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- Joshua Tree's market cools down ❄️
Today’s top stories…
Joshua Tree's real estate market takes a wild ride
NAR's $418 million settlement shakes up the residential real estate industry
California’s hidden gem for family-friendly suburban living
💰 Deal of the Day!: 3 bd | 1 ba | Packwood, WA
Today’s mortgage rate (30 Yr. Fixed): 6.99%
Joshua Tree: From Boom to Bust?
Joshua Tree, once California's pandemic real estate darling, is now experiencing a market cooldown. Home values in the area soared during the Covid-19 outbreak, with the typical value in Joshua Tree reaching $467,348 in July 2022, up from $217,007 in July 2020. However, as of February 2024, values have dropped to $385,941, though still higher than pre-pandemic levels. Neighboring communities like Twentynine Palms and Yucca Valley have also seen values fall from their pandemic peaks, dropping 12.2% and 6.5%, respectively. Foreclosures are resurfacing, with some short-term rental investments defaulting.
The short-term rental market has become increasingly competitive, with listings growing from 1,876 in 2019 to 3,550 in 2023. Occupancy levels have declined from a pandemic high of 72% in 2020 to 52.2% in 2023. Some investors are cutting their losses, such as one who sold a Landers property for $250,000 after spending $350,000 on purchase and renovations. However, high-end, amenity-rich properties continue to perform well, with one 1,600-square-foot home earning over $20,000 per month. Local governments are implementing regulations to limit short-term rentals and prevent future oversaturation.
The Joshua Tree market is in a readjustment period, with prices potentially having further to fall. Lower interest rates and the spring market could signal a bottom, but investors should keep a close eye on this evolving market.
What’s next for housing prices?
The 2024 housing market forecast indicates that affordability will remain a significant hurdle for buyers, as mortgage rates and home prices are expected to stay elevated. Fannie Mae predicts an increase in home sales compared to 2023, but price appreciation will likely slow down. U.S. home prices declined for the third consecutive month in January, but still jumped 6% year-over-year.
Experts anticipate a "flat stretch" ahead for the housing market, with 2024 not quite hitting the sweet spot. For a full recovery, inventory must rise considerably, and mortgage rates need to cool off at a steady pace. NAR's $418 million settlement will bring significant changes to the buying and selling process, potentially causing some chaos. The new rules may disproportionately impact first-time homebuyers, FHA and VA buyers, who may struggle to pay for their own agents.
Housing inventory remains near historic lows, especially for entry-level homes, but some signs of loosening are emerging. Despite affordability challenges, a housing market crash is unlikely in 2024, thanks to homeowners' substantial equity. Foreclosures are trending up but are expected to remain below pre-pandemic levels due to a strong economy and excellent loan quality.
The 2024 housing market faces ongoing affordability hurdles, but a crash seems improbable. Buyers and sellers must navigate new rules and shifting dynamics, while keeping a close eye on inventory, mortgage rates, and regional trends.
Nestled in the northeast corner of Walnut Creek, the Woodlands neighborhood has emerged as a highly sought-after real estate market in the Bay Area. Its wide streets, proximity to quality schools, and easy access to shopping centers have made it a magnet for families seeking a suburban lifestyle.
Over the past four years, Woodlands' typical home value has soared by an impressive 40%, outpacing the growth in Walnut Creek (30%) and the San Francisco metro area (19%). Despite the recent slowdown due to higher mortgage rates, the neighborhood's home values still managed to climb by 4% from February 2023 to February 2024.
As remote work became more prevalent during the pandemic, many homeowners in Woodlands added offices or accessory dwelling units to their properties, further driving up prices. The neighborhood's modest single-story homes, ranging from 1,800 to 2,300 square feet, are perfect for families, and children can often be seen riding their bicycles on the tree-named streets or playing basketball in front of their homes.
While the surging home values are great news for current homeowners, it has become increasingly challenging for first-time buyers to enter this desirable market. As interest rates eventually decline, competition for homes in the Woodlands is expected to intensify further.
Despite the challenges, the Woodlands remains a highly sought-after neighborhood for families looking for a suburban oasis in the heart of the Bay Area.
💰 Deal of the Day!
Price: $700,000
Address: 132 Slalom Way, Packwood, WA 98361
This riverfront cabin presents a prime opportunity for a successful short-term rental investment, offering stunning views, modern amenities, and a picturesque setting that's perfect for attracting guests and influencers alike, while its proximity to outdoor adventures and fully furnished status make it a turnkey solution for investors seeking a low-maintenance, high-appeal vacation property.
Airdna data:
Estimated monthly payment: $4,253/month (if financed)
Estimated monthly revenue: $4,075/month
Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.
Thanks and see you tomorrow!
✍️ Brett