Atlanta Real Estate Brokers BlogRecently posted or modified blog postshttps://www.atlantarealestatebrokers.com/blog/Copyright AtlantaRealEstateBrokers.com2022-03-08T14:37:07-07:00tag:atlantarealestatebrokers.com,2012-09-20:39424 Simple Graphs Showing Why This Is Not a Housing Bubble
<img src="https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" style="margin: 5px; border: 5px solid black; float: right;" width="300" height="164" />
A <a href="https://magazine.realtor/daily-news/2022/02/03/77-of-consumers-believe-we-re-in-a-housing-bubble" title="recent survey" target="_blank" rel="noopener noreferrer">recent survey</a> revealed that many consumers believe there’s a housing bubble beginning to form. That feeling is understandable, as year-over-year home price appreciation is still in the double digits. However, this market is very different than it was during the housing crash 15 years ago. Here are four key reasons why today is nothing like the last time.
1. Houses Are Not Unaffordable Like They Were During the Housing Boom
The affordability formula has three components: the price of the home, wages earned by the purchaser, and the mortgage rate available at the time. Conventional lending standards say a purchaser should not spend more than <a href="https://myhome.freddiemac.com/buying/what-can-you-afford" title="28%" target="_blank" rel="noopener noreferrer">28%</a> of their gross income on their mortgage payment.
Fifteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased, and the mortgage rate, even after the recent spike, is still well below 6%. That means the average purchaser today pays less of their monthly income toward their mortgage payment than they did back then.
In the latest <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-affordability-report/" title="Affordability Report" target="_blank" rel="noopener noreferrer">Affordability Report</a> by ATTOM Data, Chief Product Officer Todd Teta addresses that exact point:
“The average wage earner can still afford the typical home across the U.S., but the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward.”
Affordability isn’t as strong as it was last year, but it’s much better than it was during the boom. Here’s a chart showing that difference:
<a href="https://files.mykcm.com/2022/02/16120303/20220217-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101200" src="https://files.mykcm.com/2022/02/16120303/20220217-MEM-Eng-1.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
If costs were so prohibitive, how did so many homes sell during the housing boom?
2. Mortgage Standards Were Much More Relaxed During the Boom
During the housing bubble, it was much easier to get a mortgage than it is today. As an example, let’s review the number of mortgages granted to purchasers with credit scores under 620. According to <a href="https://credit.org/blog/what-is-a-good-credit-score-infographic/" title="credit.org" target="_blank" rel="noopener noreferrer">credit.org</a>, a credit score between 550-619 is considered poor. In defining those with a score below 620, they explain:
“Credit agencies consider consumers with credit delinquencies, account rejections, and little credit history as subprime borrowers due to their high credit risk.”
Buyers can still qualify for a mortgage with a credit score that low, but they’re considered riskier borrowers. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the 14 years since.
<a href="https://files.mykcm.com/2022/02/16120306/20220217-MEM-Eng-2.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101201" src="https://files.mykcm.com/2022/02/16120306/20220217-MEM-Eng-2.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
Mortgage standards are nothing like they were the last time. Purchasers that acquired a mortgage over the last decade are much more qualified. Let’s take a look at what that means going forward.
3. The Foreclosure Situation Is Nothing Like It Was During the Crash
The most obvious difference is the number of homeowners that were facing foreclosure after the housing bubble burst. The Federal Reserve issues a <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" title="report" target="_blank" rel="noopener noreferrer">report</a> showing the number of consumers with a new foreclosure notice. Here are the numbers during the crash compared to today:
<a href="https://files.mykcm.com/2022/02/16120309/20220217-MEM-Eng-3.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101202" src="https://files.mykcm.com/2022/02/16120309/20220217-MEM-Eng-3.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
There’s no doubt the 2020 and 2021 numbers are impacted by the forbearance program, which was created to help homeowners facing uncertainty during the pandemic. However, there are fewer than 800,000 homeowners left in the program today, and most of those will be able to work out a repayment plan with their banks.
Rick Sharga, Executive Vice President of RealtyTrac, <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-november-2021-u-s-foreclosure-market-report/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect.”
Why are there so few foreclosures now? Today, homeowners are equity rich, not tapped out.
In the run-up to the housing bubble, some homeowners were using their homes as personal ATM machines. Many immediately withdrew their equity once it built up. When home values began to fall, some homeowners found themselves in a negative equity situation where the amount they owed on their mortgage was greater than the value of their home. Some of those households decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area.
Homeowners, however, have learned their lessons. Prices have risen nicely over the last few years, leading to <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-equity-and-underwater-report/" title="over 40%" target="_blank" rel="noopener noreferrer">over 40%</a> of homes in the country having more than 50% equity. But owners have not been tapping into it like the last time, as evidenced by the fact that national tappable equity has increased to a record <a href="https://www.blackknightinc.com/wp-content/uploads/2022/02/BKI_MM_Dec2021_Report.pdf" title="$9.9 trillion" target="_blank" rel="noopener noreferrer">$9.9 trillion</a>. With the average home equity now standing at <a href="https://twitter.com/odetakushi/status/1471125050199883783" title="$300,000" target="_blank" rel="noopener noreferrer">$300,000</a>, what happened last time won’t happen today.
As the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="Homeowner Equity Insights" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights</a> report from CoreLogic explains:
“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”
There will be nowhere near the same number of foreclosures as we saw during the crash. So, what does that mean for the housing market?
4. We Don’t Have a Surplus of Homes on the Market – We Have a Shortage
The supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation. As the next graph shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing the acceleration in home values to continue.
<a href="https://files.mykcm.com/2022/02/16120313/20220217-MEM-Eng-4.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101203" src="https://files.mykcm.com/2022/02/16120313/20220217-MEM-Eng-4.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a shortage of homes for sale.
Bottom Line
If you’re worried that we’re making the same mistakes that led to the housing crash, the graphs above show data and insights to help alleviate your concerns.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2022-03-08T15:30:00-07:002022-03-08T14:35:14-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3941How Supply and Demand Can Impact Your Buying and Selling Goals
<img src="https://files.mykcm.com/2022/02/22152831/20220223-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="How Supply and Demand Can Impact Your Buying and Selling Goals | MyKCM" style="margin: 5px; border: 5px solid black; float: right;" width="300" height="164" />
In today’s <a href="https://www.mykcm.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/" title="housing market">housing market</a>, there are far more buyers looking for homes than sellers listing their houses. Based on the concept of supply and demand, this means home prices will naturally rise. Why is that? When there are more people trying to buy an item than there are making that item available for sale, that drives prices up. And that’s exactly the case in today’s housing market. So, knowing what’s happening with the inventory of homes for sale and the demand for housing is crucial for today’s buyers and sellers.
Nationally, Demand Is High and Supply Is Very Low
The latest buyer and seller <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" title="activity data" target="_blank" rel="noopener noreferrer">activity data</a> from the National Association of Realtors (NAR) indicates buyer traffic heavily outweighs seller traffic today, as shown in the maps below. There are far darker blues (strong buyer activity) on the left and much lighter blues (weak seller activity) on the right. In other words, this shows how the demand for homes is significantly greater than what’s available to purchase.
<a href="https://files.mykcm.com/2022/02/22152834/20220223-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101244" src="https://files.mykcm.com/2022/02/22152834/20220223-MEM-Eng-1.png" alt="How Supply and Demand Can Impact Your Buying and Selling Goals | MyKCM" width="600" height="338" /></a>
What Does This Mean if You’re a Seller?
Supply is struggling to keep pace with demand. In fact, the inventory of homes for sale recently hit an <a href="https://www.mykcm.com/2022/01/27/why-right-now-is-a-once-in-a-lifetime-opportunity-for-sellers/" title="all-time low">all-time low</a>. That gives you an <a href="https://www.mykcm.com/2021/11/02/sellers-have-incredible-leverage-in-todays-market/" title="incredible advantage">incredible advantage</a> when you sell your house. With so few listings, it’s likely more potential buyers will view your house – especially if you work with an agent to price it right. That means there’s a high chance you’ll receive <a href="https://www.mykcm.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/" title="multiple offers">multiple offers</a> or buyers will enter a bidding war for your house. And that dynamic can drive the sale price of your home up.
What Does This Mean if You’re a Buyer?
As a buyer with <a href="https://www.mykcm.com/2022/01/20/buyers-want-to-know-why-is-housing-supply-still-so-low/" title="fewer options">fewer options</a> available, you’re likely to see more competition, so you need to be strategic to <a href="https://www.mykcm.com/2022/02/11/how-to-win-as-a-buyer-in-a-sellers-market-infographic/" title="win">win</a>. First, make sure you have a trusted professional on your side. Your real estate agent will help you understand your local market and work with you to <a href="https://www.mykcm.com/2022/01/12/two-ways-homebuyers-can-win-in-todays-market/" title="act quickly">act quickly</a> when the time is right. Even when it’s challenging to find a home, you can still succeed as a buyer today if you have a trusted advisor on your side every step of the way.
Bottom Line
Whether you’re a homebuyer, seller, or both, knowledge truly is power. Let’s connect today so you can better understand what’s happening in our local market and achieve your homebuying and selling goals this year.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2022-03-08T15:25:00-07:002022-03-08T14:35:26-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3940The #1 Reason To Sell Your House Today
<img src="https://files.mykcm.com/2022/02/23123145/20220224-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The #1 Reason To Sell Your House Today | MyKCM" style="margin: 5px; border: 5px solid black; float: left;" width="350" height="191" />
Almost every industry is currently struggling with supply chain disruptions. This also applies to the current U.S. housing market, where buyer demand far exceeds housing supply.
Purchaser demand is very strong right now. The National Association of Realtors (NAR) just released their latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-surge-6-7-in-january" title="Existing Home Sales Report" target="_blank" rel="noopener noreferrer">Existing Home Sales Report</a> which reveals that sales surged in January. Existing home sales rose to a seasonally adjusted annual rate of 6.5 million – an increase of 6.7% from the prior month, with sales up in all regions. However, there’s one big challenge.
Inventory Is at an All-Time Low
Because purchaser demand is so high, the market is running out of available homes for sale. The above-mentioned report states that the current months’ supply of inventory of homes for sale has fallen to 1.6 months. This prompts Lawrence Yun, Chief Economist at NAR, to say:
“The inventory of homes on the market remains woefully depleted, and in fact is currently at an all-time low.”
Earlier this month, realtor.com released their <a href="https://www.realtor.com/research/data/" title="inventory data" target="_blank" rel="noopener noreferrer">inventory data</a> for January. It helps confirm this point. Here’s a graph comparing inventory levels for January over the last six years:
<a href="https://files.mykcm.com/2022/02/23123141/20220224-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101263" src="https://files.mykcm.com/2022/02/23123141/20220224-MEM-Eng-1.png" alt="The #1 Reason To Sell Your House Today | MyKCM" width="600" height="450" /></a>
As the graph shows, new listings coming on the market have decreased over the last four years (shown in blue in the graph). The graph also reveals that carry-over inventory has plummeted in recent years. This is because listings are now sold so quickly, they don’t stay on the market long enough to carry over month-to-month (shown in green in the graph). In other words, homes are not staying on the market for months as they had prior to the pandemic. In the report mentioned above, NAR reveals that:
“Seventy-nine percent of homes sold in January 2022 were on the market for less than a month.”
Odeta Kushi, Deputy Chief Economist at First American, <a href="https://twitter.com/odetakushi/status/1494695509486936067" title="explains" target="_blank" rel="noopener noreferrer">explains</a> it like this:
“A higher velocity of sales (lower [Days on Market]) helps to explain a housing market characterized by both higher sales & lower inventory. Many resale transactions are happening so quickly that they ‘flow’ in & then out of the ‘stock’ between the fixed monthly measurement of inventory.”
What Does This Mean for Sellers?
Anyone thinking of putting their home on the market shouldn’t wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today.
Later this year, inventory (and by extension, your competition) will increase as many homeowners are waiting to put their homes on the market in the spring and early summer.
In addition, Len Kiefer, Deputy Chief Economist at Freddie Mac, <a href="https://twitter.com/lenkiefer/status/1494423003224059914" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Housing starts start off 2022 strong, just edging out 2021 for most in January since 2006.”
As these newly built homes are completed, they will also become competition for your house. This gives you a tremendous opportunity right now. Don’t wait for that increase in competition in your area. If you want to sell in 2022 and are ready to start the process, today is the day to list your house.
Bottom Line
If you’re ready to sell, let’s connect to get your house on the market while today’s inventory situation is in your favor.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2022-03-08T15:17:00-07:002022-03-08T14:35:52-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3939Why It’s Critical To Price Your House Right
<img src="https://files.mykcm.com/2022/03/04133540/20220307-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Why It’s Critical To Price Your House Right | MyKCM" style="margin: 5px; border: 5px solid black; float: left;" width="400" height="219" />
When you make a move, you want to sell your house for the <a href="https://www.mykcm.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/" title="highest price">highest price</a> possible. That might be why many homeowners are eager to list in today’s <a href="https://www.mykcm.com/2022/02/24/the-1-reason-to-sell-your-house-today/" title="sellers’ market">sellers’ market</a>. After all, with record-low <a href="https://www.mykcm.com/2022/02/23/how-supply-and-demand-can-impact-your-buying-and-selling-goals/" title="inventory">inventory</a> and high <a href="https://www.mykcm.com/2022/02/18/whats-driving-todays-high-buyer-demand-infographic/" title="buyer demand">buyer demand</a>, many homes are selling for more than asking price. Data from the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-01-realtors-confidence-index-02-18-2022.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR) shows 46% of homes are selling above list price today.
But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale. Here’s why.
Pricing Your House Right Is Crucial Even in a Sellers’ Market
The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your house.
On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.
In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see a bidding war, too. And when a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.
To get a look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:
<a href="https://files.mykcm.com/2022/03/04133358/20220307-MEM-Eng.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101345" src="https://files.mykcm.com/2022/03/04133358/20220307-MEM-Eng.png" alt="Why It’s Critical To Price Your House Right | MyKCM" width="600" height="450" /></a>
Lean on a Professional’s Expertise To Price Your House Right
There are <a href="https://www.nar.realtor/determining-asking-price" title="several factors" target="_blank" rel="noopener noreferrer">several factors</a> that go into pricing your house and balancing them is the key. That’s why it’s important to lean on an expert real estate advisor when you’re ready to move. A local real estate advisor is knowledgeable about:
The value of homes in your neighborhood
The current demand for houses in today’s market
The condition of your house and how it affects the value
A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.
Bottom Line
Even in a sellers’ market, pricing your house right is critical. Don’t rely on guesswork. Let’s connect to make sure your house is perfectly priced.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2022-03-08T15:14:00-07:002022-03-08T14:36:54-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3938How Global Uncertainty Is Impacting Mortgage Rates
<img src="https://files.mykcm.com/2022/03/07135327/20220308-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="How Global Uncertainty Is Impacting Mortgage Rates | MyKCM" style="margin: 5px; border: 5px solid black; float: right;" width="350" height="191" />
If you’re thinking about <a href="https://www.mykcm.com/2022/02/21/real-estate-voted-the-best-investment-eight-years-in-a-row/" title="buying">buying</a> or <a href="https://www.mykcm.com/2022/02/24/the-1-reason-to-sell-your-house-today/" title="selling">selling</a> a home, you’ll want to keep a pulse on what’s happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year. And just a few weeks ago, the 30-year fixed mortgage rate from <a href="https://www.freddiemac.com/pmms/archive" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a> approached 4% for the first time since <a href="https://freddiemac.gcs-web.com/node/24906/pdf" title="May of 2019" target="_blank" rel="noopener noreferrer">May of 2019</a>. But that climb has dropped slightly over the past few weeks (see graph below):
<a href="https://files.mykcm.com/2022/03/07135324/20220308-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-101383" src="https://files.mykcm.com/2022/03/07135324/20220308-MEM-Eng-1.png" alt="How Global Uncertainty Is Impacting Mortgage Rates | MyKCM" width="600" height="450" /></a>
The recent decline in mortgage rates is primarily due to growing uncertainty around geopolitical tensions surrounding Russia and Ukraine. But experts say it’s to be expected.
Here’s a look at how industry leaders are explaining the impact global uncertainty has on mortgage rates:
Odeta Kushi, Deputy Chief Economist at First American, <a href="https://www.housingwire.com/articles/ukraine-conflict-could-lead-to-lower-mortgage-rates-in-short-term/" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“While mortgage rates trended upward in 2022, one unintended side effect of global uncertainty is that it often results in downward pressure on mortgage rates.”
In <a href="https://nationalmortgageprofessional.com/news/russia-ukraine-conflict-may-dampen-us-mortgage-rates" title="another interview" target="_blank" rel="noopener noreferrer">another interview</a>, Kushi adds:
“Geopolitical events play an important role in impacting the long end of the yield curve and mortgage rates. For example, in the weeks following the ‘Brexit’ vote in 2016, the U.S. Treasury bond yield declined and led to a corresponding decline in mortgage rates.”
Kushi’s insights are a reminder that, historically, economic uncertainty can impact the <a href="https://www.mykcm.com/2022/02/02/the-top-indicator-if-you-want-to-know-where-mortgage-rates-are-heading/" title="10-year treasury yield">10-year treasury yield</a> – which has a long-standing relationship with mortgage rates and is often considered a leading indicator of where rates are headed. Basically, events overseas can have an impact on mortgage rates here, and that’s what we’re seeing today.
Will Mortgage Rates Stay Down?
While no one has a crystal ball to predict exactly what will happen with rates in the future, experts agree this slight decline is temporary. Sam Khater, Chief Economist at Freddie Mac, echoes Kushi’s sentiment, but <a href="https://freddiemac.gcs-web.com/node/24976/pdf" title="adds" target="_blank" rel="noopener noreferrer">adds</a> that the decline in rates won’t last:
“Geopolitical tensions caused U.S. Treasury yields to recede this week . . . leading to a drop in mortgage rates. While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.”
Rates will likely fluctuate in the short-term based on what’s happening globally. But before long, experts project rates will renew their climb. If you’re in the market to buy a home, doing so before rates start to rise again may be your most affordable option.
Bottom Line
Mortgage rates are an important piece of the puzzle because they help determine how much you’ll owe on your monthly mortgage payment in your next home. Let’s connect so you have <a href="https://www.mykcm.com/2022/03/01/an-expert-advisor-will-give-you-the-best-advice-in-todays-market/" title="up-to-date information">up-to-date information</a> on rates and trusted advice on how to time your next move.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2022-03-08T15:11:00-07:002022-03-08T14:37:07-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3803Struggling To Find a Home To Buy? New Construction May Be an Option.
<img src="https://files.mykcm.com/2021/12/03144005/20211208-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Struggling To Find a Home To Buy? New Construction May Be an Option. | MyKCM" title="Building A Home" style="margin: 5px; border: 5px solid black; float: right;" width="300" height="164" />
There’s no question that the financial benefits of <a href="https://www.mykcm.com/2021/11/29/why-now-is-a-great-time-to-sell-your-house/" title="selling">selling</a> a house are outstanding today. Now is truly a great time to list if you’re ready to make a change. But if you do sell your house right now, you may be wondering where you’ll go when you move.
With so few homes available to <a href="https://www.mykcm.com/2021/10/27/housing-challenge-or-housing-opportunity-it-depends/" title="buy">buy</a> right now, you might be considering building a new home as one of your options. But you may be unsure if that’s the way to go. Let’s compare the benefits of a newly built home versus moving into an existing one, and why working with a <a href="https://www.mykcm.com/2021/11/26/reasons-to-hire-a-real-estate-professional-infographic/" title="real estate agent">real estate agent</a> throughout the process is mission-critical to your success no matter what you decide.
The Pros of Newly Built Homes
First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new home, you’ll be able to:
1. Create your perfect home.
If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more.
2. Cash-in on energy efficiency.
When building a home, you can choose energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.
3. Minimize the need for repairs.
Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little projects to tackle. QuickenLoans puts it like <a href="https://www.quickenloans.com/learn/old-house-vs-new-house" title="this" target="_blank" rel="noopener noreferrer">this</a>:
“Buying a new construction vs. existing home typically means you’ll have fewer repairs to do. It can be a huge relief to know that it’s unlikely you’ll have to repair the roof or replace the furnace.”
4. Have brand new everything.
Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.
The Pros of Existing Homes
Now, let’s compare that to the perks that come with buying an existing home. With a pre-existing home, you can:
1. Explore a wider variety of home styles and floorplans.
With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.
2. Join an established neighborhood.
Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit.
3. Enjoy mature trees and landscaping.
Established neighborhoods also have more developed landscaping and trees, which can give you additional privacy and curb appeal. As Investopedia <a href="https://www.investopedia.com/articles/personal-finance/062614/should-you-buy-or-build-home.asp" title="says" target="_blank" rel="noopener noreferrer">says</a>, if you buy an existing home:
“Odds are, too, that the home will have mature landscaping, so you won’t have to worry about starting a lawn, planting shrubs, and waiting for trees to grow.”
4. Appreciate that lived-in charm.
The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home. According to <a href="https://www.houseopedia.com/finding-value-and-charm-in-an-existing-home" title="Houseopedia" target="_blank" rel="noopener noreferrer">Houseopedia</a>:
“Charm is priceless. Existing homes, especially those built in the 1950’s or before, often offer architectural elements, historic charm and a quality of craftsmanship not available in new homes.”
The choice is yours. When you start your search for the perfect home, remember that you can go either route – you just need to decide which features and benefits are most important to you. Working with the guidance of your trusted real estate advisor will help you make the most informed and educated decision, so you can move into the home of your dreams.
Bottom Line
If you have questions about the options in your area, let’s discuss what’s available and what’s right for you, so you’re ready to make your next move with confidence.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-12-10T14:53:00-07:002022-03-08T14:13:33-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3435Retirement May Be Changing What You Need in a Home
<img src="https://files.mykcm.com/2021/11/16112900/20211117-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Retirement May Be Changing What You Need in a Home | MyKCM" title="Older Couple In Retirement" style="float: left; margin: 5px; border: 5px solid black;" width="400" height="219" />
The past year and a half brought about significant life changes for many of us. For some, it meant entering retirement earlier than expected. Recent data shows more people retired this year than anticipated. According to the Schwartz Center for Economic Policy Analysis, 2021 saw a retirement <a href="https://www.economicpolicyresearch.org/jobs-report/the-pandemic-retirement-surge-increased-retirement-inequality" title="boom" target="_blank" rel="noopener noreferrer">boom</a>:
“At least 1.7 million more older workers than expected retired due to the pandemic recession.”
If you’ve recently retired, your home may not fit your new lifestyle. The good news is, you’ve likely built-up significant equity that can fuel your next move. According to the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="Homeowner Equity Insights" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights</a> report from CoreLogic, homeowners gained more than $50,000 in equity over the past 12 months alone. That, plus today’s sellers’ market, presents a great <a href="https://www.mykcm.com/2021/10/27/housing-challenge-or-housing-opportunity-it-depends/" title="opportunity">opportunity</a> to sell your house and address your <a href="https://www.mykcm.com/2021/09/20/is-it-time-to-move-on-to-a-new-home/" title="evolving needs">evolving needs</a>.
You Can Move Closer to the Ones You Love
The <a href="https://cdn.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf" title="2021 Home Buyers and Sellers Generational Trends" target="_blank" rel="noopener noreferrer">2021 Home Buyers and Sellers Generational Trends</a> report from the National Association of Realtors (NAR) provides a look at the reasons people buy homes. For those reaching retirement age, the number one reason to buy is the opportunity to be closer to loved ones, friends, or relatives.
If you find yourself farther from your loved ones than you’d like to be, retirement and the equity you’ve built in your home may enable you to move closer to the people in your life who matter most.
You Can Find the Right Home for Your Needs
Not only can your equity power a move to a new location, but it can also help you purchase the right size home. Lawrence Yun, Chief Economist at NAR, <a href="https://www.realtor.com/news/trends/as-boomers-downsize-competition-grows-for-simpler-homes/" title="says" target="_blank" rel="noopener noreferrer">says</a> many homebuyers 55 and older choose to downsize – or buy a smaller home – when they make a purchase:
“Clearly from the age patterns, young people want to upsize, and the older generation is looking to downsize. . . .”
Whatever your home goals are, a trusted real estate advisor can help you to find the best option for your situation. They’ll help you sell your current home and guide you as you <a href="https://www.mykcm.com/2021/10/26/there-are-more-homes-available-now-than-there-were-this-spring/" title="buy">buy</a> your next one while you move into this new phase of life.
Bottom Line
If you’ve recently retired and your needs are changing, you’re not alone. Let’s connect so you can get a better sense of how to find a home that will match your situation.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-11-17T08:32:00-07:002021-12-10T13:56:04-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3431The Truths Young Homebuyers Need To Hear
<img src="https://files.mykcm.com/2021/07/06103625/20210707-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Truths Young Homebuyers Need To Hear | MyKCM" title="Young Homebuyers" style="margin: 5px; border: 5px solid black; float: right;" width="400" height="219" />
For many young or first-time homebuyers, purchasing a home can feel intimidating. A recent <a href="https://lombardohomes.com/renting-vs-buying-101/" title="survey" target="_blank" rel="noopener noreferrer">survey</a> shows some homebuyers ages 25 to 40 may be unsure about the homebuying process and what they can afford. It found:
“1 in 4 underestimated their buying potential by $150k or more”
“1 in 4 underestimated the increase in value by $100k or more”
“47% don’t know what a good interest rate is”
Because they feel uncertain, many young homebuyers have given up on their search, or worse, they’ve decided homebuying isn’t for them and never started on their journey to begin with.
If you’re interested in buying but aren’t sure where to begin, here are three key concepts about homeownership you should understand before you get started.
1. What You Need To Know About Down Payments
Saving for a down payment is sometimes viewed as one of the biggest obstacles for homebuyers, but that doesn’t have to be the case. As Freddie Mac <a href="https://sf.freddiemac.com/articles/insights/down-payments-helping-future-borrowers-bridge-the-awareness-gap" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”
According to the most recent <a href="https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends" title="Home Buyers and Sellers Generational Trends Report" target="_blank" rel="noopener noreferrer">Home Buyers and Sellers Generational Trends Report</a> from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. That number is even lower when we control for age – for buyers in the 22 to 30 age range, the median down payment was only 6%.
2. You May Be Able To Afford More Home Than You Think
Working remotely, exercising, and generally spending more time than ever in our homes has changed what many people are looking for in their living space. However, some young homebuyers don’t feel they can afford a home that suits their growing needs and have decided to continue renting instead. That means they’ll miss out on some of the <a href="https://www.mykcm.com/2021/06/17/housing-wealth-the-missing-piece-of-the-affordability-equation/" title="long-term benefits">long-term benefits</a> of owning a home. As an article recently published by NAR <a href="https://magazine.realtor/daily-news/2021/06/08/survey-young-adults-underestimate-costs-of-homeownership" title="points out" target="_blank" rel="noopener noreferrer">points out</a>:
“Many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years…”
Knowing how much home you can afford when starting the buying process is critical and could be the game-changer that gets you from <a href="https://www.mykcm.com/2021/06/18/owning-a-home-has-distinct-financial-benefits-over-renting-infographic/" title="renting to buying">renting to buying</a>.
3. Homeownership Will Become Less Affordable the Longer You Wait
Finally, with mortgage rates starting to rise along with home prices <a href="https://www.mykcm.com/2021/07/06/a-look-at-home-price-appreciation-through-2025/" title="appreciating">appreciating</a>, putting off buying a home now could cost you much more later. Sam Khater, Chief Economist at Freddie Mac, <a href="https://www.globenewswire.com/news-release/2021/06/24/2252751/0/en/Mortgage-Rates-Rise-Above-Three-Percent.html" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”
Most experts <a href="https://www.mykcm.com/2021/06/30/what-do-experts-see-on-the-horizon-for-the-second-half-of-the-year/" title="forecast">forecast</a> interest rates will rise in the months ahead, and even the smallest increase can influence your <a href="https://www.mykcm.com/2021/05/06/why-waiting-to-buy-a-home-could-cost-you-a-small-fortune/" title="buying power">buying power</a>. If you’ve been on the fence about buying a home, there’s no time like the present.
Bottom Line
If you feel overwhelmed by the prospect of starting your home search, you’re not alone. Let’s connect today so we can talk more about the process, what you’ll need to start your search, and what to expect.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-11-15T09:46:00-07:002021-12-10T13:55:51-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3430Are Foreclosures Coming In 2022?
<img src="https://files.mykcm.com/2021/11/01113422/20211104-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Why a Wave of Foreclosures Is Not on the Way | MyKCM" title="Why a foreclosure wave is not on the way" style="margin: 5px; border: 5px solid black;" width="350" height="191" />
With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won’t happen.
There are fewer homeowners in trouble this time
After the last housing crash, about <a href="https://economics.cmail20.com/t/ViewEmail/d/6DD5AA0E9F6529292540EF23F30FEDED/5323CD85A2087AFD22947492D9797BBC" title="9.3 million households" target="_blank" rel="noopener noreferrer">9.3 million households</a> lost their homes to a foreclosure, short sale, or because they simply gave it back to the bank.
As stay-at-home orders were issued early last year, the fear was the pandemic would impact the housing industry in a similar way. Many projected up to <a href="https://blog.firstam.com/economics/this-time-its-different-why-a-wave-of-foreclosures-is-unlikely" title="30% of all mortgage holders" target="_blank" rel="noopener noreferrer">30% of all mortgage holders</a> would enter the forbearance program. In reality, only 8.5% actually did, and that number is now <a href="https://www.mba.org/2021-press-releases/october/share-of-mortgage-loans-in-forbearance-decreases-to-221-percent" title="down to 2.2%" target="_blank" rel="noopener noreferrer">down to 2.2%</a>.
As of last Friday, the total number of mortgages still in forbearance <a href="https://www.blackknightinc.com/blog-posts/forbearances-flat-for-second-consecutive-week/" title="stood at 1,221,000" target="_blank" rel="noopener noreferrer">stood at 1,221,000</a>. That’s far fewer than the 9.3 million households that lost their homes just over a decade ago.
Most of the mortgages in forbearance have enough equity to sell their homes
Due to rapidly rising home prices over the last two years, of the 1.22 million homeowners currently in forbearance, <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/06/BKI_MM_Apr2021_Report.pdf" title="93% have at least 10% equity" target="_blank" rel="noopener noreferrer">93% have at least 10% equity</a> in their homes. This 10% equity is important because it enables homeowners to sell their homes and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.
The remaining 7% might not have the option to sell, but if the entire 7% of those 1.22 million homes went into foreclosure, that would total about 85,400 mortgages. To give that number context, here are the <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" title="annual foreclosure numbers" target="_blank" rel="noopener noreferrer">annual foreclosure numbers</a> for the three years leading up to the pandemic:
2017: 314,220
2018: 279,040
2019: 277,520
The probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures that impacted the housing crash 15 years ago. It’s actually less than one-third of any of the three years prior to the pandemic.
The current market can absorb listings coming to the market
When foreclosures hit the market back in 2008, there was an oversupply of houses for sale. It’s exactly the opposite today. In 2008, there was over a nine-month supply of listings on the market. Today, that number is less than a <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" title="three-month supply" target="_blank" rel="noopener noreferrer">three-month supply</a>. Here’s a graph showing the difference between the two markets.<a href="https://files.mykcm.com/2021/11/01113425/20211104-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99825" src="https://files.mykcm.com/2021/11/01113425/20211104-MEM-Eng-1.png" alt="Why a Wave of Foreclosures Is Not on the Way | MyKCM" width="600" height="450" /></a>
Bottom Line
The data indicates why <a href="https://www.tomferry.com/our-podcast/experience-91/" title="Ivy Zelman" target="_blank" rel="noopener noreferrer">Ivy Zelman</a>, founder of the major housing market analytical firm Zelman and Associates, was on point when she stated:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-11-15T09:39:00-07:002021-11-15T08:48:42-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3429What’s Happening with Home Prices?
<img src="https://files.mykcm.com/2021/11/05135352/20211110-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="What’s Happening with Home Prices?" title="What's Happening with Home Prices?" style="margin: 5px; border: 5px solid black; float: right;" width="750" height="410" />
Many people have questions about home prices right now. How much have prices risen over the past 12 months? What’s happening with home values right now? What’s projected for next year? Here’s a look at the answers to all three of these questions.
How much have home values appreciated over the last 12 months?
According to the latest <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="Home Price Index" target="_blank" rel="noopener noreferrer">Home Price Index</a> from CoreLogic, home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at an accelerated pace for each of the last eight months (see graph below):<a href="https://files.mykcm.com/2021/11/05135354/20211110-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99865" src="https://files.mykcm.com/2021/11/05135354/20211110-MEM-Eng-1.png" alt="What’s Happening with Home Prices? | MyKCM" width="600" height="450" /></a>
The increase in the rate of appreciation that’s shown by CoreLogic coincides with data from the other two main home price indices: the <a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA-HPI-Monthly-10262021.pdf" title="FHFA Home Price Index" target="_blank" rel="noopener noreferrer">FHFA Home Price Index</a> and the <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20211026-1444567/1444567_cshomeprice-release-1026.pdf" title="S&P Case Shiller Index" target="_blank" rel="noopener noreferrer">S&P Case Shiller Index</a>.
The last year has shown tremendous home price appreciation, which is resulting in a major gain in wealth for homeowners through rising <a href="https://www.mykcm.com/2021/10/22/your-home-equity-is-growing-infographic/" title="equity">equity</a>.
What’s happening with home prices right now?
All three indices mentioned above also show that while appreciation is in the high double digits right now, that price acceleration is beginning to level off (see graph below):<a href="https://files.mykcm.com/2021/11/05135358/20211110-MEM-Eng-2.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99866" src="https://files.mykcm.com/2021/11/05135358/20211110-MEM-Eng-2.png" alt="What’s Happening with Home Prices? | MyKCM" width="600" height="450" /></a>Year-over-year appreciation is still close to 20%, but it’s clearly plateauing at that rate. Many experts believe it will drop below 15% by the end of the year.
Keep in mind, that doesn’t mean home values will depreciate. It means the rate of appreciation will slow, yet stay well above the 25-year average of 5.1%.
What about next year?
The recent surge in prices is the result of heavy buyer demand and a <a href="https://www.mykcm.com/2021/10/26/there-are-more-homes-available-now-than-there-were-this-spring/" title="shortage">shortage</a> of homes available for sale. Most experts believe that as more housing inventory comes to market (both new construction and existing homes), the supply and demand for housing will come more into balance. That balance will bring a lower rate of appreciation in 2022. Here’s a look at home price forecasts from six major entities, and they all project future appreciation:
<a href="https://www.fanniemae.com/research-and-insights/forecast" title="Fannie Mae" target="_blank" rel="noopener noreferrer">Fannie Mae</a>
<a href="http://www.freddiemac.com/research/forecast/index.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>
<a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary" title="Mortgage Bankers Association" target="_blank" rel="noopener noreferrer">Mortgage Bankers Association</a>
<a href="https://pulsenomics.com/surveys/#home-price-expectations" title="Home Price Expectation Survey" target="_blank" rel="noopener noreferrer">Home Price Expectation Survey</a>
<a href="https://www.zelmanassociates.com/" title="Zelman & Associates" target="_blank" rel="noopener noreferrer">Zelman & Associates</a>
<a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-Q4-2021-us-economic-outlook-10-28-2021.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a>
<a href="https://files.mykcm.com/2021/11/05135401/20211110-MEM-Eng-3.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99867" src="https://files.mykcm.com/2021/11/05135401/20211110-MEM-Eng-3.png" alt="What’s Happening with Home Prices? | MyKCM" width="600" height="450" /></a>While the projected rate of appreciation varies among the experts, due to things like supply chain challenges, virus variants, and more, it’s clear that home values will continue to appreciate next year.
Bottom Line
There have been historic levels of home price appreciation over the last year. That pace will slow as we finish 2021 and enter into 2022. Prices will still rise in value, just at a much more moderate pace, which is good news for the housing market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-11-12T20:28:00-07:002021-11-15T08:48:06-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3402The Big Question: Should You Renovate or Move?
<img src="https://files.mykcm.com/2021/10/12131853/20211013-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Big Question: Should You Renovate or Move? | MyKCM" title="Beautiful Kitchen" style="margin: 5px; border: 5px solid black; float: right;" width="300" height="164" />
The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their <a href="http://info.aia.org/AIArchitect/2021/reports/2021-q3/2021-Q3-Home-Design-Trends-Survey.pdf" title="AIA Home Design Trends Survey" target="_blank" rel="noopener noreferrer">AIA Home Design Trends Survey</a> results for Q3 2021. The survey reveals the following:
70% of respondents want more outdoor living space
69% of respondents want a home office (48% wanted multiple offices)
46% of respondents want a multi-function room/flexible space
42% of respondents want an au pair/in-law suite
39% of respondents want an exercise room/yoga space
If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:
A possible desire to relocate
The difference in the cost of a renovation versus a purchase
Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)
In either case, you’ll need access to capital: the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of <a href="https://www.mykcm.com/2021/09/30/as-home-equity-rises-so-does-your-wealth/" title="equity">equity</a>.
Home Equity Is Skyrocketing
The record-setting increases in home prices over the last two years dramatically improved homeowners’ <a href="https://www.mykcm.com/2021/10/07/111285-reasons-you-should-buy-a-home-this-year/" title="equity">equity</a>. The graph below uses data from <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="CoreLogic" target="_blank" rel="noopener noreferrer">CoreLogic</a> to show the average home equity gain in the first quarter of the last nine years:<a href="https://files.mykcm.com/2021/10/12131855/20211013-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99559" src="https://files.mykcm.com/2021/10/12131855/20211013-MEM-Eng-1.png" alt="The Big Question: Should You Renovate or Move? | MyKCM" width="600" height="450" /></a>Odeta Kushi, Deputy Chief Economist at First American, <a href="https://twitter.com/odetakushi/status/1445387423442214915" title="quantifies" target="_blank" rel="noopener noreferrer">quantifies</a> the amount of equity homeowners gained recently:
“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”
As a homeowner, the money you need to purchase the perfect home or renovate your current house may be right at your fingertips. However, waiting to make your decision may increase the cost of tapping that equity.
If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.
Mortgage rates are <a href="https://www.mykcm.com/2021/10/05/the-main-key-to-understanding-the-rise-in-mortgage-rates/" title="forecast">forecast</a> to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" title="Federal Housing Finance Agency" target="_blank" rel="noopener noreferrer">Federal Housing Finance Agency</a> (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.
First Step: Determine the Amount of Equity in Your Home
If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:
The current mortgage balance on your home
The current value of your home
You can probably find the mortgage balance on your monthly mortgage statement. To find the current market value of your house, you can pay several hundreds of dollars for an appraisal, or you can contact a local real estate professional who will be able to present to you, at no charge, a professional equity assessment report.
Bottom Line
If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-10-17T09:08:00-07:002021-11-15T08:42:59-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3397Is the Number of Homes for Sale Finally Growing?
<img src="https://files.mykcm.com/2021/09/15103635/20210916-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Is the Number of Homes for Sale Finally Growing? | MyKCM" title="Suburban Neighborhood" style="margin: 5px; border: 5px solid black; float: right;" width="375" height="205" />
An important metric in today’s residential real estate market is the number of homes available for sale. The shortage of available <a href="https://www.mykcm.com/2021/08/18/real-estate-its-still-a-lack-of-supply-not-a-lack-of-demand/" title="housing inventory">housing inventory</a> is the major reason for the double-digit price appreciation we’ve seen in each of the last two years. It’s the reason many would-be purchasers are frustrated with the bidding wars over the homes that are available. However, signs of relief are finally appearing.
According to <a href="https://www.realtor.com/research/data/" title="data" target="_blank" rel="noopener noreferrer">data</a> from realtor.com, active listings have increased over the last four months. They define active listings as:
“The active listing count tracks the number of for sale properties on the market, excluding pending listings where a pending status is available. This is a snapshot measure of how many active listings can be expected on any given day of the specified month.”
What normally happens throughout the year?
Historically, housing inventory increases throughout the summer months, starts to tail off in the fall, and then drops significantly over the winter. The graph below shows this trend along with the month active listings peaked in 2017, 2018, and 2019.<a href="https://files.mykcm.com/2021/09/15103637/20210916-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99319" src="https://files.mykcm.com/2021/09/15103637/20210916-MEM-Eng-1.png" alt="Is the Number of Homes for Sale Finally Growing? | MyKCM" width="600" height="450" /></a>
What happened last year?
Last year, the trend was different. Historical seasonality wasn’t repeated in 2020 since many homeowners held off on putting their houses up for sale because of the pandemic (see graph below). In 2020, active listings peaked in April, and then fell off dramatically for the remainder of the year.<a href="https://files.mykcm.com/2021/09/15103640/20210916-MEM-Eng-2.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99320" src="https://files.mykcm.com/2021/09/15103640/20210916-MEM-Eng-2.png" alt="Is the Number of Homes for Sale Finally Growing? | MyKCM" width="600" height="450" /></a>
What’s happening this year?
Due to the decline of active listings in 2020, 2021 began with record-low housing inventory counts. However, we’ve been building inventory over the last several months as more listings come to the market (see graph below):<a href="https://files.mykcm.com/2021/09/15103643/20210916-MEM-Eng-3.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99321" src="https://files.mykcm.com/2021/09/15103643/20210916-MEM-Eng-3.png" alt="Is the Number of Homes for Sale Finally Growing? | MyKCM" width="600" height="450" /></a>There are three main reasons we may see listings continue to increase throughout this fall and into the winter.
Pent-up selling demand – Homeowners may be more comfortable putting their homes on the market as more and more Americans get vaccinated.
New construction is starting to take off – Though new construction is not included in the realtor.com numbers, as more new homes are built, there will be more options for current homeowners to consider when they sell. The lack of options has slowed many potential sellers in the past.
The end of forbearance will create some new listings – Most experts believe the end of the forbearance program will not lead to a wave of foreclosures <a href="https://www.mykcm.com/2021/07/28/4-reasons-why-the-end-of-forbearance-will-not-lead-to-a-wave-of-foreclosures/" title="for several reasons">for several reasons</a>. The <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/09/BKI_MM_July2021_Report.pdf" title="main reason" target="_blank" rel="noopener noreferrer">main reason</a> is the level of equity homeowners currently have in their homes. Many homeowners will be able to sell their homes instead of going to foreclosure, which will lead to some additional listings on the market.
Bottom Line
If you’re in the market to buy a home, stick with it. There are new listings becoming available every day. If you’re thinking of selling your house, you may want to list your home before this additional competition comes to market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-10-05T15:23:00-07:002021-10-17T08:54:58-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3396Remote Work Is Here To Stay. Can Your Home Deliver the Space You Need?
<img src="https://files.mykcm.com/2021/09/17131654/20210921-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Remote Work Is Here To Stay. Can Your Home Deliver the Space You Need? | MyKCM" title="Man Working At Desk" style="margin: 5px; border: 5px solid black; float: right;" width="350" height="191" />
A lot has changed over the past year. For many people, the rise in remote work influenced what they’re looking for in a home and created a greater appetite for a dedicated home office. Some professionals <a href="https://www.mykcm.com/2021/09/02/5-reasons-todays-housing-market-is-anything-but-normal/" title="took advantage">took advantage</a> of the situation and purchased a bigger home. Other people thought working from home would be temporary, so they <a href="https://www.mykcm.com/2021/08/12/the-best-use-of-time-and-money-when-it-comes-to-renovations/" title="chose to get creative">chose to get creative</a> and make the space they already had work for them. But recent headlines indicate working from home isn’t a passing fad.
If you’re still longing for a dedicated home office, now may be <a href="https://www.mykcm.com/2021/08/25/why-2021-is-still-the-year-to-sell-your-house/" title="the time">the time</a> to find the home that addresses your evolving needs. More and more <a href="https://www.forbes.com/sites/jackkelly/2021/09/02/after-almost-two-years-of-working-remotely-it-will-be-nearly-impossible-to-demand-people-to-return-to-the-office/?sh=6a3689743f79" title="companies are delaying" target="_blank" rel="noopener noreferrer">companies are delaying</a> their plans to return to the office – others are deciding to remain fully remote permanently. According to economists from Goldman Sachs in a recent article from <a href="https://www.cnn.com/2021/08/02/economy/remote-working-economy/index.html" title="CNN" target="_blank" rel="noopener noreferrer">CNN</a>:
“Job ads increasingly offer remote work and surveys indicate that both workers and employers expect work from home to remain much more common than before the pandemic.”
Other experts agree. A <a href="https://www.upwork.com/press/releases/economist-report-future-workforce" title="survey" target="_blank" rel="noopener noreferrer">survey</a> conducted by Upwork of 1,000 hiring managers found that due to the pandemic, companies were planning more remote work now and in the years to come. Upwork elaborates:
“The number of remote workers in the next five years is expected to be nearly double what it was before COVID-19: By 2025, 36.2 million Americans will be remote, an increase of 16.8 million people from pre-pandemic rates.”
The <a href="https://www.statista.com/chart/23781/remote-work-teams-departments/" title="charts below" target="_blank" rel="noopener noreferrer">charts below</a> break down their findings and compare pre- and post-pandemic percentages.<a href="https://files.mykcm.com/2021/09/21091003/20210921-MEM-Eng-2.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99367" src="https://files.mykcm.com/2021/09/21091003/20210921-MEM-Eng-2.png" alt="Remote Work Is Here To Stay. Can Your Home Deliver the Space You Need? | MyKCM" width="600" height="450" /></a>
How Does This Impact Homeowners?
If you <a href="https://www.mykcm.com/2021/08/13/sellers-are-in-a-sweet-spot-infographic/" title="own your home">own your home</a>, it’s important to realize that continued remote work may give you opportunities you didn’t realize you had. Since you don’t need to be tied to a specific area for your job, you have more flexibility when it comes to where you can live.
If you’re one of the nearly 23% of workers who will remain 100% remote:
You have the option to move to a lower cost-of-living area or to the location of your dreams. If you search for a home in a more affordable area, you’ll be able to get more home for your money, freeing up more options for your dedicated office space and additional breathing room.
You could also move to a location where you’ve always wanted to live – somewhere near the beach, the mountains, or simply a market that features the kind of weather and community amenities you’re looking for. Without your job tying you to a specific location, you’re bound to find your ideal spot.
If you’re one of the almost 15% of individuals who will have a partially remote or hybrid schedule:
Relocating within your local area to a home that’s further away from your office could be a great choice. Since you won’t be going in to work every day, a slightly longer commute from a more suburban or rural neighborhood may be a worthy trade-off for a home with more features, space, or comforts.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.2021-10-05T11:18:00-07:002021-10-05T14:28:38-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3394Is a 20% Down Payment Really Necessary To Purchase a Home?
<img src="https://files.mykcm.com/2021/09/17143501/20210922-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Is a 20% Down Payment Really Necessary To Purchase a Home? | MyKCM" title="Piggy Banks" style="margin: 5px; border: 5px solid black; float: left;" width="250" height="137" />
There’s a common misconception that, as a <a href="https://www.mykcm.com/2021/09/10/fact-or-fiction-homebuyer-edition-infographic/" title="homebuyer">homebuyer</a>, you need to come up with 20% of the total sale price for your down payment. In fact, a recent survey by <a href="https://www.lendingtree.com/home/mortgage/homeownership-renting-survey/" title="Lending Tree" target="_blank" rel="noopener noreferrer">Lending Tree</a> asks what is keeping consumers from purchasing a home. For over half of those surveyed, the ability to afford a down payment is the biggest hurdle.
That may be because those individuals assume a 20% down payment is necessary. While putting more money down if you’re able can <a href="https://www.mykcm.com/2021/03/01/what-are-the-benefits-of-a-20-down-payment/" title="benefit">benefit</a> buyers, putting 20% down is not mandatory. As <a href="https://sf.freddiemac.com/articles/insights/down-payments-helping-future-borrowers-bridge-the-awareness-gap" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a> puts it:
“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”
If saving that much money sounds overwhelming, you might be ready to give up on the dream of homeownership before you even begin – but you don’t have to. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="Profile of Home Buyers and Sellers" target="_blank" rel="noopener noreferrer">Profile of Home Buyers and Sellers</a> from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today’s average down payment is only 12%. That number is even lower for <a href="https://www.mykcm.com/2021/08/20/options-for-first-time-homebuyers-infographic/" title="first-time homebuyers">first-time homebuyers</a>, whose average down payment is only 7%.
Based on the <a href="https://www.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf" title="Home Buyers and Sellers Generational Trends Report" target="_blank" rel="noopener noreferrer">Home Buyers and Sellers Generational Trends Report</a> from NAR, the graph below shows an even closer look at the down payment percentage various age groups pay:<a href="https://files.mykcm.com/2021/09/17143504/20210922-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99349" src="https://files.mykcm.com/2021/09/17143504/20210922-MEM-Eng-1.png" alt="Is a 20% Down Payment Really Necessary To Purchase a Home? | MyKCM" width="600" height="450" /></a>
As the graph shows, the only groups who put 20% or more down on average are older homebuyers who likely can use the sale of an existing home to fuel a larger down payment on their next home.
What does this mean for you?
If you’re a prospective homebuyer, it’s important to know you don’t have to put the full 20% down. And while <a href="https://www.mykcm.com/2021/04/19/how-much-time-do-you-need-to-save-for-a-down-payment/" title="saving">saving</a> for any down payment amount may feel like a challenge, keep in mind there are programs for qualified buyers that allow them to purchase a home with a down payment as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.
To understand your options, you do need to do your homework. If you’re interested in learning more about <a href="https://www.mykcm.com/2020/10/27/how-down-payment-assistance-opens-the-door-to-homeownership/" title="down payment assistance">down payment assistance</a> programs, information is available through sites like <a href="https://downpaymentresource.com/" title="downpaymentresource.com" target="_blank" rel="noopener noreferrer">downpaymentresource.com</a>. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.
Bottom Line
Don’t let the myth of the 20% down payment halt your homebuying process before it begins. If you want to purchase a home this year, let’s connect to start the conversation and explore your options.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-10-03T16:12:00-07:002021-10-05T14:28:06-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3393Two Reasons Why Waiting a Year To Buy Could Cost You<article id="post-99371" class="post-99371 post type-post status-publish format-standard has-post-thumbnail hentry category-buying-myths category-first-time-home-buyers category-buyers category-sellers category-housing-market-updates category-interest-rates category-move-up-buyers-buyers category-pricing">
<img src="https://files.mykcm.com/2021/09/22131421/20210922-KCM-Share-1.jpg" class="attachment-entry size-entry wp-post-image" alt="Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM" title="Couple Looking At Home" style="margin: 5px; border: 5px solid black; float: right;" width="350" height="191" />
If you’re a renter with a desire to become a homeowner, or a homeowner who’s decided your current house no longer fits your needs, you may be hoping that waiting a year might mean better market conditions to purchase a home.
To determine if you should buy now or wait, you need to ask yourself two simple questions:
What will home prices be like in 2022?
Where will mortgage rates be by the end of 2022?
Let’s shed some light on the answers to both of these questions.
What will home prices be like in 2022?
Three major housing industry entities project continued home price appreciation for 2022. Here are their forecasts:
<a href="http://www.freddiemac.com/research/forecast/20210715_quarterly_economic_forecast.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>: 5.3%
<a href="https://www.fanniemae.com/research-and-insights/forecast" title="Fannie Mae" target="_blank" rel="noopener noreferrer">Fannie Mae</a>: 5.1%
<a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary" title="Mortgage Bankers Association" target="_blank" rel="noopener noreferrer">Mortgage Bankers Association</a>: 8.4%
Using the average of the three projections (6.27%), a home that sells for $350,000 today would be valued at $371,945 by the end of next year. That means, if you delay, it could cost you more. As a prospective buyer, you could pay an additional $21,945 if you wait.
Where will mortgage rates be by the end of 2022?
Today, the 30-year fixed mortgage rate is hovering near historic lows. However, most experts believe rates will rise as the economy continues to recover. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above:
<a href="http://www.freddiemac.com/research/forecast/20210715_quarterly_economic_forecast.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>: 3.8%
<a href="https://www.fanniemae.com/research-and-insights/forecast" title="Fannie Mae" target="_blank" rel="noopener noreferrer">Fannie Mae</a>: 3.2%
<a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary" title="Mortgage Bankers Association" target="_blank" rel="noopener noreferrer">Mortgage Bankers Association</a>: 4.2%
That averages out to 3.7% if you include all three forecasts, and it’s nearly a full percentage point higher than today’s rates. Any increase in mortgage rates will increase your cost.
What does it mean for you if both home values and mortgage rates rise?
You’ll pay more in mortgage payments each month if both variables increase. Let’s assume you purchase a $350,000 home this year with a 30-year fixed-rate loan at 2.86% after making a 10% down payment. According to the mortgage calculator from <a href="https://smartasset.com/mortgage/mortgage-calculator#tsc4HcSJb9" title="Smart Asset" target="_blank" rel="noopener noreferrer">Smart Asset</a>, your monthly mortgage payment (including principal and interest payments, and estimated home insurance, taxes in your area, and other fees) would be approximately $1,899.
That same home could cost $371,945 by the end of 2022, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment, after putting down 10%, would increase to $2,166.
<a href="https://files.mykcm.com/2021/09/22131323/20210923_MEM_ENG_1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99373" src="https://files.mykcm.com/2021/09/22131323/20210923_MEM_ENG_1.png" alt="Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM" width="600" height="338" /></a>
The difference in your monthly mortgage payment would be $267. That’s $3,204 more per year and $96,120 over the life of the loan.
If you consider that purchasing now will also let you take advantage of the equity you’ll build up over the next calendar year, which is approximately $22,000 for a house with a similar value, then the total net worth increase you could gain from buying this year is over $118,000.
Bottom Line
When asking if you should buy a home, you probably think of the <a href="https://www.mykcm.com/2021/05/03/americans-find-the-nonfinancial-benefits-of-homeownership-most-valuable/" title="non-financial benefits">non-financial benefits</a> of owning a home as a driving motivator. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
</article>
2021-10-03T16:10:00-07:002021-10-05T09:33:21-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3392As Home Equity Rises, So Does Your Wealth
Homeownership is still a crucial part of the American dream. For those people who <a href="https://www.mykcm.com/2021/06/18/owning-a-home-has-distinct-financial-benefits-over-renting-infographic/" title="own a home">own a home</a> (and those looking to buy one), it’s clear that being a homeowner has considerable benefits both <a href="https://www.mykcm.com/2021/05/03/americans-find-the-nonfinancial-benefits-of-homeownership-most-valuable/" title="emotionally">emotionally</a> and <a href="https://www.mykcm.com/2021/04/08/homeownership-is-full-of-financial-benefits/" title="financially">financially</a>. In addition to long-term stability, buying a home is one of the best ways to increase your net worth. This boost to your <a href="https://www.mykcm.com/2021/06/17/housing-wealth-the-missing-piece-of-the-affordability-equation/" title="wealth">wealth</a> comes in the form of equity.
<a href="https://www.mykcm.com/2021/07/23/pop-quiz-can-you-define-these-key-terms-in-todays-housing-market-infographic/" title="Equity">Equity</a> is the difference between what you owe on the home and its market value based on factors like price appreciation.
The best thing about equity is that it often grows without you even realizing it, especially in a <a href="https://www.mykcm.com/2021/08/17/what-does-being-in-a-sellers-market-mean/" title="sellers’ market">sellers’ market</a> like we’re in now. In today’s real estate market, the combination of <a href="https://www.mykcm.com/2021/08/18/real-estate-its-still-a-lack-of-supply-not-a-lack-of-demand/" title="low housing supply">low housing supply</a> and high buyer demand is driving <a href="https://www.mykcm.com/2021/08/16/a-look-at-home-price-appreciation-and-what-it-means-for-sellers/" title="home values">home values</a> up. This is giving homeowners a significant equity boost.
According to the latest data from CoreLogic, the amount of equity homeowners have has continued to grow as home values appreciate. Here are some key takeaways from the <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="Homeowner Equity Insights Report" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights Report</a>:
The average homeowner gained $51,500 in equity over the past year
There was a 29.3% increase in national homeowner equity year over year
To give you an idea of what that looks like in your area, the map below shows the average equity gains by state.<a href="https://files.mykcm.com/2021/09/29110531/20210930-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99434" src="https://files.mykcm.com/2021/09/29110531/20210930-MEM-Eng-1.png" alt="As Home Equity Rises, So Does Your Wealth | MyKCM" width="600" height="450" /></a>
What does all of that mean for you?
If you’re already a homeowner, you likely have more equity in your house than you realize. The numbers in the map above reflect year-over-year growth. If you’ve been in your home for longer than a year, you’ll likely have even more equity than that. That equity can take you places. You can use the equity you’ve gained to fuel your next move, achieve other life goals, and more.
On the other hand, if you haven’t purchased a home yet, understanding equity can help you realize why homeownership is a worthwhile goal. Homeowners across the nation gained an average of over $50,000 in equity this year. Don’t miss out on this chance to grow your net worth.
Bottom Line
If you want to learn more, let’s connect. A trusted advisor can help you understand where home prices are today, how they contribute to a homeowner’s net worth, and the impact equity can have when you own a home.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-10-03T16:06:00-07:002021-10-03T15:45:36-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3368Home Price Appreciation Is Skyrocketing in 2021. What About 2022?
<img src="https://files.mykcm.com/2021/09/08115511/20210909-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM" title="Home On Corner" style="margin: 5px; border: 5px solid black; float: right;" width="300" height="164" />One of the major story lines over the last year is how well the residential real estate market performed. One key metric in the spotlight is home price appreciation. According to the latest indices, home prices are skyrocketing this year.
Here are the latest percentages showing the year-over-year increase in home price appreciation:
The <a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2021Q2_HPI.pdf" title="House Price Index (HPI)" target="_blank" rel="noopener noreferrer">House Price Index (HPI)</a> from the Federal Housing Finance Agency (FHFA): 18.8%
The <a href="https://spglobal.com/spdji/en/documents/indexnews/announcements/20210831-1442970/1442970_cshomeprice-release-0831.pdf" title="S. National Home Price Index" target="_blank" rel="noopener noreferrer">S. National Home Price Index</a> from S&P Case-Shiller: 18.6%
The <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="Home Price Insights Report" target="_blank" rel="noopener noreferrer">Home Price Insights Report</a> from CoreLogic: 18%
The dramatic increases are seen at every price point and in all regions of the country.
Increases Are Across Every Price Point
According to the latest <a href="https://www.corelogic.com/intelligence/u-s-home-price-index-annual-growth-reaches-all-time-high/" title="Home Price Index" target="_blank" rel="noopener noreferrer">Home Price Index</a> from CoreLogic, each price range is seeing at least a 19% increase year-over-year:<a href="https://files.mykcm.com/2021/09/08114824/20210909-MEM-ENG-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99255" src="https://files.mykcm.com/2021/09/08114824/20210909-MEM-ENG-1.png" alt="Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM" width="600" height="450" /></a>
Increases Are Across Every Region in the Country
Every region in the country is experiencing at least a 14.9% increase in home price appreciation, according to the <a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2021Q2_HPI.pdf" title="Federal Housing Finance Agency" target="_blank" rel="noopener noreferrer">Federal Housing Finance Agency</a> (FHFA):<a href="https://files.mykcm.com/2021/09/08114827/20210909-MEM-ENG-2.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99256" src="https://files.mykcm.com/2021/09/08114827/20210909-MEM-ENG-2.png" alt="Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM" width="600" height="450" /></a>
Increases Are Across Each of the Top 20 Metros in the Country
According to the <a href="https://spglobal.com/spdji/en/documents/indexnews/announcements/20210831-1442970/1442970_cshomeprice-release-0831.pdf" title="U.S. National Home Price Index" target="_blank" rel="noopener noreferrer">U.S. National Home Price Index</a> from S&P Case-Shiller, every major metro is seeing at least a 13.3% growth in prices (see graph below):<a href="https://files.mykcm.com/2021/09/08114848/20210909-MEM-ENG-3.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99257" src="https://files.mykcm.com/2021/09/08114848/20210909-MEM-ENG-3.png" alt="Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM" width="600" height="450" /></a>
What About Price Appreciation in 2022?
Prices are the result of the balance between supply and demand. The demand for single-family homes has been strong over the last 18 months. The supply of houses available for sale was near historic lows. However, there’s some good news on the supply side. Realtor.com <a href="https://news.move.com/2021-09-02-Realtor-com-R-August-Housing-Report-Seller-Activity-Warms-Up-as-432,000-Newly-Listed-Homes-Hit-the-Market" title="reports" target="_blank" rel="noopener noreferrer">reports</a>:
“432,000 new listings hit the national housing market in August, an increase of 18,000 over last year.”
There will, however, still be a shortage of supply compared to demand in 2022. CoreLogic <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="reveals" target="_blank" rel="noopener noreferrer">reveals</a>:
“Given the widespread demand and considering the number of standalone homes built during the past decade, the single-family market is estimated to be undersupplied by 4.35 million units by 2022.”
Yet, most forecasts call for home price appreciation to moderate in 2022. The <a href="https://pulsenomics.com/surveys/#home-price-expectations" title="Home Price Expectation Survey" target="_blank" rel="noopener noreferrer">Home Price Expectation Survey</a>, a survey of over 100 economists, investment strategists, and housing market analysts, calls for a 5.12% appreciation level next year. Here are the 2022 home appreciation forecasts from the four other major entities:
The <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-q3-2021-us-economic-outlook-07-29-2021_1.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR): 4.4%
The <a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary" title="Mortgage Bankers Association" target="_blank" rel="noopener noreferrer">Mortgage Bankers Association</a> (MBA): 8.4%
<a href="https://www.fanniemae.com/media/40816/display" title="Fannie Mae" target="_blank" rel="noopener noreferrer">Fannie Mae</a>: 5.1%
<a href="http://www.freddiemac.com/research/forecast/20210715_quarterly_economic_forecast.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>: 5.3%
Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/04/BKI_MM_Feb2021_Report.pdf" title="average" target="_blank" rel="noopener noreferrer">average</a> of 4.1% over the last 25 years.
Bottom Line
If you owned a home over the past year, you’ve seen your household wealth grow substantially, and you’ll see another nice boost in 2022. If you’re thinking of buying, consider buying now as prices are forecast to continue increasing through at least next year.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-09-09T22:20:00-07:002021-10-03T15:44:54-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3360Understand Your Options To Avoid Foreclosure
Even though experts agree <a href="https://www.mykcm.com/2021/07/28/4-reasons-why-the-end-of-forbearance-will-not-lead-to-a-wave-of-foreclosures/" title="there’s no chance">there’s no chance</a> of a large-scale foreclosure crisis, there are a number of homeowners who may be coming face-to-face with foreclosure as a possibility. And while the overall percentage of homeowners at risk is decreasing with time (see graph below), that’s little comfort to those individuals who are facing challenges today.<a href="https://files.mykcm.com/2021/09/07113844/20210908-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99251" src="https://files.mykcm.com/2021/09/07113844/20210908-MEM-Eng-1.png" alt="Understand Your Options To Avoid Foreclosure | MyKCM" width="600" height="450" /></a>If you haven’t taken advantage of the <a href="https://www.hud.gov/sites/dfiles/SFH/documents/IACOVID19FBFactSheetConsumer.pdf" title="forbearance period" target="_blank" rel="noopener noreferrer">forbearance period</a>, it may be time to research and understand your <a href="https://www.mykcm.com/2021/05/12/its-not-too-late-to-apply-for-forbearance/" title="options">options</a>. It starts with knowing what foreclosure is. <a href="https://www.investopedia.com/terms/f/foreclosure.asp" title="Investopedia" target="_blank" rel="noopener noreferrer">Investopedia</a> defines it like this:
“Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, default is triggered when a borrower misses a specific number of monthly payments . . .”
The good news is, there are <a href="https://www.nerdwallet.com/article/mortgages/what-is-foreclosure" title="alternatives available" target="_blank" rel="noopener noreferrer">alternatives available</a> to help you avoid having to go through the foreclosure process, including:
Reinstatement
Loan modification
Deed-in-lieu of foreclosure
Short sale
But before you go down any of those paths, it’s worth seeing if you have enough <a href="https://www.mykcm.com/2021/07/23/pop-quiz-can-you-define-these-key-terms-in-todays-housing-market-infographic/" title="equity">equity</a> in your home to sell it and protect your investment.
Understand Your Options: Sell Your House
Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.
In today’s real estate market, many homeowners have far <a href="https://www.mykcm.com/2021/06/23/homeowner-wealth-increases-through-growing-equity-this-year/" title="more equity">more equity</a> in their homes than they realize. Over the last year, buyer demand has been high, but <a href="https://www.mykcm.com/2021/08/17/what-does-being-in-a-sellers-market-mean/" title="housing supply">housing supply</a> has been low. That’s led to a substantial increase in home values. When <a href="https://www.mykcm.com/2021/08/16/a-look-at-home-price-appreciation-and-what-it-means-for-sellers/" title="prices rise">prices rise</a>, so does the amount of equity you have in your house.
According to <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="CoreLogic" target="_blank" rel="noopener noreferrer">CoreLogic</a>, on average, homeowners gained $33,400 in equity over the last 12 months, and the average equity on mortgaged homes is now $216,000 (see map below):<a href="https://files.mykcm.com/2021/09/07113848/20210908-MEM-Eng-2.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-99252" src="https://files.mykcm.com/2021/09/07113848/20210908-MEM-Eng-2.png" alt="Understand Your Options To Avoid Foreclosure | MyKCM" width="600" height="450" /></a>So, what does that mean for you? Over the past year, chances are your home’s value and therefore your equity has risen dramatically. If you’ve been in your home for a while, the mortgage payments you’ve made over time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.
Frank Martell, President and CEO of CoreLogic, <a href="https://www.corelogic.com/insights-download/homeowner-equity-report.aspx" title="elaborates" target="_blank" rel="noopener noreferrer">elaborates</a> on how equity can help:
“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic. These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market.”
Don’t Go at It Alone – Lean on Experts for Advice
To find out what your house is worth in <a href="https://www.mykcm.com/2021/07/22/todays-real-estate-market-explained-through-4-key-trends/" title="today’s market">today’s market</a>, work with a local <a href="https://www.mykcm.com/2021/06/14/the-right-expert-will-guide-you-through-this-unprecedented-market/" title="real estate professional">real estate professional</a>. We’ll be able to give you an estimate of what your house could sell for based on recent sales of similar homes in your area. Since home prices are still appreciating, you may be able to sell your house to avoid foreclosure.
If you find out that you have to pursue other options, your agent can help with that too. We’ll be able to connect you with other professionals in the industry, like <a href="https://myhome.freddiemac.com/buying/finding-your-team.html" title="housing counselors" target="_blank" rel="noopener noreferrer">housing counselors</a> who can look into your unique situation and offer <a href="https://www.hud.gov/topics/avoiding_foreclosure/foreclosureprocess" title="advice on next steps" target="_blank" rel="noopener noreferrer">advice on next steps</a> if selling isn’t the best alternative.
Bottom Line
If you’re a homeowner facing hardship, let’s connect to explore your options and see if you can sell your house to avoid foreclosure.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-09-08T19:11:00-07:002021-09-09T21:22:28-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:33585 Reasons Today’s Housing Market Is Anything but Normal
There are many headlines out there that claim we’re reverting to a more normal real estate market. That would indicate the housing market is returning to the pre-pandemic numbers we saw from 2015-2019. But that’s not happening. The market is still extremely vibrant as demand is still strong even while housing supply is slowly returning.
Here’s the <a href="https://www.merriam-webster.com/dictionary/normal" title="definition of normal" target="_blank" rel="noopener noreferrer">definition of normal</a> from the Merriam-Webster Dictionary:
“conforming to a type, standard, or regular pattern: characterized by that which is considered usual, typical, or routine.”
Using this definition, here are five housing industry metrics that prove we’re nowhere near normal.
1. Mortgage Rates
If we look at the <a href="http://www.freddiemac.com/pmms/" title="30-year mortgage rate" target="_blank" rel="noopener noreferrer">30-year mortgage rate</a> chronicled by Freddie Mac, we can see the average rates by decade:
1970s: 8.86%
1980s: 12.7%
1990s: 8.12%
2000s: 6.29%
2010s: 4.09%
Today, the average mortgage rate stands at 2.87%, which is very close to the historic low.
Currently, mortgage rates are anything but usual, typical, or routine.
2. Home Price Appreciation
According to Black Knight, a housing data and analytics company, the <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/04/BKI_MM_Feb2021_Report.pdf" title="average annual appreciation" target="_blank" rel="noopener noreferrer">average annual appreciation</a> on residential real estate prices since 1995 has been 4.14%.
According to the <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-q3-2021-us-economic-outlook-07-29-2021_1.pdf" title="latest forecast" target="_blank" rel="noopener noreferrer">latest forecast</a> from the National Association of Realtors (NAR), home price appreciation will hit 14.1% this year, which will be greater than any year since Black Knight began collecting this data.
Currently, home price appreciation is anything but usual, typical, or routine.
3. Months’ Supply of Inventory (Homes for Sale)
According to <a href="https://www.nar.realtor/blogs/economists-outlook/inventory-and-months-supply" title="NAR" target="_blank" rel="noopener noreferrer">NAR</a>:
“Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly.”
As of the latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-climb-2-0-in-july" title="Existing Homes Sales Report" target="_blank" rel="noopener noreferrer">Existing Homes Sales Report</a> from NAR, the current months’ supply of inventory stands at 2.6. That’s less than half of a normal supply.
Currently, the supply of homes for sale is anything but usual, typical, or routine.
4. Days It Takes To Sell a Home
The <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" title="days-on-market metric" target="_blank" rel="noopener noreferrer">days-on-market metric</a> gives an indication of how hot a market is and how quickly homes are selling. In 2019, prior to the pandemic, the average days on market stood at 35, according to NAR. Today, that number is cut in half and is now at 17 days.
Currently, the days-on-market metric is anything but usual, typical, or routine.
5. Number of Offers per Listing
According to NAR, the <a href="https://cdn.nar.realtor/sites/default/files/documents/2021-07-realtors-confidence-index-08-23-2021.pdf" title="number of offers per listing" target="_blank" rel="noopener noreferrer">number of offers per listing</a> stood at 2.2 in 2019. Today, that number is double at 4.5.
Currently, the number of offers per listing is anything but usual, typical, or routine.
Bottom Line
When…
Mortgage rates are near historic lows
Price appreciation is at historic highs
Housing inventory is less than half of the normal amount
The time it takes to sell a home is cut in half, and
There are twice as many offers on each house
…it’s hard to say we’re in a normal market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-09-07T19:00:00-07:002021-09-09T21:23:54-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3271Today’s Real Estate Market Explained Through 4 Key Trends
As we move into the second half of the year, one thing is clear: the current real estate market is one for the record books. The exact mix of conditions we have today creates opportunities for both buyers and sellers. Here’s a look at four key components that are shaping this unprecedented market.
A Shortage of Homes for Sale
Earlier this year, the number of homes available for sale fell to an all-time low. In recent months, however, <a href="https://www.mykcm.com/2021/07/13/why-this-isnt-your-typical-summer-housing-market/" title="inventory levels">inventory levels</a> are starting to trend up. The latest <a href="https://www.realtor.com/research/june-2021-data/" title="Monthly Housing Market Trends Report" target="_blank" rel="noopener noreferrer">Monthly Housing Market Trends Report</a> from realtor.com says:
“In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.”
This is <a href="https://www.mykcm.com/2021/07/16/experts-agree-options-are-improving-for-buyers-infographic/" title="good news for buyers">good news for buyers</a> who crave more options. But even though we’re experiencing <a href="https://www.mykcm.com/2021/07/14/housing-supply-is-rising-what-does-that-mean-for-you/" title="small gains">small gains</a> in the number of available homes for sale, inventory remains a challenge in most states. That’s why it’s still a sellers’ market, giving homeowners immense leverage when they decide to make a move.
Buyer Competition and Bidding Wars
Today’s ongoing low supply, coupled with high demand, creates a market characterized by high buyer competition and bidding wars. Buyers are going above and beyond to make sure <a href="https://www.mykcm.com/2021/06/21/5-things-homebuyers-need-to-know-when-making-an-offer/" title="their offer">their offer</a> stands out from the crowd by offering over the asking price, all cash, or waiving some contingencies. The number of offers on the average house for sale broke records this year – and that’s great news for sellers.
The latest <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" title="Confidence Index" target="_blank" rel="noopener noreferrer">Confidence Index</a> from the National Association of Realtors (NAR) says the average home for sale receives five offers (see graph below):<a href="https://files.mykcm.com/2021/07/21151156/202010722-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-98703" src="https://files.mykcm.com/2021/07/21151156/202010722-MEM-Eng-1.png" alt="Today’s Real Estate Market Explained Through 4 Key Trends | MyKCM" width="600" height="450" /></a>
For buyers, the best way to put a compelling offer together is by working with a local real estate professional. That agent can act as your trusted advisor on what terms are best for you and what’s most appealing to the seller.
Home Price Appreciation
The competition among buyers is driving prices up. Over the past year, we’ve seen <a href="https://www.mykcm.com/2021/07/06/a-look-at-home-price-appreciation-through-2025/" title="home price appreciation">home price appreciation</a> rise across the country. According to the most recent <a href="https://www.corelogic.com/intelligence/home-price-gains-more-than-tripled-over-the-past-year/" title="Home Price Index" target="_blank" rel="noopener noreferrer">Home Price Index</a> (HPI) from CoreLogic, national home prices increased 15.4% year-over-year in May:
“The May 2021 HPI gain was up from the May 2020 gain of 4.2% and was the highest year-over-year gain since November 2005. Low mortgage rates and low for-sale inventory drove the increase in home prices.”
Rising home values are a big part of why real estate remains one of the top sought-after investments for Americans. For <a href="https://www.mykcm.com/2021/07/12/4-major-incentives-to-sell-this-summer/" title="potential sellers">potential sellers</a>, it also means it’s a great time to list your house to maximize the return on your investment.
A Rise in Home Values and Equity
The <a href="https://www.mykcm.com/2021/06/23/homeowner-wealth-increases-through-growing-equity-this-year/" title="equity">equity</a> in a home doesn’t just grow when a homeowner pays their mortgage – it also grows as the home’s value appreciates. Thanks to the jump in price appreciation, homeowners across the country are seeing record-breaking gains in home equity. <a href="https://www.corelogic.com/press-releases/nationwide-homeowner-equity-gains-hit-1-9-trillion-in-q1-2021-corelogic-reports/" title="CoreLogic" target="_blank" rel="noopener noreferrer">CoreLogic</a> recently reported:
“…homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020.”
That’s a major perk for households to leverage. Homeowners can use that equity to accomplish major life goals or move into their <a href="https://www.mykcm.com/2021/06/11/have-your-day-in-the-sun-by-moving-up-this-summer-infographic/" title="dream homes">dream homes</a>.
Bottom Line
If you’re thinking about buying or selling, there’s no time like the present. Let’s connect to talk about how you can take advantage of the conditions we’re seeing today to meet your homeownership goals.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-08-03T10:01:00-07:002021-09-08T18:12:54-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3270A Look at Housing Supply and What It Means for Sellers
One of the hottest topics of conversation in today’s real estate market is the <a href="https://www.mykcm.com/2021/06/15/hope-is-on-the-horizon-for-todays-housing-shortage/" title="shortage of available homes">shortage of available homes</a>. Simply put, there are many more potential buyers than there are homes for sale. As a seller, you’ve likely heard that low supply is good news for you. It means your house will get more attention, and likely, more offers. But as life begins to return to normal, you may be wondering if that’s something that will change.
While it may be tempting to blame the pandemic for the current inventory shortage, the pandemic can’t take all the credit. While it did make some sellers hold off on listing their houses over the past year, the truth is the low supply of homes was years in the making. Let’s take a look at the root cause and what the future holds to uncover why now is still a great time to sell.
Where Did the Shortage Come From?
It’s not just today’s high buyer demand. Our low supply goes hand-in-hand with the number of new homes built over the past decades. According to Sam Khater, VP and Chief Economist at <a href="http://www.freddiemac.com/perspectives/sam_khater/20210415_single_family_shortage.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Data in a <a href="https://cdn.nar.realtor/sites/default/files/documents/Housing-is-Critical-Infrastructure-Social-and-Economic-Benefits-of-Building-More-Housing-6-15-2021.pdf" title="recent report" target="_blank" rel="noopener noreferrer">recent report</a> from the National Association of Realtors (NAR) tells the same story. New home construction has been lagging behind the norm for quite some time. Historically, builders completed an average of 1.5 million new housing units per year. However, since the housing bubble in 2008, the level of new home construction has fallen off (see graph below):<a href="https://files.mykcm.com/2021/07/26170119/20210727-MEM-Eng-1.png" target="_blank" rel="" class="use_kcm_lightbox"><img class="aligncenter wp-image-98794" src="https://files.mykcm.com/2021/07/26170119/20210727-MEM-Eng-1.png" alt="A Look at Housing Supply and What It Means for Sellers | MyKCM" width="600" height="450" /></a>
The same NAR report elaborates on the impact of this below-average pace of construction:
“. . . the underbuilding gap in the U.S. totaled more than 5.5 million housing units in the last 20 years.”
“Looking ahead, in order to fill an underbuilding gap of approximately 5.5 million housing units during the next 10 years, while accounting for historical growth, new construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year. . . .”
That means if we build even more new houses than the norm every year, it’ll still take a decade to close the underbuilding gap contributing to today’s supply-and-demand mix. Does that mean today’s ultimate <a href="https://www.mykcm.com/2021/03/29/what-it-means-to-be-in-a-sellers-market/" title="sellers’ market">sellers’ market</a> is here to stay?
We’re already starting to see an increase in <a href="https://www.mykcm.com/2021/07/05/home-builders-ramp-up-construction-based-on-demand/" title="new home construction">new home construction</a>, which is great news. But newly built homes can’t bridge the supply gap we’re facing right now on their own. In the <a href="https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2021.pdf" title="State of the Nation’s Housing 2021 Report" target="_blank" rel="noopener noreferrer">State of the Nation’s Housing 2021 Report</a>, the Joint Center for Housing Studies of Harvard University (JCHS) says:
“…Although part of the answer to the nation’s housing shortage, new construction can only do so much to ease short-term supply constraints. To meet today’s strong demand, more existing single-family homes must come on the market.”
Early Indicators Show More Existing-Home Inventory Is on Its Way
When we look at existing homes, the latest reports signal that <a href="https://www.mykcm.com/2021/07/14/housing-supply-is-rising-what-does-that-mean-for-you/" title="housing supply is growing">housing supply is growing</a> gradually month-over-month. This uptick in existing homes for sale shows things are beginning to shift. Based on recent data, <a href="https://twitter.com/odetakushi/status/1407344750534041615" title="Odeta Kushi" target="_blank" rel="noopener noreferrer">Odeta Kushi</a>, Deputy Chief Economist at First American, has this to say:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
Lawrence Yun, Chief Economist at NAR, <a href="https://www.nar.realtor/real-estate-today" title="echoes that sentiment:" target="_blank" rel="noopener noreferrer">echoes that sentiment:</a>
“As the inventory is beginning to pick up ever so modestly, we are still facing a housing shortage, but we may have turned a corner.”
So, what does all of this mean for you? Just because life is starting to return to normal, it doesn’t mean you missed out on the best time to sell. It’s not too late to take advantage of <a href="https://www.mykcm.com/2021/06/16/dont-wait-to-sell-your-house/" title="today’s sellers’ market">today’s sellers’ market</a> and use <a href="https://www.mykcm.com/2021/07/06/a-look-at-home-price-appreciation-through-2025/" title="rising equity">rising equity</a> and <a href="https://www.mykcm.com/2021/07/19/what-you-should-do-before-interest-rates-rise/" title="low interest rates">low interest rates</a> to make your next move.
Bottom Line
It’s still a great time to sell. Even though housing supply is starting to trend up, it’s still hovering near historic lows. Let’s connect to discuss how you can list your house now and use the inventory shortage to get the best possible terms for you.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-08-03T09:56:00-07:002021-08-03T10:05:57-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3122Why This Is a Great Year to Sell Your Vacation Home
As vaccines are administered and travel resumes, many of us are beginning to plan for those long-awaited vacations we missed out on over the past year. Some households are focusing their efforts on buying a vacation home rather than staying in a hotel, too. The National Association of Home Builders (NAHB) <a href="https://eyeonhousing.org/2021/03/second-homes-15-percent-of-new-home-sales/" title="reports" target="_blank" rel="noopener noreferrer">reports</a>:
“Second homes (i.e., homes sold to buyers who are not going to occupy the home year-round, but use it as a vacation home, investment property, etc.) account for 15 percent of new single-family home sales.”
It’s not surprising that there’s an increase in demand for vacation homes. The majority of Americans are realizing they prefer to be around small groups, as shown in a recent <a href="https://theharrispoll.com/wp-content/uploads/2021/03/Harris-Poll-COVID-1-year-FINAL-3.pdf" title="survey" target="_blank" rel="noopener noreferrer">survey</a> from The Harris Poll:
“Social distancing taught consumers new things about how they like to socialize; (75%) said, ‘during COVID social distancing I realized I preferred smaller social gatherings at home or at friends’ place.’”
Not only are vacation homes seen as a potentially more pandemic-friendly way to travel and socialize, but they can also serve as an extended home-away-from-home. With more Americans being given the option to continue working remotely or retire earlier than expected, vacation homes can be used year-round. The NAHB <a href="https://eyeonhousing.org/2020/12/second-home-markets-show-construction-growth/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Remote work arrangements have made it possible for some wealthier Americans to move to alternate locations that are not just small, suburban shifts from within their current metro area. More fundamentally, second home demand may also be benefitting by an acceleration of retirement plans, as well as stock market gains.”
Bottom Line
The demand for vacation homes has increased and will continue to rise as we head into summer. If you own a house in a destination area and have thought about selling, now is a great time to take advantage of today’s high buyer interest. Let’s connect to discuss your opportunities in our local market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-04-15T12:28:00-07:002021-08-03T10:03:51-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:31204 Major Reasons Households in Forbearance Won’t Lose Their Homes to ForeclosureThere has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially be millions of foreclosures ready to hit the market. However, there are four reasons that won’t happen.
1. Almost 50% Leave Forbearance Already Caught Up on Payments
According to the Mortgage Bankers Association (MBA), <a href="https://www.mba.org/2021-press-releases/april/share-of-mortgage-loans-in-forbearance-decreases-to-490-percent" title="data" target="_blank" rel="noopener noreferrer">data</a> through March 28 show that 48.9% of homeowners who have already left the program were current on their mortgage payments when they exited.
26.6% made their monthly payments during their forbearance period
14.7% brought past due payments current
7.6% paid off their loan in full
This doesn’t mean that the over two million still in the plan will exit exactly the same way. It does, however, give us some insight into the possibilities.
2. The Banks Don’t Want the Houses Back
Banks have learned lessons from the crash of 2008. Lending institutions don’t want the headaches of managing foreclosed properties. This time, they’re working with homeowners to help them stay in their homes.
As an example, about <a href="https://www.integritylending.com/understanding-what-a-federally-backed-mortgage-loan-means/" title="50% of all mortgages" target="_blank" rel="noopener noreferrer">50% of all mortgages</a> are backed by the Federal Housing Finance Agency (FHFA). In 2008, the FHFA offered 208,000 homeowners some form of <a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/4Q2020FPR.pdf" title="Home Retention Action" target="_blank" rel="noopener noreferrer">Home Retention Action</a>, which are options offered to a borrower who has the financial ability to enter a workout option and wants to stay in their home. Home retention options include temporary forbearances, repayment plans, loan modifications, or partial loan deferrals. These helped delinquent borrowers stay in their homes. Over the past year, the FHFA has offered that same protection to over one million homeowners.
Today, almost all lending institutions are working with their borrowers. The report from the MBA reveals that of those homeowners who have left forbearance,
35.5% have worked out a repayment plan with their lender
26.5% were granted a loan deferral where a borrower does not have to pay the lender interest or principal on a loan for an agreed-to period of time
9% were given a loan modification
3. There Is No Political Will to Foreclose on These Households
The government also seems determined not to let individuals or families lose their homes. Bloomberg recently <a href="https://www.bloomberg.com/news/articles/2021-04-01/mortgage-firms-warned-to-prepare-for-a-tidal-wave-of-distress" title="reported" target="_blank" rel="noopener noreferrer">reported</a>:
“Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said. The Consumer Financial Protection Bureau (CFPB) warning is tied to forbearance relief that’s allowed millions of borrowers to delay their mortgage payments due to the pandemic…mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.”
The CFPB is proposing a new set of guidelines to ensure people will be able to retain their homes. Here are the major points in the proposal:
The proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021.
The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application.
The proposal rule wants temporary changes to certain required servicer communications to make sure borrowers receive key information about their options at the appropriate time.
A final decision is yet to be made, and some do <a href="https://www.housingwire.com/articles/does-cfpb-have-authority-to-postpone-foreclosures/" title="question" target="_blank" rel="noopener noreferrer">question</a> whether the CFPB has the power to delay foreclosures. The entire report can be found <a href="https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing_nprm_2021-04.pdf" title="here" target="_blank" rel="noopener noreferrer">here</a>: Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X.
4. If All Else Fails, Homeowners Will Sell Their Homes Before a Foreclosure
Homeowners have record levels of equity today. According to the latest CoreLogic <a href="https://www.corelogic.com/insights/homeowner-equity-report.aspx?WT.mc_id=crlgins_210308_XfafK" title="Home Equity Report" target="_blank" rel="noopener noreferrer">Home Equity Report</a>, the average equity of mortgaged homes is currently $204,000. In addition, 38% of homes do not have a mortgage, so the level of equity available to today’s homeowners is significant.
Just like the banks, homeowners learned a lesson from the housing crash too.
“In the same way that grandparents and great grandparents were shaped by the Great Depression, much of the public today remembers the 2006 mortgage meltdown and the foreclosures, unemployment, and bank failures it created. No one with any sense wants to repeat that experience…and it may explain why so much real estate equity remains mortgage-free.”
What does that mean to the forbearance situation? According to <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/03/BKI_MM_Jan2021_Report.pdf" title="Black Knight" target="_blank" rel="noopener noreferrer">Black Knight</a>:
“Just one in ten homeowners in forbearance has less than 10% equity in their home, typically the minimum necessary to be able to sell through traditional real estate channels to avoid foreclosure.”
Bottom Line
The reports of massive foreclosures about to come to the market are highly exaggerated. As Ivy Zelman, Chief Executive Officer of Zelman & Associates with roughly 30 years of experience covering housing and housing-related industries, recently <a href="https://www.tomferry.com/podcast/experience-91/" title="proclaimed" target="_blank" rel="noopener noreferrer">proclaimed</a>:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-04-14T07:50:00-07:002021-04-15T11:34:02-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3097Why You Should Think About Listing Prices Like an Auction’s Reserve Price
For generations, the homebuying process never really changed. The seller would try to estimate the market value of the home and tack on a little extra to give themselves some negotiating room. That figure would become the listing price of the house. <a href="https://www.mykcm.com/2021/03/03/how-smart-is-it-to-buy-a-home-today/" title="Buyers">Buyers</a> would then try to determine how much less than the full price they could offer and still get the home. The asking price was generally the ceiling of the negotiation. The actual sales price would almost always be somewhat lower than the list price. It was unthinkable to pay more than what the seller was asking.
Today is different.
The record-low <a href="https://www.mykcm.com/2021/02/22/where-have-all-the-houses-gone/" title="supply">supply</a> of homes for sale coupled with very strong buyer demand is leading to a rise in <a href="https://www.mykcm.com/2021/03/12/how-to-be-a-competitive-buyer-in-todays-housing-market-infographic/" title="bidding wars">bidding wars</a> on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for a lot more.
According to the Home Buyers and Sellers Generational Trends <a href="https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends" title="report" target="_blank" rel="noopener noreferrer">report</a> just released by the National Association of Realtors (NAR), 45% of buyers paid full price or more.
You may need to change the way you look at the asking price of a home.
In this market, you likely can’t shop for a home with the old-school mentality of refusing to pay full price or more for a house.
Because of the shortage of inventory of houses for sale, many homes are actually being offered in an auction-like atmosphere in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to take the highest bid, and many sellers set a reserve price on the item they’re selling. A reserve price is the minimum amount a seller will accept as the winning bid.
When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. It’s the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you’re navigating the homebuying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves as you buy a home.
Bottom Line
Someone who’s more familiar with the housing market of the past than that of today may think offering more for a home than the listing price is foolish. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions. Let’s connect so you have the <a href="https://www.mykcm.com/2021/02/01/turn-to-an-expert-for-the-best-advice-not-perfect-advice/" title="best">best</a> advice on how to make a <a href="https://www.mykcm.com/2021/03/15/how-to-make-a-winning-offer-on-a-home/" title="competitive">competitive</a> offer on a home in our local market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-03-28T10:39:00-07:002021-04-14T06:57:09-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3065How Smart Is It to Buy a Home Today?
Whether you’re buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.
However, there’s one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:
Do I think home values will be higher a year from now?
Do I think mortgage rates will be higher a year from now?
From a purely financial standpoint, if the answer is ‘yes’ to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,’ you should definitely buy now.
Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.’ Mortgage rates are expected to <a href="https://www.mykcm.com/2021/02/18/will-low-mortgage-rates-continue-through-2021/" title="rise">rise</a> and home values are expected to <a href="https://www.mykcm.com/2021/03/02/home-prices-what-happened-in-2020-what-will-happen-this-year/" title="appreciate">appreciate</a> rather nicely.
What does this mean to you?
Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:
The experts are right – mortgage rates will be 3.18% at the end of the year
The experts are right – home values will appreciate by 5.9%
You want to buy a home valued at $350,000 today
You decide on a 10% down payment
<a href="https://files.mykcm.com/2021/03/02133347/20210303-MEM-Eng-1.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-97394" src="https://files.mykcm.com/2021/03/02133347/20210303-MEM-Eng-1.png" alt="How Smart Is It to Buy a Home Today? | MyKCM" width="600" height="450" /></a>Here’s the financial impact of waiting:
You pay an extra $20,650 for the house
You need an additional $2,065 for a down payment
You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
You don’t gain the $20,650 increase in wealth through equity build-up
Bottom Line
There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-03-03T17:44:00-07:002021-03-28T09:43:51-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3063How Much Leverage Do Today’s House Sellers Have?
<img src="https://assets.site-static.com/userfiles/736/image/dad_and_boy_wrestling.jpg" alt="Dad and Son Wrestling" title="Dad and Son Wrestling" style="margin: 5px; border: 5px solid black; float: left;" width="350" height="191" />The housing market has been scorching hot over the last twelve months. Buyers and their high demand have far outnumbered sellers and a short supply of houses. According to the latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-tick-up-0-6-in-january" title="Existing Home Sales Report" target="_blank" rel="noopener noreferrer">Existing Home Sales Report</a> from the National Association of Realtors (NAR), sales are up 23.7% from the same time last year while the inventory of homes available for sale is down 25.7%. There are 360,000 fewer single-family homes for sale today than there were at this time last year. This increase in demand coupled with such limited supply is leading to more bidding wars throughout the country.
Rose Quint, Assistant Vice President for Survey Research with the National Association of Home Builders (NAHB), recently <a href="https://eyeonhousing.org/2021/02/share-of-home-buyers-getting-outbid-almost-doubles-2/" title="reported" target="_blank" rel="noopener noreferrer">reported</a>:
“The number one reason long-time searchers haven’t made a home purchase is not because of their inability to find an affordably-priced home, but because they continue to get outbid by other offers.”
A survey in the NAHB report showed that 40% of buyers have been outbid for a home they wanted to purchase. This is more than twice the percentage in 2019, which was 19%.
What does this mean for sellers today?
It means sellers have tremendous leverage when negotiating with buyers.
In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on its ability to award benefits or eliminate costs on the other side.
In today’s market, a buyer wants three things:
To buy a home
To buy now before prices continue to appreciate
To buy now and take advantage of historically low mortgage rates while they <a href="https://www.mykcm.com/2021/02/23/the-reason-mortgage-rates-are-projected-to-increase-and-what-it-means-for-you/" title="last">last</a>
These three buyer needs give the homeowner tremendous leverage when selling their house. Most realize this leverage enables the seller to sell at a good price. However, there may be another need the seller has that can be satisfied by using this leverage.
Here’s an example:
Odeta Kushi, Deputy Chief Economist at First American, recently <a href="https://blog.firstam.com/economics/housing-market-potential-poised-to-grow-in-2021" title="identified" target="_blank" rel="noopener noreferrer">identified</a> a situation in which many sellers are finding themselves today:
“As mortgage rates are expected to remain near 3%, millennials continue to form households and more existing homeowners tap their equity for the purchase of a better home…Many homeowners may want to upgrade, but do not for fear that they will be unable to find a home to buy.”
She then offers a possible solution:
“While the fear of not being able to find something to buy will not disappear in a limited supply environment, new housing supply can incentivize existing homeowners to move.”
There’s no doubt many sellers would love to build a new home to perfectly fit their <a href="https://www.mykcm.com/2021/01/12/4-reasons-people-are-buying-homes-in-2021/" title="changing">changing</a> wants and needs. However, most builders require that they sell their house first. If the seller sells their home, where would they live while their new home is being constructed?
Going back to the concept of leverage:
As mentioned, buyers have compelling reasons to purchase a home now, and many homeowners have challenges to address if they want to sell. Perhaps they can make a deal to satisfy each party’s needs. But how?
The seller may decide to sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller’s new home is being built. A true win-win negotiation.
Not every buyer will agree to such a deal – but you only need one.
That’s just one example of how a seller might be able to overcome a challenge because of the leverage they have in today’s market. Maybe you feel a need to make certain repairs before selling. Perhaps you need time to get permits or approvals for certain upgrades you made to the house. Whatever the challenge, you may be able to work it out.
Bottom Line
If you’re considering selling your house now but worry a huge obstacle stands in your way, let’s connect. Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-03-01T13:26:00-07:002021-03-03T16:45:12-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3062Are There Going to Be More Homes to Buy This Year?
If you’re looking for a home to purchase right now and having trouble finding one, you’re not alone. At a time like this when there are so <a href="https://www.mykcm.com/2021/01/29/is-right-now-the-right-time-to-sell-infographic/" title="few">few</a> houses for sale, it’s normal to wonder if you’ll actually find one to buy. According to the National Association of Realtors (<a href="https://www.nar.realtor/newsroom/existing-home-sales-rise-0-7-in-december-annual-sales-see-highest-level-since-2006" title="NAR" target="_blank" rel="noopener noreferrer">NAR</a>), across the country, inventory of available homes for sale is at an all-time low – the lowest point recorded since NAR began tracking this metric in 1982. There are, however, more homes expected to hit the market later this year. Let’s break down the three key places they’ll likely come from as 2021 continues on.
1. Homeowners Who Didn’t Sell Last Year
In 2020, many sellers decided to pause their moving plans for a number of different reasons. From health concerns about the pandemic to financial uncertainty, plenty of homeowners decided not to move last year.
Now that vaccines are being distributed and there’s a light at the end of the COVID-19 tunnel, it should bring some peace of mind to many potential sellers. As Danielle Hale, Chief Economist at realtor.com, <a href="https://www.realtor.com/research/weekly-housing-trends-view-data-week-feb-6-2021/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Fortunately for would-be homebuyers, we expect sellers to return to the market as we see improvement in the economy and progress against the coronavirus.”
Many of the homeowners who decided not to sell in 2020 will enter the market later this year as they begin to feel more comfortable showing their house in person, understanding their financial situation, and simply having more security in life.
2. More New Homes Will Be Built
Last year was a strong year for home builders, and according to the National Association of Home Builders (<a href="https://www.washingtonpost.com/business/2021/01/11/2021-housing-market-predictions/" title="NAHB" target="_blank" rel="noopener noreferrer">NAHB</a>), 2021 is expected to be even better:
“For 2021, NAHB expects ongoing growth for single-family construction. It will be the first year for which total single-family construction will exceed 1 million starts since the Great Recession.”
With more houses being built in many markets around the country, homeowners looking for new houses that meet their <a href="https://www.mykcm.com/2021/01/12/4-reasons-people-are-buying-homes-in-2021/" title="changing">changing</a> needs will be able to move into their dream homes. When they sell their current houses, this will create opportunities for those looking to find a home that’s already built to do so. It sets a simple chain reaction in motion for hopeful buyers.
3. Those Impacted Financially by the Economic Crisis
Many experts don’t anticipate a large wave of <a href="https://www.mykcm.com/2021/01/13/will-forbearance-plans-lead-to-a-tsunami-of-foreclosures/" title="foreclosures">foreclosures</a> coming to the market, given the <a href="https://www.mykcm.com/2020/12/14/5-steps-to-follow-when-applying-for-forbearance/" title="forbearance">forbearance</a> options afforded to current homeowners throughout the pandemic. Some homeowners who have been impacted economically will, however, need to move this year. There are also homeowners who didn’t take advantage of the forbearance option or were already in a foreclosure situation before the pandemic began. In those cases, homeowners may decide to sell their houses instead of going into the foreclosure process, especially given the <a href="https://www.mykcm.com/2021/02/17/3-ways-home-equity-can-have-a-major-impact-on-your-life/" title="equity">equity</a> in homes today. Lawrence Yun, Chief Economist at NAR, <a href="https://www.investors.com/news/housing-market-outlook-2021-watch-these-stocks-trends-cities/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Given the huge price gains recently, I don’t think many homes will have to go to foreclosure…I think homes will just be sold, and there will be cash left over for the seller, even in a distressed situation. So that’s a bit of a silver lining in that we don’t expect a massive sale of distressed properties.”
As we can see, it looks like we’re going to have an increase in the number of homes for sale in 2021. With fears of the pandemic starting to ease, new homes being built, and more listings coming to the market prior to foreclosure, there’s hope if you’re planning to buy this year. And if you’re thinking of selling and making a move, doing so while demand for your house is high might create an outstanding move-up option for you.
Bottom Line
Housing demand is high and supply is low, so if you’re thinking of moving, it’s a great time to do so. There are likely many buyers who are looking for a home just like yours, and there are options coming for you to find a new house too. Let’s connect today to see how you can benefit from the opportunities available in our local market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-03-01T13:21:00-07:002021-03-01T12:27:51-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3038Millennials: Is It Time to Buy a Bigger Home?
In today’s housing market, all eyes are on millennials. Not only are millennials the largest generation, but they’re also currently between 25 and 40 years old. These are often considered prime homebuying years when many people begin to form their own households and invest in real estate. If you’re like many millennials who are spending much more time at home these days, you may have a growing need for more space or upgraded features, making moving more desirable than ever.
For those millennials who already own a home, there’s a great opportunity to <a href="https://www.mykcm.com/2021/01/12/4-reasons-people-are-buying-homes-in-2021/" title="move up">move up</a> in 2021. Danielle Hale, Chief Economist at realtor.com, <a href="https://www.housingwire.com/articles/will-we-have-a-buyers-housing-market-in-2021/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Older millennials will be trade-up buyers with many having owned their first homes long enough to see substantial equity gains.”
Even if you bought a home sometime in the last few years, you may have more equity than you realize, and that’s a big factor to consider when you’re thinking about moving. According to the <a href="https://www.corelogic.com/insights-download/homeowner-equity-report.aspx" title="Homeowner Equity Insights Report" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights Report</a> from CoreLogic:
“In the third quarter of 2020, the average homeowner gained approximately $17,000 in equity during the past year. This marks the largest average equity gain since the first quarter of 2014.”
Growing equity can be the driver you’re looking for to fund your next move, especially if what you need in a home is changing right now. As equity builds over time, it can be put toward the down payment on your next home.
In addition to equity gains, today’s housing market affordability is powered by record-low <a href="https://www.mykcm.com/2020/12/22/the-difference-a-year-makes-for-homeownership/" title="mortgage rates">mortgage rates</a>, so moving at a time when you can get more for your money may be more <a href="https://www.mykcm.com/2021/02/11/47-of-new-buyers-surprised-by-how-affordable-homes-are-today/" title="realistic">realistic</a> than you think.
Bottom Line
If you’re a millennial thinking about moving this year, you’re not alone. Let’s connect to shed light on the equity you have in your current home and the opportunities it can create.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-02-18T13:10:00-07:002021-03-01T12:24:40-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:3020Do I Really Need a 20% Down Payment to Buy a Home?
Is the idea of saving for a down payment holding you back from buying a home right now? You may be eager to take advantage of today’s <a href="https://www.mykcm.com/2021/01/19/should-i-wait-for-lower-mortgage-interest-rates/" title="low">low</a> mortgage rates, but the thought of needing a large down payment might make you want to pump the brakes. Today, there’s still a common myth that you have to come up with 20% of the total sale price for your down payment. This means people who could buy a home may be putting their plans on hold because they don’t have that much saved yet. The reality is, whether you’re looking for your first home or you’ve purchased one before, you most likely don’t need to put 20% down. Here’s why.
According to <a href="https://sf.freddiemac.com/articles/insights/down-payments-helping-future-borrowers-bridge-the-awareness-gap" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>:
“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”
If saving that much money sounds daunting, potential homebuyers might give up on the dream of homeownership before they even begin – but they don’t have to.
Data in the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="2020 Profile of Home Buyers and Sellers" target="_blank" rel="noopener noreferrer">2020 Profile of Home Buyers and Sellers</a> from the National Association of Realtors (NAR) indicates that the median down payment actually hasn’t been over 20% since 2005, and even then, that was for repeat buyers, not first-time homebuyers. As the image below shows, today’s median down payment is clearly less than 20%.<a href="https://files.mykcm.com/2021/01/29154130/MedianDownPayment_MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="wp-image-97218 aligncenter" src="https://files.mykcm.com/2021/01/29154130/MedianDownPayment_MEM-600x376.png" alt="Do I Really Need a 20% Down Payment to Buy a Home? | MyKCM" width="600" height="376" /></a>
What does this mean for potential homebuyers?
As we can see, the median down payment was lowest for first-time buyers with the 2020 percentage coming in at 7%. If you’re a first-time buyer and putting down 7% still seems high, understand that there are programs that allow qualified buyers to purchase a home with a down payment as low as <a href="https://www.hud.gov/buying/loans" title="3.5%" target="_blank" rel="noopener noreferrer">3.5%</a>. There are even options like <a href="https://www.benefits.va.gov/homeloans/index.asp" title="VA loans" target="_blank" rel="noopener noreferrer">VA loans</a> and <a href="https://www.rd.usda.gov/newsroom/news-release/usda-rural-home-loans-offer-100-financing-and-no-down-payment" title="USDA loans" target="_blank" rel="noopener noreferrer">USDA loans</a> with no down payment requirements for qualified applicants.
It’s important for potential homebuyers (whether they’re repeat or first-time buyers) to know they likely don’t need to put down 20% of the purchase price, but they do need to do their <a href="https://downpaymentresource.com/" title="homework" target="_blank" rel="noopener noreferrer">homework</a> to understand the options available. Be sure to work with trusted professionals from the start to learn what you may qualify for in the homebuying process.
Bottom Line
Don’t let down payment myths keep you from hitting your homeownership goals. If you’re hoping to buy a home this year, let’s connect to review your options.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-02-09T13:07:00-07:002021-03-01T12:24:26-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:30196 Foundational Benefits of Homeownership Today
Over the past year, our homes have become an integral part of our lives more than ever. They’re much more than the houses we live in. They’re our workplaces, virtual schools, and safe havens that provide shelter, stability, and protection through the evolving health crisis. Today, <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="65.8%" target="_blank" rel="noopener noreferrer">65.8%</a> of Americans are fortunate enough to call their homes their own.
As we continue to think about the future, our goals for the year, and what we want to achieve well beyond 2021, it’s a great time to look at the benefits of owning a home. Below are some <a href="https://www.nar.realtor/sites/default/files/documents/white-paper-homeownership-incentivized-by-federal-system-02-06-2020.pdf" title="highlights" target="_blank" rel="noopener noreferrer">highlights</a> and quotes on the benefits of homeownership shared by the National Association of Realtors (NAR). From feel-good motivations to economic and social impacts on the local community, these items may give you reason to believe homeownership stretches well beyond your financial investment.
Non-Financial Benefits
Owning a home brings a sense of happiness, satisfaction, and pride.
Pride of Ownership: It feels good to have a place that’s truly your own, especially since you can customize it to your liking. “The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness and well-being for homeowners and those around them.”
Civic Participation: Homeownership creates stability, a sense of community, and increases civic engagement. It’s a way to add to the strength of your local area and drive value into your neighborhood.
Financial Benefits
Buying a home is also an investment in your financial future.
Net Worth: Homeownership builds your <a href="https://www.mykcm.com/2020/10/07/a-homeowners-net-worth-is-40x-greater-than-a-renters/" title="net worth">net worth</a>. Today, the median household net worth of all homeowners is $254,900, while the median net worth of renters is only $6,270.
Financial Security: Equity, appreciation, and more predictable monthly housing expenses are huge financial benefits of owning a home. Homeownership is truly the best way to improve your long-term financial position.
Economic Benefits
Homeownership is even a local economic driver.
Housing-Related Spending: An economic force throughout our nation, housing-related expenses accounted for more than one-sixth of the country’s economic activity over the past three decades.
Entrepreneurship: Homeownership is also a form of forced savings that can provide entrepreneurial opportunities. “Owning a home enables new entrepreneurs to obtain access to credit to start or expand a business and generate new jobs by using their home as collateral for small business loans.”
Bottom Line
The benefits of homeownership go well beyond the basics. Homeownership is truly a way to build financial freedom, find greater satisfaction and happiness, and make a substantial impact in your community. If owning a home is part of your dream this year, let’s connect so you can begin the homebuying process today.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-02-09T13:01:00-07:002021-02-09T12:08:14-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2980Why Moving May Be Just the Boost You Need
As we look back over the past year, we’ve certainly lived through one of the most stressful periods in recent history. After spending so much more time at home throughout the health crisis, some are wondering if they should move to improve their mental health and well-being. This is no surprise since the U.S. Census Bureau reported an increase in the percentage of adults with symptoms of anxiety and depression in a recent <a href="https://www.census.gov/library/stories/2021/01/young-adults-living-alone-report-anxiety-depression-during-pandemic.html?utm_campaign=20210113msacos1ccstors&utm_medium=email&utm_source=govdelivery" title="Household Pulse Survey" target="_blank" rel="noopener noreferrer">Household Pulse Survey</a>.
There’s logic behind the idea that making a move could improve someone’s quality of life. When people change their scenery, they often feel happier. Catherine Hartley, an Assistant Professor at New York University’s Department of Psychology and co-author of a <a href="https://www.nyu.edu/about/news-publications/news/2020/may/new-and-diverse-experiences-linked-to-enhanced-happiness--new-st.html" title="study" target="_blank" rel="noopener noreferrer">study</a> on how new experiences impact happiness, mentioned:
“Our results suggest that people feel happier when they have more variety in their daily routines—when they go to novel places and have a wider array of experiences.”
If you’re looking for a new experience, planning a move into a new home may be something you’ve started to consider more carefully. If so, you’re not alone. The <a href="https://www.unitedvanlines.com/newsroom/movers-study-2020" title="2020 Annual National Movers Study" target="_blank" rel="noopener noreferrer">2020 Annual National Movers Study</a> by United Van Lines shows:
“For customers who cited COVID-19 as an influence on their move in 2020, the top reasons associated with COVID-19 were concerns for personal and family health and wellbeing (60%); desires to be closer to family (59%); 57% moved due to changes in employment status or work arrangement (including the ability to work remotely); and 53% desired a lifestyle change or improvement of quality of life.”
So, if you’re thinking of moving this year to help boost your happiness factor, here are a few questions to ask yourself as you make your decision.
How’s the Weather?
Is the weather something that’s important to you? Does it have a tendency to impact your mood? The World Population Review <a href="https://worldpopulationreview.com/state-rankings/states-with-the-best-weather" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“What states have the best weather? When evaluating each state for temperature, rain, and sun, some states stand out. Although climate and weather preferences are personal and subjective, some criteria are considered to make up the best weather, according to Current Results:
Comfortable temperatures from 63°F to 86°F for more than half of the year.
Dry weather with no more than 60 inches of rain per year.
Mostly clear skies with an average of sunshine for at least 60% of the year.”
“Better weather” can mean different things to different people – some prefer the heat, others cooler temperatures, and some want to experience all four seasons. Think about what makes you feel happiest if you’re looking for a new location.
Should I Choose the City, Suburbs, or Country?
With the COVID-19 pandemic, some people are deciding to move to lower-density areas. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), <a href="http://eyeonhousing.org/2021/01/top-posts-of-2020-suburban-shift-for-home-building/" title="mentions" target="_blank" rel="noopener noreferrer">mentions</a>:
“The third quarter Home Building Geography Index (HBGI) reveals that a suburban shift for consumer home buying preferences in the wake of the COVID-19 pandemic is accelerating as telecommuting is providing consumers more flexibility to live further out within large metros or even to relocate to more affordable, smaller metro areas.”
Can you work from home? Are you open to a longer commute in the future? If so, a move to the suburbs or even a quieter rural area may be a win for you. Or, if you’ve always dreamed of life in the city, now may be your chance to move into town.
Bottom Line
As we look beyond the trials of the pandemic, many are hoping for a new beginning, and that may mean moving. Let’s connect today to talk about your new goals and options in today’s market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-01-25T19:16:00-07:002021-02-09T12:02:53-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2939Why the 2021 Forecast Doesn’t Call for a Foreclosure Crisis
<img src="https://assets.site-static.com/userfiles/736/image/blog_articles/woman_looking_at_ocean.jpg" alt="Woman Looking At Ocean" title="Woman Looking At Ocean" style="margin: 5px; border: 5px solid black; float: left;" width="400" height="219" />As the current forbearance <a href="https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/mortgage-relief/" title="mortgage relief options" target="_blank" rel="noopener noreferrer">mortgage relief options</a> come to an end, many are wondering if we’ll face a foreclosure crisis next year. This is understandable, especially for those who remember the housing crisis that began in 2008. The reality is, plans have been put in place through forbearance to ensure history doesn’t repeat itself.
This year, homeowners are able to request 180 days of mortgage relief through forbearance. Upon expiration of that timeframe, they’re also entitled to request 180 additional days, bringing the total to 360 days of deferred payment eligibility. As forbearance expires, homeowners should stay in touch with their lender, because creating a plan for the deferred payments is a critical next step to avoiding foreclosure. There are <a href="https://www.mykcm.com/2020/10/21/why-todays-options-will-save-homeowners-from-foreclosure/" title="multiple options">multiple options</a> for homeowners to pursue at this point, and with the right planning and communication with the lender, foreclosure doesn’t have to be one of them.
Many homeowners are concerned that they’ll have to pay the deferred payments back in a lump sum payment at the end of forbearance. Thankfully, that’s not the case. Fannie Mae <a href="https://capmrkt.fanniemae.com/heretohelp/kyo/posts/you-dont-have-to-repay-the-forbearance-amount-all-at-once-upon-completion-of-your-forbearance-plan-get-the-facts/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“You don’t have to repay the forbearance amount all at once upon completion of your forbearance plan…Here’s the important thing to remember: If you receive a forbearance plan, you will have options when it comes to repaying the missed amount. You don’t have to pay the forbearance amount at once unless you are able to do so.”
When looking at the percentage of people in forbearance, we can also see that this number has been decreasing steadily throughout the year. Fewer people than initially expected are still in forbearance, so the number of homeowners who will need to work out alternative payment options is declining (See graph below):<a href="https://files.mykcm.com/2020/11/04164136/20201105-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96358" src="https://files.mykcm.com/2020/11/04164136/20201105-MEM-Eng-1.jpg" alt="Why the 2021 Forecast Doesn’t Call for a Foreclosure Crisis | MyKCM" width="600" height="450" /></a>This means there are fewer and fewer homeowners at risk of foreclosure, and many who initially applied for forbearance didn’t end up needing it. Mike Fratantoni, Senior Vice President and Chief Economist at the Mortgage Bankers Association (MBA), <a href="https://www.mba.org/2020-press-releases/october/share-of-mortgage-loans-in-forbearance-declines-to-632" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Nearly two-thirds of borrowers who exited forbearance remained current on their payments, repaid their forborne payments, or moved into a payment deferral plan. All of these borrowers have been able to resume – or continue – their pre-pandemic monthly payments.”
For those who are still in forbearance and unable to make their payments, foreclosure isn’t the only option left. In their <a href="https://www.corelogic.com/insights-download/homeowner-equity-report.aspx" title="Homeowner Equity Insights Report" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights Report</a>, CoreLogic indicates:
“In the second quarter of 2020, the average homeowner gained approximately $9,800 in equity during the past year.”
Many homeowners have enough equity in their homes today to be able to sell their houses instead of foreclosing. Selling and protecting the overall financial investment may be a very solid option for many homeowners. As Ivy Zelman, Founder of Zelman & Associates, mentioned in a recent <a href="https://www.tomferry.com/podcast/experience-91/" title="podcast" target="_blank" rel="noopener noreferrer">podcast</a>:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
Bottom Line
If you’re currently in forbearance or think you should be because you’re concerned about being able to make your mortgage payments, reach out to your lender to discuss your options and next steps. Having a trusted and knowledgeable professional on your side to guide you is essential in this process and might be the driving factor that helps you stay in your home.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-01-06T17:27:00-07:002021-01-25T18:19:04-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2938Is it Time to Move into a Single-Story Home?
<img src="https://assets.site-static.com/userfiles/736/image/blog_articles/one_story_living.jpg" alt="Couple Considering One Story Living" title="Couple Considering One Story Living" style="float: right; margin: 5px; border: 5px solid black;" width="350" height="191" />Once the kids have left the nest, you may be wondering what to do with all of the extra space in your home. Chances are, you don’t need four bedrooms anymore, and it may be a great time to <a href="https://www.mykcm.com/2020/09/30/why-selling-this-fall-may-be-your-best-move/" title="sell">sell</a> your house and downsize, maybe even into a single-story home. You’ve likely gained significant equity if you’ve lived in your home for a while, so making a move while demand for your current house is high could be your best step forward toward the retirement goals you set out to achieve several years ago.
The dilemma, though, is where to go next. A big concern for many homeowners who are ready to sell is finding a home to move into, given today’s lack of houses available for <a href="https://www.mykcm.com/2020/09/17/how-low-inventory-may-impact-the-housing-market-this-fall/" title="sale">sale</a>. There is, however, some good news: the number of single-family 1-story homes being built today is on the rise, improving your odds of finding the right home for your changing needs. In a recent <a href="http://eyeonhousing.org/2020/09/single-story-home-construction-continued-to-increase-in-2019/" title="article" target="_blank" rel="noopener noreferrer">article</a>, The National Association of Home Builders (NAHB) explains:
“Nationwide, the share of new homes with two or more stories fell from 53% in 2018 to 52% in 2019, while the share of new homes with one story grew from 47% to 48%.”
Here’s a map showing the breakdown of newly constructed homes being built by region, and the percentage of 1-story and 2-story homes in that mix:<a href="https://files.mykcm.com/2020/10/05132531/20201006-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96038" src="https://files.mykcm.com/2020/10/05132531/20201006-MEM-Eng-1.jpg" alt="Is it Time to Move into a Single-Story Home? | MyKCM" width="600" height="450" /></a>
What are the benefits of buying a one-story home?
Still not sure about buying a single-story home? An <a href="https://www.hometalk.com/36501070/top-5-benefits-of-buying-a-single-story-home" title="article" target="_blank" rel="noopener noreferrer">article</a> from Home Talk covers several advantages of switching from two floors to one:
1. Energy Efficient
“It is easier to heat and cool a single-story house [than] it would be to regulate the temperatures of a multi-story house.”
Most single-story homes only need one heating or cooling unit, and they typically stay cooler than a two-story home, both of which can lead to significant savings.
2. Easier to Maintain
“Doing a general cleaning in a single story requires less effort and you will be able to see all areas that need cleaning and the areas are easily accessible.”
Cleaning and maintenance of a single-story home can take less time and effort, and better upkeep helps improve the overall value of the home.
3. Accessible for Everyone
“A single-story house can be accessed by anyone, whether they are young children or the senior citizens.”
If you’re looking for a house that provides a safe and easily accessible environment at any age, a single-story home may be optimal.
4. Good Resell Potential
“When buying a single-story house, you should consider the resale value should you think of reselling it in case of a circumstance that can happen. Look at the growth rate of that area. Due to the high demand of these types of houses it is [easy] to resell them and depending on the growth rate of an area, it increases in value significantly.”
Single-story homes have a lot of benefits and are often in higher demand. This bodes well for future resale opportunities.
Bottom Line
There are many benefits to downsizing into a one-story home. Doing so while demand for your <a href="https://www.mykcm.com/2020/09/15/is-now-a-good-time-to-move/" title="current house">current house</a> is high might make it easier than ever to make a move. Let’s connect if you’re ready to purchase the single-story home you need while homes are so affordable today.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-01-06T15:12:00-07:002021-01-08T08:15:17-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2937Homeowner Equity Increases an Astonishing $1 Trillion
<img src="https://assets.site-static.com/userfiles/736/image/blog_articles/home_equity_over_one_trillion.jpg" alt="Money With Homes On Top" title="Money With Homes On Top" style="margin: 5px; border: 5px solid black; float: right;" width="350" height="191" />In a year that was financially devastating for many Americans, some good news for most homeowners is the dramatic gain in home equity over the last twelve months. Last week, CoreLogic released its <a href="https://www.corelogic.com/insights-download/homeowner-equity-report.aspx" title="2020 3rd Quarter Homeowner Equity Insights" target="_blank" rel="noopener noreferrer">2020 3rd Quarter Homeowner Equity Insights</a> report, which reveals four major findings:
U.S. homeowners with mortgages have seen their equity increase by a total of $1 trillion since the third quarter of 2019.
The average homeowner gained approximately $17,000 in equity over the past year.
This is a 10.8% increase in equity over last year.
The average household with a mortgage now has $194,000 in home equity.
This has given many homeowners the ability to redesign their homes to meet their changing needs. Frank Martell, President and CEO of CoreLogic, explains in the report:
“The housing market has remained a strong pillar in an otherwise tumultuous economic year. A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity. And with many people now spending more time than ever before at home, some homeowners have tapped into their strengthening equity to fund renovations.”
This build-up in equity also gives more options to homeowners who have been financially impacted by the pandemic. Today, homeowners with substantial equity are in a much better position to work out a deal with their lender if they cannot pay their mortgage. Alternatively, they also have the power to sell and walk away with their equity in the form of cash or as a down payment toward a more affordable house. Frank Nothaft, Chief Economist for CoreLogic, addresses the issue in the report:
“Over the past year, strong home price growth has created a record level of home equity for homeowners…This provides an important buffer to protect families if they experience financial difficulties and is one reason for the generational-low in foreclosure rates reported.”
Here’s a map showing equity gains by state:<a href="https://files.mykcm.com/2020/12/16103425/20201217-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96821" src="https://files.mykcm.com/2020/12/16103425/20201217-MEM-Eng-1.jpg" alt="Homeowner Equity Increases an Astonishing $1 Trillion | MyKCM" width="600" height="450" /></a>This gain in home equity is a blessing for homeowners in these trying times, and it seems that the next two years will continue to reward those who own a home.
Last week, the National Association of Realtors (NAR) held their <a href="https://www.nar.realtor/newsroom/top-economic-and-housing-experts-predict-post-pandemic-rebound-with-continued-job-growth-stable" title="2020 Real Estate Forecast Summit" target="_blank" rel="noopener noreferrer">2020 Real Estate Forecast Summit</a>. At the summit, they shared the results of a recent survey of 23 economic and housing market experts. The median forecast among the experts called for home values to increase further by 8% in 2021 and 5.5% in 2022.
Bottom Line
In a year that has many of us reevaluating what “home” really means, those who own their homes have been rewarded with a financial windfall that averages $17,000 individually and totals $1 trillion nationally.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-01-06T15:06:00-07:002021-01-08T08:19:33-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2936Four Expert Views on the 2021 Housing Market
<img src="https://assets.site-static.com/userfiles/736/image/blog_articles/housing_statistics.jpg" alt="Woman Working" title="Womon Working" style="margin: 5px; border: 5px solid black; float: right;" width="250" height="137" />The housing market was a shining star in 2020, fueling the economic turnaround throughout the country. As we look forward to 2021, can we expect real estate to continue showing such promise? Here’s what four experts have to say about the year ahead.
<a href="https://time-com.cdn.ampproject.org/c/s/time.com/nextadvisor/mortgages/mortgage-predictions-2021/amp/" title="Lawrence Yun, Chief Economist, National Association of Realtors (NAR)" target="_blank" rel="noopener noreferrer">Lawrence Yun, Chief Economist, National Association of Realtors (NAR)</a>
“In 2021, I think rates will be similar or modestly higher, maybe 3%…So, mortgage rates will continue to be historically favorable.”
<a href="https://www.forbes.com/sites/brendarichardson/2020/12/16/experts-predict-what-the-housing-market-will-be-like-in-2021/?sh=5889695236dc" title="Danielle Hale, Chief Economist, realtor.com" target="_blank" rel="noopener noreferrer">Danielle Hale, Chief Economist, realtor.com</a>
“We expect sales to grow 7 percent and prices to rise another 5.7 percent on top of 2020’s already high levels.”
<a href="https://www.forbes.com/sites/brendarichardson/2020/12/16/experts-predict-what-the-housing-market-will-be-like-in-2021/?sh=5889695236dc" title="Robert Dietz, Senior Vice President and Chief Economist, National Association of Home Builders (NAHB)" target="_blank" rel="noopener noreferrer">Robert Dietz, Senior Vice President and Chief Economist, National Association of Home Builders (NAHB)</a>
“With home builder confidence near record highs, we expect continued gains for single-family construction, albeit at a lower growth rate than in 2019. Some slowing of new home sales growth will occur due to the fact that a growing share of sales has come from homes that have not started construction. Nonetheless, buyer traffic will remain strong given favorable demographics, a shifting geography of housing demand to lower-density markets and historically low interest rates.”
<a href="https://blog.firstam.com/economics/why-the-big-short-in-housing-supply-will-remain-in-2021" title="Mark Fleming, Chief Economist, First American" target="_blank" rel="noopener noreferrer">Mark Fleming, Chief Economist, First American</a>
“Mortgage rates are expected to remain low for the foreseeable future and millennials will continue forming households, keeping demand robust, even if income growth moderates. Despite the best intentions of home builders to provide more housing supply, the big short in housing supply will continue into 2021 and likely keep house price appreciation flying high.”
Bottom Line
Whether you’re ready to buy or sell a home in 2021, if you’re planning to take advantage of the market this winter, let’s connect to talk about the opportunities available in our local market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-01-06T15:00:00-07:002021-01-08T08:22:03-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2934The Importance of Home Equity in Building Wealth
Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently <a href="https://myhome.freddiemac.com/owning/equity-and-appreciation.html" title="posted" target="_blank" rel="noopener noreferrer">posted</a>:
“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”
Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.
You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, contact a local real estate professional.
Is homeownership truly a better path to wealth than renting?
Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.
As proof of this, First American broke down the <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" title="net worth" target="_blank" rel="noopener noreferrer">net worth</a> of homeowners and renters by income categories. Here are their findings:<a href="https://files.mykcm.com/2021/01/05123633/20210106-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96940" src="https://files.mykcm.com/2021/01/05123633/20210106-MEM-Eng-1.jpg" alt="The Importance of Home Equity in Building Wealth | MyKCM" width="600" height="450" /></a>Only one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.
According to the latest <a href="https://www.corelogic.com/insights-download/homeowner-equity-report.aspx" title="Homeowner Equity Insights Report" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights Report</a> from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state:<a href="https://files.mykcm.com/2021/01/05123631/20210106-MEM-Eng-2.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96939" src="https://files.mykcm.com/2021/01/05123631/20210106-MEM-Eng-2.jpg" alt="The Importance of Home Equity in Building Wealth | MyKCM" width="600" height="450" /></a>
When can you cash in on your housing wealth?
Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:
Selling
Refinancing
Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.
Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.
How can these options help homeowners?
During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently <a href="https://blog.firstam.com/economics/will-record-equity-levels-prevent-a-foreclosure-tsunami" title="explained" target="_blank" rel="noopener noreferrer">explained</a> that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:
“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”
What might the future bring?
Most experts are calling for home prices to continue appreciating going forward. The <a href="https://pulsenomics.com/surveys/#home-price-expectations" title="Home Price Expectation Survey" target="_blank" rel="noopener noreferrer">Home Price Expectation Survey</a>, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:<a href="https://files.mykcm.com/2021/01/05123628/20210106-MEM-Eng-3.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank" style="outline: currentcolor none medium;"><img class="aligncenter wp-image-96938" src="https://files.mykcm.com/2021/01/05123628/20210106-MEM-Eng-3.jpg" alt="The Importance of Home Equity in Building Wealth | MyKCM" width="600" height="450" /></a>
Bottom Line
Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2021-01-06T14:41:00-07:002021-01-06T14:03:49-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:28972021 Housing Forecast <img src="https://files.mykcm.com/2020/12/17164522/20201218-MEM-1046x2213.png" class="attachment-entry size-entry wp-post-image" alt="2021 Housing Forecast [INFOGRAPHIC] | MyKCM" width="1046" height="2213" />2020-12-22T11:36:00-07:002021-01-06T14:16:36-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2877Are Home Prices Headed Toward Bubble Territory?
<img src="https://assets.site-static.com/userfiles/736/image/blog_articles/girl_blowing_bubbles.jpg" alt="Girl Blowing Bubbles" title="Girl Blowing Bubbles" style="margin: 5px; border: 5px solid black; float: right;" width="350" height="191" />
Talk of a housing bubble is beginning to crop up as home prices have appreciated at a rapid pace this year. This is understandable since the appreciation of residential real estate is well above historic annual averages. According to the Federal Housing Finance Agency (FHFA), annual <a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2020Q3_HPI.pdf" title="appreciation" target="_blank" rel="noopener noreferrer">appreciation</a> since 1991 has averaged 3.8%. Here are the latest 2020 appreciation numbers from three reliable sources:
<a href="https://www.fhfa.gov/AboutUs/Reports/Pages/US-House-Price-Index-Report-2020-Q3.aspx" title="FHFA" target="_blank" rel="noopener noreferrer">FHFA</a>: 7.8%
<a href="https://www.corelogic.com/news/gaining-momentum-annual-u.s.-home-prices-appreciated-7.3-in-october-corelogic-reports.aspx" title="CoreLogic" target="_blank" rel="noopener noreferrer">CoreLogic</a>: 7.3%
<a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20201124-1264559/1264559_cshomeprice-release-1124.pdf" title="Case-Shiller" target="_blank" rel="noopener noreferrer">Case-Shiller</a>: 7%
It’s easy to jump to the conclusion that house appreciation is out of control in today’s market. However, we need to put these numbers into context first.
Inflation and the Comeback from the Housing Crash
Following the housing crash, home values depreciated dramatically from 2007-2011. Values are still recovering from that unusually long period of falling prices. We must also realize that normal inflation has had an impact.
Bill McBride, the founder of the well-respected Calculated Risk blog, recently summed it up <a href="https://www.calculatedriskblog.com/2020/11/real-house-prices-and-price-to-rent.html" title="this way" target="_blank" rel="noopener noreferrer">this way</a>:
“It has been over fourteen years since the bubble peak. In the Case-Shiller release today, the seasonally adjusted National Index, was reported as being 22.2% above the previous bubble peak. However, in real terms (adjusted for inflation), the National index is still about 2% below the bubble peak…As an example, if a house price was $200,000 in January 2000, the price would be close to $291,000 today adjusted for inflation.”
The COVID Impact on Home Prices
The pandemic caused many households to reconsider whether their current home still fulfills their lifestyle. Many homeowners now want larger yards that are both separate and private.
Their needs on the inside of the home have changed too. People now want home offices, gyms, and living rooms well-suited for video conferencing. Barbara Ballinger, a freelance writer and the author of several books on real estate, recently <a href="https://magazine.realtor/home-and-design/feature/article/2020/12/a-myriad-of-home-trends-to-gain-momentum-in-2021" title="wrote" target="_blank" rel="noopener noreferrer">wrote</a>:
“While homeowners continue to want their outdoor spaces that offer a safe retreat, that appeal has shifted into other parts of the home, coupling comfort with function. In other words, homeowners want amenities for work and leisure, and they plan to enjoy them long after the pandemic.”
At the same time, concerns about the pandemic have caused many homeowners to put their plans to sell on hold. Realtor.com just released their November <a href="https://www.realtor.com/research/topics/housing-supply/" title="Monthly Housing Market Trends Report" target="_blank" rel="noopener noreferrer">Monthly Housing Market Trends Report</a>. It explains:
“Nationally, the inventory of homes for sale decreased 39.2% over the past year in November…This amounted to 490,000 fewer homes for sale compared to November of last year.”
More people buying and fewer people selling has caused home prices to escalate. However, with a vaccine on the horizon, more homeowners will be putting their houses on the market. This will better balance supply with demand and slow down the rapid appreciation.
That’s why major organizations in the housing industry are calling for much more moderate home appreciation next year. Here are the most recent forecasts for 2021:
<a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-Q3-2020-us-economic-outlook-0-11-17-2020.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a>: 4.5%
<a href="http://www.freddiemac.com/research/forecast/20201014_quarterly_economic_forecast.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>: 2.6%
<a href="https://www.fanniemae.com/media/37166/display" title="Fannie Mae" target="_blank" rel="noopener noreferrer">Fannie Mae</a>: 2.1%
<a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary" title="Mortgage Bankers Association" target="_blank" rel="noopener noreferrer">Mortgage Bankers Association</a>: 2%
This Is Nothing Like 2006
Finally, let’s put to rest some of the concerns that today’s scenario is anything like what led up to the last housing crash. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains why this is <a href="https://magazine.realtor/news-and-commentary/feature/article/2020/11/the-double-edged-housing-boom" title="nothing like 2006" target="_blank" rel="noopener noreferrer">nothing like 2006</a>:
“Such a frenzy of activity, reminiscent of 2006, raises questions about a bubble and the potential for a painful crash. The answer: There’s no comparison. Back in 2006, dubious adjustable-rate mortgages taxed many buyers’ budgets. Some loans didn’t even require income documentation. Today, buyers are taking out 30-year fixed-rate mortgages. Fourteen years ago, there were 3.8 million homes listed for sale, and home builders were putting up about 2 million new units. Now, inventory is only about 1.5 million homes, and home builders are underproducing relative to historical averages.”
Bottom Line
Most aspects of life have been anything but normal in 2020. That includes buying and selling real estate. High demand coupled with restricted supply has caused home prices to appreciate above historic levels. With the end of the health crisis in sight, we will see price appreciation return to more normal levels next year.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-10T09:25:00-07:002021-01-06T14:03:20-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2875An Honest Look at Unemployment Numbers
Last Friday, the Bureau of Labor Statistics released the <a href="https://www.bls.gov/news.release/pdf/empsit.pdf" title="November Jobs Report" target="_blank" rel="noopener noreferrer">November Jobs Report</a>. It revealed that, though headed in the right direction, the nation’s job recovery has slowed. The consensus reaction is best exemplified by a <a href="https://www.wsj.com/articles/november-jobs-report-unemployment-rate-2020-11607028480" title="quote" target="_blank" rel="noopener noreferrer">quote</a> from Glassdoor Senior Economist, Daniel Zhao:
“We saw positive job gains, but I think the sentiment is largely negative because we know that we’re heading into a dark winter.”
There’s no doubt that millions of households have been – and continue to be -devastated by the economic downturn caused by the pandemic.
We should, however, put the current situation into perspective. Where we currently stand is much better than where most experts thought we would be at this time. Jed Kolko, Chief Economist of Indeed, explained in his <a href="https://www.hiringlab.org/2020/12/01/2020-labor-market-review-2021-outlook/" title="State of the Labor Market" target="_blank" rel="noopener noreferrer">State of the Labor Market</a> that, though the situation is not good, we’re doing better than original expectations:
“Though the labor market rebound is incomplete, it has nevertheless surpassed expectations. In May, after payrolls plunged and unemployment spiked, the Wall Street Journal panel of economic forecasters projected unemployment would be over 11% in December 2020 and not fall below 7% until the first half of 2022 — a milestone already passed in October.”
With the announcement that vaccines should be available soon, we’re not far from the most damaged segments of the economy gaining momentum again.
Jeff Sparshott of the Wall Street Journal recently <a href="https://economics.cmail19.com/t/ViewEmail/d/5899B6E8ECF443972540EF23F30FEDED/5323CD85A2087AFD22947492D9797BBC" title="wrote" target="_blank" rel="noopener noreferrer">wrote</a>:
“Even with signs of a recent slowdown, the labor-market recovery since this spring has been stronger than most economists expected. Many now project widespread vaccine distribution will eventually help lift the economy further as businesses are allowed to reopen and consumers feel more comfortable traveling, going to the movies.”
Bottom Line
Though millions of Americans are still out of work, the situation was forecasted to be even direr than it is today. Once a vaccine becomes available, the economy should complete its comeback, and so should the labor market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-09T14:45:00-07:002020-12-10T08:28:37-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2853Should You Buy a Retirement Home Sooner Rather than Later?
Every day in the U.S., roughly <a href="https://arc.aarpinternational.org/countries/united-states" title="10,000" target="_blank" rel="noopener noreferrer">10,000</a> people turn 65. Prior to the health crisis that swept the nation in 2020, most people had to wait until they retired to make a move to the beach, the golf course, or the senior living community they were looking to settle into for their later years in life. This year, however, the game changed.
Many of today’s workers who are nearing the end of their professional careers, but maybe aren’t quite ready to retire, have a new choice to make: should I move before I retire? If the sand and sun are calling your name and you have the opportunity to <a href="https://www.mykcm.com/2020/08/06/how-is-remote-work-changing-homebuyer-needs/" title="work remotely">work remotely</a> for the foreseeable future, now may be a great time to purchase that beach bungalow you’ve always dreamed of or the <a href="https://www.mykcm.com/2020/10/06/is-it-time-to-move-into-a-single-story-home/" title="single-story">single-story</a> home in the sprawling countryside that might be a little further out of town. Whether it’s a second home or a future retirement home, spending the next few years in a place that truly makes you smile every day might be the best way to round out a long and meaningful career.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.cnbc.com/2020/09/21/with-remote-work-options-people-opt-to-relocate-before-retirement-.html" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“The pandemic was unexpected, working from home was unexpected, but nonetheless many companies realized that workers can be just as productive working from home…We may begin to see a boost in people buying retirement homes before their retirement.”
According to the <a href="https://www.transamericacenter.org/docs/default-source/retirees-survey/tcrs2020_sr_retiree-retirement-amid-covid19.pdf" title="20th Annual Transamerica Retirement Survey" target="_blank" rel="noopener noreferrer">20th Annual Transamerica Retirement Survey</a>, 3 out of 4 retirees (75%) own their homes, and only 23% have mortgage debt (including any equity loans or lines of credit). Since entering retirement, almost 4 in 10 retirees (38%) have moved into a new home. They’re making a profit by <a href="https://www.mykcm.com/2020/09/30/why-selling-this-fall-may-be-your-best-move/" title="selling">selling</a> their current homes in today’s low inventory market and using their <a href="https://www.mykcm.com/2020/09/24/home-equity-gives-sellers-options-in-todays-market/" title="equity">equity</a> to purchase their future retirement homes. It’s a win-win.
Why These Homeowners Are Making Moves Now
The health crisis this year made us all more aware of the importance of our family and friends, and many of us have not seen our extended families since the pandemic started. It’s no surprise, therefore, to see in the same report that 32% of those surveyed cited the top reason they’re making a move is that they want to be closer to family and friends (See graph below):<a href="https://files.mykcm.com/2020/10/07103809/20201008-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96068" src="https://files.mykcm.com/2020/10/07103809/20201008-MEM-Eng-1.jpg" alt="Should You Buy a Retirement Home Sooner Rather than Later? | MyKCM" width="600" height="450" /></a>The survey also revealed that 73% percent of retirees currently live in single-family homes. With the overall number of homes for sale today hitting a historic <a href="https://www.mykcm.com/2020/09/17/how-low-inventory-may-impact-the-housing-market-this-fall/" title="low">low</a>, and with the buyer demand for single-family homes skyrocketing, there’s never been a more ideal time to sell a single-family home and make a move toward retirement. Today’s market has the perfect combination of driving forces to make selling optimal, especially while buyers are looking to take advantage of <a href="https://www.mykcm.com/2020/08/11/current-buyer-seller-perks-in-the-housing-market/" title="low interest rates">low interest rates</a>.
If you’re one of the 73% of retirees with a single-family home and want to move closer to your family, now is the time to put your house on the market. With the pace homes are selling today, you could essentially wrap up your move – start to finish – before the holidays.
Bottom Line
Whether you’re looking to fully retire or to buy a second home with the intent to use it as your retirement home in the future, the 2020 fall housing market may very well work in your favor. Let’s connect today to discuss your options in our local market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-04T12:01:00-07:002020-12-09T13:49:05-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2852Do You Have Enough Money Saved for a Down Payment?
One of the biggest misconceptions for first-time homebuyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20% down to buy a house. Here’s how it breaks down.
A recent survey by Point2Homes <a href="https://magazine.realtor/daily-news/2020/10/01/millennials-underestimate-down-payment-needs" title="mentions" target="_blank" rel="noopener noreferrer">mentions</a> that 74% of millennials (ages 25-40) say they’re interested in purchasing a home over the next 12 months. The study notes, “88% say they have significantly less savings than the average national down payment amount, which is $62,600.”
Thankfully, $62,600 is not the amount every buyer needs for a down payment in the United States. There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house.
According to the National Association of Realtors (NAR), “The median existing-home price for all housing types in August was <a href="https://www.nar.realtor/newsroom/existing-home-sales-hit-highest-level-since-december-2006" title="$310,600" target="_blank" rel="noopener noreferrer">$310,600</a>.” (These are the latest numbers available). NAR also <a href="https://cdn.nar.realtor/sites/default/files/documents/2020-downpayment-expectations-and-hurdles-to-homeownership-report-04-16-2020.pdf" title="indicates" target="_blank" rel="noopener noreferrer">indicates</a> that:
“In 2019, the median down payment was 12 percent for all buyers, six percent for first-time buyers, and 16 percent for repeat buyers.” (See graph below):
<a href="https://files.mykcm.com/2020/10/09084054/20201013-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96094" src="https://files.mykcm.com/2020/10/09084054/20201013-MEM-Eng-1.jpg" alt="Do You Have Enough Money Saved for a Down Payment? | MyKCM" width="600" height="450" /></a>That means if a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636. That’s nowhere near $62,600.
Knowing there are also programs like <a href="https://www.hud.gov/buying/loans" title="FHA" target="_blank" rel="noopener noreferrer">FHA</a> where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like <a href="https://www.rd.usda.gov/newsroom/news-release/usda-rural-home-loans-offer-100-financing-and-no-down-payment" title="USDA" target="_blank" rel="noopener noreferrer">USDA</a> and loans for <a href="https://www.benefits.va.gov/homeloans/index.asp" title="Veterans" target="_blank" rel="noopener noreferrer">Veterans</a> that waive down payment requirements.
The Point2Homes study also shares how much millennials have indicated they’ve saved for a down payment. As we can see in the graph below, 39% have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.<a href="https://files.mykcm.com/2020/10/09084056/20201013-MEM-Eng-2.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96095" src="https://files.mykcm.com/2020/10/09084056/20201013-MEM-Eng-2.jpg" alt="Do You Have Enough Money Saved for a Down Payment? | MyKCM" width="600" height="450" /></a>Unfortunately, the lack of knowledge about the homebuying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to contact a local real estate professional to understand the requirements in your local area if you want to buy a home. A trusted agent and your lender can guide you through the process.
Bottom Line
Be careful not to let big myths about homebuying keep you and your family out of the housing market. Let’s connect to discuss your options today.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-04T08:55:00-07:002020-12-04T11:04:16-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2848Don’t Let Buyer Competition Keep You from Purchasing a Home
This year’s record-low mortgage rates sparked high demand among homebuyers. Current homeowners, however, haven’t put their houses on the market so quickly. This makes finding a home to buy today challenging for many potential buyers. With an obstacle like this, those searching for their dream homes may be pressing pause on their searches as we approach the end of the year, but that could be a big mistake for many hopeful house hunters. Here’s why.
According to the most recent <a href="http://eyeonhousing.org/wp-content/uploads/2020/10/HOUSING-TRENDS-REPORT-Q320.pdf" title="Housing Trends Report" target="_blank" rel="noopener noreferrer">Housing Trends Report</a> from the National Association of Home Builders (NAHB):
“The length of time spent searching for a home continues to grow.”
The report indicates that 62% of buyers now spend 3 months or more looking for a home, an increase from 58% one year ago. A primary cause for the delay is the heavy competition today’s buyers face when making an offer on a home. Based on recent <a href="https://cdn.nar.realtor/sites/default/files/documents/2020-09-realtors-confidence-index-10-22-2020.pdf" title="data" target="_blank" rel="noopener noreferrer">data</a> from the National Association of Realtors (NAR), the average house in today’s market receives 3.4 offers before it’s sold. This means for every buyer who purchases a home, there are on average two or three buyers who have to begin their search all over again.
Compared to this time last year, the NAHB report shows that buyers are having more success finding homes in their <a href="https://www.mykcm.com/2020/09/22/the-cost-of-a-home-is-far-more-important-than-the-price/" title="price">price</a> range. However, it also notes the percentage of buyers saying they’re getting outbid when they make an offer has jumped from 15% to 27%. Buyers are indicating that <a href="https://www.mykcm.com/2020/10/16/how-to-prepare-for-a-bidding-war-infographic/" title="bidding wars">bidding wars</a> are a major obstacle to finding their dream home (See graph below):<a href="https://files.mykcm.com/2020/11/19103044/20201123-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96582" src="https://files.mykcm.com/2020/11/19103044/20201123-MEM-Eng-1.jpg" alt="Don’t Let Buyer Competition Keep You from Purchasing a Home | MyKCM" width="600" height="450" /></a>If this is a challenge you’re up against in your home search, you’re not alone. Feeling stuck in the process can be frustrating, but if there’s ever been a year to power through, this is the one. NAHB noted:
“Difficulties finding a home to buy will likely lead 20% of active buyers to give up until next year or later. That share is up from 15% a year earlier.”
Experts anticipate home prices will continue to <a href="https://www.mykcm.com/2020/10/22/home-values-projected-to-keep-rising/" title="rise">rise</a> into 2021, and the incredibly low interest rates we’ve seen this year are also forecasted to <a href="https://www.mykcm.com/2020/11/19/will-mortgage-rates-remain-low-next-year/" title="increase">increase</a> as the economy strengthens. Hopeful homebuyers who decide to hold off on their search until there’s less competition run the risk of finding a more expensive housing market when they start looking again. If affordability is a key motivator behind your decision to buy a home, this winter is still the best time to make it happen.
Bottom Line
Bidding wars may be one of the greatest challenges buyers face in today’s housing market, but they shouldn’t be a deal-breaker. Having the right expert on your side throughout the buying process will give you the advantage you need when it comes to finding the right home and making a competitive offer. If you’re ready to buy this winter, let’s connect to discuss how to position yourself for success.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-03T10:00:00-07:002020-12-04T07:57:23-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:28476 Reasons You’ll Win by Selling with a Real Estate Agent This Fall
There are many benefits to working with a real estate professional when selling your house. During challenging times, like what we face today, it becomes even more important to have an expert you trust to help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale by Owner (FSBO), it’s critical to consider the following:
1. Your Safety Is a Priority
Your family’s safety should always come first, and that’s more crucial than ever given the current health situation in our country. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, real estate professionals are equipped to follow the latest <a href="https://www.nar.realtor/coronavirus-a-guide-for-realtors" title="industry standards" target="_blank" rel="noopener noreferrer">industry standards</a> recommended by the National Association of Realtors (NAR) to help protect you and your family.
2. A Powerful Online Strategy Is a Must to Attract a Buyer
Recent <a href="https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends" title="studies" target="_blank" rel="noopener noreferrer">studies</a> from NAR have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumps to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?
3. There Are Too Many Negotiations
Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:
The buyer, who wants the best deal possible
The buyer’s agent, who solely represents the best interest of the buyer
The inspection companies, which work for the buyer and will almost always find challenges with the house
The appraiser, if there is a question of value
As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.
4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage
Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress being made toward a purchaser’s mortgage commitment.
Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was available yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.
5. FSBOing Has Become More Difficult from a Legal Standpoint
The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="dropped" target="_blank" rel="noopener noreferrer">dropped</a> from 19% to 8% over the last 20+ years.
6. You Net More Money When Using an Agent
Many homeowners believe they’ll 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 on the commission.
A <a href="https://collateralanalytics.com/wp-content/uploads/2017/08/CA-RESEARCH-Saving-Real-Estate-Commissions-at-Any-Price.pdf" title="study" target="_blank" rel="noopener noreferrer">study</a> by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”<br />
The more buyers that view a home, the greater the chance a bidding war will take place.
Bottom Line<br />
Listing on your own leaves you to manage the entire transaction by yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-02T17:48:00-07:002020-12-03T09:01:51-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2846 Is Buying a Home Today a Good Financial Move?
There’s no doubt 2020 has been a challenging year. A global pandemic coupled with an economic recession has caused heartache for many. However, it has also prompted more Americans to reconsider the meaning of “home.” This quest for a place better equipped to fulfill our <a href="https://www.mykcm.com/2020/08/24/the-top-reasons-people-are-moving-this-year/" title="needs">needs</a>, along with record-low mortgage <a href="http://www.freddiemac.com/pmms/" title="rates" target="_blank" rel="noopener noreferrer">rates</a>, has skyrocketed the <a href="https://www.mykcm.com/2020/11/12/winter-will-bring-a-flurry-of-activity-to-the-housing-market/" title="demand">demand</a> for home purchases.
This increase in demand, on top of the severe <a href="https://www.mykcm.com/2020/11/17/homes-for-sale-are-rapidly-disappearing/" title="shortage">shortage</a> of homes for sale, has also caused more <a href="https://www.mykcm.com/2020/11/23/dont-let-buyer-competition-keep-you-from-purchasing-a-home/" title="bidding wars">bidding wars</a> and thus has home prices appreciating rather dramatically. Some, therefore, have become cautious about buying a home right now.
The truth of the matter is, even though homes have appreciated by a whopping <a href="https://www.corelogic.com/blog/2020/11/annual-u.s.-home-price-appreciation-jumped-to-six-year-high-in-september.aspx" title="6.7%" target="_blank" rel="noopener noreferrer">6.7%</a> over the last twelve months, the cost to buy a home has actually dropped. This is largely due to mortgage rates falling by a full percentage point.
Let’s take a look at the monthly mortgage payment on a $300,000 house one year ago, and then compare it with that same home today, after it has appreciated by 6.7% to $320,100:<a href="https://files.mykcm.com/2020/11/20175530/20201124-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-96610" src="https://files.mykcm.com/2020/11/20175530/20201124-MEM-Eng-1.jpg" alt="Is Buying a Home Today a Good Financial Move? | MyKCM" width="600" height="450" /></a>Compared to this time last year, you’ll actually save $87 dollars a month by purchasing that home today, which equates to over one thousand dollars a year.
But isn’t the economy still in a recession?
Yes, it is. That, however, may make it the perfect time to buy your first home or move up to a larger one. Tom Gil, a Harvard trained negotiator and real estate investor, recently <a href="https://magazine.realtor/for-brokers/network/article/2020/10/real-estate-as-a-hedge-against-currency-devaluation" title="explained" target="_blank" rel="noopener noreferrer">explained</a>:
“When volatile assets are facing recessions, hard assets, such as gold and real estate, thrive. Historically speaking, residential real estate has done better compared to other markets during and after recessions.”
That thought is substantiated by the fact that homeowners have 40 times the <a href="https://www.mykcm.com/2020/10/07/a-homeowners-net-worth-is-40x-greater-than-a-renters/" title="net worth">net worth</a> of renters. Odeta Kushi, Deputy Chief Economist for First American Financial Corporation, recently <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" title="said" target="_blank" rel="noopener noreferrer">said</a>:
“Despite the risk of volatility in the housing market, numerous studies have demonstrated that homeownership leads to greater wealth accumulation when compared with renting. Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments, which become a form of forced savings for homeowners.”
Bottom Line
With home prices still <a href="https://www.mykcm.com/2020/10/22/home-values-projected-to-keep-rising/" title="increasing">increasing</a> and mortgage rates perhaps poised to begin <a href="https://www.mykcm.com/2020/11/19/will-mortgage-rates-remain-low-next-year/" title="rising">rising</a> as well, buying your first home, or moving up to a home that better fits your current needs, likely makes a ton of sense.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-02T17:45:00-07:002020-12-02T16:49:49-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2845Knowledge is Power On Path To Homeownership
Homeownership is on the goal list for many young adults, but sometimes it’s hard to know exactly how to get there. From understanding the homebuying <a href="https://www.mykcm.com/2020/02/28/10-steps-to-buying-a-home-infographic-2/" title="process">process</a> to pre-approval and down payment assistance options, uncertainty along the way can ultimately hold some buyers back.
Today, there are over 75 million Millennials and 67 million Gen Z’ers in the U.S., making up a significant number of both current and soon-to-be homebuyers. According to a recent Fannie Mae <a href="https://fm.fanniemae.com/affordable/insights/future-homebuyers/index.html" title="survey" target="_blank" rel="noopener noreferrer">survey</a> of more than 2,000 of these individuals:
“88% said they are confident they will achieve homeownership someday.”
In addition, the survey also reveals that for younger generations, the motivation to own a home may be more emotional than financial compared to previous generations:
<50% say they want to use their home as an asset
78% believe it’s the best way to live the way they want, without restrictions
80% believe homeownership is the best way to make it on their own
Whether homeownership goals come from the heart or are driven by financial aspirations (or maybe both), the obstacles standing in the way don’t have to bring these dreams to a screeching halt. The same survey also reveals two key roadblocks for potential buyers. Thankfully, they’re both easily overcome with the power of knowledge and trusted advisors leading the way. Here’s a look at these two challenges potential homebuyers face today:
1. 73% of future homebuyers are unaware of low-down-payment mortgage options
For those who want to purchase a home, low-down-payment options are instrumental to affording one sooner rather than later, especially given the amount of debt many younger adults have accumulated. Fannie Mae also notes:
“Among the challenges they face is an unprecedented amount of debt, along with a lack of understanding of the mortgage process and their own purchasing power. Debt, in particular, creates many obstacles such as a limited ability to save and the fear of taking on more debt.”
Today, there are more than 2,340 down payment assistance <a href="https://www.mykcm.com/2020/10/27/how-down-payment-assistance-opens-the-door-to-homeownership/" title="programs">programs</a> available nationwide to help relieve this pressure. Understanding what’s out there and the options available may help many buyers become homeowners faster than they thought possible. In a year like this, with record-low mortgage <a href="https://www.mykcm.com/2020/11/19/will-mortgage-rates-remain-low-next-year/" title="rates">rates</a> making their mark in the history books, being able to take advantage of the opportunity buyers have right now is essential to long-term <a href="https://www.mykcm.com/2020/11/24/is-buying-a-home-today-a-good-financial-move/" title="affordability">affordability</a>.
2. 64% of buyers expect lenders and other real estate professionals to educate them about the mortgage process
While many people love to do a quick search online to find instant answers to their questions, it isn’t the only way younger generations want to consume information or build their knowledge base. As the survey mentions, having trusted professionals help them learn what it takes to achieve their dreams is definitely on their wish list too.
Bottom Line
If you’re aiming for homeownership someday, it may be in closer reach than you think. Let’s connect so you can learn about the process and get the guidance you need to make it happen.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-12-02T11:54:00-07:002020-12-02T16:47:14-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2622Homes Are More Affordable Right Now Than They Have Been in Years
Today, home prices are appreciating. When we hear prices are going up, it’s normal to think a home will cost more as the trend continues. The way the housing market is positioned today, however, low mortgage rates are actually making homes more affordable, even as prices rise. Here’s why.
According to the <a href="https://www.blackknightinc.com/black-knights-june-2020-mortgage-monitor/" title="Mortgage Monitor Report" target="_blank" rel="noopener noreferrer">Mortgage Monitor Report</a> from Black Knight:
“While home prices have risen for 97 consecutive months, July’s record-low mortgage rates have made purchasing the average-priced home the most affordable it’s been since 2016.”
How is that possible?
Black Knight continues to explain:
“As of mid-July, it required 19.8% of the median monthly income to make the mortgage payment on the average-priced home purchase, assuming a 20% down payment and a 30-year mortgage. That was more than 5% below the average of 25% from 1995-2003.
This means it currently requires a $1,071 monthly payment to purchase the average-priced home, which is down 6% from the same time last year, despite the average home increasing in value by more than $12,000 during that same time period.
In fact, buying power is now up 10% year-over-year, meaning the average home buyer can afford nearly $32,000 more home than they could at the same time last year, while keeping their monthly payment the same.”
This is great news for the many buyers who were unable to purchase last year, or earlier in the spring due to the slowdown from the pandemic. By waiting a little longer, they can now afford 10% more home than they could have a year ago while keeping their monthly mortgage payment unchanged.
With mortgage rates hitting all-time lows eight times <a href="https://www.mykcm.com/2020/08/11/current-buyer-seller-perks-in-the-housing-market/" title="this year">this year</a>, it’s now less expensive to borrow money, making homes significantly more affordable over the lifetime of your loan. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/what-the-historic-mortgage-rate-drop-means-for-affordability" title="shares" target="_blank" rel="noopener noreferrer">shares</a> what low mortgage rates mean for affordability:
“In July, house-buying power got a big boost as the 30-year, fixed mortgage rate made history by moving below three percent. That drop in the mortgage rate from 3.23 percent in May to 2.98 percent in July increased house-buying power by nearly $15,000.”
The map below shows the last time homes were this affordable by <a href="https://cdn.blackknightinc.com/wp-content/uploads/2020/07/BKI_MM_Jun2020_Report.pdf" title="state" target="_blank" rel="noopener noreferrer">state</a>:<a href="https://files.mykcm.com/2020/08/12112058/20200813-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-95135" src="https://files.mykcm.com/2020/08/12112058/20200813-MEM-Eng-1.jpg" alt="Homes Are More Affordable Right Now Than They Have Been in Years | MyKCM" width="600" height="450" /></a>In six states – Arkansas, Iowa, Kentucky, Louisiana, Maryland, and West Virginia – homes have not been this affordable in more than 25 years.
Bottom Line
If you’re thinking of making a move, now is a great time to take advantage of the affordability that comes with such low mortgage rates. Whether you’re thinking of purchasing your first home or moving into a new one and securing a significantly lower mortgage rate than you may have on your current house, let’s connect today to determine your next steps in the process.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-08-16T08:38:00-07:002020-08-16T07:40:19-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2613Current Buyer and Seller Perks In The Housing Market
Today’s <a href="https://www.mykcm.com/2020/08/03/experts-weigh-in-on-the-remarkable-strength-of-the-housing-market/" title="housing market">housing market</a> is making a truly impressive turnaround, and it’s also setting up some outstanding opportunities for buyers and sellers. Whether you’re thinking of buying or selling a home this year, there are perks today that are rarely available, and definitely worth looking into. Here are the top two.
The Biggest Perk for Buyers: Low Mortgage Rates
The most impressive buyer incentive today is the average mortgage interest rate. Just last week, mortgage rates hit an all-time low for the <a href="https://freddiemac.gcs-web.com/node/20476/pdf" title="eighth time this year" target="_blank" rel="noopener noreferrer">eighth time this year</a>. The 30-year fixed-rate is now averaging 2.88%, the lowest rate in the survey’s history, which dates back to 1971 (See graph below):<a href="https://files.mykcm.com/2020/08/06105150/20200810-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-95051" src="https://files.mykcm.com/2020/08/06105150/20200810-MEM-Eng-1.jpg" alt="Current Buyer & Seller Perks in the Housing Market | MyKCM" width="600" height="338" /></a>This is a huge advantage for buyers. To put it in perspective, it means that today you can get a lower rate than any of the past two generations of homebuyers in your family if you decide to purchase at this time.
In addition, the National Mortgage News <a href="https://www.nationalmortgagenews.com/news/us-housing-market-is-most-affordable-its-been-since-2016" title="notes" target="_blank" rel="noopener noreferrer">notes</a> how today’s buyers have increasing purchasing power due to these low mortgage rates:
“Purchasing power rose 10% year-over-year…With interest rates hitting record lows, buyers were able to afford $32,000 “more house” as of July 23 than they could the year before with the same monthly payment.”
This is a great perk for buyers who are hoping to potentially get more for their money in a home, something many are considering today as they re-evaluate the amount of <a href="https://www.mykcm.com/2020/07/30/will-we-see-a-surge-of-homebuyers-moving-to-the-suburbs/" title="space">space</a> they ideally need for their families. It is an opportunity not seen in 50 years, and one not to be missed if the time is right for you to buy a home.
The Biggest Perk for Sellers: Low Inventory
Today, there are simply not enough <a href="https://www.mykcm.com/2020/07/20/thinking-of-selling-your-house-now-may-be-the-right-time/" title="houses">houses</a> on the market for the number of buyers looking to purchase them. According to the National Association of Realtors (<a href="https://www.nar.realtor/newsroom/existing-home-sales-climb-record-20-7-in-june" title="NAR" target="_blank" rel="noopener noreferrer">NAR</a>):
“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million).”
The red bars in the graph below indicate that the inventory of homes coming into the market continues to decline. It was low as we entered the pandemic and has reduced even further this year. Houses today are selling faster than they’re being listed, and that’s creating an even greater supply shortage (See graph below): <a href="https://files.mykcm.com/2020/08/06105149/20200810-MEM-Eng-2.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-95050" src="https://files.mykcm.com/2020/08/06105149/20200810-MEM-Eng-2.jpg" alt="Current Buyer & Seller Perks in the Housing Market | MyKCM" width="600" height="338" /></a>The lack of inventory has been a challenging situation for a while now, and with low mortgage rates fueling buyer demand, inventory is even harder for buyers to find today. Buyers are eager to purchase, and because of the shortage of homes available, they’re encountering more <a href="https://www.mykcm.com/2020/07/13/buyers-are-you-ready-for-a-bidding-war/" title="bidding wars">bidding wars</a>. This is one of the factors keeping home prices strong, an advantage for sellers. Lawrence Yun, Chief Economist for NAR notes that this trend may continue, too:
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
With low inventory and high buyer demand, homeowners can potentially earn an increasing <a href="https://www.mykcm.com/2020/08/05/why-homeowners-have-great-selling-power-today/" title="profit">profit</a> on their houses and sell them quickly in this sizzling summer market.
Bottom Line
Whether you’re thinking about buying or selling at home, there are some key perks available right now. Let’s connect today to discuss how they may play to your advantage in our local market.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-08-11T11:59:00-07:002020-08-16T07:40:06-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2594Where Is The Real Estate Market Going?
America has faced its share of challenges in 2020. A once-in-a-lifetime pandemic, a financial crisis leaving millions still unemployed, and an upcoming presidential election that may prove to be one of the most contentious in our nation’s history all continue to test this country in unimaginable ways.
Even with all of that uncertainty, the residential real estate market continues to show great resilience. Here’s a look at what the experts have said about the housing market over the past few weeks.
<a href="https://www.zelmanassociates.com/" title="Ivy Zelman, CEO of Zelman & Associates" target="_blank" rel="noopener noreferrer">Ivy Zelman, CEO of Zelman & Associates</a>:
“Whether in terms of pending contract activity or our proprietary buyer demand ratings, the various measures of demand captured in this month’s survey can only be described as shockingly strong, in spite of the resurgence in COVID-19 cases.”
<a href="https://www.housingwire.com/articles/could-2020-somehow-see-year-over-year-growth-in-home-sales/" title="Logan Mohtashami, Lead Housing Analyst at HousingWire" target="_blank" rel="noopener noreferrer">Logan Mohtashami, Lead Housing Analyst at HousingWire</a>:
“Existing home sales are still down year over year by 11.3%, but as crazy as this might sound, we have a shot at getting positive year-over-year growth…We may see an existing home sales print of 5,510,000 in 2020.”
<a href="https://themreport.com/daily-dose/07-28-2020/home-price-increases-decelerate" title="Matthew Speakman, Zillow Economist" target="_blank" rel="noopener noreferrer">Matthew Speakman, Zillow Economist</a>:
“In a remarkable show of resilience, the housing market has stared the pandemic right in the eye and hasn’t blinked.”
<a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-q2-2020-u-s-home-sales-report/" title="Todd Teta, Chief Product Officer for ATTOM Data Solutions" target="_blank" rel="noopener noreferrer">Todd Teta, Chief Product Officer for ATTOM Data Solutions</a>:
“The housing market across the United States pulled something of a high-wire act in the second quarter, surging forward despite the encroaching economic headwinds resulting from the Coronavirus pandemic.”
<a href="https://www.realtor.com/news/trends/housing-market-rebounds/" title="Ali Wolf, Chief Economist of Meyers Research" target="_blank" rel="noopener noreferrer">Ali Wolf, Chief Economist of Meyers Research</a>:
“The housing recovery has been nothing short of remarkable. The expectation was that housing would be crushed. It was—for about two months—and then it came roaring back.”
<a href="https://www.realtor.com/news/trends/housing-market-rebounds/" title="Clare Trapasso, Senior News Editor of realtor.com" target="_blank" rel="noopener noreferrer">Clare Trapasso, Senior News Editor of realtor.com</a>:
“Despite the crippling and ongoing coronavirus pandemic, millions out of work, a recession, a national reckoning over systemic racism, and a highly contentious presidential election just around the corner, the residential real estate market is staging an astonishing rebound.”
<a href="https://themreport.com/daily-dose/07-28-2020/home-price-increases-decelerate" title="Bill Banfield, EVP of Capital Markets at Quicken Loans" target="_blank" rel="noopener noreferrer">Bill Banfield, EVP of Capital Markets at Quicken Loans</a>:
“The pandemic has not stopped the consistent home price growth we have witnessed in recent years.”
<a href="https://www.fanniemae.com/portal/research-insights/forecast/monthly/economic-developments/july-2020.html" title="Economic & Strategic Research Group at Fannie Mae" target="_blank" rel="noopener noreferrer">Economic & Strategic Research Group at Fannie Mae</a>:
“Recent home purchase measures have continued to show remarkable strength, leading us to revise upward our home sales forecast, particularly over the third quarter. Similarly, we bumped up our expectations for home price growth and purchase mortgage originations.”
<a href="https://www.forbes.com/sites/dimawilliams/2020/07/10/is-it-going-to-get-better-before-it-gets-worse-five-experts-share-predictions-for-the-us-housing-market-in-the-second-half-of-2020/#31b6529b7026" title="Mark Fleming, Chief Economist at First American" target="_blank" rel="noopener noreferrer">Mark Fleming, Chief Economist at First American</a>:
“It seems hard to deny that when one looks at many of the housing market statistics, a “V” shape is quite apparent.”
Bottom Line
The experts seem to agree that residential real estate is doing remarkably well. If you’re thinking of jumping into the housing market (whether buying or selling), this may be the perfect time.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-08-03T14:12:00-07:002020-08-03T13:15:56-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2586Home Sales Are Surging2020-07-31T09:51:00-07:002020-07-31T08:54:00-07:00Pat Rarytag:atlantarealestatebrokers.com,2012-09-20:2585Will We See A Surge Of Homebuyers Moving to the Suburbs?
As remote work continues on for many businesses and Americans weigh the risks of being in densely populated areas, will more people start to move out of bigger cities? Spending extra time at home and dreaming of more indoor and outdoor space is certainly sparking some interest among homebuyers. Early data shows an initial trend in this direction of moving from urban to suburban communities, but the question is: will the trend continue?
According to recent data from <a href="http://zillow.mediaroom.com/index.php?s=28775&item=137617" title="Zillow" target="_blank" rel="noopener noreferrer">Zillow</a>, there is a current surge in urban high-end listings in some larger metro areas. The month-over-month increase in these homes going on the market indicates more urban homeowners may be ready to make a move out of the city, particularly at the upper end of the market (See graph below):<a href="https://files.mykcm.com/2020/07/28074149/20200730-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img class="aligncenter wp-image-94959" src="https://files.mykcm.com/2020/07/28074149/20200730-MEM-Eng-1.jpg" alt="Will We See a Surge of Homebuyers Moving to the Suburbs? | MyKCM" width="600" height="450" /></a>
Why are people starting to move out of larger cities?
With the ongoing health crisis, it’s no surprise that many people are starting to consider this shift. A July survey from HomeLight <a href="https://3xlsey17pnzh3nf35w1wwnug-wpengine.netdna-ssl.com/wp-content/uploads/2020/06/real-estate-top-agent-insights-for-q2-2020.pdf" title="notes" target="_blank" rel="noopener noreferrer">notes</a> the top reasons people are actually moving today:
More interior space
Desire to own
Move from city to suburbs
More outdoor space
More space, proximity to fewer people, and a desire to own at a more affordable price point are highly desirable features in this new era, so the list makes sense.
John Burns Consulting <a href="https://www.realestateconsulting.com/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“The trend is accelerating faster than anyone could have predicted. The need for more space is driving suburban migration.”
In addition, Sheryl Palmer, CEO of Taylor Morrison, a home building company, <a href="https://www.cnbc.com/2020/07/13/homebuilders-just-saw-the-strongest-june-sales-since-the-last-housing-boom.html" title="indicates" target="_blank" rel="noopener noreferrer">indicates</a>:
“Most recently, we’re really seeing a pickup in folks saying they want more rural or suburban locations. Initially, there was a lot of talk about that, but it’s really coming through our buyers today.”
The National Association of Home Builders (NAHB) also <a href="http://nahbnow.com/2020/07/builder-confidence-rallies-to-pre-pandemic-level-in-july/" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“New home demand is improving in lower density markets, including small metro areas, rural markets and large metro exurbs, as people seek out larger homes and anticipate more flexibility for telework in the years ahead. Flight to the suburbs is real.”
Will the shift pick up speed and continue on?
The question remains, will this interest in suburban and rural living continue? Some, like Lawrence Yun, Chief Economist at the National Association of Realtors (NAR) think the possibility is there, but it is still quite early to tell for sure. Yun <a href="https://www.nar.realtor/newsroom/existing-home-sales-climb-record-20-7-in-june" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival…Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”
While much of the energy behind this trend has largely been accelerated by the current health crisis, monitoring the momentum over time is critically important. Businesses are discovering new and innovative ways to function in remote environments, so the shift has the potential to stick. Much like the economic recovery, however, the long-term impact may hinge largely on the health situation throughout this country.
Bottom Line
Early data is showing a shift from urban to suburban markets, but keeping an eye on this trend will help us understand how it will ultimately play out. It may just be a temporary swing in a new direction until Americans once again feel a sense of comfort in the cities they’ve grown to love.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. <a href="https://www.atlantarealestatebrokers.com/" title="Atlanta Real Estate Brokers" target="_blank">Atlanta Real Estate Brokers</a> will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
2020-07-31T09:04:00-07:002020-08-11T11:01:00-07:00Pat Rary