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4 Reasons to Buy This Summer!

06 Jul 2016 Posted by NooshiAdmin in Blog

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Summer is here! The temperature isn’t the only thing heating up right now, so too is the housing market in many areas of the country! Here are four great reasons to consider buying a home today instead of waiting.

 

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 5.9% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.3% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.


2. Mortgage Interest Rates Are Projected to Increase
 

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & theNational Association of Realtors are in unison, projecting that rates will be up almost a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home. 


3. Either Way You are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”


4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.


If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Source: KCM.com

Gap Between Homeowner’s & Appraiser’s Opinions Narrows Slightly

29 Jun 2016 Posted by NooshiAdmin in Blog

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In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.

Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.

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The gap between the homeowner vs. appraiser’s opinion has started to head in the right direction (closer to even), as June saw a slight decrease from May’s -1.95% to -1.89% nationally.

Homeowners in the western part of the country, however, have been pleasantly surprised as their homes have appraised higher than they expected. Denver received its highest HPPI last month as homes came in an average of 3.28% higher than the homeowner believed it would. Nine of the twelve metro areas that had a positive HPPIlast month were located in the west.

Quicken Loans’ Chief Economist, Bob Walters explains:

“The hot housing markets along the West Coast are growing quicker than owners realize, giving way to higher than expected prices for buyers and more home equity for existing owners.  

On the other hand, the housing markets are more balanced in the East and Midwest, leading owners to be slightly over-enthusiastic about their home’s appreciation.”

Bottom Line 

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, meet with an experienced professional who can guide you through this, and any other, obstacle that may arise.

Source: KCM.com

Do Homeowners Realize Their Equity Position Has Changed?

23 Jun 2016 Posted by NooshiAdmin in Blog

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Yesterday, we reported that according to CoreLogic’s latest Equity Report, nearly 268,000 homeowners regained equity and are no longer underwater on their mortgage in the first quarter. Homes with negative equity have decreased by 21.5% year-over-year.

A study by Fannie Mae suggests that many homeowners are not aware of how their equity position has changed as their home has increased in value.

For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 8% of homes are in that position. 

The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%), when in actuality, 74% do!

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This means that 37% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate: 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

CoreLogic’s report also revealed that if homes were to appreciate by an additional 5%, over 800,000 US households would regain positive equity.

Bottom Line

If you are one of the many homeowners who is unsure of your current equity situation and would like to know your options, contact a local real estate professional who can help.

Source: KCM.com

74% of Households in the US Now Have Significant Equity!

22 Jun 2016 Posted by NooshiAdmin in Blog

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CoreLogic’s latest Equity Report revealed that 92% of all mortgaged properties are now in a positive equity situation, while 74% now actually have significant equity (defined as more than 20%)! The report also revealed that 268,000 households regained equity in the first quarter of 2016 and are no longer under water.

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

“In just the last four years, equity for homeowners with a mortgage has nearly doubled to $6.9 trillion. The rapid increase in home equity reflects the improvement in home prices, dwindling distressed borrowers and increased principal repayment.  

These are all positive factors that will provide support to both household balance sheets and the overall economy.” 

Anand Nallathambi, President & CEO of CoreLogic, believes this is a great sign for the market in 2016 as well, as he had this to say:

“More than 1 million homeowners have escaped the negative equity trap over the past year. We expect this positive trend to continue over the balance of 2016 and into next year as home prices continue to rise.  

Nationally, the CoreLogic Home Price Index was up 5.5% year over year through the first quarter. If home values rise another 5% uniformly across the U.S., the number of underwater borrowers will fall by another one million during the next year.” 

Below is a map illustrating the percentage of households in each state with significant equity: 

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Many homeowners with more than 20% equity in their home would be able to use that equity as a down payment on either a larger home or even a retirement home.

Bottom Line

If you are one of the many Americans who are unsure of how much equity you have in your home, don’t let that be the reason you fail to move on to your dream home this year!

Source: KCM.com

Thinking of Selling? 5 Reasons You Shouldn’t FSBO

21 Jun 2016 Posted by NooshiAdmin in Blog

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In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where did buyers find the home they actually purchased?

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Source : KCM.com

What’s Happening in the Real Estate Market?

18 Jun 2016 Posted by NooshiAdmin in Blog

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This is a pretty common question that a potential home buyer or seller may be asking themselves. Leading economists in real estate converged in New Orleans this past week as they presented their answer to this question at the 50th Annual Real Estate Journalism Conference for the National Association of Real Estate Editors.

Here are the top takeaways from the week of presentations:

Many of the conversations at the conference came back to the impact that Millennials and first-time home buyers will have on the market in the future. Jonathan Smoke,Chief Economist for realtor.com had this to say: 

“At any given time in our history, demographics would explain 60-80% of what’s happening [in the market], and we are in a period of time where Millennials make up a largest demographic group according to the Census, at 84 million.”

According to the National Association of Realtors (NAR), the median first-time home buyer age is 30 and many millennials are entering a prime age to drive the housing market into the future.

Lawrence Yun, Chief Economist for NAR shared that myths and affordability may be holding back potential buyers:

“84% of current renters have the desire to own. While 36% believe they cannot afford a home and 60% of renters believe it would be ‘difficult’ to qualify for a mortgage.

Ellie Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage: 

“Many potential home buyers are ‘disqualifying’ themselves. You don’t need a 750 FICO Score and a 20% down payment to buy.”

The National Multifamily Housing Council (NMHC) revealed that Millennials and Baby Boomers are often competing for the same housing inventory, causing a challenge as these two groups are the largest generations by population.

Both groups are looking for affordable, convenient homes close to city centers and ‘what’s happening.’

Bottom Line

The experts agree that homeownership is still desirable across all demographic groups, with Millennials and Baby Boomers having a great impact on available supply. If your dreams include owning your own home, meet with a local real estate professional who can evaluate your ability to buy now!

Source: KCM.com

US Housing Market Swings in Favor of Homeownership

15 Jun 2016 Posted by NooshiAdmin in Blog

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According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Indexhomeownership is a better way to produce greater wealth, on average, than renting. The results from the first quarter index showed that “16 of the 23 metropolitan markets investigated moved in the direction of buy territory.”

The BH&J Index is a quarterly report that attempts to answer the question: Is it better to rent or buy a home in today’s housing market?

“The U.S. housing market, when considered as a whole, has swung marginally more in favor of home ownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds.”

The latest results were released shortly after the S&P/Case-Shiller Home Price Index, which reported that home prices had climbed 5.4% nationally since March 2015.

Ken Johnson Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:

“This [growth] appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds.”

Dallas and Denver are two of the major cities that continued to move deeper into rent territory, but they moved at a slower rate than they had in previous quarters. Johnson believes that, in these two markets, “strong economic support…should make for a soft landing in terms of slowing property price growth, increased marketing time for properties and lower probabilities that sellers will actually transact and close during a given marketing effort of their property.”

 

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

 

To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.

Source: KCM.com

Single Women Make Up 2nd Largest Home Buying Group

10 Jun 2016 Posted by NooshiAdmin in Blog

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According to the National Association of Realtors’ (NAR) 2015 Profile of Home Buyers and Sellers, single women made up 18% of all first-time homebuyers last year, second only to married couples who made up 54% of total buyers.

 

Whether they are young, single and no longer want to rent, or newly divorced, the amount of single women becoming homeowners greatly outnumbers single males (11%). A survey of recent home buyers revealed some interesting trends about this rapidly growing group:

 

  • Average Age: 32 years old
  • Average Income: $49,400
  • Single women are more likely to become preapproved for a mortgage in order to know their budget at the beginning of the home buying process and to be able to make a move if they find their dream home.
  • Many female homebuyers think long-term when considering buying a home, often considering what amenities they may need in the near future.

“So what do women like best about homeownership? They believe that they are investing in their future by building equity and financial security. They are also very happy to no longer be paying their landlord’s mortgage payment. Being independent and having control over their environment is a key factor.”

 

It appears that it is not marriage before mortgage any longer, for either gender. As we reported yesterday, unmarried couples make up 13% of buyers, while single males account for 11%.

Bottom Line

If owning a home of your own has always been your dream, meet with a local real estate professional who can help determine if your dream can become a reality sooner than you think.

Source : KCM.com