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Don’t Underestimate the Importance of Using an Agent When Selling Your Home

22 Sep 2016 Posted by NooshiAdmin in Blog

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When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online, but then depend on an agent to find the actual home they will buy (53%), to negotiate the terms of the sale & price (48%), or to help understand the process (60%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Source: KCM.com

The Cost of NOT Owning Your Home

18 Sep 2016 Posted by NooshiAdmin in Blog

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Owning a home has great financial benefits. Because of this, more and more experts are growing concerned about the ramifications of a falling homeownership rate. Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

The outcomes of a falling homeownership rate can be devastating. As explained byApartmentList.com:

“Our research indicates that not owning a home has a sizable financial cost, as renters miss out on low mortgage rates and are hit by higher rents.

This phenomenon may exacerbate inequality in our society, as those wealthy enough to invest in real estate benefit from lower interest rates, whereas minorities and younger Americans, hit by rising rents and student debt, risk being locked out of homeownership.”

What proof exists that owning is financially better than renting?

1. A study published by the Joint Center of Housing Studies at Harvard Universityshows the financial benefits of homeownership. The study mentions five major financial benefits:

  • Housing is typically the one leveraged investment available
  • You’re paying for housing whether you own or rent
  • Owning is usually a form of “forced savings”
  • There are substantial tax benefits to owning
  • Owning is a hedge against inflation

2. Studies have shown that homeowners have a net worth that is 45X greater than that of a renter.

3. Just last month, we explained that a family buying an average priced home this past January could build more than $46,000 in family wealth over the next five years. 

4. Some argue that renting eliminates the cost of taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs are baked into the rent payment already – along with a profit margin!!

Bottom Line

Owning a home has always been, and will always be better from a financial standpoint than renting.

Source: KCM.com

Mortgage Standards Easing TOO MUCH? NO!!

17 Sep 2016 Posted by NooshiAdmin in Blog

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There is no doubt that getting a mortgage is easier today than it was right after the housing crash a decade ago. However, the easing of credit availability has led to some questioning of whether or not we are headed for another housing crisis.

Let’s put everything into the proper perspective.

Mortgage Credit Availability Over the Last Three Years

Getting a home mortgage has definitely gotten easier over the last three years as evidenced by the Mortgage Credit Availability Index, issued by the Mortgage Bankers Association, in the following graph (the higher the index, the easier it is to get a mortgage):

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Mortgage Credit Availability Today Compared to 2006

The graph below shows the index going back to 2004, and the first graph we showed you above is represented by the small, orange, triangular section all the way in the lower-right corner.

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As this visual easily illustrates, today’s index is nowhere near the levels it shot up to in 2006.

Bottom Line

Mortgage credit is definitely easing. However, we are not coming close to the lax standards that caused the housing crisis of last decade.

Source: KCM.com

Why Getting Pre-Approved Should Be Your First Step

15 Sep 2016 Posted by NooshiAdmin in Blog

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In many markets across the country, the amount of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

 

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

Source: KCM.com

Interest Rates Remain at Historic Lows… But for How Long?

13 Sep 2016 Posted by NooshiAdmin in Blog

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The interest rate you pay on your home mortgage has a direct impact on your monthly payment; The higher the rate, the greater your payment will be. That is why it is important to look at where the experts believe rates are headed when deciding to buy now or wait until next year.

The 30-year fixed mortgage rate has fallen half a percentage point since the beginning of the year and has remained at or below 3.5% for the last 11 weeks according toFreddie Mac’s Primary Mortgage Market Survey.

The chart below shows how far rates have fallen this year (on the left), and uses an average of the projections from Freddie Mac, Fannie Mae, the Mortgage Bankers Association and National Association of Realtors (on the right). As you can see, interest rates are projected to increase steadily over the course of the next 12 months.

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How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.0% over the last year and are predicted to be 5.4% higher next year.

If both the predictions of home prices and interest rate increases become a reality, families will wind up paying considerably more for their next home.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth. Meet with a local real estate professional to evaluate your ability to purchase your dream home.

Source: KCM.com

14,767 Homes Sold Yesterday… Did Yours?

06 Sep 2016 Posted by NooshiAdmin in Blog

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There are some homeowners that have been waiting for months to get a price they hoped for when they originally listed their house for sale. The only thing they might want to consider is… If it hasn’t sold yet, maybe it’s not priced properly.

After all, 14,767 houses sold yesterday, 14,767 will sell today and 14,767 will sell tomorrow.

14,767!

That is the average number of homes that sell each and every day in this country, according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales are at an annual rate of 5.39 million. Divide that number by 365 (days in a year) and we can see that, on average, over 14,767 homes sell every day.

The report from NAR also revealed that there is currently only a 4.7-month supply of inventory available for sale, (6-months inventory is considered ‘historically normal’).

This means that there are not enough homes available for sale to satisfy the buyers who are out in the market now in record numbers.

Bottom Line

We realize that you want to get the fair market value for your home. However, if it hasn’t sold in today’s active real estate market, perhaps you should reconsider your current asking price.

Source : KCM.com

Don’t Get Caught in the Rental Trap!

31 Aug 2016 Posted by NooshiAdmin in Blog

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There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

Don’t Become Trapped

Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

In the Joint Center for Housing Studies at Harvard University’s 2015 Report on Rental Housing, they reported that 49% of rental households are cost-burdened, meaning they spend more than 30% of their income on housing. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

It’s Cheaper to Buy Than Rent

In Smoke’s article, he went on to say,

“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

 “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reportedthat analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

 It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Many first-time homebuyers who believe that they need a large down payment may beholding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

Source: KCM.com

San Francisco – August 2016 The Real Estate Update

30 Aug 2016 Posted by NooshiAdmin in Blog

In the fast paced and ever changing world of San Francisco real estate, reviewing yearly market trends with monthly breakdowns is the most viable way of staying on top of the market. Monitoring yearly data enables buyers and sellers to fully understand where the market has been and where it is going.

Overall, the real estate market has achieved a “Soft Landing’ this year, with the best evidence of this being the modest increase in median sales price. Over the past twelve months, condo prices have increased by 2.76%, and single-family homes by 6.25%. On a month-to-month basis, condo prices have remained relatively constant, while the price of single-family homes has varied by as much as $235,000.

 

Median Sales Price

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Average Days on Market – 14% 23.3%

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# Units Sold – -16.1% -9.7%

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More Insights

Over the last 12 months, there has been a very slight increase in Days on Market. To a seller eager to sell their home, an increase in Days on Market sounds daunting, but in reality, it has only taken 7 more days to sell a condo and 4 more days to sell a single-family home. This directly reflects the fact that inventory has increased 29% for single-family homes and 56% for condominiums. This translates to an increase in the Month’s Supply of Inventory (MSI), a term statisticians use to tell us how long it would take to sell out our current inventory, with single-family homes at 2.2 months and condominiums at 2.5 months. An MSI of 4 – 6 is considered a balanced market, thus we are still experiencing a strong seller’s market.

When looking at statistics, seasonality always has to be considered. The market is more active in spring and fall, and slower in winter and summer. However, even considering seasonality, the difference between list price and sale price has tightened over the last 12 months. When compared to last July, the average list price/sale price ratio for single-family homes is down by 8 points and down 4 points for condominiums. Although inventory has increased July over July, the number of sales has decreased, which helps explain the modest increase in appreciation. (These increases, by the way, would be considered good in most parts of the country). This is further evidence of the soft landing we’re experiencing.

 

% List Price Received

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Months Supply of Inventory

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SFRs – For Sale vs Under Contract + Sold

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Condos – For Sale vs Under Contract + Sold

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