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by Brant Cox – original article
Every decent city in America has their escape place. New York has the Hamptons and the Jersey Shore, and Chicago has, well, Wisconsin. And Los Angeles? We get Palm Springs. Only the best escape destination in the entire country. When you have a town that was created solely on the idea of sitting by the pool and getting as hammered as f*cking possible, there’s little to complain about.
Where should you be eating in between all those mojitos and dancing at Coachella though? Between the classic old haunts where Marilyn Monroe used got her freak on, to the new, modern spots popping up all over downtown, Palm Springs is a culinary destination to be reckoned with. Here’s our updated guide on exactly how to navigate it.
Breakfast / Brunch
701 E. Palm Canyon Dr
It’s not often you eat brunch in an abandoned Denny’s and want your friends to see it on Instagram. Located inside America’s hipster safe house (Ace Hotel), King’s Highway is the all-day cafe for everyone who just can’t with the pool anymore. Don’t be fooled though. With a recently overhauled menu of things people like to eat before noon, King’s Highway has sneakily become one of the best breakfasts in town and has a not-cheesy retro atmosphere going for it, too.
Wilma and Frieda’s Cafe
73575 El Paseo
Wilma and Frieda’s is out in Palm Desert, but wherever you find yourself after a long night of Mai Tais, this is a brunch must. Open only from 8am-3pm, Wilma and Frieda’s is next to a Saks Fifth Avenue in a high-end shopping plaza, but don’t let that fool you – this place is all about comfort. Think short rib eggs benedict and a blackberry vanilla custard French toast. And with everything hovering under $15, it’s really affordable too.
4200 E Palm Canyon Dr.
Norma’s might not have the best brunch in Palm Springs, but it definitely has one of the best patios to eat it on. Technically serving as the all-day cafe at Parker Palm Springs, Norma’s at 12:30pm on a Saturday is an all-out scene — the kind of scene you came to Palm Springs to experience. Rich old women drinking chardonnay before lunch, stressed-out bridal parties guzzling mimosas, and you and your friends going to town on taco salads and Bloody Marys before hitting the pool for the next 72 hours.
622 N Palm Canyon Dr
If you hear someone shout “brunch!” in Palm Springs, it probably means they’re on their way to Cheeky’s. Open only until 2pm each day, this cafe has become the absolute go-to morning dining destination in Palm Springs. Just be warned: the line gets ridiculous. But for those who tough it out, a fantastic rotating menu of all the breakfast foods your hungover stomach wants awaits. Two words: bacon flight.
415 S Belardo Rd
When the Viceroy Palm Springs became the Avalon Hotel, it not only gave us a fantastic new place to stay, but also a great new poolside restaurant to go along with it. It’s a calm, tranquil setting, and the Latin-tinged brunch menu is a perfect complement.
The Purple Palm
572 N Indian Canyon Dr.
In the heart of Palm Springs sits the fantastic Colony Palms Hotel. And at the heart of the Colony Palms sits Purple Palm – the immaculate all-day poolside restaurant straight from your desert dreams. The weekend brunch goes from 8am-3pm, ideal for all your hazy Coachella mornings, and there’s a special sunset menu from 3-6pm for when you just need a breather from the mayhem. The American-ish menu is very solid and the ambience can’t be beat.
The Real Italian Deli
100 S Sunrise Way
The Real Italian Deli is one of those places everybody wishes they had around the corner from their apartment. The small, order-at-the-counter spot is located in a run-down stripmall a few miles outside of downtown Palm Springs, but despite its lackluster surroundings, it’s home to some of our favorite sandwiches in town. You’re going to want the Parma sandwich (prosciutto and mozzarella) on a housemade torpedo roll with a side of their fantastic mac salad. Bonus: There’s a grocery component here too if you’re in the mood to cook up an Italian feast tonight at the vacation rental.
1501 N Palm Canyon Dr.
Most day-drinking scenarios in Palm Springs revolve around strongly poured cocktails by the pool, but Draughtsman is here to change that (or at least give you more options). The massive bar/restaurant on the north side of town has a solid craft beer list, good bar food (get the burger), and is the kind of place you come for a quick bite to eat and end up staying for several hours. Why? That side patio with all the games you could ever want. There’s cornhole, hook and ring, foosball, and life-size Connect Four.
Sherman’s Deli and Bakery
401 E. Tahquitz Canyon Way
One can come to expect certain things from Palm Springs. Plenty of pool time, lots of golf, and drunk old people at stop lights asking you if you know their grandson. But an NYC-style kosher deli in the heart of the city? Not particularly. And yet, there’s Sherman’s, a Palm Springs institution, dishing out immensely respectable versions of all the old classics. It might be 114 degrees out, but sometimes a hot pastrami on rye is simply what needs to happen.
The Barn Kitchen at Sparrows Lodge
1330 E Palm Canyon Dr.
Located in one of the most underrated little hotels in Palm Springs, The Barn Kitchen at Sparrows Lodge has expanded its menu to include a lunch situation that’s open to the public (dinner is not) and has quickly become one of our favorites in town. The ham and mustard melt has no business being as good as it is, and the smoked salmon spread is all you need as the temperature hits triple digits. This is the casual, hidden lunch oasis you can’t find anywhere else in Palm Springs.
540 S Indian Canyon Dr.
Frankinbun is a small joint on the south end of downtown Palm Springs serving hot dogs like you’ve never had before – on French baguettes. But if you’re not feeling one of their traditional dogs, we recommend going for the currywurst, chicken and waffles on a stick, or something they call the tornado potato. This is your power move when brunch got a little too drunk and you need some further sustenance to get through your Saturday.
707 N. Palm Canyon Dr.
Lunch is often the forgotten meal in Palm Springs and Trio is hell-bent on changing that. How? Well, for starters, an eight-hour happy hour isn’t too shabby. And if that doesn’t suit your needs, you can go for the $19 three-course prix fixe menu. Ultimately, Trio nails the casual walk-up vibe you want for lunch and is also big enough for your whole crew to find a seat.
Ruben and Ozzy’s Oyster Bar
241 E. Tahquitz Canyon Way
Not everything has to be a big deal in this town, and in the case of Ruben and Ozzy’s, they made a business out of providing an alternative. You come to Ruben and Ozzy’s because the midday sun is taking zero prisoners and you need a beer and some oysters. This is a glorified dive bar with a great patio to get your buzz on for cheap. And with $4 alcoholic oyster shooters, danger is near.
4200 E Palm Canyon Dr.
Counter Reformation is one of the newest spots in all of Palm Springs, but it’s already operating on a higher level than just about everyone else. Hidden in a corner of the massive Parker Palm Springs, this is a wine bar that happens to have some of the best food in town. The place is small (it’s one long bar with counter seats), but the vibe is fun and cool. You’re going to want the cheese plate, the beef charcuterie, and the hen of the woods. Also, lots and lots of wine. More places like this please, Palm Springs.
621 N. Palm Canyon Dr
As far as Palm Springs is concerned, Copley’s still might be considered a relative newcomer. And yet, this decade-old restaurant is easily one of the best restaurants in town. Located in the courtyard of the former Cary Grant estate, the almost entirely outdoor space (with ridiculous mountain views) is that essential Palm Springs setting you came all the way out here looking for. Not to mention, the food is pretty good too. If you’re looking for that quintessential Palm Springs date night, this is it.
800 N Palm Canyon Dr
Farm-to-table (desert-to-table?) menus have quickly become the norm in Palm Springs dining culture, but Workshop’s still stands far above the rest – making it one of the most popular dinner spots in town. You probably didn’t think you’d come to Palm Springs and eat octopus carpaccio or duck leg confit, but here you are and you’re going to love it. The restaurant is also located inside a ridiculous all-concrete, chapel-like space that puts even some of LA’s great spaces to shame.
Rooster And The Pig
356 S. Indian Canyon Dr
Taking a page out of the LA dining handbook, Rooster And The Pig proves some of the best food in town can be found in weird strip malls. This is modern Vietnamese food and despite being open for a few years now, there’s still nothing else like it in Palm Springs. The space is small and modern, but with an atmosphere that makes you feel welcome the second you walk in. If you’re looking a good dinner in PS that doesn’t involve the usual long waits and big slabs of steak, make moves to Rooster And The Pig.
196 S Indian Canyon Dr.
An Austrian-fusion restaurant might be the last place you’d choose to go to in Palm Springs, but this 15-year-old institution has other plans. The atmosphere inside this homey restaurant is quiet and casual, with fantastic service, good wine, and a schnitzel that had us at hello. If you’re looking to avoid that overcrowded tourist scene, you should go here.
Truss & Twine
800 N Palm Canyon Dr.
For as much fun as it is to look at all the furniture stores you can’t afford, the north end of Palm Canyon can get a little sleepy when it comes to nightlife. But Truss and Twine is here to change that. The all-concrete bar certainly has the industrial look on lock, but if you’re looking for some snacks and a well-made cocktail before a night on the town, this is your spot. The waitstaff is friendly, there’s a daily happy hour from 4pm – 6pm, and they have these prosciutto-wrapped pretzel things that are downright addictive.
1050 E. Palm Canyon Dr.
The L’Horizon resort underwent a massive overhaul and came out looking like its old 1950′s glamorous self. And with it came SO.PA, the beautiful all-day, all-outdoors restaurant with a heavy Middle Eastern lean. Think crispy California squid with spicy yogurt, Alaskan trout with lentils, and a housemade hummus we’d buy tubs of. Your date night in the desert is set.
Edit 400 S El Cielo Rd. Ste A
Solid Mexican food in Palm Springs is not always easy to come by. Which is why you need to know about Felipe’s. Open for breakfast, lunch, and dinner, this family-run cafe is serving familiar Mexican classics better than anybody in Palm Springs. The tiny spot is out by the airport, perfect if you’re flying in for Coachella or aren’t in the mood to deal with the downtown crowds. The Hawaiian torta is a must.
622 N. Palm Canyon Dr
Right next door to Cheeky’s (with the same address) is Birba. Home to hands down the best pizza in Palm Springs, Birba is also the perfect casual big group jumping-off point before a night out in Palm Canyon. With bar, lounge, and table seating, you can make Birba into whatever you damn please. Expect a lively (but not sceney) courtyard atmosphere and a lot of white pizza in your mouth.
200 W. Ramon Rd.
Not so much a throwback as a perfectly-preserved relic, Melvyn’s was a favorite of Sinatra and the rest of the Rat Pack. Stay on the staff’s good side (not an easy task), and they’ll treat you to some carefully-practiced banter as they prepare their famous Steak Diane (pan-fried beefsteak with pan juices served tableside). Put away your iPhone, tuck in your shirt young man, and enjoy a classic dinner from a different era.
330 E. Amado Rd
With an old-school Miami supper club vibe, The Tropicale is a grown-up, kitschy oasis and perhaps your best spot to finally pull off that flowered button-down you got in Nassau. This is certainly a fine dining experience (and a great one at that), but with a fantastic cocktail list and an even better back patio, the recipe is right for things to get weird. The Tropicale is down to party.
701 W. Baristo Rd\
Pressed up against the base of Mount San Jacinto Mountain in The Palm Springs Tennis Club, Spencer’s is an icon and one of the all-time great restaurants in the city. Come for a wine-soaked power lunch on the patio with your interior decorator or bring the parents along for dinner to get a glimpse of how the upper crust really do it. You don’t come to Spencer’s to skimp, and that means the Black Angus Petit Filet is your order.
Well, we’re not usually the type to forward links to our friends and clients….but we felt this was really useful info which you will hopefully get to enjoy in person sometime soon. The link below lists the best restaurants here in the Palm Springs area. I think we both are going to start going down the list of these and give them a try.
by The KCM Crew
If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.
The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer, or can be found at a discount.
Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.
The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.
But not all who are buying luxury properties have a home to sell first.
In a recent Washington post article, Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:
“Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”
The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs, and are looking to step into a luxury home… Now’s the time to list your house for sale and make your dreams come true.
by President Jamie Duran, Orange County, San Diego, and Desert Companies
We want to Thank President Jamie Duran of Coldwell Banker Residential Brokerage for this Presidents Message! And we were honored to have been the ones that handled the Sells of these hallmark properties that were features in numerous books and received several architectural awards for its “timeless architecture.” As quoted by us :These are stunning estates with rich history, remarkable design, and incredible vistas. The transactions fell into place beautifully and we were fortunate to be involved with the sales”
346 Tamarisk Rd – Zanuck Estate – Sold /$4.9M
64725 Acanto Drive – Pond Estate – Sold /$7.5M
2212 Southridge Dr – Boat House – Sold /$1.75M
We Cat Moe & John Nelson of Nelson-Moe Properties Coldwell Banker Presidents Premier Properties would also be HONOREDif given the chance to SELL your “Timeless Architecture” Estate as well! Contact us TODAY!
We were very HONORED to have been the ones that listed this Iconic architectural property in the desert of Palm Springs!
Earlier this year after four years of working with Lloyds Bank of London, we announced the listings of the iconic architectural properties at Southridge. Today as an update we are proud to announce the successful closing of escrow of the famous Lautner/James Bond House. This sale marks a historic bench mark as the highest sale in Palm Springs history – a sign of a healthy direction in our Real Estate market as Palm Springs continues to attract the next generation of successful investors from outside the area. We are honored to have another very happy client and appreciate the opportunity given to us. Known as the Elrod House this monumental, world famous residential sculpture was designed by 1968. Organic shapes, monumental construction and world class design create an extraordinary experience of space that Lautner himself described as “timeless” architecture. The 60′ wide circular living room has a conical dome that fans out in nine petals between nine clerestories angled up to bring in light. Retractable curved glass walls open the entire living room and pool terrace to panoramic views of Mt San Jacinto, Mt San Gorgonio and the full sweep of the valley below and mountain ranges beyond. The very rock of the ridge is incorporated into the design throughout the home. A very rare opportunity to acquire an inspiring example of architectural perfection. SOLD!!!
But surprisingly, it’s located in the desert of Palm Springs
Text by Jennifer Tzeses Posted July 8, 2016
The “ship” is situated next to a road and surrounded by palm trees.Photo: Courtesy of Hawaii Life Real Estate Brokers
Part irony, part wishful thinking, this Palm Springs, California, home, aptly named Boat House for its shiplike exterior, happens to be located in the heart of the desert. Built in 1992 by architect Michael P. Johnson for race-car driver Jim Jeffords, the property is located on the side of a hill in the gated community of Southridge. Inside the towering glass walls, the interiors feature 14-foot ceilings. Vistas of the arid landscape and valley take center stage in the living room at the bow of the “ship.” There’s also an open-plan kitchen with sliding privacy screens, a dining area, and three en suite bedrooms, including the master suite, which features a skylight and fireplace and overlooks the living room. Outside, there’s an infinity pool and large sun deck, both with beautiful views. Listed for $2 million, this 3,905-square-foot home has 3 bedrooms and 3 baths. Contact: Coldwell Banker, 760-325-4500; coldwellbankerhomes.com
Walls of glass and wood beams surround the living room.
Photo: Courtesy of Hawaii Life Real Estate Brokers
A skylight crowns the master suite.
Photo: Courtesy of Hawaii Life Real Estate Brokers
The pool area offers amazing views.
Photo: Courtesy of Hawaii Life Real Estate Brokers
Thank you Jennifer Tzeses with Architectural digest for including our “Boat House” listing as one of your recent articles you can also see it here: http://www.architecturaldigest.com/story/ship-home-palm-springs
Famous for appearing in Diamonds are Forever, the concrete masterpiece returns to the market
by Patrick Sisson
A famous modernist home in Palm Springs designed by John Lautner, known by many for its brief appearance in a Bond film, has recently been re-listed, quickly drawing attention and offers. The one-of-a-kind dwelling, which hasn’t been open to the public for years, returns to the market after a lengthy legal battle and is asking $8M, according to The Desert Sun.
Real estate investor Michael Kilroy purchased the Elrod Home, as well as two other properties (the Steve McQueen House and Boat House), for $11 million. Years later, Kilroy fell on hard times and in 2012, UK-based lender Lloyds Bank sued Kilroy, claiming he had stopped payment and owed $1.8 million. In addition, the nearby Southbridge Property Owners Association also sued, claiming Kilroy owed $150,000 in fees.
Last April, Kilroy filed a petition for bankruptcy, and the creditors agreed he had until the end of 2016 to sell. Last week, local broker Nelson Moe Properties listed the home.
Designed for a noted interior designer and considered a key example of Lautner’s exemplary means of blending architecture and nature, the Elrod House is one of the most famous Modernist homes in Palm Springs. Highlights of the home’s layout include a circular concrete canopy framed by glass windows and a projecting pool deck that seems to float above the landscape.
This isn’t the only John Lautner-designed home to be in the news this year. In February, it was announced that his famous, dramatically slanted Sheats-Goldstein Residence, which made a cameo in The Big Lewbowski, was donated to the Los Angeles County Museum of Art (LACMA).
2175 Southridge Drive, Palm Springs, California [Nelson Moe Properties]
Thank you Patirck Sisson with L.A. Curbed http://www.curbed.com/authors/patrick-sisson for including our iconic famous high end real estate home as one of your articles!
Article by Diana Olick
Rampant volatility in the U.S. stock market is showing up in the high-end housing market. But as with all things real estate, the impact depends entirely on location.
2016 started with a severe stock swoon, and that had an outsized impact on homebuyers with a higher net worth. Historically, high-end housing suffers most in a market downturn.
“As you go up the income quintile, into the top 10 percent, 5 percent, 1 percent by income, their stock exposure increases,” said Sam Khater, chief economist at CoreLogic. “For the typical family, the bulk of their equity is tied up in home equity not stock equity. It’s the reverse for high income.”
Source: Sam Khater/CoreLogic
Khater compared the share of million-dollar home sales to the S&P 500 and found a distinct correlation. While the share of $1 million or more homes is very small, just 1.2 percent of all home sales historically, it can move dramatically depending on stock market gains or losses. From the worst of the financial crisis in 2008 to the peak of the equity markets in May 2015, the share of million dollar and more home sales nearly doubled, according to Khater.
Read More Homeowners and the Super Tuesday vote
“Since its peak in May 2015, the S&P index declined 10 percent as of mid-February. This decline in the S&P index was matched by a 30 basis point or 15 percent decline in the $1 million or more share,” Khater said.
The correlation, however, is far more acute in certain locations.
In New York City and San Francisco, where the local economies are tied most to financial markets, sales of high-end homes have weakened, and supply is rising. That jump in inventory will likely affect prices down the road, as supply outstrips demand. Nationally there was a 9.3-month supply of homes listed at $1 million or above in December 2014, but that increased to 13 months by December 2015, according to CoreLogic.
“With more than a year’s supply of inventory, prices, for the most part, won’t be increasing,” Khater said.
Read More House flipping: Deja vu all over again
In Washington, D.C., however, the stock effect is far more muted. Government, and the high-priced lawyers and lobbyists that surround it, are a steady denominator.
“Demand is higher, even though the stock market has gotten in the way and the snowstorm has gotten in the way, but demand is there, people are feeling very good about the economy,” said Nancy Taylor Bubes, a 30-year veteran of high-end D.C. real estate and currently an agent with Washington Fine Properties.
She was standing in a $5.75 million listing that received a solid offer in just 10 days. Taylor Bubes, who specializes in the area’s high-end neighborhoods, says she has sold six million-dollar-plus listings year to date, three times what she did last year. Her buyers, mostly domestic and local, are not swayed by Wall Street.
“I actually think the stock market is good for my business. I think people are going to really think about divesting a little bit and putting it into something they would really enjoy,” Taylor Bubes said.
In southwest Florida, however, where real estate is primarily driven by wealthy retirees from the Northeast and Midwest, the story is very different. Sales have slowed dramatically.
“The stock market volatility has definitely impacted the luxury homebuyer in Florida, particularly in Naples and Sarasota,” said Kristine Smale, a senior consultant with John Burns Real Estate Consulting who is based in Florida. “Seasonal traffic is still strong, but would-be buyers are slow to commit this year due to the significant hits to their portfolios. Builders are disappointed, and some are increasing incentives to generate sales,”
Read MoreYours for $44M: Margaret Thatcher’s London home
The direction of the luxury real estate market now depends entirely on both the trajectory of the stock market and on inventory levels. Supply of less-expensive homes is extremely tight, and homebuilders are leery of building to that market, as it is harder to meet margins at lower price points. Early last year, before the stock market began its fall, the CEO of Pulte Group, Richard Dugas, said the company would focus more on high-end product, because that is where the demand is.
If the stock market settles, the spring housing market could see a resurgence on the high end. If not, supply will surely increase, and prices will chill.
Article by Real Estate News
Rising home prices? C’est la vie, say a majority of today’s high-net-worth (HNW) individuals. According to new research Coldwell Banker Previews International®/NRT commissioned from Ipsos MediaCT, 54% of HNW individuals say they plan to make a real estate investment this year, up from 48% in 2014. The report surveyed the wealthiest 1.5% of the U.S. population with an average net worth of $8.5 million, and their outlook on real estate was generally positive.
An overwhelming majority — 94% — expect their property to grow, on average, 16% in value over the next five years. However, appreciation is not their primary motivator for wanting to buy. Those considering a purchase are twice as likely to be looking for a residence for personal use, as opposed to purely for investment/rental purposes. Still, 40% of respondents cited investment attractiveness as a reason to be in the real estate market.
“Property has been a mainstay of high-net-worth investor portfolios for decades, but what is notable now is that so many those investors continue to be bullish about real estate, even in the face of rising real estate prices in many U.S. cities,” says Ginette Wright, vice president of marketing for Previews®/NRT. “Financial market uncertainty and other recent global economic factors, such as a potential slowdown in China, all seem to have contributed to their view of real estate as a safe haven.”
Young, Free and Willing to Pay a Premium
Even younger affluent generations are taking an interest in real estate. The survey found that 69% of HNW millennials (those under age 35) say they plan to purchase a new property in the coming year — running contrary to the myth that millennials are reluctant to enter the housing market. Compare that to 50% of Gen Xers (ages 35-49) and 17% of baby boomers (50 and older), who expect to purchase new property in the coming year. Millennials are also leading the movement toward embracing a “live anywhere” lifestyle, a trend spotted in last year’s survey.
In addition to being more inclined to invest in real estate, younger wealthy consumers are also purchasing homes at substantially higher prices than baby boomers. Gen Xers paid an average of $5.24 million for their last home, and millennials spent $4.96 million. Baby boomers, who tend to be in downsizing mode, reported an average closing price of $1.55 million on their last home purchase.
Most Wanted: Tech and Green Features
What features and amenities do HNW individuals most desire? A home that’s move-in ready was at the top of their list, followed by modern appliances and technology, as well as the latest in “green” features. A growing share of HNW individuals say that a fully automated and wired home environment and a LEED-certified green home are becoming more important.
It’s a late-summer nail-biter: The U.S. Federal Reserve will announce its current policy for short-term rates on Thursday, ending weeks of suspense. If you’ve been worrying that the Fed will raise rates and thus ruin your dream of homeownership, well, you’re not alone.
But higher rates won’t hurt the housing market overall, which should console homeowners watching their equity as well as home buyers concerned about their investment.
The Fed’s target for short-term rates has been zero since December 2008. Since then, the 30-year fixed mortgage rate has averaged between 3.31% and 5.59% on a weekly basis. So when the Fed officially moves away from a zero interest rate policy for short-term rates, whether it happens tomorrow or in a few months, it will mark the beginning of the end of an era: seven years of incredibly low mortgage rates and high affordability.
But interest rates matter less to housing demand than consistently high levels of job creation and household formation. That is, when people are able to get jobs, move out on their own, and create families, they’re likely to want to buy a home. So higher rates—though they may price out some buyers—won’t cause a decline in sales, or a decline in prices.
But that may not help you feel better if you’ve yet to buy and lock in a monthly payment at these historically low rates. If that’s you, have you completely missed out on the party?
No. You will still be able to do well by historical standards.
The affordability index reported by the National Association of Realtors® stood at 151.2 in July. That number basically means that a family earning the median household income could afford to buy 151% of the median-priced homes in the U.S. Yes, the index is down 16% from January when mortgage rates were at their lows for this year. But the index has averaged 125 over the past 44 years. That means you can still get more home for your money than most people have for more than 40 years.
Over that same 44-year period, the average monthly 30-year fixed mortgage rate was over 8%. It was 4.06% on Tuesday.
Does that mean dealing with higher rates will be easy? No, we will have to adjust to the impact. A 50 basis-point increase in rates causes a 6% increase in monthly mortgage payments. (A basis point is 1/100th of a percentage point.) And higher payments cause higher debt-to-income ratios, which typically max out for various mortgage products between 36% and 43%.
How can you still qualify even with higher rates?
Consider a higher down payment. Can you swing it? This could qualify you for a lower rate, but even if it doesn’t, you’d have a lower loan balance, resulting in a lower monthly payment.
Pay a discount point. This would also reduce the applicable rate, and could make economic sense if you intend to stay in the home long enough to recover the cost of that discount point.
Consider hybrid mortgages. These offer lower rates that are fixed for a specified period such as five, seven, or 10 years. Since rates have been so low, most mortgages have been fixed for the duration of the mortgage term. But in periods of higher rates, we usually see more hybrid term mortgages because of the flexibility the lower rates provide.
Consider different mortgage types such as an FHA loan. This offers more flexibility on key ratios for qualified buyers.
Finally, consumers may need to rethink their target prices based on what they can afford with higher rates. That may mean rethinking location, size, or key features. An expert local Realtor® can help you think through trade-offs and home in on what matters most.
Bottom line: This era of low rates was a unique period of economic weakness and poor housing fundamentals. That era is ending, as conditions are much, much better now. Yes, that does mean that affordability will be lower, but we are still in good territory by historical standards, and today looks pretty good compared to the future for locking in prices and rates.
California pending home sales continued to gain steam in June, registering seven months of continued annual increases and the fifth consecutive month of double-digit increases, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
In a separate report, California REALTORS responding to C.A.R’s June Market Pulse Survey saw a reduction in floor calls, listing appointments, and open house traffic, compared with May. The Market Pulse Survey is a monthly online survey of more than 300 California REALTORS, Which measures data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.
Pending Home Sales data:
• California pending home sales were up 12.5% on an annual basis from the revised 107 index recorded in June 2014, marking the seventh straight month of year-to-year gains and the fifth straight month of double-digit advances.
• Statewide pending home sales fell in June on a month-to-month basis, with the Pending Home Sales index (PHSI) decreasing 2.6% from revised 123.6 in May to 120.4, based on signed contracts. The month-to-month decrease was slightly below the average May-June loss of 1.9% observed in the last seven years.
• A shortage of available homes in the San Francisco Bay Area stified pending sales in June, pushing the PHSI to 127.9, down 5.3% from 135.1 in May down 0.9% from 129.1 index recorded in June 2014.
• Pending home sales in Southern California continued last month’s increase by rising 4% in June to reach an index of 109.6 up 14.2% from June 2014 index of 96.
• Central Valley pending sales fell in June dropping 8.2% from May to reach an index of 99.5 in June but up 14.2% from 87.2 index of June 2014.
Equity and distressed housing market data:
• The share of equity sales – or non-distressed property sales – declined slightly in June to make up 92.4% of all home sales, remaining near the highest level since late 2007. Equity sales make up 92.6% of all home sales in May and 89.9% in June 2014. The share of equity sales has been at or near 90% since mid-2014.
• Conversely, the combined share of all distressed property sales (REOs and short sales) rose slightly in June, up to 7.6% from 7.4% in May. Distressed sales made up 10.1% of total sales a year ago. Ten of the 43 counties that C.A.R. reported showed month-to-month decreases in their distressed sales shares, with Alameda and Santa Clara having the smallest share of distressed sales shares at 1%, followed by San Mateo (2%), Contra Costa (3%), and San Francisco (3%). Glenn had the highest share of distressed sales at 27% followed by Merced and Siskiyou (both at 23%) For more information, visit http://www.car.org, CALIFORNIA ASSOCIATION OF REALTORS®