March 2016

Chris Stanley Broker / Owner

916.690.0250 chris@stanleyrei.com

CalBRE #01101168

JUST LISTED

9090 Trumbauer Way $369,950

Elk Grove 3 Bed / 2.5 Bath 1532 sq ft

SALE PENDING

JUST SOLD

916.667.8081 ofc

916.667.9354 fax

9129 Elk Grove Blvd. Elk Grove, CA 95624

stanleyrei.com

STANLEYREI IS SOCIAL!

Housing wealth hits a new record high

1449 Fruitridge Rd 5 acres $339,000

Sacramento 4 Bed / 2 Bath 1213 sq ft

5132 Laguna Park Drive $289,950

Elk Grove 3 Bed / 2 Bath 1334 sq ft

The housing bust wiped out about $7 trillion worth of ordinary Americans’ net

worth—but the damage has finally been repaired. The Federal Reserve says the

total value of Americans’ homes hit $25.3 trillion in the fourth quarter of 2015.

That’s about $450 billion more than in the prior quarter, and a new high. Nine

years after home values starting falling in 2006.

It took a long time for housing wealth to get back to break-even. Financial mar-

kets recovered much faster, with total financial assets peaking at $54.3 trillion in

2007, bottoming out at $45.8 trillion in 2009, and hitting a new high of $55.1 tril-

lion in 2011. Investors recovered all their lost financial wealth in just over four

years. Today, total financial assets stand at $66.9 trillion, 23% above the prior

peak. That partly reflects the Fed’s aggressive monetary stimulus policies, which

pushed up stock values a lot faster than home values.

Housing has been so slow to recover for a number of reasons. The value of

homes, like the value of everything, is determined by supply and demand. And

demand collapsed during and after the recession, as lending standards tightened

and widespread unemployment cut into income and savings. As a debt binge

unwound, many consumers found themselves owing far too much to afford a

home or qualify for a mortgage. And the foreclosure epidemic left many people

with wrecked credit and low odds of owning again any time soon.

Housing isn’t completely back to normal. The Case-Shiller national home-price

index is still slightly below its 2006 peak, so while the total net worth of homes is

at a new high, the average price of a home is still about 5% below the all-time

high, according to the index. That indicates more homes with a higher total val-

ue, but a slightly lower average price.

The sales pace of both new and existing homes is still below historical averages,

with young buyers waiting far longer to purchase a first home. Part of the prob-

lem is a shortage of starter homes, a result of fewer people upgrading from their

first home to a larger second one. And median household income, adjusted for

inflation, is still slightly below where it was in 2000, showing that ordinary fami-

lies remain under financial stress.

But rising home values and improving net worth are an important part of the

solution. As home values increase, owners who might have been under water a

few years ago -- owing more than their home was worth -- will rise above the

water line and be able to sell without losing money. That will boost the invento-

ry of homes for sale and make room for more first-time buyers. A more stable

housing market, in turn, makes the overall economy stronger, banks more will-

ing to lend, and consumers a bit cheerier. It’s about time.

If you know of anyone looking to buy or sell Real Estate, referrals are always

valued and considered the highest form of compliment.

Thanks again,

Chris