become more expensive overall in the past several decades.
In 1950, Hoosiers made less — the median household income was $2,827, or about $30,000 in today’s dollars — now the median household income is $61,944. But housing prices have zoomed past that growth.
In 1950, the inflation-adjusted cost of the median home value was around $70,000. Today, the median listing price is $218,000, according to the state housing dashboard. In other words, the cost of housing has tripled, clearly outpacing wage growth in Indiana.
The cause of this gap is hotly debated. Some argue it is due to a decreased supply of housing — in Indiana, 16.8% of existing housing was built prior to 1940, and the percentage of homes built in the 2010s makes up the smallest slice of the housing pie at just 5.3%.
Experts point to the 2008 housing crash as a major factor in the building slowdown. After the crash, the membership of the Indiana Builders Association fell from 7,200 to 3,000, and the industry has been cautious ever since.
While building picked up pace in response to pandemic-driven demand, Indiana still has a 1.04% shortage of housing stock according to FreddieMac — the largest of all surrounding states.
Density, zoning and community opposition
At the most basic level, a housing unit cannot be cheaper than the raw cost to build it. During the pandemic, supply and demand saw timber, copper and other building materials spike in price, which was exacerbated by high labor costs. Schwinghammer argues this raw cost can be further increased by municipal regulations surrounding lot size, materials and aesthetics.
“That’s all well and good, except you’re ruling out homebuyers,” Schwinghammer said.
For affordability advocates, a relatively simple solution is increasing the amount of homes that can be built in an area by reducing lot size. This allows more homes to be built, increasing supply, all at a lower cost to builders, which are hopefully passed onto consumers.
But in practice, housing density is fiercely contested. Examples of density can range from apartment complexes to duplexes, which can be impossible if an area is zoned for single-family use. Other times, things like parking space requirements can thwart density attempts.
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But overwhelmingly, the biggest opposition to denser housing can come from neighbors and community members, whether it’s an apartment complex in Broad Ripple or a controversial zoning change to allow for multifamily housing in certain Bloomington neighborhoods. In fact, a survey of New York developers found that the majority of opposition to developments came from residents.
Ultimately, Indiana joins most of the country in having high rates of single-family detached housing, with the housing type making up 73.1% of all housing in Indiana, according to the state housing dashboard.
A shortage of affordable housing
While housing supply remains low in general, low-income Hoosiers are facing an even bigger gap when it comes to affordable housing supply. According to a Prosperity Indiana report, the state is 120,796 homes short of affordable and available rental homes, which means there are only 39 affordable units available for every 100 low-income renter households. The numbers show Indiana is performing worse than the regional average.
“Indiana is increasingly out of step with its Midwest peers when it comes to affordability and stability,” Andrew Bradley, policy director at Prosperity Indiana, said.
One method of helping low-income renters is Section 8 housing, a federal program that allows income-qualifying individuals to pay subsidized rents. But the program often fails to meet the demand — in Indiana, people are often on waitlists for three to five years before they can get housing, and sometimes the waitlists themselves are closed. There are currently seven waitlists open on the Indiana Housing and Community Development Authority website, spanning only about a third of counties.
With state and federal assistance so hard to find, some municipalities have attempted to fill the gap in affordable housing through local regulations.
In Bloomington, where housing is the most expensive in the state, local officials attempted to implement inclusionary zoning in 2017. Inclusionary zoning is a type of policy that requires developers to include a certain percentage of affordable units in their projects instead of trying to individually negotiate more affordable units through incentives.
That same year, the Indiana General Assembly banned municipalities from doing so, putting a direct halt to the city’s plans. Today, Indiana preempts municipalities from enacting four different types of equitable housing policies. In addition to inclusionary zoning, these include short term rentals, source of income nondiscrimination policies and rent regulation. Indiana is the only state in the country to prohibit all four policies.
Bradley said Indiana’s Housing Task Force is focusing too much on building new homes instead of sharing a focus on strengthening protections for tenants and improving current housing stock. He said this is partly due to a lack of representation of everyday Hoosiers on the task force.
He referenced Senate Bill 202, bipartisan legislation focused on tenant protections that was later stripped down to a study bill, as an example of the priorities of the legislature. The bill did not end up passing the House, and was not selected as a summer study topic.
“Suppliers of new housing have dominated the conversation at the Statehouse,” Bradley said.
Homebuyers suffer from high rates
Although commodity prices have decreased 10% across the board, Schwinghammer said, homebuyers are not seeing true relief due to high mortgage rates, which currently hover around 7%. Although mortgage rates have spiked as high as 16% in previous decades, the current rate is higher than pre-pandemic rates of around 4% and pandemic lows of 3%.
Part of this is due to the Federal Reserve’s sharp hikes in interest rates in order to combat inflation.
Ultimately, Schwinghammer said it would take 33% of the average person’s wage to begin homeownership — resulting in the highest debt to income ratio since 2007. Housing is effectively the least affordable it’s been in nearly two decades, he said.
As potential homebuyers are shut out of the market, builders have turned to the build-for-rent phenomenon sweeping the country in order to keep busy. BFR involves communities of single family rental homes that people can live in without making a purchase, allowing people to avoid interest rates.
Schwinghammer said BFR, which once took up 3% of the market, is now 15%.
As people struggle to afford new homes, pre-existing — and often cheaper — homes are selling less because homeowners don’t want to trade in their lower rates for the current 7% interest rate.
But the market is cyclical by nature, Schwinghammer said, and interest rates will likely be declining in a year.
“The natural ebbs and flows of the market will allow that to happen,” he said.
The Palos Verdes Peninsula — a land of rolling hills, jagged cliffs and sweeping views of the city and ocean — boasts some of the most beautiful terrain in Southern California.
It’s also long proven to be some of the most dangerous.
For hundreds of thousands of years, the peninsula has been plagued by an ancient landslide complex that slowly reshapes the topography. The earth lurches and warps, sometimes slowly, sometimes rapidly, destroying homes and infrastructure along the way.
The latest damage was dealt to Rolling Hills Estates, where a major ground shift led to 12 homes being evacuated after a fissure snaked its way through the neighborhood. Foundations cracked, walls collapsed and some homes were visibly leaning as the hillside upon which they were perched slowly descended into a canyon.
Land movement is a stubborn, if periodic reality for much of California, particularly the coastal hills of the South Bay and Orange County.
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Laguna Beach, Laguna Niguel and San Clemente have dealt with destructive slides. In the 1920s, a handful of homes in San Pedro slid into the ocean, creating what’s now known as the Sunken City. A mile south of Rolling Hills Estates, the city of Rancho Palos Verdes is hatching plans to avoid a similar fate.
“This remains an active situation,” said Rolling Hills Estates Mayor Britt Huff at a city council meeting on Tuesday, adding that due to a break in a sewer main, five additional houses were ordered to evacuate earlier that day.
At the meeting, the council declared a state of emergency in order to access broader resources from state and federal agencies.
“No one expected this. Landslides don’t really happen in this area,” said resident Lisa Zhang.
A landslide-prone peninsula
The peninsula’s bout with landslides is well-documented in the geological record, stretching back millenniums but coming to a head 67 years ago when an L.A. County road crew accidentally reactivated an ancient slide complex while building an extension of Crenshaw Boulevard in Rancho Palos Verdes.
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The crew dug up and shifted thousands of tons of dirt, throwing things off balance enough to send the land in the Portuguese Bend into a super-slow-motion descent and activating a landslide.
That’s just one ancient landslide complex. According to El Hachemi Bouali, assistant professor of geosciences at Nevada State University who co-authored a report on the Portuguese Bend landslide complex, there are areas all across the peninsula at similar risk.
Due to precipitation and geology, the hills are uniquely susceptible to movement. Layers of clay — bentonite and montmorillonite, to be specific — are found beneath the ground, interspersed between layers of bedrock. When water absorbs into the earth, it expands and lubricates the clay until it’s slippery enough for the land to ride downward with the force of gravity. Even thick layers of bedrock will slip.
Water infiltrating the earth is the most common cause of landslides, according to Brian Collins, a research civil engineer with the U.S. Geological Survey. In California, these types of landslides are typically triggered during a big rainy season.
But there is another factor at play. The Palos Verdes Peninsula — like Laguna Beach and San Clemente — is packed with people. Those people have sprinklers, gutters, irrigation systems and leaky pipes that all add water to the earth.
Inland, an area as hilly and craggy as the Palos Verdes Peninsula might not be expected to house roughly 65,000 people. But anywhere with a view of the ocean, with secluded canyons to hike and ride horses in, will always be attractive — especially right next to L.A.’s flat sprawl.
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What caused the slide?
There’s no official diagnosis on what caused the landslide. According to city officials, a geologist will study the site and draw a conclusion from there, reviewing both the history of the area and any recent changes to the land.
But geologists and structural experts have suggested a few likely culprits: land grading, rainfall or something as simple as a broken pipe.
The townhomes destroyed in the landslide were built in the 1970s, and according to Kyle Tourje, a structural assessor with Alpha Structural, much of the land was graded and reshaped to make room for buildable lots starting in the 1950s.
So even though lots might be relatively flat, if land was moved in order to make it flat, the soil might not be as compact as it should be. When soil is looser, it’s more susceptible to water.
Tourje said the record rainfall of winter and spring didn’t help, but he thinks the slide was likely caused by a concentrated water source such as a broken pipe or sewer drain.
“On a big graded tract like this, one line that feeds one sink of one single house can affect the soil,” he said. “Next month, your water bill is extremely high. Next thing you know, your house is at the bottom of the canyon.”
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Tourje works on landslide damage every week but only comes across slides of this magnitude a few times per year.
“This is a total loss. These homes will have to be completely demolished,” he said.
Bouali, on the other hand, says unless a smoking gun appears, such as a burst pipe or a resident’s $1,500 water bill for June, he’s leaning toward rainfall as the primary culprit.
“My guess is that there has been a slow decrease of the slope’s resisting forces due to infiltration of precipitation into the clay layers,” Bouali said, adding that even though the rain fell in the spring, it might take until July for the water to flow through the layers of clay.
He points to California’s Landslide Susceptibility map, which shows almost the entire peninsula as highly susceptible. Given the area’s geological makeup, as well as the roughly 20-degree downward slope upon which the homes were perched, the landslide didn’t necessarily come as a surprise.
Since the ‘70s, regulations have become stricter with limits on how steep builders can grade lots and requirements for more subsurface drainage systems and more compact soil.
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But those measures might not help if the slippery layer is 60 feet underneath all the grading and maybe several strata of bedrock, according to Tony Lee, a local geologist who has worked in the area for 30 years.
Lee said most of his clients come from other areas of the peninsula where slides are more prevalent, but he’s already received multiple calls from homeowners in Rolling Hills Estates wanting to get their properties checked.
The allure of living in a landslide zone
Common sense might suggest that the land is uninhabitable — that building homes on terrain prone to landslides will inevitably lead to disaster.
But California is a beautiful place, and Californians love looking at it. It’s the same reason that hillside homes are perched on stilts in a region that deals with devastating earthquakes. The same reason buyers flock to the fire-prone hills of Malibu or the Western Sierra or cram beach houses onto the sand as ocean levels rise.
“I’ll be here until I can’t be here anymore. I’ll slide away with the land,” said Claudia Gutierrez, a longtime resident of Portuguese Bend, an area about a mile southeast of the slide site that has been dealing with landslide issues of its own.
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If the Rolling Hills Estates landslide is the hare, moving quickly and aggressively, then the Portuguese Bend landslide is the tortoise, with the land slowly shifting roughly eight feet per year for the last 15 years.
It has caused chaos in the community, with houses sliding across property lines and roads warping into roller coasters. But according to Gutierrez, that hasn’t kept people away.
“We had homes in the middle of the active landslide zone that sold for more than $2 million last year,” she said. “I’m amazed.”
For newcomers, the peninsula offers not only great views but stellar schools, cool coastal weather, larger lots and a more relaxed, rural feel compared to the bustling cities surrounding it. And for longtime residents, even though they’d be able to sell their houses, the peninsula has become home — even if that home is slowly slipping out from under them.
According to local real estate agents, the landslides have never been a major concern to residents of Rolling Hills Estates.
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“People think this was an isolated incident,” said Mingli Wang, a longtime real estate agent in the area. “People believe their homes are safe. They don’t think it’ll happen to them.”
She noted that during home sales in the city, sellers disclose natural hazards such as the area being high-risk for fires or a dormant earthquake zone. But landslides are not part of the disclosure.
Wang is a resident herself, and she’s not concerned about the community’s safety going forward.
Steve Watts of Vista Sotheby’s International Realty said that landslides are never part of the conversation during a sale in the city.
“If your house is hanging off the edge of a cliff, they’ll sometimes get a soil report to check how deep the bedrock is. But it’s very minor,” he said.
Watts said the gated neighborhood where the homes slid into the canyon might see a slow market in the short-term, but sales will be back to normal before long.
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Zillow puts the median home value in Rolling Hills Estates at $1.918 million, nearly double the $1.067-million mark set in 2015. Many homes in the city face Torrance, missing many of the ocean views featured elsewhere on the peninsula, but still fetch prices north of $5 million. The cheapest single-family home currently on the market is offered at $1.8 million.
When Bouali, the geologist, leads classroom discussions about hazardous areas, the conversation inevitably leads to the question, “Why do people even live there?”
He said it often comes down to the cost of moving. And Southern California has an additional factor: most of the region deals with some sort of natural disaster risk, whether it’s a landslide, flood, wildfire or earthquake. Pick your poison.
That said, he added that he wouldn’t personally live on the peninsula.
A 12% increase in the conforming loan limits for 2023 raised the baseline loan limit for a single unit to $726,200 in most counties in the United States.
The adjustment is a result of a change in the average price of a home nationwide from the third quarter of 2021 to the third quarter of 2022. Home prices increased an average of 12.21%, and the baseline conforming loan limit kept pace.
Conforming loans may be cheaper than nonconforming loans like jumbo mortgages, but jumbo loans have their place.
Conforming Loan Limits for 2023
The conforming loan limits set by the Federal Housing Finance Agency can vary based on area and the number of units in the property.
In most counties, that number increased to $726,200 in 2023 for a one-unit property. In high-cost areas, the limit is $1,089,300 for a one-unit property.
In general, here’s how the baseline conforming loan limits break down for 2023.
Maximum baseline loan limit for 2023
Units
Many counties in the contiguous states, District of Columbia, and Puerto Rico
Alaska, Hawaii, Guam, and the U.S. Virgin Islands
1
$726,200
$1,089,300
2
$929,850
$1,394,775
3
$1,123,900
$1,685,850
4
$1,396,800
$2,095,200
Recommended: The Cost of Living by State
Why Care About Conforming Loan Limits?
Staying under a conforming loan limit means you’ll most likely obtain a lower-cost mortgage. Mortgages that “conform” to the limits can be acquired by Fannie Mae and Freddie Mac, government-sponsored enterprises.
Because these mortgages can be bought by the agencies and then sold to investors on the secondary mortgage market, they represent a lower risk to the lender and a lower cost to the consumer.
If you need to finance more than the conforming limit, you’ll need to look at jumbo mortgage loans.
Getting a jumbo loan involves clearing more hurdles than a conforming loan. The rate will usually be similar to conforming loan rates, but sometimes it can be lower. How jumbo can a loan be for a primary residence, second home, or investment property? It’s up to each lender.
Government-backed mortgages are also nonconforming loans, and although they serve certain homebuyers, they also may be more expensive than conforming conventional loans because they usually come with additional fees.
Recommended: How to Get a Mortgage Loan
Notable Counties Above the Standard Loan Limits
Loan limits are higher in counties where the average home price is above 115% of the local median home value. The loan ceiling is 150% of the baseline value.
For 2023, the high-cost-area loan limit increased from $970,800 to $1,089,300 on a one-unit property. Alaska, Hawaii, Guam, and the U.S. Virgin Islands also have a baseline loan limit of $1,089,300.
The following is a chart of counties in high-cost areas with an increased baseline loan limit. The increased amount for high-cost areas is either maxed out at $1,089,300 or the average percentage of increase for the price of a home in the area.
State
County
2022 limit for a single unit
2023 limit for a single unit
% change year over year
Alaska
All
$970,800
$1,089,300
12%
California
Los Angeles County, San Benito, Santa Clara, Alameda, Contra Costa, Marin, Orange, San Francisco, San Mateo, Santa Cruz
$970,800
$1,089,300
18%
California
Napa
$897,000
$1,017,750
13%
California
Monterey
$854,400
$915,400
7%
California
San Diego
$879,950
$977,500
11%
California
Santa Barbara
$783,150
$805,000
3%
California
San Luis Obisbo
$805,000
$911,950
13%
California
Sonoma
$764,750
$861,350
13%
California
Ventura
$851,000
$948,750
11%
California
Yolo
$675,050
$763,600
13%
Colorado
Eagle
$862,500
$1,075,250
25%
Colorado
Garfield
$856,750
$948,750
11%
Colorado
Pitkin
$856,750
$948,750
11%
Colorado
San Miguel
$756,750
$862,500
14%
Colorado
Boulder
$747,500
$856,750
15%
Florida
Monroe
$710,700
$874,000
23%
Guam
All
$970,800
$1,089,300
12%
Hawaii
All
$970,800
$1,089,300
12%
Idaho
Teton
$970,800
$1,089,300
12%
Maryland
Calvert, Charles, Frederick, Montgomery, Prince George’s County
Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester
$970,800
$1,089,300
12%
New York
Dutchess, Orange
$726,525
$726,525
0%
Pennsylvania
Pike
$970,800
$1,089,300
12%
Utah
Summit, Wasatch
$970,800
$1,089,300
12%
Utah
Box Elder, Davis, Morgan, Weber
$647,200
$744,050
15%
Virgin Islands
All
$970,800
$1,089,300
12%
Virginia
Arlington, Clarke, Culpeper, Fairfax, Fauguier, Loudon, Madison, Prince William, Rappahannock, Spotsylvania, Stafford, Warren, Alexandria, Fairfax City, Falls Church City, Fredericksburg City, Manassas City, Manassas Park City
$970,800
$1,089,300
12%
Washington
King, Pierce, Snohomish
$891,250
$977,500
10%
Washington D.C.
District of Columbia
$970,800
$1,089,300
12%
West Virginia
Jefferson County
$970,800
$1,089,300
12%
Wyoming
Teton
$970,800
$1,089,300
12%
Will Conforming Loan Limits Rise or Fall?
The baseline conforming loan limit is adjusted each year to reflect the change in the average home value in the United States.
The conforming loan limit has increased in six of the past 10 years and has never declined. From 2006 to 2016, for example, the conforming loan limit remained at $417,000, despite declining home values across the country. If home values continue to rise, the conforming loan limit will also rise.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Conforming Loan Limits Over the Past 10 Years
The 12% increase in loan limits for 2023 is lower than the 18% increase of 2022, which was the largest jump in the past 40 years. But it still represents an increase of $79,000 over the past year alone.
Conforming loan limit
Year
Amount
2023
$726,200
2022
$647,200
2021
$548,250
2020
$510,400
2019
$484,350
2018
$453,100
2017
$424,100
2016
$417,000
2015
$417,000
2014
$417,000
The Takeaway
Conforming loan limits are intended to keep costs low for homebuyers. This means competitive pricing on mortgages, no matter what the housing market looks like each year.
If you’re looking to apply for a home mortgage loan, check out how SoFi can help. SoFi offers fixed-rate mortgages, and qualifying first-time buyers can put as little as 3% down.
If a supersized loan is needed, SoFi offers jumbo loans with as little as 10% down and no private mortgage insurance.
Check out the full range of SoFi Mortgages today.
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Just when you thought things were cooling off, home prices surprised us with yet another killer year.
Tomorrow, Zillow will release the November edition of their Real Estate Market Reports, which will show that home prices increased 6.5% in November from a year earlier, the best year-over-year gain since 2006.
Yes, you heard that right. It might be a seasonal blip, but still, best 12 months since 2006…that’s impressive.
I Was Wrong
I’ll be the first one to admit I was wrong about sustained, stellar home price appreciation. I actually thought things were overheating a couple years ago, yet home prices continued to defy expectations.
I suppose we can thank low mortgage rates and scant inventory for that. The good news is I’ve learned something from all of this.
Whenever you think things are about to top out, they’ve probably got a lot more time to keep going higher. This is probably even more true when you watch things really closely.
The same thing happened in the stock market. It looked frothy a couple years ago, but now we’re on the cusp of Dow 20,000. And probably Dow 21,000 if history is any indication.
Not long after, it might be time to worry, or least get slightly less bullish.
The takeaway is that market tops take a long time to reach, just like market bottoms, and you’ll doubt yourself along the way.
I’ve been hearing chatter lately about how we probably have another good year or so, maybe less, depending on who you ask, in both real estate and the stock market.
The sentiment seems to be that we can squeeze a little more out of this rally, but it’s clearly coming to an end. Everyone seems to agree on that, at least in private.
Does that mean the bottom is going to fall out once we all realize we’ve gotten ahead of ourselves? That part I’m not sure of, though history does tend to surprise us over and over again with the same exact outcome (think about it).
We’ll Never See Another Crisis Like We Did
The chart above (I annotated it) shows the Case-Shiller Home Price Index (red) versus the S&P 500 (blue) since 1987.
I discuss this stuff with my wife sometimes, who always tells me I overthink everything. She’s probably 100% right. But what struck me recently was her telling me something like, “Things will never be as bad as they were a few years ago.”
When I heard her say that I thought to myself, “famous last words.” The second you hear that kind of stuff, it conjures up memories of the dot-com bust or simply the most recent housing crisis, and fears of impending doom.
Back in early 1999, the Dow hit 10,000 for the first time…and it wasn’t long before it hit 11,000. In fact, it was less than two months later that it climbed above that next key threshold.
Interestingly, it wasn’t until 2006 that the Dow surpassed 12,000 for the first time. Does that mean the Dow is going to hit 20,000 soon, then 21,000 shortly after, then tank? Or at least stall for five years? Maybe, who knows?
There’s certainly a lot of uncertainty in the world at the moment. If you want to talk about geopolitical tension, you’ll have plenty of material to fuel days, if not weeks of conversation.
Should You Buy a House in 2017?
Now let’s talk about real estate. Home prices are no longer on sale. Whether they’re still cheap is perhaps a more complicated question.
Most pundits will tell you that Americans are spending less on housing historically, but that’s mainly because of near-record low mortgage rates.
Still, home prices have increased as mortgage rates have risen, so there’s no clear correlation there, as many might expect.
But there will come a time when wages won’t be able to keep up with home prices, at which point they’ll need to fall, or at a minimum, gains will need to moderate as incomes catch up.
The question is when will that actually happen? When the dot-com bubble burst around the turn of the century, home prices pulled back around 10% in the Bay Area.
Before that somewhat modest decline, home prices had risen about 60% from 1997 to 2000.
In San Francisco, the median home value increased from $670,000 in 2012 (most recent bottom) to $1.12 million as of early 2016, a gain exceeding 67%.
History is starting to sound pretty familiar, isn’t it?
Of course, home prices in the Bay Area bounced back between 2003 and 2006, before tanking again. Regardless, the trajectory is always up.
The question then is clearly a matter of timing. As I’ve said before, time heals all real estate wounds, but there are better and worse times to buy. There are also those who tell you not to time the stock market, and probably the housing market too.
For me, 2017 doesn’t seem like a particularly good year to buy real estate. There’s just too much uncertainty in the world at the moment, and with home prices at new, fairly pricey all-time highs, I’d rather watch how things play out.
Pull Back More Likely Than Another Crisis?
Fortunately, the mortgages originated over the past few years (and still today) are of the utmost quality. CoreLogic launched a new quarterly report this week featuring its Housing Credit Index (HCI), which claims mortgage credit risk continues to be low.
In fact, it fell in the third quarter of 2016 from a quarter earlier and a year before that. You can thank rising credit scores, falling DTI ratios, and lower LTVs for that.
But it might be set to change direction as mortgage rates begin to rise, finally. Chances are borrowers will begin to assume more risk to deal with the higher rates and home prices in place, perhaps in the form of ARMs and smaller down payments.
Before long, we could be back in a familiar situation, though as my wife said, not as bad as it was before.
If you wait, maybe you’ll see a pullback of 10% or so, it’s just unclear when that’s going to happen, and also where mortgage rates will be at that time. And with rents expensive too, it’s not an ideal situation for anyone to just sit around and wait. But at some point, something’s got to give.
2021 VA Home Loan Limit: $0 down payment up to $5,000,000* (subject to lender limits) /2 open VA loans at one time $548,250 (Call 877-432-5626 for details).
How to Apply for a VA Home Loan?
This is a quick look at how to apply for a VA home loan in Merced county. For a more detailed overview of the VA home loan process, check out our complete guide on how to apply for a VA mortgage loan. Here, we’ll go over the general steps to getting a VA home loan and point out some things to pay attention to in Merced County. If you have any questions, you can call us at VA HLC and we’ll help you get started.
Get your Certificate of Eligibility (COE)
Give us a call at (877) 432-5626 and we’ll get your COE for you.
Are you applying for a refinance loan? Check out our complete guide to VA Refinancing.
Get pre-approved, to get pre-approved for a loan, you’ll need:
Previous two years of W2s
Most recent 30 days paystubs or LES (active duty)
Most recent 60 days bank statements
Landlord and HR/Payroll Department contact info
Find a home
We can help you check whether the home is in one of the Merced County flood zones
Get the necessary inspections
Termite inspection: required
Well or septic inspections needed, if applicable
Get the home appraised
We can help you find a VA-Certified appraiser in Merced County and schedule the process
Construction loan note: Construction permit/appraisal info
Building permit
Elevation certificate
Lock in your interest rates
Pro tip: Wait until the appraisal lock in your loan rates. If it turns out you need to make repairs, it can push your closing back. Then you can get stuck paying rate extension fees.
Close the deal and get packing!
You’re ready to go.
What is the Median Home Price?
As of March 31, 2021, the median home value for Merced County is $326,192. In addition, the median household income for residents of the county is $53,672.
How much are the VA Appraisal Fees?
Single-Family: $600.
Individual Condo: $600.
Manufactured Homes: $600.
2-4 Unit Multi-Family: $850.
Appraisal Turnaround Times: 7 days.
Do I need Flood Insurance?
The VA requires properties are required to have flood insurance if they are in a Special Flood Hazard Area.
In Merced County, there are many flood plains, especially in the low-lying areas. Your agent can help you to check whether a property will require flood insurance.
How do I learn about Property Taxes?
For questions about property tax, you can get in touch with Merced County Assessor Barbara Levey. Her office is located at 2222 M. St. Merced, CA 95340 or by calling (209) 385-7434.
Veterans, owner-occupiers, and senior citizens may be eligible for property tax relief. You can find out whether you qualify through the county assessor. In addition, the Assessor’s Office can do re-appraisals to determine property values and flood risks.
What is the Population?
The county’s population of 277,680 is, 61% Hispanic, 26% White, and 7% Asian.
Most county residents are between 18 and 65 years old, with 29% under 18 years old and 11% older than 65.
In total, the county has about 79,606 households, with an average of three people per household.
What are the major cities?
There is a total of six cities in the county including the city of Merced which also served as the county seat. In addition, the five other cities in the county are Atwater, Dos Palos, Gustine, Livingston, and Los Banos.
About Merced County
Merced County, California is located right in the heart of California’s San Joaquin Valley. This region is known as the breadbasket of the US because of its agricultural production. In addition, while Merced is away from the bustle of California’s biggest cities, the I-5 runs through the county and connects it to the rest of the state.
The City of Merced is the county’s cultural and economic hub. In addition to its connection to California’s primary highway system, it is also home to a major train station. The downtown area has plenty of exciting restaurants, shops, and nightlife.
The county is also home to plenty of green space. There are two national wildlife preserves along the river, where you can hike or bike along miles of trails. Plus, the City of Plenada, on the county’s eastern edge, contains one of the entrances to Yosemite National Park. Residents don’t just enjoy the park’s natural beauty but the droves of tourists it brings to the region each year.
Veteran Information
The county is currently home to 9,662 veterans.
Merced County is home to four VFW post:
Post 4327 Robert M Kelley – 939 W. Main St. Merced, CA 95340.
Post 8327 Livingston – 1605 7th Street, Livingston, CA 95334.
Post-2487 Lieut. Laurence F. Muth – 615 E Street, Los Banos, CA 93635.
Post 7635 Joseph G. Rose – 145 5th Street, Gustine, CA 95322.
VA Medical Centers in the county:
Merced VA Clinic – 340 East Yosemite Avenue, Suite D, Merced, CA 95340.
County Veteran Assistance Information
Merced County Veteran Services – 3376 N State Hwy 59, Merced, CA 95348.
VA Home Loan Information
For more information about VA Home Loans and how to apply, click here.
If you meet the VA’s eligibility requirements, you will be able to enjoy some of the best government-guaranteed home loans available.
VA loans can finance the construction of a property. However, the property must be owned and prepared for construction as the VA cannot ensure vacant land loans.
VA Approved Condos
Name (ID): VILLA DEL SOL (C01070) Address: NONE MERCED CA 95348-0000 MERCED Status: Accepted Without Conditions Request Received Date: 11/16/1986 Review Completion Date: 11/16/1986
2021 VA Home Loan Limit: $0 down payment up to $5,000,000* (subject to lender limits) /2 open VA loans at one time $548,250 (Call 877-432-5626 for details).
How to Apply for a VA Home Loan?
This is a quick look at how to apply for a VA home loan in Lawrence County. For a more detailed overview of the VA home loan process, check out our complete guide on how to apply for a VA mortgage loan. Here, we’ll go over the general steps to getting a VA home loan and point out some things to pay attention to in Lawrence County. If you have any questions, you can call us at VA HLC and we’ll help you get started.
Get your Certificate of Eligibility (COE)
Give us a call at (877) 432-5626 and we’ll get your COE for you.
Are you applying for a refinance loan? Check out our complete guide to VA Refinancing.
Get pre-approved, to get pre-approved for a loan, you’ll need:
Previous two years of W2s
Most recent 30 days paystubs or LES (active duty)
Most recent 60 days bank statements
Landlord and HR/Payroll Department contact info
Find a home
We can help you check whether the home is in one of the Lawrence County flood zones
Get the necessary inspections
Termite inspection: required
Well or septic inspections needed, if applicable
Get the home appraised
We can help you find a VA-Certified appraiser in Lawrence County and schedule the process
Construction loan note: Construction permit/appraisal info
Building permit
Elevation certificate
Lock in your interest rates
Pro tip: Wait until the appraisal lock in your loan rates. If it turns out you need to make repairs, it can push your closing back. Then you can get stuck paying rate extension fees.
Close the deal and get packing!
You’re ready to go.
What is the Median Home Price?
As of February 28, 2021, the median home value for Lawrence County is $69,091. In addition, the median household income for residents of the county is $39,993.
How much are the VA Appraisal Fees?
Single-Family: $500.
Individual Condo: $500.
Manufactured Homes: $550.
2-4 Unit Multi-Family: $550.
Appraisal Turnaround Times: 10 days.
Do I need Flood Insurance?
The VA requires properties are required to have flood insurance if they are in a Special Flood Hazard Area.
There are some minimal flood hazard areas in Lawrence County, particularly by Lake Charles, Black River, and its attached streams such as Flat Creek.
How do I learn about Property Taxes?
Becky Holder is the Lawrence County tax assessor. Her office can be reached at 315 West Main St. Walnut Ridge, Arkansas, 72476. Additionally, Becky’s office can also be reached by calling 870-886-1135.
As a homeowner, Amendment 79 and Act 142 provide that tax relief to make them eligible to receive up to $350.00 tax credit on the property that is their principal residence. Also, homeowners who are 65 years of age or older or 100% disabled may receive a freeze on their assessed value, so their taxes do not increase over the years. Mobile homeowners are also eligible.
What is the Population?
The county’s population of 16,406 is 95% White, 2% Hispanic, and 1% Black.
Most county residents are between 18 and 65 years old, with 22% under 18 years old and 19% older than 65.
In total, the county has about 6,463 households, with an average of 2.4 people per household.
What are the major cities?
The county has at least 5 large cities and communities, including Walnut Ridge, which serves as the county seat. Some other cities and towns making up this county are Imboden, Hoxie, Black Rock, and Ravenden.
About Lawrence County
Lawrence County, Arkansas farmers produce mostly corn, rice, sorghum, and soybeans. Additionally, other industries contribute to the county’s economy, such as manufacturing, poultry, and cattle.
Regarding education, more than 3,000 students benefit from the academic programs provided in its 10 public schools. Besides, higher education can be achieved at the historic Williams Baptist University, which is now famous for its liberal arts program.
The wide variety of rivers and lakes found in Lawrence County offer excellent outdoor opportunities for entertainment such as kayaking, rafting, and canoeing. Furthermore, in Lake Charles State Park, locals and visitors enjoy fishing, camping, and hiking.
Furthermore, the county offers many historical landmarks to visit, so tourists can benefit from its rich history and culture. Also, one of the most famous and visited annual festivals is the Lawrence County Fair, featuring rodeos, shows, exhibitions, and much more.
Veteran Information
Lawrence County has a veteran population of 1,082.
County Veteran Assistance Information
Lawrence Veteran’s Services Office – 315 West Main Street STE 1, Walnut Ridge, Arkansas 72476.
VA Home Loan Information
For more information about VA Home Loans and how to apply, click here.
If you meet the VA’s eligibility requirements, you will be able to enjoy some of the best government-guaranteed home loans available.
VA loans can finance the construction of a property. However, the property must be owned and prepared for construction as the VA cannot ensure vacant land loans.
VA Approved Condos
There are no VA-approved condos available in Lawrence County Arkansas. For more information about the VA condo approval process give us a call at (888)573-4496.
2021 VA Home Loan Limit: $0 down payment up to $5,000,000* (subject to lender limits) /2 open VA loans at one time $816,500 (Call 877-432-5626 for details).
How to Apply for a VA Home Loan?
This is a quick look at how to apply for a VA home loan in Napa county. For a more detailed overview of the VA home loan process, check out our complete guide on how to apply for a VA house loan. Here, we’ll go over the general steps to getting a VA home loan and point out some things to pay attention to in Napa County. If you have any questions, you can call us at VA HLC and we’ll help you get started.
Get your Certificate of Eligibility (COE)
Give us a call at (877) 432-5626 and we’ll get your COE for you.
Are you applying for a refinance loan? Check out our complete guide to VA Refinancing.
Get pre-approved, to get pre-approved for a loan, you’ll need:
Previous two years of W2s
Most recent 30 days paystubs or LES (active duty)
Most recent 60 days bank statements
Landlord and HR/Payroll Department contact info
Find a home
We can help you check whether the home is in one of the Napa County flood zones
Get the necessary inspections
Termite inspection: required
Well or septic inspections needed, if applicable
Get the home appraised
We can help you find a VA-Certified appraiser in Napa County and schedule the process
Construction loan note: Construction permit/appraisal info
Building permit
Elevation certificate
Lock in your interest rates
Pro tip: Wait until the appraisal lock in your loan rates. If it turns out you need to make repairs, it can push your closing back. Then you can get stuck paying rate extension fees.
Close the deal and get packing!
You’re ready to go.
What is the Median Home Price?
As of March 31, 2021, the median home value for Napa County is $786,853. In addition, the median household income for residents of the county is $88,596.
How much are the VA Appraisal Fees?
Single-Family: $600.
Individual Condo: $600.
Manufactured Homes: $600.
2-4 Unit Multi-Family: $850.
Appraisal Turnaround Times: 7 days.
Do I need Flood Insurance?
The VA requires properties are required to have flood insurance if they are in a Special Flood Hazard Area.
In Napa County, there are many flood plains, both in the City of Napa and in the unincorporated areas. Also, FEMA recommends people purchase flood insurance on lands that were previously damaged in wildfires.
How do I learn about Property Taxes?
For questions about property tax, you can get in touch with the Napa County Assessor, John Tuteur. His office is at 1127 First Street Suite A Napa, CA 94559 and can be called at (707) 253-4466.
Veterans, owner-occupiers, and senior citizens may be eligible for property tax relief. You can find out whether you qualify through the county assessor. In addition, the Assessor’s Office can do re-appraisals to determine property values and flood risks.
What is the Population?
The county’s population of 137,744 is 51% White, 34% Hispanic, and 8% Asian.
Most county residents are between 18 and 65 years old, with 20% under 18 years old and 19% older than 65.
In total, the county has about 49,032 households, with an average of two people per household.
What are the major cities?
The City of Napa is the largest city, with a population of 76,915. It is also the county seat. The next-largest city is American Canyon, with a population of 19,454. All of the other cities have fewer than 6,000 residents. Some of the notable small towns in Napa County are Calistoga, St. Helena, and Deer Park.
About Napa County
Welcome to Wine Country! Napa County the premier grape growing and wine-producing region in the country. Known for its rich soil, Napa County has a long tradition of farming, in addition to its world-famous vineyards. Plus, the cities of Napa and Calistoga are known for their amazing restaurant scene. Outside of the main cities, residents appreciate the clear views of the county’s rolling hills and big, blue skies.
In addition to centuries of local knowledge, the county works to stay on the cutting edge of agricultural technologies. The University of California Cooperative Extension helps the general public to stay up to date on the newest developments in farming and growing.
Also, the local schools provide education from kindergarten through community college. Plus, the nearby Sonoma State University and University of California schools offer four-year degrees without having to travel far from home.
Veteran Information
Napa County is currently home to 7,741 veterans.
County Veteran Assistance Information
Napa County Veterans Services – 650 Imperial Way, 2nd Floor, Napa, CA 94559.
VA Home Loan Information
For more information about VA Home Loans and how to apply, click here.
If you meet the VA’s eligibility requirements, you will be able to enjoy some of the best government-guaranteed home loans available.
VA loans can finance the construction of a property. However, the property must be owned and prepared for construction as the VA cannot ensure vacant land loans.
VA Approved Condos
Name (ID): REDWOOD GARDENS #1,2 & 3 (C00436) Address: (UNITS #1 THRU #98) NAPA CA 94558-0000 NAPA Status: Accepted Without Conditions Request Received Date: 10/09/2010 Review Completion Date: 10/09/2010