Silicon Valley Real Estate MarketAugust 2024
NAR Settlement
The commission law suit you might have heard about. Does it give consumer choices?
August 17, 2024 was a significant date in the real estate industry -- The new real estate practice took effect: In the past, the seller's agent negotiates one commission with the seller, and split it between two brokers, seller's and buyer's brokers
With the change, the seller's agent negotiates his/her commission with the seller, the buyer's agent negotiates his/her commission with the buyer. It seems logical, doesn't it. Yet, changes can be uncomfortable. Things will settle, and we'll get used to it, like it's always been done this way.
For more information, National Association of Realtors provided FAQ at https://www.nar.realtor/the-facts
Interest Rates
The Federal Reserve may be dropping rates in September. which could provide some relief to the tight real estate market. It's expected more buyers will become qualified and jump into the market.
Real Estate Wealth
What demographic owns a lot of real estate in the country? As of 4Q23, baby boomers (age 57 to 75) own over 40% of the real estate in the U.S. The Great Wealth Transfer is the name given to the estimated $84.4 trillion in assets that the Silent Generation and baby boomers are expected to pass down to their children and grandchildren over the next 20 years. This transfer is expected to take place mostly from baby boomers, with $72 trillion going to heirs and $12 trillion to charities. The Bank Administration Institute has called it "the greatest transfer of wealth in history"
Insurance
Home owners' insurance continue to be challenging for California. State Farm (the largest insurance carrier in California) had 70,000 policies cancelled (meaning non-renewal), including 30,000 home insurance. They later reversed the non-renewal with a caveat. Policyholders must now secure fire coverage through the California FAIR Plan. The FAIR Plan is the state’s insurance program of last resort, providing fire coverage but lacking other essential coverages such as liability. This means that while State Farm will continue to provide coverage for other perils, fire coverage must be sourced separately through the FAIR Plan.
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Also, below are median home prices and stats for Santa Clara and San Mateo counties. Stats for other areas are available upon request.
