Thursday, December 6, 2018

2008 vs. Now: Are Owners Using Their Homes as ATMs Again?

Are homeowners using their homes as ATM's again? This is an easy way to say are consumers taking out all the equity out of their homes or have they learned from the past?


Over the last six years, we have experienced strong price appreciation which has increased home equity levels dramatically. As the number of “cash-out” refinances begins to approach numbers last seen during the crash, some are afraid that we may be repeating last decade’s mistake.
However, a closer look at the numbers shows that homeowners are being much more responsible with their home equity this time around.

What happened then…

When real estate values began to surge last decade, people started using their homes as personal ATMs. Homeowners would refinance their houses and convert their equity into instant cash (known as “cash-out” refinances). Because homes were appreciating so rapidly, many homeowners tapped into their equity multiple times.
This left homeowners with little-or-no equity left in their homes, so when prices started to fall many homeowners found their houses in a negative equity situation (where the mortgage amount was greater than the value of the home). When some of these homeowners saw that there was no value left in their houses, they just stopped paying their mortgages altogether.

Banks eventually foreclosed on those homes and the foreclosures drove prices down even further and put more homes in the negative equity category. This cycle continued, leading to the worst housing crash in almost one hundred years.

What’s happening now…

Again, Americans are seeing their home equity grow. Today, over 48% of all single-family homes in the country have over 50% equity, and yes, some families are tapping into that equity. However, this time around, homeowners are not doing making irresponsible decisions. According to the latest information from Freddie Mac, the total equity being “cashed out” is a fraction of what it was leading up to the crash. Here are the numbers:
2008 vs. Now: Are Owners Using Their Homes as ATMs Again? | Keeping Current Matters

Wednesday, October 17, 2018

First Step in Buying a Home


Pre-Approval: Your 1st Step in Buying a Home

Pre-Approval: Your 1st Step in Buying a Home | Keeping Current MattersI
In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

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

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”
One of the many advantages of working with a local real estate professional like myself, is that we have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:
  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

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

Don't hesitate to give me a call with any questions at 661-510-5370

Thursday, April 26, 2018

First Time Home Buyer? Don't Miss Out On The Tax Credit!

Directly From My Lenders Mouth!


Mike Meena

Augusta Financial

661-290-2970

We have been touting a first-time buyer tax credit for over a year now that helps buyers qualify for loans and it also gives them a TAX CREDIT in addition to the normal tax write off.  The maximum loan amount in Los Angeles, Orange and Ventura Counties is $585,713.00 and it can be used on FHA, Conventional, VA and USDA loans.  A first-time buyer is defined as someone who has not owned a property in 3 years.  You would be eligible if your household income meets the following criteria:
  • LA County $108,120.00 for a 1-2 person household and you can earn up to $126,140.00 if you have a household of 3 or more people.
  • Orange County $125,160.00 for a 1-2 person household and you can earn up to $146,020.00 if you have a household of 3 or more people.
  • Ventura County $119,880.00 for a 1-2 person household and you can earn up to $139,860.00 if you have a household of 3 or more people.
  • call  for other county limits
Now to the good part!  A buyer that is buying a property for $470,000.00 with 3.5% down using FHA financing that meets the criteria above will get a mortgage credit of approximately $335.00 per month.  They will also get their usual write off in addition to the mortgage credit.  So this buyer will get to write off $16,000.00 instead of the usual $20,000.00 and the $4000.00 they don't write off will be a tax credit!  The other great thing about this is the $335.00 mortgage credit will reduce their debt-to-income ratios which will allow them to qualify easier! 

So if you have a first-time buyer and they are saying, "Oh no, my payment is too much," then you throw the following info at them:

$470,000.00 Purchase Price 3.5% down rate 4.375% (5.54APR) No Points
 

Principal and Interest           $2301.85
Property Taxes             $490.00
Homeowners Insurance         $90.00
Homeowners Association ???$0.00
PMI                         $326.56
Total Payment =  $3208.41


Here is how this breaks down in a nutshell: $3208.41 - $335.00 = $2873.41.  Just this little tax credit makes a 4.375% rate look like a 3.09% interest rate! 

YES the money is a straight TAX CREDIT!  Not a tax deduction!  A TAX CREDIT!  This will help a lot of buyers, that could not qualify before, qualify now!  The fee is $300.00 and it is the best deal running out there!  Please let me know if you have a first-time buyer that is struggling to qualify or crying about higher interest rates! 

Interest rates rose a little more over the last week.  The 30-year mortgage has had 101 months below 5% in the past 60+ years!  I hope these help you if you are shopping around:

  • 30-year fixed conventional 1st Mortgage with 20% down - 4.750% (4.813 APR). Loan amounts up to $453,100.00 = $2363.58
  • 15-year fixed conventional 1st Mortgage with 20% - 4.250% (4.352 APR). Loan amounts up to $453,100.00 = $3408.57
  • 5/1 ARM 1st Mortgage -  20% down - Fixed for 5 years and then becomes variable - 4.125% -  (4.276 APR) Loan amounts up to $453,100.00 = $2195.95
  • 7/1 ARM 1st Mortgage - 20% Fixed for 7 years and then becomes variable - 4.375% - (4.528 APR) Loan amounts up to $453,100.00 = $2262.26
  • 10/1 ARM 1st Mortgage - 20% Fixed for 10 years and then becomes variable - 4.375% - (4.528 APR) Loan amounts up to $453,100.00 = $2262.26
  • 30-year fixed 1st Mortgage FHA loan 3.50% down - 4.375% (5.539 APR). Loan amounts up to $453,100.00 = $2301.85 + $326.56 PMI = $2628.41
  • 30-year fixed 1st Mortgage VA loan 0% - 4.375% (4.318 APR). Loan amounts up to $453,100.00 = $2262.26
  • 30-year fixed 1st Mortgage Jumbo loan 20% down - 4.625% (4.639 APR). Loan amounts up to $3,000,000.00 = $15,424.19
All of the above are based on a 740 credit score.  Rates are subject to change without notice.

If you have any questions, don't hesitate to contact me directly at 661-510-5370 or call Mike Meena at 661-290-2970.

Monday, April 23, 2018

Getting Pre-Approved For A LoanShould Always Be Your First Step

Getting Pre-Approved Should Always Be Your First Step | Keeping Current MattersIn many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

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

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

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

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

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

Capacity: Your current and future ability to make your payments
Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
Collateral: The home, or type of home, that you would like to purchase
Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line
Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so. Call me today and let's sit down and discuss your options, Wendy Gundry 661-702-4767.

'Servicing Your Real Estate Needs At A Higher Level'

Monday, April 9, 2018

You Can Save for a Down Payment Faster Than You Think!

You Can Save for a Down Payment Faster Than You Think! | Keeping Current MattersSaving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long it would take to save for a down payment in each state.
Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

By determining the percentage of income spent renting in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

According to the data, residents in Ohio can save for a down payment the quickest in just under 3 years (2.44). Below is a map that was created using the data for each state:
You Can Save for a Down Payment Faster Than You Think! | Keeping Current Matters

What if you only needed to save 3%?

What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3%-down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes possible in a year or two in many states as shown on the map below.
You Can Save for a Down Payment Faster Than You Think! | Keeping Current Matters

'Serving your real estate needs at a higher level'
661-702-4767

Be Thankful You Don't Have to Pay Your Parents' Interest Rate!


Be Thankful You Don̢۪t Have to Pay Your Parents̢۪ Interest Rate! | Keeping Current Matters


Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability. In the first quarter of 2018, rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.

The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home. Don’t let the prediction that rates will increase stop you from purchasing your dream home this year.


Let’s take a look at a historical view of interest rates over the last 45 years.


Be Thankful You Don̢۪t Have to Pay Your Parents̢۪ Interest Rate! | Keeping Current Matters

With the above graph I think we should be thankful that we can still get a better interest rate than your mom or dad when they purchased a home, a lower rate than your grandparents did 40 years ago, and a better interest rate than your brother or sister 10 years ago.

If you are interested in making a move contact me today!

'Servicing your real estate needs at a higher level'
661-702-4767

Monday, March 26, 2018

Is a Major Home Renovation Worth It In the Long Run?


Is a Major Home Renovation Worth It in the Long Run? | Keeping Current Matters

Let’s say you have a 4-bedroom colonial style home in a great school district. The neighborhood is amazing, and you are very comfortable there, but your kids are all grown up and the original benefits of the home no longer apply.

You’ve always wanted a huge master suite and are considering merging 3 of the smaller bedrooms on the second floor to achieve this dream.

In the short term, you are over the moon excited about your newly renovated oasis.

In the long term, when you go to sell your home down the road, you’ve now taken a 4-bedroom home in a great school district and turned it into a 2-bedroom home. Your pool of potential buyers has shrunk significantly and so has the value of your home (unless you are able to find someone who has the exact needs you have today!).

Why not consider listing your 4-bedroom home now and moving into a gorgeous 2-bedroom with a master suite? 

Your house can become a home for the next family looking for that perfect neighborhood with a great school district to raise their kids in!

You may even be able to achieve your dream in the same area you love, without having to give up your favorite restaurants and grocery stores.

Bottom Line

If you are debating a major renovation that would change the layout of your home, before you pick up that sledgehammer, meet with a local real estate professional who can show you the available listings in your area that might meet your needs today! Wendy Gundry. 660-702-4767

2 Ways to Get the Most Money from The Sale of Your Home


2 Ways to Get the Most Money from The Sale of Your Home | Keeping Current Matters

2 Ways to Get the Most Money from The Sale of Your Home

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?
Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW

This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
2 Ways to Get the Most Money from The Sale of Your Home | Keeping Current Matters
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.
Realtor.com gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
A study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”
The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house. If you have any questions give me a call, 661-702-4767.

Monday, March 19, 2018

Do You Save Money By Renting?


Is Now a Good Time to Rent? | Keeping Current Matters

Is Now a Good Time to Rent?


People often ask if now is a good time to buy a home, but nobody ever asks when it’s a good time to rent. Regardless, we want to make certain that everyone understands that today is NOT a good time to rent.
The Census Bureau recently released their 2017 fourth quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

Is Now a Good Time to Rent? | Keeping Current Matters

As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.

Bottom Line

One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, meet with a local real estate professional who can help determine if you are able to today!

Click here and search homes for sale: https://rem.ax/2FCLj2O
Get value of your current home: https://rem.ax/2txP6cQ


The Difference 5 Years Makes in Home Prices

The economists at CoreLogic recently released a special report entitled, Evaluating the Housing Market Since the Great Recession. The goal of the report was to look at economic recovery since the Great Recession of December 2007 through June 2009.
One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from December 2012 to December 2017 to show how prices over the last five years have fared.
Frank Nothaft, Chief Economist at CoreLogic, commented on the importance of breaking out the data by state,
“Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011. After finally reaching bottom in 2011, home prices began a slow rise back to where we are now.
Greater demand and lower supply – as well as booming job markets – have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”
The map below was created to show the 5-year appreciation from December 2012 – December 2017 by state.
Home Prices: The Difference 5 Years Makes | Keeping Current Matters
Nationally, the cumulative appreciation over the five-year period was 37.4%, with a high of 66% in Nevada, and a modest increase of 5% in Connecticut.

Where were prices expected to go?

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).
According to the December 2012 survey results, national homes prices were projected to increase cumulatively by 23.1% by December 2017. The bulls of the group predicted home prices to rise by 33.6%, while the more cautious bears predicted an appreciation of 11.2%.

Where are prices headed in the next 5 years?

Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%.

Bottom Line

Every day, thousands of homeowners regain positive equity in their homes. Some homeowners are now experiencing values even higher than before the Great Recession. If you’re wondering if you have enough equity to sell your house and move on to your dream home, contact a local real estate professional who can help!


Click here and search homes for sale: https://rem.ax/2FCLj2O
Get value of your current home: https://rem.ax/2txP6cQ

7 Factors To Consider When Choosing A Home To Retire In

7 Factors to Consider When Choosing A Home to Retire In | Keeping Current Matters

As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.
According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.
1. Affordability
2. Equity
3. Maintenance
4. Security
5. Pets
6. Mobility
7. Convenience
Bottom Line
“It may be easy enough to purchase your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.
Would moving to a complex with homeowner association fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?
“If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”
The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $14,000 in equity last year.
“As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”
As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind of not having to do the maintenance work yourself?
“Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”
As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.
“Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”
Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or in a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?
“No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”
Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Installing handrails and making sure your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.
“Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”
How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, contact me today and let's meet to discuss your options. Wendy Gundry, 661-702-4767

Click here and search homes for sale: https://rem.ax/2FCLj2O
Get value of your current home: https://rem.ax/2txP6cQ

Monday, February 26, 2018

What do Higher Interest Rates Mean?


So the big question of the day is, "What is going to happen with interest rates and will this affect the market?"  I think that is a great question and I am going to do my best to answer it.  When rates jump up the first thing people want to do is run!  They are not sure whether to run and buy a house or wait and see if the market will crash and burn and they can pick up some pieces at bargain prices.  Keep in mind that the Real Estate market is not the stock market and prices don't just fall in one day and interest rates at these levels don't affect everyone the same.  The difference in payment in the .50% that we have increased since December is $29.00 a month for every $100,000.00 borrowed.  That may seem like a lot, but if you have a family of 4 that is Starbucks for 1 morning.  Low interest rates have pushed the Real Estate market for years, but that is almost over!  Inventory is still very low in most areas and there is a standing inventory of 1.75-2.5 months in most areas of Los Angeles.  This is significant because you would need inventory to be at 3.5 times what is in escrow to start to see major price reductions.  
They even asked about Earthquakes and what happens to prices after an earthquake?  My answer was simple, last time we had an earthquake with any damage, I sold a house 2 days later because it had no damage and then people waited to see what they would get from FEMA or the SBA and eventually we saw some foreclosures of damaged houses, but for the most part inventory shrunk and the market slowed while people were fixing their houses up.  The market was slow in 1994 anyway and it started to jump again in 1998.  Did we see 50% price reductions?  NO!  We saw the market slowly decrease in value over a period of a few years, but this started before the earthquake and was part of that cycle.  By 1998 prices were rising again and we hit all-time highs again in 1999 or 2000.  I explained if they want to wait out the market then it could be 10-15 years to find a dip or it could be 3-5 years, but I don't see it happening this year.  Trying to time the market is not easy!  Trying to wait for a dip in the market and rent until then is absolutely insane, because the odds are that this could be the best time for you to ever buy a house going forward.  I could be wrong, but I think I am right!

Interest rates are holding for now!  They are still at the highest levels in over a year, but rates are still great!  I hope these are helpful as your buyers are looking for property:
  • 30-year fixed conventional 1st Mortgage with 20% down - 4.500% (4.558 APR). Loan amounts up to $453,100.00 = $2295.79
  • 15-year fixed conventional 1st Mortgage with 20% - 4.000% (4.101 APR). Loan amounts up to $453,100.00 = $3351.53
  • 5/1 ARM 1st Mortgage -  20% down - Fixed for 5 years and then becomes variable - 3.875% -  (4.005 APR) Loan amounts up to $453,100.00 = $2130.64
  • 7/1 ARM 1st Mortgage - 20% Fixed for 7 years and then becomes variable - 4.000% - (4.131 APR) Loan amounts up to $453,100.00 = $2130.64
  • 10/1 ARM 1st Mortgage - 20% Fixed for 10 years and then becomes variable - 4.000% - (4.131 APR) Loan amounts up to $453,100.00 = $2130.64
  • 30-year fixed 1st Mortgage FHA loan 3.50% down - 4.250% (5.469 APR). Loan amounts up to $453,100.00 = $2267.99 + $326.56 PMI = $2594.55
  • 30-year fixed 1st Mortgage VA loan 0% - 4.250% (4.307 APR). Loan amounts up to $453,100.00 = $2228.98
  • 30-year fixed 1st Mortgage Jumbo loan 20% down - 4.625% (4.639 APR). Loan amounts up to $3,000,000.00 = $15,424.19
All of the above are based on a 740 credit score.  Rates are subject to change without notice, your mileage may vary! 

80% of Renters Believe Homeownership is a Part of Their American Dream


80% of Renters Believe Homeownership is a Part of Their American Dream | Keeping Current Matters

According to the latest Aspiring Home Buyers Profile by the National Association of Realtors (NAR), 82% of surveyed renters desire to own a home in the future, with 80% believing homeownership is a big part of achieving their American Dream.
The profile went on to state that 50% of millennials believe that their rent will increase, with 20% believing that an increase in rent will be the catalyst that pushes them to consider buying a home vs. renewing their lease.

So, what is holding renters back?

80% of Renters Believe Homeownership is a Part of Their American Dream | Keeping Current Matters

What would make renters take the plunge?

80% of Renters Believe Homeownership is a Part of Their American Dream | Keeping Current Matters
NAR’s Chief Economist, Lawrence Yun believes that,
“Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher.”
Yun goes on to warn that,
“However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”

Bottom Line

If you are one of the many homeowners whose houses no longer fit their needs and are looking to move up to your dream home, now is a great time to list your starter home! First-time buyers are out in force looking to achieve their American Dream.

Latest NAR Data Shows Now Is a Great Time to Sell!


Latest NAR Data Shows Now Is a Great Time to Sell! | Keeping Current Matters

We all realize that the best time to sell anything is when demand for that item is high, and the supply of that item is limited. Two major reports released by the National Association of Realtors (NAR) revealed information that suggests that now is a great time to sell your house.
Let’s look at the data covered in the latest REALTORS® Confidence Index and Existing Home Sales Report.

REALTORS® CONFIDENCE INDEX

Every month, NAR surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions.” This month, the index showed (again) that homebuying demand continued to outpace the supply of homes available in January.
The map below illustrates buyer demand broken down by state (the darker your state, the stronger demand there is).
Latest NAR Data Shows Now Is a Great Time to Sell! | Keeping Current Matters
In addition to revealing high demand, the index also shows that compared to conditions in the same month last year, seller traffic conditions were ‘weak’ in 22 states, ‘stable’ in 25 states, and ‘strong’ in only 4 states (Alaska, Nevada, North Dakota & Utah).
Takeaway: Demand for housing continues to be strong but supply is struggling to keep up, and this trend is likely to continue throughout 2018.

THE EXISTING HOME SALES REPORT

The most important data revealed in the report was not sales but was instead the inventory of homes for sale (supply). The report explained:
  • Total housing inventory rose 4.1% from December to 1.52 million homes available for sale.
  • Unsold inventory is 9.5% lower than a year ago, marking the 32nd consecutive month with year-over-year declines.
  • This represents a 3.4-month supply at the current sales pace.
According to Lawrence Yun, Chief Economist at NAR:
“Another month of solid price gains underlines this ongoing trend of strong demand and weak supply. The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability.”
In real estate, there is a guideline that often applies; when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values.
As we mentioned before, there is currently a 3.4-month supply, and houses are going under contract fast. The Existing Home Sales Report shows that 43% of properties were on the market for less than a month when sold.
In January, properties sold nationally were typically on the market for 42 days. As Yun notes, this will continue unless more listings come to the market.
“While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market and supply will ‘fail to catch up with demand’ if a ‘sizable’ supply does not enter the market.

Thursday, February 15, 2018

Calm Down! The Real Estate Market is NOT Falling Apart


Calm Down! The Real Estate Market is NOT Falling Apart | Keeping Current Matters

Calm Down! The Real Estate Market is NOT Falling Apart

There has been tremendous volatility in certain markets over the last few weeks (for example, the stock and currency markets). When this happens, some tend to lump all of their investments together and create an almost ‘Armageddon’ scenario where everything loses value quickly and dramatically. Real estate is an investment that can get caught up in this hysteria. Does the concern about the current housing market have merit?
Financial advisors have been warning us for months that the stock market was ripe for a “correction.”
Experts have been questioning the value of alternative currencies for over a year.
In contrast, here are the opinions of three major players in the residential housing market:

Ralph DeFranco, Chief Economist, Arch Capital Services Inc.

“It’s premature to worry about a housing bubble. The typical warning signs – excessive debt levels, poor quality loans, exponentially increasing home prices, rising vacancy rates and/or poor affordability compared to the past, and a high number of internet searches on house flipping – are not present.”

Liu-Down, Genworth Chief Economist

“My thoughts on many recent discussions of ‘housing bubble’ – the bar for a housing bubble is higher than just prices being above some fundamental value. There must be widespread behavior change as well such as higher levels of fraud and speculation.”

Fitch Report

“US home prices are on track for a 5% nominal gain for the 4th consecutive year, returning national prices to their highest level since 2007. The growth has been driven by historically low mortgage rates and unemployment plus solid population and personal income growth rates…a meaningful correction should only be triggered by an unexpected economic shock.”

Bottom Line

Speculation has driven certain markets over the last year. However, it has not been speculation, but instead people’s desire for homeownership, that has driven the real estate market. If you are considering a move in the near future don't hesitate to contact me directly for a free discussion on buying or selling, 661-510-5370.

Monday, January 8, 2018

712,000 Homes in the US Regained Equity in the Past 12 Months!

CoreLogic’s latest Equity Report revealed that “over the past 12 months, 712,000 borrowers moved into positive equity.” This is great news, as the share of homeowners with negative equity (those who owe more than their home is worth), has dropped more than 20% since the peak in Q4 of 2009 (26%) to 4.9% today.
The report also revealed:
  • The average homeowner gained approximately $14,900 in equity during the past year.
  • Compared to Q3 2016, negative equity decreased 22% from 3.2 million homes, or 6.3% of all mortgaged properties.
  • U.S. homeowners with mortgages (roughly 63% of all homeownershave seen their equity increase by a total of $870.6 billion since Q3 2016, an increase of 11.8%, year-over-year.
The map below shows the percentage of homes by state with a mortgage and positive equity. (The states in gray have insufficient data to report.)
712,000 Homes in the US Regained Equity in the Past 12 Months! | Keeping Current Matters
Significant Equity Is on The Rise
Frank Nothaft, Chief Economist at CoreLogic, believes this is great news for the “housing market.” He went on to say:
“Homeowner equity increased by almost $871 billion over the last 12 months, the largest increase in more than three years. This increase is primarily a reflection of rising home prices, which drives up home values, leading to an increase in home equity positions and supporting consumer spending.”
Of the 95.1% of homeowners with positive equity in the U.S., 82.9% have significant equity (defined as more than 20%). This means that more than three out of four homeowners with a mortgage could use the equity in their current home to purchase a new home now.
The map below shows the percentage of homes by state with a mortgage and significant equity.
712,000 Homes in the US Regained Equity in the Past 12 Months! | Keeping Current Matters


Bottom Line

This is exciting news! If you are one of the many homeowners who are unsure of how much equity you have in your home and are curious about your ability to move, call me today and let's meet to discuss the amount of equity in your home!