Summer is around the corner, and it is hard to imagine the year is almost half over. The last few months have been very volatile in all segments of everyday life, from the economy to the geopolitical landscape. Even though the devastating fires are almost four months past, many clients are still figuring out the next steps in their home rebuilding. The insurance issues remain complex and convoluted, and it is hard to say when actual rebuilding will be moving ahead full steam.
Tariff tension
On the political front, one word describes the pins-and-needles approach everyone is glued to: tariffs. Many people are frozen on major financial decisions until there is greater clarity on how the situation will play out. However, this does not mean the real estate market isn’t active. Sales at all price points continue with slightly longer marketing time, but prices remain firm, with certain pockets faring quite well. The relocation of people affected by the fires has taken root in an uptick in purchases in Brentwood, Santa Monica, the Marina areas, the South Bay, Coastal Orange County, and the Valleys.
On the mortgage front, conventional rates are in the mid-6% range, with jumbo mortgages slightly lower and some 7- and 10-year ARMs in the high 5% range. We have a wide array of no-tax-return programs designed for self-employed clients. Business bank-statement programs are an excellent alternative with many user-friendly variations. Additionally, we have many programs for investment properties underwritten solely on the rental income of the property, with no tax returns required.
In the commercial realm, we are experiencing a significant uptick in volume with purchase activity and refinances of loans that are maturing or rolling to market rates. Lenders can be very flexible with qualifying guidelines, especially for quality properties. We have excellent banking relationships that focus on owner-user properties, with rates in the high 5% range. On a sidebar, reverse mortgages are becoming increasingly important, and because there is no pre-payment penalty, we are structuring transactions that make excellent economic sense.
Stay tuned!