How’s the market?

So how is our nation’s real estate market doing these days? Check out this info from Keeping Current Matters for an update:

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There are some pundits lamenting the softness of the 2014 housing market. We can’t understand why. Though it is true that the early part of the year disappointed because of a myriad of reasons (ex. weather, lack of inventory, less distressed sales), the recent housing news is extremely encouraging. Let’s give some examples:

Spring’s Home Buying Season was Healthiest in 3 Years

Move, Inc. just last week revealed that this spring’s housing market finished stronger than any time in the last three years. In the report, Jonathan Smoke, chief economist for realtor.com explained:
“This is the first time, since the beginning of the recovery that we expect to see positive momentum throughout the second half of the year. While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum.”

Existing Home Sales are Up

In their latest Existing Home Sales Report, the National Association of Realtors (NAR) announced existing-home sales increased in July to their highest annual pace of the year. That is even though distressed property sales fell to 9%, the first time they were in the single-digits since NAR started tracking the category in October 2008. Lawrence Yun, chief economist for NAR explained:
“The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market. More people are buying homes compared to earlier in the year and this trend should continue.”

New Construction Surging

According to an article on Market Watch, new constructing is surging:
“Construction on new U.S. homes jumped 15.7% in July to the highest level in eight months and starts were revised up sharply for June, indicating a pickup in home building after an early-year lull. Housing starts climbed to an annual rate of 1.09 million last month…Economists surveyed by MarketWatch had expected starts to climb to a seasonally adjusted 975,000 in July.”

Foot Traffic at Year-High Numbers

Foot traffic (the number of people out actually physically looking at homes) has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.

The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market.

Bottom Line

The spring market finished stronger than any time in the last three years. Home sales are at year long highs. New construction is beating estimates. There are more buyers out than at any time in the last twelve months.

We think the housing market is doing just fine.

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Five Financial Reasons to Purchase a Home–According to Harvard

Happy Monday to You!

Here is some interesting info regarding the financial benefits of purchasing a home:

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Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. Last year, he released a paper on homeownership – The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You’re paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings.”

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

Homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially.

[Source: Keeping Current Matters, Joint Center for Housing Studies Harvard University]

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Home Appraisals Explained — Infographic

Hi there!

Have you ever wondered what exactly goes on in the appraisal process of a home?

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Check out today’s informative infographic. You’ll learn:

1. What an appraisal is.
2. What factors go into an appraisal.
3. What appraisers are specifically looking for.
4. How long it should take.
5. Things you can do to make a positive impact on the process.

Click the link below to read it! Have a great weekend!

The Art of Home Appraisals

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[Source: Lending Expert Blog]

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Agent wise!

Happy Wednesday!

When homeowners decide to sell their house, they want to A.) Get the best possible price and B.) Have as few hassles as possible. However, for the vast majority of sellers, the most important result is C.) To actually get the home sold.

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In order to accomplish all three of these goals, a seller should realize the importance of using a real estate professional.

Over the years, technology has changed purchasers’ behavior during the home buying process. According to the National Association of Realtors’ 2013 Profile of Home Buyers & Sellers, 92% of all buyers use the internet in their home search. However, the report also revealed that 96% percent of buyers who used the internet when searching for a home wound up purchasing one with the help of either a real estate agent/broker, builder or builder’s agent. Only 2% purchased their home directly from a seller they didn’t know.

The study concluded that buyers indeed search for a home online, but then depend on an agent to 1.) Find the actual home they will buy (52%), 2.) Help them handle the paperwork (24%) and 3.) Understand the process (24%).

It is true that the percentage of buyers using the internet to search for homes and information on the home buying process has increased dramatically over the last decade. However, the plethora of information now available has also resulted in an increase in the percentage of buyers who reach out to real estate professionals to “connect the dots.” (Back in 2001, only 69% of buyers used agents!)

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

[Sources: Keeping Current Matters, National Association of Realtors]

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Is your home older than its years?

Happy Friday All!

Click the link below for an article from HouseLogic giving you maintenance tips for keeping your home young:

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  • Is Your Home Older Than Its Years?

    Would you throw away $20,000? You are if you’re letting your home age faster than it should. Here’s a simple maintenance strategy to keep your home young. Read

Visit houselogic.com for more articles like this.

Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

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Millennials: How Many Actually Live with their Parents?

Hello!

Here is some interesting info from Keeping Current Matters regarding Millennials:

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Every day we are pleasantly surprised with the research coming forward regarding the Millennial generation. Whether it was the over-exaggeration of the student debt challenge, the misbelief that they are not yet ready to buy or the under-estimation of their actual home purchases, evidence is beginning to debunk the myths many have held about this generation and homeownership. Now, one more strongly held belief is being questioned.

Do Millennials live in their parents’ basements?

It seems not as many as once was reported. Our friends at Calculated Risk (CR) alerted us to a post by Derek Thompson in the Atlantic: The Misguided Freakout About Basement-Dwelling Millennials. The article explains that according to the Census Reports:

“It is important to note that the Current Population Survey counts students living in dormitories as living in their parents’ home.”

What?!? If you live in a college dorm, the census counts you as living with your parents. Thompson has some fun with this when he explains:

“When you were adjusting to your freshman roommate, you were ‘living with your parents’. When you snagged that sweet triple with your best friends in grad housing, you were ‘living with your parents’. That one time you launched butt-rattling bottle rockets at the stroke of midnight off your fraternity roof? I hope you didn’t make too much noise. After all, you were ‘living with your parents’.”

The data is “Criminally Misleading”

According to Thompson, the counting of those living in college dorms as living with their parents is “criminally misleading”. He explains that part of the increase in these numbers is actually attributed to the fact that more people are attending college:

“[T]he share of 25- to 29-year-olds with a bachelor degree has grown by almost 50 percent since the early 1980s. More than 84 percent of today’s 27-year-olds spend at least some time in college and now 40 percent have a bachelor’s or associate’s degree. More young people going to school means more young people living in dorms, which means more young people ‘living with their parents’, according to the weird Census.”

Thompson then goes on to reveal that:

“[T]he share of 18-to-24-year-olds living at home who aren’t in college has declined since 1986. But the share of college students living “at home” (i.e.: in dorms, often) has increased.

So the Millennials-living-in-our-parents meme is almost entirely a result of higher college attendance.” (emphasis added)

The Other Side of the Argument

However, Trulia’s chief economist Jed Kolko, doesn’t totally agree. In a post in response to the Thompson article, Kolko explains:

“The Current Population Survey’s (CPS) Annual Social and Economic Supplement (ASEC) counts college students who are living in dorms as living with their parents, and college enrollment has indeed gone up. But it does not follow that basement-dwelling millennials are a myth. The ASEC and other Census data show that after adjusting for college enrollment and for dormitory living, millennials were more likely to live with parents in 2012 and 2013 than at any other time for which a consistent data series is available.”

Bottom Line

There are more Millennials living with their parents than ever before. However, the numbers being quoted by some seem to be exaggerated.

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There’s an app for that?

Hi there! Today’s post is for the Apple iPhone, iPad and iPod users out there.

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Ever have trouble deciding on the perfect match for paint? Problem solved. Take a pic of anything you like and the ColorSnap app will find a Sherwin-Williams paint color that most closely matches it. In need of a surface level, plumb bob, ruler or more? Of course there’s an app for that! How about a way to know how much mulch or asphalt to buy? Yup, that too. Check out these cool home maintenance and home improvement apps brought to you by HouseLogic:

Visit houselogic.com for more articles like this.

Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

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Five reasons to sell your home now

Hello!

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Many sellers are still hesitant about putting their house up for sale. Where are prices headed? Where are interest rates headed? Can buyers qualify for a mortgage? These are all valid questions. However, there are several reasons to sell your home sooner rather than later. Here are five of those reasons:

1. Demand is Strong

There is currently a pent-up demand of purchasers as many homebuyers pushed off their search this past winter and early spring because of extreme weather. According to the National Association of Realtors (NAR), the number of buyers in the market, which peel off dramatically in December, January and February, has begun to increase again over the last few months. These buyers are ready, willing and able to buy–and are in the market right now!

2. There is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of negative equity situations. Homeowners are now seeing a return to positive equity as prices increased over the last eighteen months. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home, while only 21% prefer an existing home (38% had no preference).

The choices buyers have will continue to increase over the next few months. Don’t wait until all of this other inventory comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. As the market heats up, banks will be inundated with loan inquiries causing closing timelines to lengthen. Selling now will quicken and simplify the process.

4. There Will Never Be a Better Time to Move Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock in your 30-year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by the end of next year.

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

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take back control of the situation by putting your home on the market and pricing it so it sells. Perhaps, the time has come for you and your family to move on and start living the life you desire.

Things that make you go hmmm…

Have a great Monday!

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How much of a down payment do you really need?

Hello!

So you want to buy a house but don’t think you have enough money for a down payment? Think again! Let’s look at what you might actually need to have the home of your dreams.

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A recent survey by Zelman & Associates revealed that 38% of those between the ages of 25-29 years old and 42% of those between the ages of 30-34 years old believe that a minimum of 15% is required as a down payment to purchase a home. A recent questionnaire administered by Freddie Mac showed that over 50% of all respondents thought 20% was required as a down payment.

In actuality, a purchaser may be able to put down far less.

Freddie Mac, in a recent blog post addressing the issue, confirmed that there is misinformation regarding the amount necessary when determining the down payment for a home purchase:

“Did you know 40 percent of today’s homebuyers using mortgage financing are making down payments that are less than 10 percent? And how about this: since 2010, the number of people putting down less than 10 percent for conventional loans has grown three fold. So, not only are low down payment options real, they represent a significant portion of today’s purchases.”

In a separate Executive Perspectives, Christina Boyle, Freddie Mac’s VP and Head of Single-Family Sales & Relationship Management explained further:

A person “can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets).”
Qualified borrowers can further reduce the down payment coming out of their own pockets to 3 percent by lining up gifts from family or grants or loans from non-profits or public agencies.

Ms. Boyle goes on to explain:

“Letting more consumers know how down payments are determined could bring more qualified borrowers off the sidelines. Depending on their credit history and other factors, many borrowers can expect to make a down payment of about 5 or 10 percent.”

Bottom Line
If you are saving for either your first home or that perfect move-up dream house, make sure you know all your options. You may be pleasantly surprised.

(Sources: KCM, Freddie Mac)

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Appreciation of homes over the years

Hello! Quick post today.

Check out this infographic from Keeping Current Matters. It shows the average annual appreciation of homes from 1987 until now – as reported in the most recent Home Price Expectation Survey by Pulsenomics. (Click on the image to enlarge it.)

Appreciation-InfoGraphic

From 1987 – 1999, homes saw an average annual appreciation of 3.6%. From January 2000 – April 2007, average annual appreciation was at 7%. (That was the crazy time before the bubble burst.) Then when the housing market fell apart, we saw a depreciation of 5.2% from May 2007 – January 2012. Finally, as we began the slog to recovery, we saw an average annual appreciation of 5.2% from January 2012 until today.

1978 – 1999 = +3.6%
Jan 2000 – Apr 2007 = +7%
May 2007 – Jan 2012 = -5.2%
Jan 2012 – Today = +5.2%

If you look at the numbers, you will see that we indeed have come out of the housing crisis. While there are still people who are underwater and homes that are in foreclosure or short sale, for the most part, we have weathered the turbulent storm that affected our economy and so many people’s livelihoods. Hopefully we will continue on this healthy path as more people test the waters and try to sell or buy a home.

Have a great weekend!

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