Americans Rank Real Estate Best Investment!Some Highlights:
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4 Reasons Why We Are Not Heading Toward Another Housing BubbleWith home prices continuing to appreciate above historic levels, some are concerned that we may be heading for another housing ‘boom & bust.’ It is important to remember, however, that today’s market is quite different than the bubble market of twelve years ago. Here are four key metrics that will explain why:
1. HOME PRICESThere is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone. Last week, CoreLogic reported that,
2. MORTGAGE STANDARDSMany are concerned that lending institutions are again easing standards to a level that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash. The Urban Institute’s Housing Finance Policy Center issues a monthly index which,
Their July Housing Credit Availability Index revealed:
3. FORECLOSURE RATESA major cause of the housing crash last decade was the number of foreclosures that hit the market. They not only increased the supply of homes for sale but were also being sold at 20-50% discounts. Foreclosures helped drive down all home values. Today, foreclosure numbers are lower than they were before the housing boom. Here are the number of consumers with new foreclosures according to the Federal Reserve’s most recent Household Debt and Credit Report:
Foreclosures today are less than 40% of what they were in 2003. 4. HOUSING AFFORDABILITYContrary to many headlines, home affordability is better now than it was prior to the last housing boom. In the same article referenced in #1, CoreLogic revealed that in the vast majority of markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain much lower than their pre-crisis peaks.” They went on to explain:
The “price” of a home may be higher, but the “cost” is still below historic norms. Bottom LineAfter using these four key housing metrics to compare today to last decade, we can see that the current market is not anything like that bubble market. |
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Every homeowner wants to make sure that 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 ways to ensure that you get the highest price possible. |
This may seem counterintuitive, but let’s take a 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 when, in actuality, it just dramatically lessens the demand for their houses (see chart below). Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fightingwith each other over the house. Realtor.com gives this advice:
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This, too, may seem counterintuitive as the seller may think that he or she will make more money by avoiding a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by real estate professionals. A 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. The data showed that:
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 sales price was near 6% lower for FSBO sales of similar properties. |
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. |
Will Your Current House Fit Your Needs in Retirement?As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement. According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.1 1. Affordability
Would moving to a complex with homeowner association (HOA) fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement? 2. Equity
The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $16,300 in equity last year. 3. Maintenance
As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind in knowing that you do not have to do the maintenance work yourself? 4. Security
As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind. 5. Pets
Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or moving in to a condo? Is the backyard fenced in? How far are you from your favorite veterinarian? 6. Mobility
Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Having to install handrails and make sure that your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs. 7. Convenience
How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider. Bottom LineWhen it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, contact a local real estate professional who can evaluate your ability to sell your house in today’s market and get you into your dream retirement home! |
Across the United States, there is a severe mismatch between the low number of houses for sale and the high demand for those houses! First-time homebuyers are out in force and are being met with a highly competitive summer real estate market. According to the National Association of Realtors (NAR), the inventory of homes for sale “has fallen year-over-year for 36 consecutive months,” and now stands at a 4.1-month supply. A 6-month supply of inventory is necessary for a balanced market and has not been seen since August of 2012. NAR’s Chief Economist Lawrence Yun had this to say,
Is There Any Relief Coming?According to the CoreLogic’s 2018 Consumer Housing Sentiment Study, four times as many renters are considering buying homes in the next 12 months than homeowners who are planning to sell, “which is the crux of the available housing-supply imbalance.” As more and more renters realize the benefits of homeownership, the demand for housing will continue to rise. Do homeowners realize demand is so high? With home prices rising across the country, homeowners gained over a trillion dollars in equity over the last 12 months, with the average homeowner gaining over $16,000! The map below shows the breakdown by state: Many homeowners who have not thought about listing their homes may not even realize how much equity they have gained, or the opportunity available to them in today’s market! Bottom LineIf you are one of the many homeowners across the country who hasn’t quite found their forever home, now may be a great time to list your house for sale and find your dream home! |
Some experts are calling for a slowdown in the economy later this year and most economists have predicted that the next recession could only be eighteen months away. The question is, what impact will a recession have on the housing market? Here are the opinions of several experts on the subject: Ivy Zelman in her latest “Z Report”:
Aaron Terrazas, Zillow’s Senior Economist:
Mark Fleming, First American’s Chief Economist:
Mark J. Hulbert, Financial Analyst and Journalist:
U.S. News and World Report:
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According to the Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers purchased their homes with down payments below 6% in 2017. Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying, but in March, 71% of first-time buyers and 54% of all buyers put less than 20% down. Ralph McLaughlin, Chief Economist and Founder of Veritas Urbis Economics, recently shed light on why buyer demand has remained strong,
It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes. Bottom LineIf you are one of the many first-time buyers unsure of whether or not they would qualify for a low-down payment mortgage, consult a local real estate professional who can set you on your path to homeownership! |