Santa Rosa Fire Fighters Local 1401 is partnering with Community Housing Sonoma County (CHSC) to create HOME for 7 veterans in the former 1950’s Santa Rosa firehouse on Benton Street. CHSC refurbished and re purposed the firehouse to become Benton Veterans Village housing veterans in need of housing. This former firehouse will be a unique veterans’ housing community due to the enormous commitment made by our Santa Rosa Firefighters to be involved in the veterans’ lives. Led by Santa Rosa Fire Fighters who are veterans, our local fire heroes are committed to creating a long-lasting partnership with our nation’s veteran heroes who will be living at the firehouse.
We are asking for your help. We need your help with cash donations or donations of new or gently used items to finish outfitting the building and each veteran apartment to create the feeling of HOME for our veterans moving into Benton Veterans Village in mid-October.
Santa Rosa Fire Fighters already secured donations for a pool table, dressers, tables and other items. You can participate with cash donation or donate items needed for the apartments and the firehouse. Please visit our website donation page to make a cash donation or view household items that you can donate to help secure HOME for our veterans. https://www.communityhousingsc.org/support-us.
One of the main factors of a real estate “Bubble” is the appearance and increase of the mortgage “default” rate. This usually goes hand in hand with years of issuing shady lending. We saw it in the 2008 real estate crash when default rates soared first at the “sub-prime” level but then the “A+” paper. Those who saw the movie, “The Big Short”, recall the number which was being posted on a white board outside one of the main character’s office. It was the “default” rate and was quickly into the double digit numbers. It kept soaring upward until the moment of implosion and government bail-out intervention. Many today are calling this market a “bubble”. But the default rates are just NOT there. The graph below from Freddie Mac/Fannie Mae, show the gradual decline in default rates. We are at historic lows. NOTE the numbers during the “crash”.
I bring this up because shaky or very ez money was the basis of the great default of the 2008 real estate market crash. Speculation, another cause of the crash, was driven by the availability of this ez money in which to invest in real estate. But one of the first indicators was the alarming default rate of first “sub-prime” and then “prime” loans. We can eliminate default rates as the canary in the coal mine. NOT happening this time.
What WILL drive a bubble to burst or gradually deflate? In our area it is affordability. Currently in Sonoma County only 1 in 5 can afford our median home price of $670,000. It’s an old equation–buyers quit buying, Seller needs to sell, Seller drops price to bring buy to their property. The other Sellers follow suit and you’ve got a decreasing value market. Stay tuned!
The current slowdown of the real estate market is being blamed on higher interest rates and/or affordability. Interest rates have moved over the past five years from lows in the 3.40% range to the current 4.94% range. You’d think 1% would not make a huge difference in qualifying but when you add in the lack of affordability in our area you find consumers right at their limits. And not only are they hitting their max for loan qualifying, many are saying NO to a life where the mortgage payment dominates their household monthly outlays. What makes the market tick in the Sonoma County area is Affordability. Currently 1 in 5 can afford to purchase the median home price. We are among the top counties with affordability issues. As you can see below, our affordability number is at 20% who can afford the median home price. But look at San Francisco, San Mateo and Santa Clara! The most affordable county in the Bay Area is Solano but that dropped 6 points over the past year. How do we increase affordability? #1 lower interest rates, #2 building more affordable housing, #3 the economic boom we’re in needs to generate higher wages.
Continue reading Market Slow Down–Interest Rates or Affordability?