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Are Home Values Really Overinflated?

07 Mar 2018 Posted by NooshiAdmin in Blog

Last week, the National Association of Realtors (NAR) released their most recent Existing Home Sales Report.According to the report:

“The median existing-home price for all housing types in January was $240,500, up 5.8 percent from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.”

Seventy-one consecutive months of price increases may have some concerned that current home values may be overinflated.

However, at the same time, Zillow issued a press release which revealed:

“If the housing bubble and bust had not happened, and home values had instead appreciated at a steady pace, the median home value would be higher than its current value.”

Here are two graphs that help show why home prices are exactly where they should be.

The first graph shows actual median home sales prices from 2000 through 2017.

By itself, this graph could heighten concerns as it shows home values rose in the early 2000s, came tumbling down and are now headed up again. It gives the feel of a rollercoaster ride that is about to take another turn downward.

However, if we also include where prices would naturally be, had there not been a boom & bust, we see a different story.

The blue bars on this graph represent where prices would be if they had increased by the normal annual appreciation rate (3.6%). By adding 3.6% to the actual 2000 price and repeating that for each subsequent year, we can see that prices were overvalued during the boom, undervalued during the bust, and a little bit LOWER than where they should be right now.

Bottom Line

Based on historic appreciation levels, we should be very comfortable that current home values are not overinflated.

Source: KCM.com

2 Ways to Get the Most Money from The Sale of Your Home

05 Mar 2018 Posted by NooshiAdmin in Blog

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?

Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW 

This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.

Source: KCM.com

Latest NAR Data Shows Now Is a Great Time to Sell!

02 Mar 2018 Posted by NooshiAdmin in Blog

We all realize that the best time to sell anything is when demand for that item is high, and the supply of that item is limited. Two major reports released by the National Association of Realtors (NAR) revealed information that suggests that now is a great time to sell your house.

Let’s look at the data covered in the latest REALTORS® Confidence Index and Existing Home Sales Report.

REALTORS® CONFIDENCE INDEX

Every month, NAR surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions.” This month, the index showed (again) that homebuying demand continued to outpace the supply of homes available in January.

The map below illustrates buyer demand broken down by state (the darker your state, the stronger demand there is).

In addition to revealing high demand, the index also shows that compared to conditions in the same month last year, seller traffic conditions were ‘weak’ in 22 states, ‘stable’ in 25 states, and ‘strong’ in only 4 states (Alaska, Nevada, North Dakota & Utah).

Takeaway: Demand for housing continues to be strong but supply is struggling to keep up, and this trend is likely to continue throughout 2018.

THE EXISTING HOME SALES REPORT

The most important data revealed in the report was not sales but was instead the inventory of homes for sale (supply). The report explained:

  • Total housing inventory rose 4.1% from December to 1.52 million homes available for sale.
  • Unsold inventory is 9.5% lower than a year ago, marking the 32nd consecutive month with year-over-year declines.
  • This represents a 3.4-month supply at the current sales pace.

According to Lawrence Yun, Chief Economist at NAR:

“Another month of solid price gains underlines this ongoing trend of strong demand and weak supply. The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability.”

In real estate, there is a guideline that often applies; when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values.

As we mentioned before, there is currently a 3.4-month supply, and houses are going under contract fast. The Existing Home Sales Report shows that 43% of properties were on the market for less than a month when sold.

In January, properties sold nationally were typically on the market for 42 days. As Yun notes, this will continue unless more listings come to the market.

“While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”

Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market and supply will ‘fail to catch up with demand’ if a ‘sizable’ supply does not enter the market.

Bottom Line

If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers that are still out searching for your house.

Source: KCM.com

Which Comes First… Marriage or Mortgage?

28 Feb 2018 Posted by NooshiAdmin in Blog

According to the National Association of REALTORS most recent Profile of Home Buyers & Sellers, married couples once again dominated the first-time homebuyer statistics in 2017 at 57% of all buyers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.

But, many couples are also deciding to buy a home before spending what would be a down payment on a wedding, as unmarried couples made up 16% of all first-time buyers last year.

If you’re single, don’t fret! Single women made up 18% of first-time buyers in 2017, while single men accounted for 7% of buyers. A recent report pointed to a sense of responsibility and commitment that drives many single women to want to own their own homes rather than rent someone else’s.

Here is the breakdown of all first-time homebuyers in 2017 by percentage of all buyers, income, and age:

Bottom Line

You may not be that much different than those who have already purchased their first homes. Meet with a local real estate professional today who can help determine if your dream home is already within your grasp.

Source: KCM.com

The Power of Scent

26 Feb 2018 Posted by NooshiAdmin in Blog

There are certain things that trigger memories in your mind. Sometimes it’s a song or a piece of clothing. But more than likely, it’s a scent; the olfactory system has the strongest link to memory. This correlation can trigger memories of experiences and places, but it can also trigger your body into a specific state of being. Encourage restfulness, healing, increased energy, and more with essential oils.

Determining how to best incorporate essentials oils into your lifestyle can be a bit overwhelming. How do you use them? What does each scent do? And why do they work so well? Ultimately the oils might help ease the stress of it all. But in the meantime, here’s a quick-start guide to using essential oils at home.

WHAT ARE ESSENTIAL OILS?

Essential oils are highly concentrated oils extracted from plant parts such as leaves, flowers, needles, roots, seeds, resin, bark, rinds, berries, wood, and grass. “It takes nearly eight million small jasmine blossoms, handpicked on the day the flowers open, to produce just over two pounds of superior essential oil,” says Stephanie Tourles, a certified aromatherapist and holistic esthetician among other designations.

HOW DO I USE THEM?

“To capture the aromas of nature—whether it be the fresh scent of the ocean or sparkling citrus to freshen the bathroom, or heady jasmine or distinctive gardenia in the living room or bedroom—you can purchase a wide array of essential oils, which can be diffused into different machines or diffusers,” says fragrance expert Sue Phillips, founder of the Tribeca, New York City–based The Scentarium. Alternatively, you can soak cotton balls with the essential oils and apply them to cold lightbulbs, she adds. “Then when you switch the light on, the heat from the light bulbs will diffuse the fragrance and will waft in the air.”

WHAT SHOULD I NOT DO WITH THEM?

“Always dilute the oil if you’re going to apply it to your skin or someone else’s skin,” explains herbalist and aromatherapist Lisa Akers. “About 1 to 2 percent essential oil in a carrier oil like coconut, avocado, olive, or jojoba is best. Water won’t dilute the essential oils, because they don’t mix. Use an oil, glycerin, or milk to get a good, diluted oil.” And most importantly, do not ingest the oils. “Don’t take essential oils internally unless under the direction of a physician or trained aromatherapist or herbalist. Most essential oils are corrosive and can cause liver damage. The damage isn’t seen for months or even years later, which makes this a real concern that people aren’t considering when they drop that lemon essential oil in their morning water.”

WHAT ARE THE BEST ESSENTIAL OILS FOR EVERYDAY USE?

Lavender. This do-all essential oil is a powerhouse when it comes to helping your body inside and out. Research shows that lavender is the go-to aroma for relaxation as it lowers blood pressure, heart rate, and skin temperature—but that’s not all. Studies also suggest that it helps alleviate insomnia as well as eczema. “A few drops of [diluted] lavender sprinkled on your pillow or applied to your temples will help relax you and cause a good night’s sleep,” says Phillips. “I love lavender-filled eye sachets, which can be placed over your eyes and you will immediately drift off to sleep.”

Peppermint Oil. Headaches be gone! “A few drops of peppermint oil applied to the temples, wrists, and forehead will alleviate headaches,” says Phillips. Another unconventional use for peppermint oil is to get rid of spiders. “Take about fifteen drops of peppermint essential oil and add a cup of water in a spray bottle,” she says. “Shake well. Gently spray around the corners, window frames, and doorways and the spiders will disappear. They hate the smell of peppermint!”

Eucalyptus Oil. The common cold is no match for eucalyptus. “Eucalyptus is used for treating the common cold and all its side effects like coughing, mucous, sinus infections, and a sore throat,” says acupuncture physician Elizabeth Trattner. “Eucalyptus oil also has antiviral, antifungal, and antibacertial effects. My favorite use for eucalyptus is during a cold. I like to take a bowl of hot water and create a tent with a towel over my head draped around the bowl. I will put a few drops of eucalyptus oil in and inhale the steam. It works wonders for any cold or virus and opens my respiratory passages. I would use this oil in a diffuser or a few drops in a bowl of hot water.”

Source: article.homebydesign.com

Low Inventory Pushes Home Prices Higher

26 Feb 2018 Posted by NooshiAdmin in Blog

According to CoreLogic’s latest Home Price Index, prices appreciated by 6.9% year-over-year from December 2016 to December 2017 on a national level. This marks the fifth month in a row with at least a 6.9% increase.

Dr. Frank Nothaft, Chief Economist for CoreLogic, gave insight into the reason behind the large appreciation,

“The number of homes for sale has remained very low. Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

This is great news for homeowners who have gained nearly $15,000 in equity (on average) in their homes over the last year! Those homeowners who had been on the fence as to whether or not to sell will be pleasantly surprised to find out that they now have an even larger profit to help cover a down payment on their dream homes.

As we near the traditionally busy spring buyers season, there is still hope for buyers as mortgage rates remain low compared to recent decades. The report also predicted that home price appreciation will slow slightly, rising by 4.3% by this time next year.

Bottom Line

If you are looking to enter the housing market, as either a buyer or a seller, meet with a local real estate professional who can explain exactly what’s going on in your neighborhood and discuss your options!

Source: KCM.com

The #1 Reason To Sell Now Before Spring

23 Feb 2018 Posted by NooshiAdmin in Blog

The price of any item (including residential real estate) is determined by ‘supply and demand.’ If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

According to the National Association of Realtors (NAR), the supply of homes for sale dramatically increases every spring. As an example, here is what happened to housing inventory at the beginning of 2017:

Putting your home on the market now instead of waiting for increased competition in the spring might make a lot of sense.

Bottom Line

Buyers in the market during the winter months are truly motivated purchasers. They want to buy now. With limited inventory currently available in most markets, sellers are in a great position to negotiate.

Source: KCM.com

Homeownership: “The Reports Of My Death Have Been Greatly Exaggerated”

21 Feb 2018 Posted by NooshiAdmin in Blog

The famous quote by Mark Twain in the title of this article can be used to describe homeownership in America today. Last week, the Census revealed that the percentage of homeowners in the country increased for the first time in thirteen years.

story in the Wall Street Journal gave these new homeownership numbers some context:

“The annual increase marks a crucial turning point because it comes after the federal government reined in bubble-era policies that encouraged banks to ease lending standards to boost homeownership. This time, what’s driving the market is a shift in favor of owning rather than renting.

‘This is market, market and market…There’s no government incentive program in sight that is having this effect,’ said Susan Wachter, a professor of real estate and finance at the Wharton School at the University of Pennsylvania, ‘This is back to basics.’”

In a separate report comparing the rental population in America to the homeowner population, RentCaféalso concluded that the gap is now shrinking.

“Undoubtedly, the recession had a great impact on homeownership…However, it looks like it takes more to discourage Americans from buying a house than that.

As the years go by, it seems more and more certain that the fact that renting has seen a sudden gain in popularity is more a reaction to the economic crisis than a paradigm shift in the Americans’ attitude toward housing.”

America’s belief in homeownership was also evidenced in a recent survey by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”

The results:

43% said homeownership was essential to the American Dream

48% said homeownership was important to the American Dream

Only 9% said it was not important

Bottom Line

Homeownership has been, is and will always be a crucial element of the American Dream.

*Pictured Above – Mark Twain’s home in Hartford, Connecticut.

Source: KCM.com