The Jersey Shore Real Estate BlogRecently posted or modified blog postshttps://www.murphyleegroup.com/blog/Copyright MurphyLeeGroup.com2024-02-16T14:00:59-07:00tag:murphyleegroup.com,2012-09-20:14877Summer Rental
<a href="http://realtimerental.com/p.asp?mp=1408B1443o0OL~153140" target="iframe_a">Try this</a>2024-02-16T13:59:45-07:002024-02-16T14:00:59-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:14811Why Pre-Approval Is Even More Important This Year<img src="https://assets.site-static.com/userfiles/1482/image/20240207-Why-Pre-Approval-Is-Even-More-Important-This-Year.jpg" width="750" style="font-size: 17px;" height="410" />
On the road to becoming a <a href="https://www.simplifyingthemarket.com/en/2023/12/08/your-homebuying-adventure-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">homeowner</a>? If so, you may have heard the <a href="https://www.simplifyingthemarket.com/en/2024/01/19/key-terms-every-homebuyer-should-learn-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">term</a> pre-approval get tossed around. Let’s break down what it is and why it’s important if you’re looking to <a href="https://www.simplifyingthemarket.com/en/2024/01/03/thinking-about-buying-a-home-ask-yourself-these-questions/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">buy a home</a> in 2024.
What Pre-Approval Is
As part of the <a href="https://www.simplifyingthemarket.com/en/2024/01/10/avoid-these-common-mistakes-after-applying-for-a-mortgage/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">homebuying process</a>, your lender will look at your finances to figure out what they’re willing to loan you. According to <a href="https://www.investopedia.com/financial-edge/0411/5-things-you-need-to-be-pre-approved-for-a-mortgage.aspx" rel="noopener noreferrer" target="_blank">Investopedia</a>, this includes things like your W-2, tax returns, <a href="https://www.simplifyingthemarket.com/en/2023/12/26/get-ready-to-buy-a-home-by-improving-your-credit-score/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">credit score</a>, bank statements, and more.
From there, they’ll give you a pre-approval letter to help you understand how much money you can borrow. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/how-do-i-get-pre-approved-mortgage" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”
Now, that last piece is especially important. While <a href="https://www.simplifyingthemarket.com/en/2024/01/18/3-key-factors-affecting-home-affordability/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">home affordability</a> is getting better, it’s still tight. So, getting a good idea of what you can borrow can help you really wrap your head around the financial side of things. It doesn’t mean you should borrow the full amount. It just tells you what you can borrow from that lender.
This sets you up to make an informed decision about your numbers. That way you’re able to tailor your <a href="https://www.simplifyingthemarket.com/en/2023/12/11/the-perfect-home-could-be-the-one-you-perfect-after-buying/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">home search</a> to what you’re actually comfortable with budget-wise and can act fast when you find a home you love.
Why Pre-Approval Is So Important in 2024
If you want to buy a home this year, there’s another reason you’re going to want to be sure you’re working with a trusted lender to make this a priority.
While <a href="https://www.simplifyingthemarket.com/en/2024/01/24/are-more-homeowners-selling-as-mortgage-rates-come-down/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">more homes</a> are being listed for sale, the overall number of available homes is still below the norm. At the same time, the recent downward trend in <a href="https://www.simplifyingthemarket.com/en/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">mortgage rates</a> compared to last year is bringing more buyers back into the market. That imbalance of more demand than supply creates a bit of a tug-of-war for you.
It means you’ll likely find you have more competition from other buyers as more and more people who were sitting on the sidelines when mortgage rates were higher decide to jump back in. But pre-approval can help with that too.
Pre-approval shows sellers you mean business because you’ve already undergone a credit and financial check. As Greg McBride, Chief Financial Analyst at Bankrate, <a href="https://www.bankrate.com/mortgages/preapproved-vs-prequalified/#preapproval" rel="noopener noreferrer" target="_blank">says</a>:
“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”
Sellers love that because that makes it more likely the sale will move forward without unexpected delays or issues. And if you may be competing with another buyer to land your dream home, why wouldn’t you do this to help stack the deck in your favor?
Bottom Line
If you’re looking to buy a home in 2024, know that getting pre-approved is going to be a key piece of the puzzle. With lower mortgage rates bringing more buyers back into the market, this can help you make a strong offer that stands out from the crowd.2024-02-08T10:31:22-07:002024-02-08T11:20:01-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:14744Foreclosure Activity Is Still Lower than the Norm<img src="https://assets.site-static.com/userfiles/1482/image/20240131-Foreclosure-Activity-Is-Still-Lower-than-the-Norm.jpg" width="750" height="410" style="font-size: 17px;" />
Have you seen headlines talking about the increase in foreclosures in today’s <a href="https://www.simplifyingthemarket.com/en/2023/12/19/expert-quotes-on-the-2024-housing-market-forecast/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">housing market</a>? If so, they may leave you feeling a bit uneasy about <a href="https://www.simplifyingthemarket.com/en/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">what’s ahead</a>. But remember, these clickbait titles don’t always give you the full story.
The truth is, if you compare the current numbers with what usually happens in the market, you’ll see there’s no need to worry.
Putting the Headlines into Perspective
The increase the media is calling attention to is misleading. That’s because they’re only comparing the most recent numbers to a time where foreclosures were at historic lows. And that’s making it sound like a bigger deal than it is.
In 2020 and 2021, the moratorium and forbearance program helped millions of homeowners stay in their homes, allowing them to get back on their feet during a very challenging period.
When the moratorium came to an end, there was an expected rise in foreclosures. But just because foreclosures are up doesn’t mean the <a href="https://www.simplifyingthemarket.com/en/2023/11/29/why-the-economy-wont-tank-the-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">housing market</a> is in trouble.
Historical Data Shows There Isn’t a Wave of Foreclosures
Instead of comparing today’s numbers with the last few abnormal years, it’s better to compare to long-term trends – specifically to the housing crash – since that’s what people worry may happen again.
Take a look at the graph below. It uses foreclosure <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-2023-year-end-u-s-foreclosure-market-report/" rel="noopener noreferrer" target="_blank">data</a> from ATTOM, a property data provider, to show foreclosure activity has been consistently lower (shown in orange) since the crash in 2008 (shown in Cabernet):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240130/20240131-us-forclosure-activity-increases-from-2022-but-still-below-pre-pandemic-levels.png" rel="noopener noreferrer" target="_blank"><img src="https://assets.site-static.com/userfiles/1482/image/20240131-us-forclosure-activity-increases-from-2022-but-still-below-pre-pandemic-levels.jpg" width="960" height="720" /></a>
So, while foreclosure filings are up in the latest report, it’s clear this is nothing like it was back then.
In fact, we’re not even back at the levels we’d see in more normal years, like 2019. As Rick Sharga, Founder and CEO of the CJ Patrick Company, <a href="https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/" rel="noopener noreferrer" target="_blank">explains</a>:
“Foreclosure activity is still only at about 60% of pre-pandemic levels. . .”
That’s largely because buyers today are more qualified and less likely to default on their loans. Delinquency rates are still low and most homeowners have <a href="https://www.simplifyingthemarket.com/en/2024/01/09/ways-your-home-equity-can-help-you-reach-your-goals/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">enough equity</a> to keep them from going into foreclosure. As Molly Boesel, Principal Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/loan-performance-insights-january-2024/" rel="noopener noreferrer" target="_blank">says</a>:
“U.S. mortgage delinquency rates remained healthy in October, with the overall delinquency rate unchanged from a year earlier and the serious delinquency rate remaining at a historic low… borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans.”
The reality is, while increasing, the data shows a foreclosure crisis is not where the market is today, or where it’s headed.
Bottom Line
Even though the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst. If you have questions about what you’re hearing or reading about the housing market, let’s connect.2024-01-31T12:42:11-07:002024-01-31T12:51:15-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:146453 Key Factors Affecting Home Affordability<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240116/202401183-Key-Factors-Affecting-Home-Affordability.png" width="960" style="font-size: 17px;" />
Over the past year, a lot of people have been talking about <a href="https://www.simplifyingthemarket.com/en/2023/12/28/what-you-need-to-know-about-saving-for-a-home-in-2024/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">housing affordability</a> and how tight it’s gotten. But just recently, there’s been a little bit of relief on that front. Mortgage rates have gone down since their most recent peak in October. But there’s more to being able to <a href="https://www.simplifyingthemarket.com/en/2023/12/26/get-ready-to-buy-a-home-by-improving-your-credit-score/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">afford a home</a> than just mortgage rates.
To really understand home affordability, you need to look at the combination of three important factors: mortgage rates, home prices, and wages. Let’s dive into the latest data on each one to see why affordability is improving.
1. Mortgage Rates
<a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">Mortgage rates</a> have come down in recent months. And looking forward, most experts expect them to <a href="https://www.simplifyingthemarket.com/en/2023/12/20/why-mortgage-rates-could-continue-to-decline/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">decline further</a> over the course of the year. Jiayi Xu, an economist at Realtor.com, <a href="https://www.cnn.com/2024/01/11/economy/mortgage-rates-climb-for-the-second-week-in-a-row/index.html" rel="noopener noreferrer" target="_blank">explains</a>:
“While there could be some fluctuations in the path forward … the general expectation is that mortgage rates will continue to trend downward, as long as the economy continues to see progress on inflation.”
And even a small change in mortgage rates can have a big impact on your <a href="https://www.simplifyingthemarket.com/en/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">purchasing power</a>, making it easier for you to afford the home you want by reducing your monthly mortgage payment.
2. Home Prices
The second important factor is home prices. After going up at a relatively normal pace last year, they’re expected to continue rising moderately in 2024. That’s because even with inventory projected to grow slightly this year, there still aren’t enough homes for sale for all the people who want to buy them. <a href="https://brightmls.com/article/2024-national-housing-market-outlook" rel="noopener noreferrer" target="_blank">According</a> to Lisa Sturtevant, Chief Economist at Bright MLS:
“More inventory will be generally offset by more buyers in the market. As a result, it is expected that, overall, the median home price in the U.S. will grow modestly . . .”
That’s great news for you because it means prices aren’t likely to skyrocket like they did during the pandemic. But it also means it’ll probably cost you more to wait. So, if you’re ready, willing, and able to buy, and you can find the right home, purchasing before more buyers enter the market and prices rise further might be in your best interest.
3. Wages
Another positive factor in affordability right now is rising income. The graph below uses <a href="https://fred.stlouisfed.org/series/CES0500000017" rel="noopener noreferrer" target="_blank">data</a> from the Federal Reserve to show how wages have grown over time:
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240116/20240118-Wages-Climbing-at-a-faster-pace.png" rel="noopener noreferrer" target="_blank"><img src="https://assets.site-static.com/userfiles/1482/image/20240118-Wages-Climbing-at-a-faster-pace.jpg" width="960" height="720" /></a>
If you look at the blue dotted trendline, you can see the rate at which wages typically rise. But on the right side of the graph, wages are above the trend line today, meaning they’re going up at a higher rate than normal.
Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage. That’s because you don’t have to put as much of your paycheck toward your monthly housing cost.
What This Means for You
<a href="https://www.simplifyingthemarket.com/en/2024/01/01/3-keys-to-hitting-your-homeownership-goals-in-2024/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">Home affordability</a> depends on three things: mortgage rates, home prices, and wages. The good news is, they’re moving in a positive direction for <a href="https://www.simplifyingthemarket.com/en/2024/01/10/avoid-these-common-mistakes-after-applying-for-a-mortgage/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">buyers</a> overall.
Bottom Line
If you're thinking about <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">buying a home</a>, it's important to know the main factors impacting affordability are improving. To get the latest updates on each, let's connect.2024-01-21T13:16:29-07:002024-01-21T13:26:10-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:14098Reasons To Sell Your House Before the New Year<img src="https://files.keepingcurrentmatters.com/content/images/20231106/Reasons-To-Sell-Your-House-Before-the-New-Year.png" width="600" style="font-size: 17px;" />
As the year winds down, you may have decided it's time to make a move and put your house on the market. But should you sell now or wait until January? While it may be tempting to hold off until after the holidays, here are three reasons to make your move before the new year.
Get One Step Ahead of Other Sellers
Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and sometimes deprioritize selling their house until the start of the new year when their schedules and social calendars calm down. But that gives you an opportunity to get one step ahead.
Selling now, while other homeowners may hold off until after the holidays, can help you get a leg up on your competition. Start the process with a <a href="https://www.simplifyingthemarket.com/en/2023/08/23/why-you-need-a-true-expert-in-todays-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">real estate agent</a> today so you can get your house on the market before your neighbors do.
Get Your House in Front of Eager Buyers
Even though the supply of <a href="https://www.simplifyingthemarket.com/en/2023/09/29/explaining-todays-low-housing-supply-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">homes for sale</a> did grow compared to last year, it’s still low. That means there aren’t enough homes on the market today. While some buyers may also delay their plans to move until January, others will still need to move for <a href="https://www.simplifyingthemarket.com/en/2023/10/18/what-are-the-real-reasons-you-want-to-move-right-now/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">personal reasons</a> or because something in their life has changed.
Those buyers are still going to be active later this year and will be seriously motivated to make their move happen because they need to. Unfortunately, the challenge they'll face is a shortage of available inventory to meet their needs. A recent article from Investopedia <a href="https://www.investopedia.com/articles/personal-finance/102615/why-holidays-are-good-time-sell-your-house.asp" rel="noopener noreferrer" target="_blank">says</a>:
“. . . if your house is up for sale in the winter and someone is looking at it, chances are that person is serious and ready to buy. Anyone shopping for a new home between Thanksgiving and New Year’s is likely going to be a serious buyer. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sale.”
Use Your Equity To Fuel Your Move
Keep in mind that homeowners today have record amounts of <a href="https://www.simplifyingthemarket.com/en/2023/09/01/homeowners-have-a-lot-of-equity-right-now-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">equity</a>. According to <a href="https://www.corelogic.com/press-releases/home-equity-increases-winter-spring-reducing-underwater-properties-q2/" rel="noopener noreferrer" target="_blank">CoreLogic</a>, the average amount of equity per mortgage holder has climbed to almost $290,000. That means the <a href="https://www.simplifyingthemarket.com/en/2023/09/19/your-home-equity-can-offset-affordability-challenges/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">equity</a> you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.
And as you weigh the reasons to sell before year-end, it's important to remember the reasons that sparked your desire to move in the first place. Maybe it’s time for a new home in a location that suits you better, one that offers the perfect space for you and your loved ones, or maybe your needs have evolved over time. A local real estate agent can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.
Bottom Line
Listing your home before the new year can offer unique benefits. Less competition, motivated buyers, and your equity gains can all play to your advantage. Reach out, and let's achieve your goals before winter sets in.2023-11-06T13:27:40-07:002023-11-06T13:29:10-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:14027Unmasking Scary Myths about Today’s Housing Market<a href="https://files.keepingcurrentmatters.com/content/images/20231026/Unmasking-Scary-Myths-About-Todays-Housing-Market-MEM.png" rel="noopener noreferrer" target="_blank" style="font-size: 17px;"><img src="https://files.keepingcurrentmatters.com/content/images/20231026/Unmasking-Scary-Myths-About-Todays-Housing-Market-MEM.png" /></a>
Some Highlights
Here’s what you really <a href="https://www.mykcm.com/2023/10/23/why-home-prices-keep-going-up/" rel="noopener noreferrer" target="_blank">need to know</a> about a few myths <a href="https://www.mykcm.com/2023/10/16/are-higher-mortgage-rates-here-to-stay/" rel="noopener noreferrer" target="_blank">causing fear</a> in today’s <a href="https://www.mykcm.com/2023/09/29/explaining-todays-low-housing-supply-infographic/" rel="noopener noreferrer" target="_blank">housing market</a>.
Despite common misconceptions, many people can <a href="https://www.apartmenttherapy.com/how-to-buy-a-house-with-student-loans-36755886" rel="noopener noreferrer" target="_blank">buy a home</a> even if they have student loans, <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/fannie-mae-home-price-index" rel="noopener noreferrer" target="_blank">home prices</a> are rising nationally (not falling), and you usually don’t have to have <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">20%</a> for a down payment.
If you have other fears or reservations about <a href="https://www.mykcm.com/2023/10/13/the-difference-between-renting-and-buying-a-home-infographic/" rel="noopener noreferrer" target="_blank">buying a home</a> today, let’s connect so you have an expert to help <a href="https://www.mykcm.com/2023/10/20/home-price-growth-is-returning-to-normal-infographic/" rel="noopener noreferrer" target="_blank">clear those up</a>.
2023-10-27T10:55:47-07:002023-10-27T11:01:14-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:13877Key Skills You Need Your Listing Agent To Have<img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231009-Key-skills-you-need-your-listing-agent-to-have.png" width="600" style="font-size: 17px;" />
<a href="https://www.simplifyingthemarket.com/en/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">Selling</a> your house is a big decision. And that can make it feel both exciting and a little bit nerve-wracking. But the key to a successful sale is finding the perfect listing agent to work with you throughout the process. A listing agent, also known as a <a href="https://www.simplifyingthemarket.com/en/2023/08/23/why-you-need-a-true-expert-in-todays-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">seller's agent</a>, helps market and sell your house while advocating for you every step of the way.
But, how do you know you've found the perfect match in an agent? Here are three key skills you’ll want your listing agent to have.
They Price Your House Based on the Latest Data
While it may be tempting to pick the agent who suggests the highest asking price for your house, that strategy may <a href="https://www.simplifyingthemarket.com/en/2023/09/28/why-your-house-didnt-sell/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">cost you</a>. It’s easy to get caught up in the excitement when you see a bigger number, but overpricing your house can have consequences. It could mean it’ll sit on the market longer because the higher price is actually deterring buyers.
Instead, you want to pick an agent who’s going to have an open conversation about how they think you should price your house and why. A great agent will base their pricing strategy on solid data. They won't throw out a number just to win your listing. Instead, they'll show you the facts, explain their pricing strategy, and make sure you're on the same page. As NerdWallet <a href="https://www.nerdwallet.com/article/mortgages/are-all-real-estate-agents-the-same-which-realtor-is-right-for-you" rel="noopener noreferrer" target="_blank">explains</a>:
“An agent who recommends the highest price isn't always the best choice. Choose an agent who backs up the recommendation with market knowledge.”
They’re a Great Negotiator
The home-selling process can be emotional, especially if you’ve been in your house for a long time. You’re connected to it and have a lot of memories there. This can make the negotiation process harder. That’s where a trusted professional comes in.
A skilled listing agent will be calm under pressure and will be your point-person in all of those conversations. Their experience in handling the back-and-forth gives you with the peace of mind that you've got someone on your side who’s got your best interests in mind throughout this journey.
They’re a Skilled Problem Solver
At the heart of it all, a listing agent's main priority is to get your house sold. A great agent never loses sight of that goal and will help you prioritize your needs above all else. If they identify any necessary steps you need to take, they’ll be open with you about it. Their commitment to your success means they'll work with you to address any potential roadblocks and find creative solutions to anything that pops up along the way.
BankRate <a href="https://www.bankrate.com/real-estate/finding-best-real-estate-agent/#go-with-your-gut" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“Just as important as the knowledge and experience agents bring is their ability to guide you smoothly through the process. Above all, go with an agent you trust and will feel comfortable with. . .”
Bottom Line
Whether you're a first-time seller or you’ve been through selling a house before, a great listing agent is the key to success. Let’s connect so you have a skilled local expert by your side to guide you through every step of the process.2023-10-10T09:32:31-07:002023-10-10T09:37:13-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:13869Stay Informed and Secure with the Ocean County Clerk's Office Property Alert Service<img src="https://assets.site-static.com/userfiles/1482/image/612TrentonDroneOnline-13.jpg" width="750" height="562" style="vertical-align: middle;" />
In an age where information is key, staying informed about your property is essential. The Ocean County Clerk's Office recognizes this need and has introduced a Property Alert Service to help residents protect their most significant assets. Whether you're a homeowner, investor, or concerned citizen, this service offers an invaluable way to stay updated on property-related activities within Ocean County, New Jersey.
What Is the Ocean County Clerk's Office Property Alert Service?
The Ocean County Clerk's Office Property Alert Service is a proactive and user-friendly tool designed to keep you in the loop about any activity associated with your property. It allows you to receive real-time notifications regarding critical changes to your property records, helping you detect potential fraudulent activities and ensuring that you're always aware of developments that may affect your property.
Key Features of the Property Alert Service
Customized Alerts: The service is highly customizable, enabling you to set up alerts based on specific criteria. You can choose to receive notifications for any changes to your property, such as new deeds, mortgages, liens, and more.
Timely Notifications: The Property Alert Service sends you alerts in real-time, ensuring that you're promptly informed about any updates to your property records. This helps you stay proactive in managing your property affairs.
Fraud Prevention: By receiving alerts for any unexpected or unauthorized changes to your property records, you can detect and prevent potential fraudulent activities before they escalate.
Peace of Mind: With the Property Alert Service, you can rest easy, knowing that your property is being monitored closely, and you'll be promptly informed of any significant developments.
How to Sign Up for the Property Alert Service
Getting started with the Ocean County Clerk's Office Property Alert Service is easy and free of charge. Here's a step-by-step guide:
Visit the Ocean County Clerk's Office website: <a href="https://countyclerkpas.co.ocean.nj.us/PropertyAlert/" target="_blank" data-mt-original-track-url="https://mailtrack.io/trace/link/fea6c01a4a8452c5cced47211150a224a4a1259e?notrack=1&url=https%3A%2F%2Fcountyclerkpas.co.ocean.nj.us%2FPropertyAlert%2F&userId=2284172&signature=34d3e441fb01d88d" data-mt-detrack-inspected="true">https://countyclerkpas.co.ocean.nj.us/PropertyAlert/</a>
Create an account or log in if you already have one.
Enter the necessary details, including your property information and preferred alert criteria.
Confirm your registration and start receiving alerts.
Benefits of Using the Property Alert Service
Protection Against Fraud: The service helps safeguard your property from potential fraudsters by alerting you to any suspicious activities.
Increased Awareness: Stay informed about changes to your property records, making it easier to manage your property affairs effectively.
Time Savings: By automating the monitoring process, you save time and effort compared to manually checking property records.
Confidence and Peace of Mind: With the Property Alert Service, you can confidently protect your property investments and enjoy peace of mind.
Conclusion
The Ocean County Clerk's Office Property Alert Service is a valuable resource for residents of Ocean County, New Jersey, and beyond. It offers a simple, convenient, and effective way to stay informed and secure when it comes to your property. By proactively monitoring your property records, you can protect your investments, detect potential fraud, and ensure that your property affairs are managed efficiently. Sign up for this service today and enjoy the benefits of staying ahead in the world of property management.
2023-10-06T17:30:13-07:002023-10-06T17:36:22-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:13849Understanding the Benefits of Owning Your First Home<img src="https://files.keepingcurrentmatters.com/content/images/20231003/20231004-Understanding-the-benefits-of-owning-your-first-home.png" width="600" style="font-size: 17px;" />
Are you considering buying your first <a href="https://www.simplifyingthemarket.com/en/2023/09/21/the-many-non-financial-benefits-of-homeownership/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">home</a>? If so, it can be helpful to know what led other people to make that decision. According to a <a href="https://s22.q4cdn.com/957797852/files/doc_news/2023/09/9-14-23-first-time-homebuyers-undeterred-by-rising-mortgage-interest-rates.pdf" rel="noopener noreferrer" target="_blank">recent survey</a> of first-time homebuyers by PulteGroup:
“When asked why they purchased their first home recently, the answer was simple: because they wanted to. Either the desire to stop renting or recognition that homeownership is a smart financial investment was the main motivator for 72% of respondents.”
While that survey looked specifically at first-time homebuyers buying newly built homes, the same sentiment is true for just about anyone buying their first home. Here’s a bit more information to help you think about those two benefits of homeownership to see if they’re a key factor for you too.
When You Buy a Home, You Have More Stability than When You Rent
You might want to stop renting because rents keep <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">going up</a>. If you’re a renter, that means there’s a chance your payment will increase each time you sign a new rental agreement or renew your current one.
On the other hand, when you buy your home with a fixed-rate mortgage, your monthly housing payment is predictable over the length of that loan. This stability can give you a peace of mind that renting just can’t provide. Jeff Ostrowski, real estate journalist, <a href="https://www.moneygeek.com/mortgage/resources/rent-vs-buy-guide/" rel="noopener noreferrer" target="_blank">breaks it down</a>:
“With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan. Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”
When You Buy a Home, You Grow Your Wealth as Home Values Climb
Beyond that, owning a home can also be a great long-term investment. While renting may be the more affordable option right now, it doesn’t provide an avenue for you to grow your wealth over time. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/the-reconomy-podcast-should-you-rent-or-buy-a-home-right-now" rel="noopener noreferrer" target="_blank">explains</a> that’s an important distinction to consider:
“Given current dynamics, more young households may choose to rent in the near term as the cost to own, excluding house price appreciation, has unequivocally increased. Yet, accounting for house price appreciation in that cost of homeownership, whether to rent or buy will depend on where, and if, a home is likely to cost more or less in the near future.”
Basically, renting doesn’t allow you to build equity. In contrast, homeownership can help you grow your net worth as your home’s value <a href="https://www.simplifyingthemarket.com/en/2023/09/08/home-price-forecasts-revised-for-2023-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">appreciates</a>. That’s a significant perk you can’t get if you keep renting.
When you take that into account, it may make better financial sense to buy. Most experts project home prices will <a href="https://www.simplifyingthemarket.com/en/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">continue to appreciate</a> over the next few years at a pace that’s more normal for the market. That means when you buy a home, not only are you investing in a place to live, but you’re also investing in your financial future.
Bottom Line
If you're ready, it can be a smart move to buy your first <a href="https://www.mykcm.com/2023/09/07/get-ready-for-smaller-more-affordable-homes/" rel="noopener noreferrer" target="_blank">home</a> instead of renting. Let’s connect so you can stabilize your housing payment and start building wealth for your future.2023-10-05T06:26:59-07:002023-10-05T06:31:48-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:12822Oops! Home Prices Didn’t Crash After All<img src="https://assets.site-static.com/userfiles/1482/image/20230605-oops-home-prices-didnt-crash-after-all.jpg" width="750" style="font-size: 17px; display: block; margin-left: auto; margin-right: auto;" height="410" />
During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts:
<a href="https://www.yahoo.com/lifestyle/housing-recession-already-according-economists-150645245.html" rel="noopener noreferrer" target="_blank">Jeremy Siegel</a>, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business:
“I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.”
<a href="https://twitter.com/markzandi/status/1577352297239248896?s=61&t=a3XuSbg4t99IcSH3mFbdpQ" rel="noopener noreferrer" target="_blank">Mark Zandi</a>, Chief Economist at Moody’s Analytics:
"Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.”
<a href="https://www.goldmansachs.com/intelligence/pages/why-home-prices-are-poised-to-fall.html" rel="noopener noreferrer" target="_blank">Goldman Sachs</a>:
“Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.”
The Bad News: It Rattled Consumer Confidence
These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the <a href="https://www.fanniemae.com/media/46031/display" rel="noopener noreferrer" target="_blank">December Consumer Confidence Survey</a> from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year.
<a href="https://files.keepingcurrentmatters.com/content/images/20230602/20230605-percent-of-americans-each-december-who-thought-prices-would-go-down-over-the-next-12-months.png" rel="noopener noreferrer" target="_blank"><img src="https://assets.site-static.com/userfiles/1482/image/20230605-percent-of-americans-each-december-who-thought-prices-would-go-down-over-the-next-12-months.jpg" width="1000" height="750" /></a>
The Good News: Home Prices Never Crashed
However, home prices didn’t come crashing down and seem to be <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" rel="noopener noreferrer" target="_blank">already rebounding</a> from the minimal depreciation experienced over the last several months.
In a report just released, Goldman Sachs <a href="https://www.goldmansachs.com/intelligence/pages/as-interest-rates-climb-the-global-housing-market-is-surprisingly-stable.html" rel="noopener noreferrer" target="_blank">explained</a>:
“The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ”
Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#news-research" rel="noopener noreferrer" target="_blank">Case-Shiller</a> and the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx" rel="noopener noreferrer" target="_blank">FHFA</a>. Here are the numbers each reported:
<a href="https://files.keepingcurrentmatters.com/content/images/20230602/20230605-percent-change-in-home-values.png" rel="noopener noreferrer" target="_blank"><img src="https://assets.site-static.com/userfiles/1482/image/20230605-percent-change-in-home-values_1.jpg" width="1000" height="750" /></a>
Home values seem to have turned the corner and are headed back up.
Bottom Line
When the forecasts of significant home price appreciation were made last fall, they were made with megaphones. Mass media outlets, industry newspapers, and podcasts all broadcasted the news of an eminent crash in prices.
Now, forecasters are saying the worst is over and it wasn’t anywhere near as bad as they originally projected. However, they are whispering the news instead of using megaphones. As real estate professionals, it is our responsibility – some may say duty – to correct this narrative in the minds of the American consumer.2023-06-05T09:28:03-07:002023-06-05T10:00:41-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:12203NJHMFA Grant Raised to $15,000
<img src="https://assets.site-static.com/userfiles/1482/image/NJHMFA_DPA_15k_FLYER_PK_1_1400.jpg" width="1444" height="1451" />
2023-03-15T14:11:07-07:002023-09-27T07:21:04-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:10898 3 Questions You May Be Asking About Selling Your House Today<img src="https://assets.site-static.com/userfiles/1482/image/kcm-infographic-1668002059.jpg" width="800" height="2017" />
Some Highlights
If you’re planning to <a href="https://www.mykcm.com/2022/10/03/how-to-prep-your-house-for-sale-this-fall/" title="sell your house">sell your house</a> this year, you likely have <a href="https://www.mykcm.com/2022/09/19/will-my-house-still-sell-in-todays-market/" title="questions">questions</a> about what the shift in the housing market means for your home sale.
You might be wondering: Should I wait <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" title="to sell" target="_blank" rel="noopener noreferrer">to sell</a>? Are <a href="https://www.showingtime.com/blog/august-2022-showing-index-results/" title="buyers" target="_blank" rel="noopener noreferrer">buyers</a> still out there? And can I afford to buy my <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="next home" target="_blank" rel="noopener noreferrer">next home</a>?
Let’s connect so you can get answers to these questions and learn about the opportunities you still have in today’s housing market.
2022-11-14T09:09:49-07:002022-11-14T09:12:48-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:10583Perspective Matters When Selling Your House Today<img src="https://assets.site-static.com/userfiles/1482/image/35OceanBreezeDusk-800.jpg" width="800" height="533" />
Does the latest news about the housing market have you questioning your plans to <a href="https://www.simplifyingthemarket.com/2022/09/29/if-youre-thinking-of-selling-your-house-this-fall-hire-a-pro/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a>? If so, perspective is key. Here are some of the ways a trusted real estate professional can explain <a href="https://www.simplifyingthemarket.com/2022/09/14/is-the-real-estate-market-slowing-down-or-is-this-a-housing-bubble/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="the shift" target="_blank" rel="noopener noreferrer">the shift</a> that’s happening today and why it’s still a sellers’ market even during the cooldown.
Fewer Homes for Sale than Pre-Pandemic
While the supply of homes available for sale has increased this year compared to last, we’re still nowhere near what’s considered a balanced market. A <a href="https://www.calculatedriskblog.com/2022/10/housing-october-10th-weekly-update.html" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> from Calculated Risk helps put this year’s increased inventory into context (see graph below):
<a href="https://files.mykcm.com/2022/10/12112113/20221013-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105077" src="https://files.mykcm.com/2022/10/12112113/20221013-MEM-Eng-1.png" alt="Perspective Matters When Selling Your House Today | MyKCM" width="600" height="450" /></a>
It shows supply this year has surpassed 2021 levels by over 30%. But the further back you look, the more you’ll understand the big picture. Compared to 2020, we’re just barely above the level of inventory we saw then. And if you go all the way back to 2019, the last normal year in real estate, we’re roughly 40% below the housing supply we had at that time.
Why does this matter to you? When inventory is low, there is still demand for your house because there just aren’t enough homes available for sale.
Homes Are Still Selling Faster Than More Normal Years
And while homes aren’t selling as quickly as they did a few months ago, the average number of days on the market is still well below pre-pandemic norms – in large part because inventory is so low. The graph below uses data from the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-08-realtors-confidence-index-09-21-2022.pdf" title="Realtors’ Confidence Index" target="_blank" rel="noopener noreferrer">Realtors’ Confidence Index</a> by the National Association of Realtors (NAR) to illustrate this trend:
<a href="https://files.mykcm.com/2022/10/12112115/20221013-MEM-Eng-2.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105078" src="https://files.mykcm.com/2022/10/12112115/20221013-MEM-Eng-2.png" alt="Perspective Matters When Selling Your House Today | MyKCM" width="600" height="450" /></a>
As the graph shows, the pre-pandemic numbers (shown in blue) are higher than the numbers we saw during the pandemic (shown in green). That’s because the average days on the market started to decrease as homes sold at record pace during the pandemic. Most recently, due to the cooldown in the housing market, the average days on the market have started to tick back up slightly (shown in orange) but are still far below the pre-pandemic norm.
What does this mean for you? While it may not be as fast as it was a couple of months ago, homes are still selling much faster than they did in more normal, pre-pandemic years. And if you price it right, your home could still go under contract quickly.
Buyer Demand Has Moderated and Is Now in Line with More Typical Years
Buyer demand has softened this year in response to rising <a href="https://www.simplifyingthemarket.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a>. But again, perspective is key. Getting 3-5 offers like <a href="https://www.simplifyingthemarket.com/2022/09/21/top-reasons-homeowners-are-selling-their-houses-right-now/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="sellers" target="_blank" rel="noopener noreferrer">sellers</a> did during the pandemic isn’t the norm. The graph below uses <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-08-realtors-confidence-index-09-21-2022.pdf" title="data" target="_blank" rel="noopener noreferrer">data</a> from NAR going back to 2018 to help tell the story of this shift over time (see graph below):
<a href="https://files.mykcm.com/2022/10/12112108/20221013-MEM-Eng-3.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105075" src="https://files.mykcm.com/2022/10/12112108/20221013-MEM-Eng-3.png" alt="Perspective Matters When Selling Your House Today | MyKCM" width="600" height="450" /></a>
Prior to the pandemic, it was typical for homes sold to see roughly 2-2.5 offers (shown in blue). As the market heated up during the pandemic, the average number of offers skyrocketed as record-low mortgage rates drove up demand (shown in green). But most recently, the number of offers on homes sold today (shown in orange) has started to return to pre-pandemic levels as the market cools from the frenzy.
What’s the takeaway for you? Buyer demand has moderated from the pandemic peak, but it hasn’t disappeared. The buyers are still out there, and if you <a href="https://www.simplifyingthemarket.com/2022/08/09/selling-your-house-your-asking-price-matters-more-now-than-ever/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="price your house" target="_blank" rel="noopener noreferrer">price your house</a> at current market value, you’ll still be able <a href="https://www.simplifyingthemarket.com/2022/09/19/will-my-house-still-sell-in-todays-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a> today.
Bottom Line
If you have questions about selling your house in today’s housing market, let’s connect. That way you have context around what’s happening now, so you’re up to date on what you can expect when you’re ready to move.
2022-10-15T10:43:00-07:002022-11-14T09:06:39-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:101992022 Fall Homebuyer's Guide Now Available!
The market is still strong for sellers, but that doesn't mean there aren't great homes to still be had at reasonable prices and terms. Check out our Fall Buyer's Guide below.
<br />Feel free to contact us with any questions.
2022-09-08T04:55:00-07:002022-09-08T05:48:23-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:9469Two Reasons Why Today’s Housing Market Isn’t a Bubble<img src="https://assets.site-static.com/userfiles/1482/image/IMG_20220627_121722_1.jpg" width="750" height="410" />
You may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A <a href="https://pulsenomics.com/surveys/#home-price-expectations" title="recent survey" target="_blank" rel="noopener noreferrer">recent survey</a> from Pulsenomics asked over one hundred housing market experts and real estate economists if they believe the housing market is in a <a href="https://www.simplifyingthemarket.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="bubble" target="_blank" rel="noopener noreferrer">bubble</a>. The results indicate most experts don’t think that’s the case (see graph below):
<a href="https://files.mykcm.com/2022/06/24131343/20220627-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-103106" src="https://assets.site-static.com/userfiles/1482/image/IMG_20220627_121852.jpg" alt="Two Reasons Why Today’s Housing Market Isn’t a Bubble | MyKCM" width="960" height="720" /></a>As the graph shows, a strong majority (60%) said the real estate market is not currently in a bubble. In the same survey, experts give the following reasons why this isn’t like 2008:
The recent growth in <a href="https://www.simplifyingthemarket.com/2022/06/16/home-price-deceleration-doesnt-mean-home-price-depreciation/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="home prices" target="_blank" rel="noopener noreferrer">home prices</a> is because of demographics and low inventory
Credit risks are low because underwriting and <a href="https://www.simplifyingthemarket.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="lending standards" target="_blank" rel="noopener noreferrer">lending standards</a> are sound
If you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns.
1. Low Housing Inventory Is Causing Home Prices To Rise
The supply of homes available for sale needed to sustain a normal real estate market is approximately <a href="https://www.simplifyingthemarket.com/2022/04/28/what-you-need-to-know-about-selling-in-a-sellers-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="six months" target="_blank" rel="noopener noreferrer">six months</a>. 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 graph below shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and <a href="https://www.simplifyingthemarket.com/2022/05/12/what-you-actually-need-to-know-about-the-number-of-foreclosures-in-todays-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="foreclosures" target="_blank" rel="noopener noreferrer">foreclosures</a>), and that caused prices to tumble. Today, there’s still a <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" title="shortage of inventory" target="_blank" rel="noopener noreferrer">shortage of inventory</a>, which is causing ongoing home price appreciation (see graph below):
<a href="https://files.mykcm.com/2022/06/24131331/20220627-MEM-Eng-2.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-103103" src="https://assets.site-static.com/userfiles/1482/image/IMG_20220627_121811.jpg" alt="Two Reasons Why Today’s Housing Market Isn’t a Bubble | MyKCM" width="960" height="720" /></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 limited supply of homes for sale. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”
2. Mortgage Lending Standards Today Are Nothing Like the Last Time
During the housing bubble, it was much easier to get a mortgage than it is today. Here’s a graph showing the <a href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/hhdc_2022q1.pdf" title="mortgage volume" target="_blank" rel="noopener noreferrer">mortgage volume</a> issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the years after:
<a href="https://files.mykcm.com/2022/06/24131335/20220627-MEM-Eng-3.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-103104" src="https://assets.site-static.com/userfiles/1482/image/kcm-infographic-1656347403.jpg" alt="Two Reasons Why Today’s Housing Market Isn’t a Bubble | MyKCM" width="960" height="720" /></a>This graph helps show one element of why mortgage standards are nothing like they were the last time. Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash. Realtor.com <a href="https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”
Bottom Line
A majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.
2022-06-27T09:20:00-07:002022-06-27T09:31:57-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:9033 2022 Housing Market Forecast [INFOGRAPHIC]
<img src="https://assets.site-static.com/userfiles/1482/image/kcm-infographic-1651941390.jpg" width="1300" height="2505" />
Call us with any questions you have on the market, we are here to help.2022-05-07T09:48:00-07:002022-05-07T09:57:30-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:8624Are You Wondering if This Is the Year To Buy a Home?<img width="750" height="410" src="https://files.mykcm.com/2022/03/15132118/20220316-KCM-Share0.jpg" class="attachment-entry size-entry wp-post-image" alt="Are You Wondering if This Is the Year To Buy a Home? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/03/15132118/20220316-KCM-Share0.jpg 750w, https://files.mykcm.com/2022/03/15132118/20220316-KCM-Share0-600x328.jpg 600w, https://files.mykcm.com/2022/03/15132118/20220316-KCM-Share0-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Every year, many renters ask themselves the same question: Should I continue <a href="https://www.simplifyingthemarket.com/2022/02/25/the-difference-between-renting-and-owning-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="renting">renting</a>, or is it time to <a href="https://www.simplifyingthemarket.com/2022/03/10/how-to-navigate-a-market-where-multiple-offers-is-the-new-normal/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="buy a home">buy a home</a>? If you’re a renter, chances are you’ve asked yourself that question at least once, and it’s likely because you’ve faced an increase in your monthly housing costs over time. After all, according to <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="Census" target="_blank" rel="noopener noreferrer">Census</a> data, rents have risen consistently for decades.
To make an informed and powerful decision, the first step is understanding what’s happening in today’s housing market so you can determine which option is the better long-term <a href="https://www.simplifyingthemarket.com/2022/01/31/owning-is-more-affordable-than-renting-in-the-majority-of-the-country/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="financial decision">financial decision</a> for you.
Rents Are Going Up Again This Year
Rents are skyrocketing right now. <a href="https://news.move.com/2022-02-22-Realtor-com-R-January-Rental-Report-Buying-a-Starter-Home-is-More-Affordable-than-Renting-in-Over-Half-of-the-Largest-U-S-Metros" title="Data" target="_blank" rel="noopener noreferrer">Data</a> from realtor.com shows just how much rental prices are surging throughout the country. The graph below highlights rental unit price increases over the past year:
<a href="https://files.mykcm.com/2022/03/15114235/20220316-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101509" src="https://assets.site-static.com/userfiles/1482/image/20220316-MEM-Eng-1.jpg" alt="Are You Wondering if This Is the Year To Buy a Home? | MyKCM" width="1000" height="750" /></a>
If you’re a renter and plan on signing a new lease, your monthly costs are likely to go up when you do. Those rising costs can have a big impact on your financial goals, including any <a href="https://www.simplifyingthemarket.com/2022/03/02/down-payment-assistance-programs-can-help-you-achieve-homeownership/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="plans">plans</a> you’re making to save for a home purchase.
Homeownership Offers Stable Monthly Costs
Of course, one of the key benefits of owning your home is that you’re able to <a href="https://www.simplifyingthemarket.com/2022/02/21/real-estate-voted-the-best-investment-eight-years-in-a-row/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="lock in">lock in</a> and stabilize your payments for the duration of your loan. That’s not the case when you rent.
While rents are already on the rise, there’s a good chance many people will see their rental costs increase even more this year. As Danielle Hale, Chief Economist at realtor.com, <a href="https://www.prnewswire.com/news-releases/realtorcom-december-rental-report-rental-market-wraps-up-2021-with-price-growth-thats-5-3-times-faster-than-in-2020--301468347.html" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“With rents already at a high and expected to keep going up, rental affordability will increasingly challenge many Americans in 2022. For those thinking about making the transition from renting to buying their first home, rising rents will remain a motivating factor. . . .”
So, if you're ready to become a homeowner, waiting any longer may not make financial sense. Instead, escape the cycle of <a href="https://www.simplifyingthemarket.com/2022/01/04/avoid-the-rental-trap-in-2022/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="rising rents">rising rents</a> and enjoy the <a href="https://www.simplifyingthemarket.com/2022/02/14/are-you-ready-to-fall-in-love-with-homeownership/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="many benefits">many benefits</a> that come with homeownership today.
Bottom Line
Starting your journey towards homeownership can pay off significantly this year. If you’re financially ready today, let’s connect so we can discuss your options.
2022-03-16T13:04:00-07:002022-03-16T13:06:27-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:8547Key Factors That Impact Affordability Today<img width="750" height="410" src="https://files.mykcm.com/2022/03/08130721/20220309-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Key Factors That Impact Affordability Today | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/03/08130721/20220309-KCM-Share.jpg 750w, https://files.mykcm.com/2022/03/08130721/20220309-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/03/08130721/20220309-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
You can’t read an article about residential real estate without the author mentioning the affordability challenges that today’s buyers face. There’s no doubt homes are less affordable today than they were over the last two years, but that doesn’t mean homes are now unaffordable.
There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let’s look closely at each of these components.
1. Home Prices
The most recent <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="Home Price Insights" target="_blank" rel="noopener noreferrer">Home Price Insights</a> report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.
2. Mortgage Rates
While the current <a href="https://www.simplifyingthemarket.com/2022/03/08/how-global-uncertainty-is-impacting-mortgage-rates/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="global uncertainty">global uncertainty</a> makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to <a href="https://www.freddiemac.com/pmms/pmms30" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.
3. Wages
The one big, positive component in the affordability equation is an increase in American wages. In a <a href="https://www.realtytrac.com/blog/can-real-estate-prices-go-even-higher/" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> by RealtyTrac, Peter Miller addresses that point:
“Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income.”
The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR <a href="https://www.nar.realtor/blogs/economists-outlook/housing-affordability-conditions-fade-in-December" title="data" target="_blank" rel="noopener noreferrer">data</a> provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here’s a graph of their findings:
<a href="https://files.mykcm.com/2022/03/08130724/20220309-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101389" src="https://assets.site-static.com/userfiles/1482/image/20220309-MEM-Eng-1.jpg" alt="Key Factors That Impact Affordability Today | MyKCM" /></a>
As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it’s important to note that, in most of the country, homes are still affordable.
So, when you think about affordability, remember that the picture includes more than just <a href="https://www.simplifyingthemarket.com/2022/03/03/are-home-prices-continuing-to-rise/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="home prices">home prices</a> and <a href="https://www.simplifyingthemarket.com/2022/02/02/the-top-indicator-if-you-want-to-know-where-mortgage-rates-are-heading/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="mortgage rates">mortgage rates</a>. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That’s why it’s less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they’re a big reason that, while less affordable, homes are not unaffordable today.
Bottom Line
To find out more about affordability in our local area, let’s discuss where home prices are locally, what’s happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.
2022-03-09T17:50:00-07:002022-03-09T17:57:12-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:8501Are Home Prices Continuing To Rise?<img width="750" height="410" src="https://files.mykcm.com/2022/03/02155552/20220303-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Are Home Prices Continuing To Rise? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/03/02155552/20220303-KCM-Share.jpg 750w, https://files.mykcm.com/2022/03/02155552/20220303-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/03/02155552/20220303-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn’t happened. The major price indices are all revealing ongoing double-digit price appreciation. Here’s a look at their reports on year-over-year price appreciation for December:
<a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/HPI_2021Q4.pdf" title="Federal Housing Finance Agency" target="_blank" rel="noopener noreferrer">Federal Housing Finance Agency</a> (FHFA): 17.6%
<a href="http://www.spglobal.com/spdji/en/documents/indexnews/announcements/20220222-1450062/1450062_cshomeprice-release-0222.pdf" title="S&P Case-Shiller" target="_blank" rel="noopener noreferrer">S&P Case-Shiller</a>: 18.8%
<a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="CoreLogic" target="_blank" rel="noopener noreferrer">CoreLogic</a>: 18.5%
To show that they’re not seeing signs of softening, here’s a graph that gives the progression of all three indices for each month of 2021.
<a href="https://files.mykcm.com/2022/03/02155554/20220303-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101324" src="https://assets.site-static.com/userfiles/1482/image/20220303-MEM-Eng-1.jpg" alt="Are Home Prices Continuing To Rise? | MyKCM" width="1000" height="750" /></a>
As the graph above reveals, last year, home price appreciation accelerated dramatically from January to July according to all three indices. Then, it began to decelerate in August when prices appreciated at a slower pace, but it didn’t decline. Many thought that would be the beginning of a rapid slowdown in the level of home price appreciation, but as the data shows, that wasn’t the case. Instead, prices began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December.
To clarify, deceleration is not the same as depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month. Deceleration means home values continue to rise but at a slower pace of year-over-year appreciation. Depreciation means prices drop below current values. No one is forecasting that to happen.
In fact, the FHFA revealed that price appreciation accelerated in December in six of the nine regions it tracks. Case Shiller showed that appreciation accelerated in 15 of the 20 metros they report on. As Selma Hepp, Deputy Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/buy-stories/us-sp-corelogic-case-shiller-index-holds-steady-up-18-8-in-december-unchanged-from-november/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“After some signs of slowing home price growth . . . monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel.”
What Does This Mean for You?
Whether you’re a first-time purchaser or someone looking to sell your current house and buy a home that better fits your needs, waiting to decide what to do will cost you in two ways:
Mortgage rates are <a href="https://www.nytimes.com/2022/02/18/your-money/home-buying-mortgages.html" title="forecast" target="_blank" rel="noopener noreferrer">forecast</a> to rise this year.
Home prices should continue to appreciate at double-digit levels for some time.
If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your monthly mortgage payment.
Bottom Line
Maybe the best thing to do is listen to the <a href="https://money.yahoo.com/mortgage-rates-ris-214815105.html" title="advice" target="_blank" rel="noopener noreferrer">advice</a> of Len Kiefer, Deputy Chief Economist at Freddie Mac:
“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices - well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”
2022-03-03T18:58:00-07:002022-03-03T19:05:43-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:83964 Simple Graphs Showing Why This Is Not a Housing Bubble<img width="750" height="410" 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" loading="lazy" srcset="https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
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="noopener noreferrer"><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="noopener noreferrer"><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="noopener noreferrer"><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="noopener noreferrer"><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.
2022-02-20T18:06:00-07:002022-02-20T18:07:46-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:8086Achieving the Dream of Homeownership<img src="https://assets.site-static.com/userfiles/1482/image/IMG_20220117_195225.jpg" width="750" height="514" />
Homeownership has long been considered the American Dream, and it’s one every American should feel confident and powerful pursuing. But owning a home is also a deeply personal dream. Our home provides us with safety and security, and it’s a place where we can <a href="https://www.simplifyingthemarket.com/2021/12/23/when-a-house-becomes-a-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="grow and flourish">grow and flourish</a>.
Today, we remember the legacy of Dr. Martin Luther King, Jr. Many of us will remember his passion and determination for the causes he championed, including his famous “<a href="https://www.npr.org/2010/01/18/122701268/i-have-a-dream-speech-in-its-entirety" title="I Have a Dream" target="_blank" rel="noopener noreferrer">I Have a Dream</a>” speech in 1963. As we reflect on his message today, it may inspire your own dream of homeownership. And if so, know you’re not alone. With a trusted <a href="https://www.simplifyingthemarket.com/2021/11/26/reasons-to-hire-a-real-estate-professional-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="real estate advisor">real estate advisor</a> at your side, you can begin your journey toward homeownership by answering the questions below.
1. Where Do I Start?
The <a href="https://www.simplifyingthemarket.com/2021/11/19/your-journey-to-homeownership-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="process">process</a> of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, how much space you need, what kind of commute works for you, and how much you can spend.
Then, when you decide you’re ready to buy, you’ll need to apply for a <a href="https://www.simplifyingthemarket.com/2021/12/27/key-things-to-avoid-after-applying-for-a-mortgage/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="mortgage">mortgage</a>. Your lender will look at several factors to determine how much you’re able to borrow, including your credit history. Lenders want to understand how well you’ve managed paying your student loans, credit cards, car loans, and other past debts.
According to <a href="https://myhome.freddiemac.com/buying/what-can-you-afford" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>:
“To get a rough estimate of what you can afford, most lenders suggest that you should spend no more than 28% of your monthly gross (pre-tax) income on your mortgage payment, including principal, interest, taxes and insurance.”
2. How Do I Save Enough for a Down Payment?
Speaking of how much you can afford, you’ll want to know what to save for a <a href="https://www.simplifyingthemarket.com/2021/12/22/the-perks-of-putting-20-down-on-a-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="down payment">down payment</a>. While the idea of saving for a down payment can be daunting, there are many different options and resources that can help.
According to <a href="https://www.businessinsider.com/personal-finance/tips-for-saving-for-a-down-payment" title="Business Insider" target="_blank" rel="noopener noreferrer">Business Insider</a>, automatic savings can bring you one step closer to achieving your target down payment:
“If you receive your paycheck as a direct deposit, you may want to arrange for your company to send a percentage of each check directly into a savings account for the down payment. . . . The automatic-savings strategy makes it so you don't have to constantly remember to save money.”
Before you know it, you’ll have enough for a down payment if you’re disciplined and thoughtful about your process. And the best part is, you may need to save less for your <a href="https://www.simplifyingthemarket.com/2022/01/03/how-much-do-you-need-for-your-down-payment/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="down payment">down payment</a> than you think. Your agent and lender can help you understand your options.
3. How Can I Reach My Financial Goals?
Another way to increase your savings is by sticking to a planned budget. If you’ve never budgeted before, there are tools available. For example, MoneyFit.org provides a <a href="https://static1.squarespace.com/static/5b1056f17e3c3a3d50d4605c/t/5f8dbbd1c5bc3f25be3b180d/1603124184016/Money+Fit+Automatic+Budget+Worksheet.pdf" title="budgeting worksheet" target="_blank" rel="noopener noreferrer">budgeting worksheet</a> you can use to create your own plan and <a href="https://moneyfit.org/how-to-budget" title="five rules" target="_blank" rel="noopener noreferrer">five rules</a> to follow when you’re saving. They recommend you:
Identify Goals
Record Expenses
Record Earnings
Compare and Calculate
Fix Weak Spots
If you’re already budgeting, consider finding ways to tighten your spending a bit more to accelerate your journey to homeownership. After all, putting even a little extra into your savings each month can truly add up over time.
Bottom Line
As you set out to realize your dream of homeownership this year, know that it’s achievable with careful planning. Most importantly, let’s connect today so you don’t have to walk alone on this journey.
2022-01-17T17:56:00-07:002022-01-17T17:57:57-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:8080What’s Going To Happen with Home Prices This Year?<img src="https://assets.site-static.com/userfiles/1482/image/20220113-KCM-Share_2.jpg" width="750" height="410" style="font-size: 17px;" />
After almost two years of double-digit increases, many experts thought home price appreciation would decelerate or happen at a slower pace in the last quarter of 2021. However, the latest <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 indicates while prices may have plateaued, appreciation has definitely not slowed. The following graph shows year-over-year appreciation throughout 2021. December data has not yet been released.
<img src="https://assets.site-static.com/userfiles/1482/image/20220113-MEM-Eng-1.jpg" width="1000" height="750" />
As the graph shows, appreciation has remained steady at around 18% over the last five months.
In addition, the latest <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20211228-1448566/1448566_cshomeprice-release-1228.pdf" title="S&amp;P Case-Shiller Price Index" target="_blank" rel="noopener noreferrer">S&P Case-Shiller Price Index</a> and the <a href="https://www.fhfa.gov/AboutUs/Reports/Pages/US-House-Price-Index-December-2021.aspx" title="FHFA Price Index" target="_blank" rel="noopener noreferrer">FHFA Price Index</a> show a slight deceleration from the same time last year – it's just not at the level that was expected. However, they also both indicate there’s continued strong price growth throughout the country. FHFA reports all nine regions of the country still experienced double-digit appreciation. The Case-Shiller 20-City Index reveals all 20 metros had double-digit appreciation.
Why Haven’t We Seen the Deeper Deceleration Many Expected?
Experts had projected the supply of housing inventory would increase in the last half of 2021 and buyer demand would decrease, as it historically does later in the year. Since all pricing is subject to supply and demand, it seemed that appreciation would wane under those conditions.
<a href="https://www.simplifyingthemarket.com/2022/01/05/why-waiting-to-sell-your-house-could-cost-you-a-small-fortune/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="Buyer demand">Buyer demand</a>, however, did not slow as much as expected, and the number of listings available for sale dropped instead of improved. The graph below uses <a href="https://www.realtor.com/research/data/" title="data" target="_blank" rel="noopener noreferrer">data</a> from realtor.com to show the number of available listings for sale each month, including the decline in listings at the end of the year.
<img src="https://assets.site-static.com/userfiles/1482/image/20220113-MEM-Eng-2.jpg" width="1000" height="750" />Here are three reasons why the number of active listings didn’t increase as expected:
1. There hasn’t been a surge of <a href="https://www.simplifyingthemarket.com/2022/01/06/there-wont-be-a-wave-of-foreclosures-in-the-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="foreclosures">foreclosures</a> as the forbearance program comes to an end.
2. New construction slowed considerably because of <a href="https://www.probuilder.com/nahb-chairmans-letter-nahb-takes-action-solve-supply-chain-issues" title="supply chain challenges" target="_blank" rel="noopener noreferrer">supply chain challenges</a>.
3. Many believed more sellers would put their houses on the market once the concerns about the pandemic began to ease. However, those concerns have not yet disappeared. A <a href="https://www.realtor.com/advice/buy/omicron-impact-on-real-estate-homebuyers-sellers-need-to-know/" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> published by com explains:
“Before the omicron variant of COVID-19 appeared on the scene, the 2021 housing market was rebounding healthily from previous waves of the pandemic and turned downright bullish as the end of the year approached. . . . And then the new omicron strain hit in November, followed by a December dip in new listings. Was this sudden drop due to omicron, or just the typical holiday season lull?”
No one knows for sure, but it does seem possible.
Bottom Line
Home price appreciation might slow (or decelerate) in 2022. However, based on supply and demand, you shouldn’t expect the deceleration to be swift or deep.
2022-01-16T15:08:00-07:002022-01-16T15:14:57-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:7845What Everyone Wants To Know: Will Home Prices Decline in 2022?<img src="https://assets.site-static.com/userfiles/1482/image/14SeaviewDroneOnline-1.jpg" width="745" height="357" style="vertical-align: middle;" />
If you’re thinking of buying a home in today’s housing market, you may be wondering how strong your investment will be. You might be asking yourself: if I buy a home now, will it lose value? Or will it continue to appreciate going forward? The good news is, according to the experts, home prices are not projected to decline. Here’s why.
With buyers still outweighing sellers, home prices are forecast to continue climbing in 2022, just at a slower or more <a href="https://www.simplifyingthemarket.com/2021/11/10/whats-happening-with-home-prices/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="moderate pace">moderate pace</a>. Why the continued increase? It’s the simple law of supply and demand. When there are fewer items on the market than there are buyers, the competition for that item makes prices naturally rise.
And while the number of homes for sale today is expected to improve with more sellers getting ready to <a href="https://www.simplifyingthemarket.com/2021/11/18/home-sales-about-to-surge-we-may-see-a-winter-like-never-before/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="list their houses">list their houses</a> this winter, we’re certainly not out of the inventory woods yet. Thus, the projections show continued appreciation, but at a more moderate rate than what we’ve seen over the past year.
Here’s a look at the latest 2022 expert forecasts on home price appreciation:
<img src="https://assets.site-static.com/userfiles/1482/image/20211216-MEM-Eng.jpg" width="960" height="720" />What’s the biggest takeaway from this graph? None of the major experts are projecting depreciation in 2022. They’re all showing an increase in home prices next year.
And here’s what some of the industry’s experts say about how that will play out in the housing market next year:
Brad Hunter of <a href="https://hunterhousingeconomics.com/" title="Hunter Housing Economics" target="_blank" rel="noopener noreferrer">Hunter Housing Economics</a> explains:
“. . . the recent unsustainable rate of home price appreciation will slow sharply. . . . home prices will not decline. . . but they will simply rise at a more sustainable pace.”
Danielle Hale from realtor.com <a href="https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/" title="agrees" target="_blank" rel="noopener noreferrer">agrees</a>:
“Price growth is expected to move back toward a normal range, but this is on top of recent high prices, . . . So prices will [still] hit new highs. . . . The pace of price growth is going to slow notably . . . ”
What Does This Mean for the Housing Market?
While home price appreciation is expected to continue, it isn’t projected to be the <a href="https://www.simplifyingthemarket.com/2021/09/09/home-price-appreciation-is-skyrocketing-in-2021-what-about-2022/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="record-breaking">record-breaking</a> 18 to almost 20% increase the market saw over the past 12 months. Overall, it’s important to note that price increases won’t be as monumental as they were in 2021 – but they certainly won’t decline anytime soon.
What Does That Mean for You?
With motivated buyers in the market and so few homes available to purchase, the imbalance of supply and demand will continue to put upward pressure on <a href="https://www.simplifyingthemarket.com/2021/10/19/what-does-the-future-hold-for-home-prices/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="home prices">home prices</a> in 2022. And when home price appreciation is in the forecast, that’s a clear indication your investment in homeownership is a sound one.
Bottom Line
It’s important to know that home prices are not projected to decline in the new year. Instead, they’re forecast to rise, just at a more moderate pace. Let’s connect to make sure you’re up to date on what’s happening with home price appreciation in our market, so you can make an informed decision about your next move.
2021-12-16T11:50:00-07:002021-12-16T12:09:13-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:7508Why a Wave of Foreclosures Is Not on the Way<img width="750" height="410" 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" loading="lazy" srcset="https://files.mykcm.com/2021/11/01113422/20211104-KCM-Share.jpg 750w, https://files.mykcm.com/2021/11/01113422/20211104-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/11/01113422/20211104-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
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&nbsp; 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="noopener noreferrer"><img class="aligncenter wp-image-99825" src="https://assets.site-static.com/userfiles/1482/image/IMG_20211105_211245.jpg" alt="Why a Wave of Foreclosures Is Not on the Way | MyKCM" width="1000" height="750" /></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.”
2021-11-05T18:14:00-07:002021-11-05T18:17:45-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:7435 What Does the Future Hold for Home Prices?<img width="750" height="410" src="https://files.mykcm.com/2021/10/13150342/20211019-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="What Does the Future Hold for Home Prices? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/10/13150342/20211019-KCM-Share.jpg 750w, https://files.mykcm.com/2021/10/13150342/20211019-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/10/13150342/20211019-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s <a href="https://www.simplifyingthemarket.com/2021/10/06/what-do-supply-and-demand-tell-us-about-todays-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="rising home prices">rising home prices</a>. And while this increase in home values is great news for sellers, you may be wondering what the future holds. Will prices continue to rise with time, or should you expect them to fall?
To answer that question, let’s first understand a few terms you may be hearing right now.
<a href="https://www.merriam-webster.com/dictionary/appreciation" title="Appreciation" target="_blank" rel="noopener noreferrer">Appreciation</a> is an increase in the value of an asset.
<a href="https://www.merriam-webster.com/dictionary/depreciation" title="Depreciation" target="_blank" rel="noopener noreferrer">Depreciation</a> is a decrease in the value of an asset.
<a href="https://www.merriam-webster.com/dictionary/deceleration" title="Deceleration" target="_blank" rel="noopener noreferrer">Deceleration</a> is when something happens at a slower pace.
It’s important to note home prices have increased, or appreciated, for <a href="https://www.nar.realtor/newsroom/existing-home-sales-recede-2-0-in-august" title="114" target="_blank" rel="noopener noreferrer">114</a> straight months. To find out if that trend may continue, look to the experts. <a href="https://pulsenomics.com/surveys/#home-price-expectations" title="Pulsenomics" target="_blank" rel="noopener noreferrer">Pulsenomics</a> surveyed over 100 economists, investment strategists, and housing market analysts asking for their five-year projections. In terms of what lies ahead, experts say the market may see some slight deceleration, but not depreciation.
Here’s the forecast for the next few years:<a href="https://files.simplifyingthemarket.com/2021/10/13150344/20211019-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-99581" src="https://assets.site-static.com/userfiles/1482/image/IMG_20211102_081414.jpg" alt="What Does the Future Hold for Home Prices? | MyKCM" width="1000" height="750" /></a>As the graph above shows, prices are expected to <a href="https://www.simplifyingthemarket.com/2021/09/09/home-price-appreciation-is-skyrocketing-in-2021-what-about-2022/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="continue to rise">continue to rise</a>, just not at the same pace we’ve seen over the last year. Over 100 experts agree, there is no expectation for price depreciation. As the arrows indicate, each number is an increase, which means prices will rise each year.
Bill McBride, author of the blog <a href="https://www.calculatedriskblog.com/" title="Calculated Risk" target="_blank" rel="noopener noreferrer">Calculated Risk</a>, also expects deceleration, but not depreciation:
“My sense is the Case-Shiller National annual growth rate of 19.7% is probably close to a peak, and that year-over-year price increases will slow later this year.”
Ivy Zelman of <a href="https://www.zelmanassociates.com/" title="Zelman &amp; Associates" target="_blank" rel="noopener noreferrer">Zelman & Associates</a> agrees, saying:
“. . . home price appreciation is on the cusp of flipping to a decelerating trend.”
A <a href="https://www.realtor.com/news/trends/is-housing-market-frenzy-going-to-cool-off-this-fall/" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> from realtor.com indicates you should expect:
“. . . annual price increases will slow to a more normal level, . . .”
What Does This Deceleration Mean for You?
What experts are projecting for the years ahead is more in line with the historical norm for appreciation. According to data from <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/04/BKI_MM_Feb2021_Report.pdf" title="Black Knight" target="_blank" rel="noopener noreferrer">Black Knight</a>, the average annual appreciation from 1995-2020 is 4.1%. As you can see from the chart above, the expert forecasts are closer to that pace, which means you should see appreciation at a level that’s aligned with a more normal year.
If you’re a buyer, don’t expect a sudden or drastic drop in home prices – experts say it won’t happen. Instead, think about your homeownership goals and consider purchasing a home before prices rise further.
If you’re a seller, the continued home price appreciation is good news for the value of your house. Work with an agent to list your house for the <a href="https://www.simplifyingthemarket.com/2021/09/03/your-agent-is-key-when-pricing-your-house-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="right price">right price</a> based on market conditions.
Bottom Line
Experts expect price deceleration, not price depreciation over the coming years. Let’s connect to talk through what’s happening in the housing market today, where things are headed, and what it means for you.
2021-11-02T05:43:00-07:002021-11-02T05:46:26-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:7276What Do Past Years Tell Us About Today’s Real Estate Market?<img width="750" height="410" src="https://files.mykcm.com/2021/10/13134909/20211014-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/10/13134909/20211014-KCM-Share.jpg 750w, https://files.mykcm.com/2021/10/13134909/20211014-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/10/13134909/20211014-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
As you follow the news, you’re likely seeing headlines discussing what’s going on in today’s housing market. Chances are high that some of the more recent storylines you’ve come across mention terms like cooling or slowing when talking about where the market is headed.
But what do these terms mean? The housing market today is <a href="https://www.simplifyingthemarket.com/2021/09/02/5-reasons-todays-housing-market-is-anything-but-normal/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="anything but normal">anything but normal</a>, and it’s still an incredibly strong <a href="https://www.simplifyingthemarket.com/2021/09/24/its-still-a-sellers-market-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="sellers’ market">sellers’ market</a>, especially when compared to the few years leading up to the pandemic. With that in mind, what can previous years tell us about today’s real estate market and if it’s truly slowing?
We’re Still Seeing an Above Average Number of Sales
You may see headlines about a drop in home sales. But are those headlines telling the full story? The most recent <a href="https://www.nar.realtor/newsroom/existing-home-sales-recede-2-0-in-august" title="Existing Home Sales Report" target="_blank" rel="noopener noreferrer">Existing Home Sales Report</a> from the National Association of Realtors (NAR) does show a drop of about 2% from July to August. But the month-over-month decline doesn’t provide the full picture (see graph below):<a href="https://files.simplifyingthemarket.com/2021/10/13134916/20211014-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-99571" src="https://assets.site-static.com/userfiles/1482/image/IMG_20211102_082257.jpg" alt="What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM" width="1000" height="750" style="display: block; margin-left: auto; margin-right: auto; vertical-align: middle;" /></a>
As the graph shows, historical context is key. Today’s home sales are well ahead of some of the more normal years that led up to the health crisis. That means buyers are still in the market, which is great news if you’re planning to list your home.
Houses Are Selling Faster Than Usual
When headlines mention the market is slowing, sellers may naturally wonder if their house will sell as quickly as they’d like. According to the most recent <a href="https://cdn.nar.realtor/sites/default/files/documents/2021-08-realtors-conference-index-09-22-2021_0.pdf" title="Realtors Confidence Index" target="_blank" rel="noopener noreferrer">Realtors Confidence Index</a> from NAR, homes are still selling at record speed (see graph below):<a href="https://files.simplifyingthemarket.com/2021/10/13134920/20211014-MEM-Eng-2.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-99572" src="https://assets.site-static.com/userfiles/1482/image/IMG_20211102_082401.jpg" alt="What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM" width="1000" height="750" style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" /></a>
Again, if we look back at data from previous years, we can see the average <a href="https://www.simplifyingthemarket.com/2021/09/17/have-you-ever-seen-a-housing-market-like-this-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="time on market">time on market</a> – 17 days – means homes are selling faster than a normal pace.
Bidding Wars Are Still the Norm
The Realtors Confidence Index from NAR also shows a drop in the average number of offers homes are receiving in August, and many headlines may simply focus there without providing the important context (see graph below):<a href="https://files.simplifyingthemarket.com/2021/10/13134925/20211014-MEM-Eng-3.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-99573" src="https://assets.site-static.com/userfiles/1482/image/IMG_20211102_082456.jpg" alt="What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM" width="1000" height="750" style="display: block; margin-left: auto; margin-right: auto;" /></a>
Again, it’s important to compare today’s market to trends from recent years. Currently, the average number of offers per listing is higher than 39 of the previous 45 months. That means the likelihood of a bidding war on your home is still high. And the number of offers your house receives can have a major influence on the final sale price.
So, Is the Market Slowing Down?
While there are slight declines in various month-to-month data, it’s important to keep historical context in mind when determining what’s happening in <a href="https://www.simplifyingthemarket.com/2021/08/25/why-2021-is-still-the-year-to-sell-your-house/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="today’s market">today’s market</a>. Odeta Kushi, Deputy Chief Economist at First American, put it best recently, <a href="https://twitter.com/odetakushi/status/1435594052456570885" title="saying" target="_blank" rel="noopener noreferrer">saying</a>:
“It's not the white-hot market from earlier in the year & it's not the 2020 market benefiting from a wave of pent-up demand but make no mistake this is still a hot housing market.”
Bottom Line
Don’t let headlines make you rethink listing your home this <a href="https://www.simplifyingthemarket.com/2021/09/07/reasons-you-should-consider-selling-this-fall/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="fall">fall</a>. Selling today means you can still take advantage of high buyer demand, multiple offers, and a quick sale. If you’re thinking of selling your house, let’s connect and discuss why this fall is the perfect time to do so.
2021-10-14T17:39:00-07:002021-11-02T05:42:54-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:7097 Remote Work Is Here To Stay. Can Your Home Deliver the Space You Need?<img src="https://assets.site-static.com/userfiles/1482/image/20210921-KCM-Share_1.jpg" width="750" height="410" />
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.simplifyingthemarket.com/2021/09/02/5-reasons-todays-housing-market-is-anything-but-normal/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" 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.simplifyingthemarket.com/2021/08/12/the-best-use-of-time-and-money-when-it-comes-to-renovations/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" 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.simplifyingthemarket.com/2021/08/25/why-2021-is-still-the-year-to-sell-your-house/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" 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.<img src="https://assets.site-static.com/userfiles/1482/image/20210921-MEM-Eng-2_1.jpg" width="960" height="720" />
How Does This Impact Homeowners?
If you <a href="https://www.simplifyingthemarket.com/2021/08/13/sellers-are-in-a-sweet-spot-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" 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.
Bottom Line
If ongoing remote work is changing what you need in a home, let’s connect to find one that delivers on your new wish list.
2021-09-22T08:44:00-07:002021-09-22T08:50:15-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6695Key Questions To Ask Yourself Before Buying a Home<img src="https://assets.site-static.com/userfiles/1482/image/20210802-KCM-Share.jpg" width="750" height="410" />
Sometimes it can feel like everyone has advice when it comes to buying a home. While your friends and loved ones may have your best interests in mind, they may also be missing crucial information about today’s housing market that you need to make your best decision.
Before you decide whether you’re ready to buy a home, you should know how to answer these three questions.
1. What’s Going on with Home Prices?
Home prices are one factor that directly impacts how much it will cost to buy a home and how much you stand to gain as a homeowner when prices appreciate.
The graph below shows just how much <a href="https://www.simplifyingthemarket.com/2021/07/06/a-look-at-home-price-appreciation-through-2025/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="experts">experts</a> are forecasting prices to rise this year:<a href="https://files.simplifyingthemarket.com/2021/07/29160837/20210802-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98865" src="https://files.mykcm.com/2021/07/29160837/20210802-MEM-Eng-1.png" alt="Key Questions To Ask Yourself Before Buying a Home | MyKCM" width="600" height="450" /></a>Continued price appreciation is great news for <a href="https://www.simplifyingthemarket.com/2021/06/18/owning-a-home-has-distinct-financial-benefits-over-renting-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="existing homeowners">existing homeowners</a> but can pose a significant challenge if you <a href="https://www.simplifyingthemarket.com/2021/07/07/the-truths-young-homebuyers-need-to-hear/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="wait to buy">wait to buy</a>. Using these forecasts, you can determine just how much waiting could cost you. If prices increase based on the average of all forecasts (12.46%), a median-priced home that cost $350,000 in January of 2021 will cost an additional $43,610 by the end of the year. What does this mean for you? Put simply, with home prices increasing, the longer you wait, the more it could cost you.
2. Are Today’s Low Mortgage Rates Going To Last?
Another significant factor that should inform your decision is mortgage interest rates. Today’s average rates remain close to record-lows. Much like prices, though, experts forecast rates will rise over the coming months, as the chart below shows:<a href="https://files.simplifyingthemarket.com/2021/07/29160840/20210802-MEM-Eng-2.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98866" src="https://files.mykcm.com/2021/07/29160840/20210802-MEM-Eng-2.png" alt="Key Questions To Ask Yourself Before Buying a Home | MyKCM" width="600" height="450" /></a>Your monthly mortgage payment can be significantly impacted by even the <a href="https://www.simplifyingthemarket.com/2021/07/19/what-you-should-do-before-interest-rates-rise/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="slightest increase">slightest increase</a> in mortgage rates, which makes the overall cost of the home greater over time when you wait.
3. Why Is Homeownership Important to You?
The final question is a personal one. Before deciding, you’ll need to understand your motivation to buy a home and why homeownership is an important goal for you. The financial benefits of owning a home are often easier to account for than the many emotional ones.
The <a href="https://72nut3mk2z64bywh6c1thwjy-wpengine.netdna-ssl.com/wp-content/uploads/2021/06/USMI-National-Homeownership-Market-Survey-June-2021.pdf" title="2021 National Homeownership Market Survey" target="_blank" rel="noopener noreferrer">2021 National Homeownership Market Survey</a> shows that six of the nine reasons Americans value homeownership are because of how it impacts them on a personal, aspirational level. The survey says homeownership provides:
Stability
Safety
A Sense of Accomplishment
A Life Milestone
A Stake in the Community
Personal Pride
The <a href="https://www.neighborworks.org/getattachment/73023399-4bb0-4d98-b2f8-8a3aa940d065/attachment.aspx" title="National Housing &amp; Financial Capability Survey" target="_blank" rel="noopener noreferrer">National Housing & Financial Capability Survey</a> from NeighborWorks America also highlights the emotional benefits of homeownership:<a href="https://files.simplifyingthemarket.com/2021/07/29160843/20210802-MEM-Eng-3.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98867" src="https://files.mykcm.com/2021/07/29160843/20210802-MEM-Eng-3.png" alt="Key Questions To Ask Yourself Before Buying a Home | MyKCM" width="600" height="450" /></a>Clearly, there’s a value to <a href="https://www.simplifyingthemarket.com/2021/05/03/americans-find-the-nonfinancial-benefits-of-homeownership-most-valuable/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="homeownership">homeownership</a> beyond the many great financial opportunities it provides. It gives homeowners a sense of pride, safety, security, and accomplishment – which impacts their lives and how they feel daily.
Bottom Line
Homeownership is life-changing, and buying a home can positively impact you in so many ways. With any decision this big, it helps to have a trusted advisor by your side each step of the way. If you’re ready to begin your journey toward homeownership, let’s connect to discuss your options and begin your journey.
2021-08-03T08:29:00-07:002021-08-03T08:31:49-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6674 4 Reasons Why the End of Forbearance Will Not Lead to a Wave of Foreclosures<img src="https://assets.site-static.com/userfiles/1482/image/20210728-KCM-Share.jpg" width="750" height="410" />
With forbearance plans about to come to an end, many are concerned the housing market will experience a wave of foreclosures like what happened after the housing bubble 15 years ago. Here are four reasons why that won’t happen.
1. 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" target="_blank" rel="noopener noreferrer">9.3 million</a> households lost their home 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 overwhelming fear was the pandemic would decimate the housing industry in a similar way. Many experts projected <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. Only 8.5% actually did, and that number is now <a href="https://www.mba.org/2021-press-releases/july/share-of-mortgage-loans-in-forbearance-decreases-to-350-percent" title="down to 3.5%" target="_blank" rel="noopener noreferrer">down to 3.5%</a>.
As of last Friday, the total number of mortgages still in forbearance stood at <a href="https://www.blackknightinc.com/blog-posts/forbearances-flat-for-second-consecutive-week/" title="1,863,000" target="_blank" rel="noopener noreferrer">1,863,000</a>. That’s definitely a large number, but nowhere near 9.3 million.
2. Most of the 1.86M in forbearance have enough equity to sell their home
Of the 1.86 million homeowners currently in forbearance, 87% have at least <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/06/BKI_MM_Apr2021_Report.pdf" title="10% equity" target="_blank" rel="noopener noreferrer">10% equity</a> in their homes. The 10% equity number is important because it enables homeowners to sell their houses and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.
The remaining 13% might not all have the option to sell, so if the entire 13% of the 1.86M homes went into foreclosure, that would total 241,800 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> of 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 coming out of the housing crash 15 years ago. The number does, however, draw a similar comparison to the three years prior to the pandemic.
3. The current market can absorb any listings coming to the market
When foreclosures hit the market in 2008, there was an excess supply of homes for sale. The situation is exactly the opposite today. In 2008, there was a 9-month supply of listings for sale. Today, that number stands at less than <a href="https://www.nar.realtor/newsroom/existing-home-sales-expand-1-4-in-june" title="3 months of inventory" target="_blank" rel="noopener noreferrer">3 months of inventory</a> on the market.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://magazine.realtor/daily-news/2020/11/18/yun-real-estate-could-see-best-winter-ever" title="explains" target="_blank" rel="noopener noreferrer">explains</a> when addressing potential foreclosures emerging from the forbearance program:
“Any foreclosure increases will likely be quickly absorbed by the market. It will not lead to any price declines.”
4. Those in power will do whatever is necessary to prevent a wave of foreclosures
Just last Friday, the White House released a <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/23/fact-sheet-biden-administration-announces-additional-actions-to-prevent-foreclosures/" title="fact sheet" target="_blank" rel="noopener noreferrer">fact sheet</a> explaining how homeowners with government-backed mortgages will be given further options to enable them to keep their homes when exiting forbearance. Here are two examples mentioned in the release:
“For homeowners who can resume their pre-pandemic monthly mortgage payment and where agencies have the authority, agencies will continue requiring mortgage servicers to offer options that allow borrowers to move missed payments to the end of the mortgage at no additional cost to the borrower.”
“The new steps the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA), and Department of Veterans Affairs (VA) are announcing will aim to provide homeowners with a roughly 25% reduction in borrowers’ monthly principal and interest (P&I) payments to ensure they can afford to remain in their homes and build equity long-term. This brings options for homeowners with mortgages backed by HUD, USDA, and VA closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac.”
When evaluating the four reasons above, it’s clear there won’t be a flood of foreclosures coming to the market as the forbearance program winds down.
Bottom Line
As Ivy Zelman, founder of the major housing market analytical firm Zelman & Associates, <a href="https://www.tomferry.com/our-podcast/experience-91/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
2021-07-30T15:06:00-07:002021-07-30T15:08:45-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6626 What You Should Do Before Interest Rates Rise<img src="https://assets.site-static.com/userfiles/1482/image/20210719-KCM-branded.jpg" width="750" height="410" />
In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average. Here are some options you should consider if you want to take advantage of today’s current low rates before they rise.
Sell and Move Up (or Downsize)
Many of today’s homeowners are rethinking what they need in a home and redefining what their <a href="https://www.simplifyingthemarket.com/2021/06/03/dreaming-of-a-bigger-home-why-not-buy-it-this-year/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="dream home" target="_blank" rel="noopener noreferrer">dream home</a> means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.
The chart below shows average <a href="http://www.freddiemac.com/pmms/" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> by decade compared to where they are today:<a href="https://files.simplifyingthemarket.com/2021/07/16134037/20210719-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98577" src="https://files.mykcm.com/2021/07/16134037/20210719-MEM-Eng-1.png" alt="What You Should Do Before Interest Rates Rise | MyKCM" width="600" height="450" /></a>Today’s rates are below 3%, but <a href="https://www.simplifyingthemarket.com/2021/06/30/what-do-experts-see-on-the-horizon-for-the-second-half-of-the-year/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="experts forecast" target="_blank" rel="noopener noreferrer">experts forecast</a> rates to rise over the next few years.
If the interest rate on your current mortgage is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. <a href="https://www.simplifyingthemarket.com/2021/04/21/planning-to-move-you-can-still-secure-a-low-mortgage-rate-on-your-next-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="Lower rates" target="_blank" rel="noopener noreferrer">Lower rates</a> mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.
Waiting, however, might mean you miss out on this historic opportunity. Below is a chart showing how your monthly payment will change if you buy a home as mortgage rates increase:<a href="https://files.simplifyingthemarket.com/2021/07/16134040/20210719-MEM-Eng-2.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98578" src="https://files.mykcm.com/2021/07/16134040/20210719-MEM-Eng-2.png" alt="What You Should Do Before Interest Rates Rise | MyKCM" width="600" height="450" /></a>
Breaking It All Down:
Using the chart above, let’s look at the breakdown of a $300,000 mortgage:
When mortgage rates rise, so does the monthly payment you can secure.
Even the smallest increase in rates can make a difference in your monthly mortgage payment.
As interest rates rise, you’ll need to look at a lower-priced home to try and keep the same target monthly payment, meaning you may end up with less home for your money.
No matter what, whether you’re looking to make a <a href="https://www.simplifyingthemarket.com/2021/06/11/have-your-day-in-the-sun-by-moving-up-this-summer-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="move up" target="_blank" rel="noopener noreferrer">move up</a> or <a href="https://www.simplifyingthemarket.com/2021/04/13/some-buyers-prefer-smaller-homes/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="downsize" target="_blank" rel="noopener noreferrer">downsize</a> to a home that better suits your needs, now is the time. Even a small change in interest rates can have a big impact on your purchasing power.
Refinance
If making a move right now still doesn’t feel right for you, consider refinancing. With the current low mortgage rates, refinancing is a great option if you’re looking to lower your monthly payments and stay in your current home.
Bottom Line
Take advantage of today’s low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect today to discuss which option is best for you.
For more mortgage or refinance information contact our mortgage partner Bob Faust
<a href="https://www.dkmortgage.com/faust/" target="_blank"><img src="https://assets.site-static.com/userfiles/1482/image/IMG_20210725_074228.jpg" width="750" height="475" /></a>
2021-07-25T04:48:00-07:002021-07-25T04:56:38-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6615Today’s Real Estate Market Explained Through 4 Key Trends<img src="https://assets.site-static.com/userfiles/1482/image/20210722-KCM-Share_1.jpg" width="750" height="410" />
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.simplifyingthemarket.com/2021/07/13/why-this-isnt-your-typical-summer-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="inventory levels" target="_blank" rel="noopener noreferrer">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.simplifyingthemarket.com/2021/07/16/experts-agree-options-are-improving-for-buyers-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="good news for buyers" target="_blank" rel="noopener noreferrer">good news for buyers</a> who crave more options. But even though we’re experiencing <a href="https://www.simplifyingthemarket.com/2021/07/14/housing-supply-is-rising-what-does-that-mean-for-you/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="small gains" target="_blank" rel="noopener noreferrer">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.simplifyingthemarket.com/2021/06/21/5-things-homebuyers-need-to-know-when-making-an-offer/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="their offer" target="_blank" rel="noopener noreferrer">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.simplifyingthemarket.com/2021/07/21151156/202010722-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><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.simplifyingthemarket.com/2021/07/06/a-look-at-home-price-appreciation-through-2025/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="home price appreciation" target="_blank" rel="noopener noreferrer">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.simplifyingthemarket.com/2021/07/12/4-major-incentives-to-sell-this-summer/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="potential sellers" target="_blank" rel="noopener noreferrer">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.simplifyingthemarket.com/2021/06/23/homeowner-wealth-increases-through-growing-equity-this-year/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="equity" target="_blank" rel="noopener noreferrer">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.simplifyingthemarket.com/2021/06/11/have-your-day-in-the-sun-by-moving-up-this-summer-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="dream homes" target="_blank" rel="noopener noreferrer">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.
2021-07-22T11:21:00-07:002021-07-22T11:23:58-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6609 Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too?<img src="https://assets.site-static.com/userfiles/1482/image/20210721-2-KCM-Share.jpg" width="750" height="410" />
Over the past year, many homeowners realized what they need in a home is changing, especially with the rise in remote work. If you’re longing for a dedicated home office or a change in scenery, now may be the <a href="https://www.simplifyingthemarket.com/2021/05/04/4-big-incentives-for-homeowners-to-sell-now/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="time" target="_blank" rel="noopener noreferrer">time</a> to find the home that addresses your <a href="https://www.simplifyingthemarket.com/2021/06/11/have-your-day-in-the-sun-by-moving-up-this-summer-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="evolving needs" target="_blank" rel="noopener noreferrer">evolving needs</a>.
Working from Home Isn’t a Passing Fad
Before the pandemic, only 21% of individuals worked from home. However, if you’ve recently discovered remote work is your new normal, you’re not alone.
A <a href="https://www.statista.com/chart/23781/remote-work-teams-departments/" title="survey" target="_blank" rel="noopener noreferrer">survey</a> of hiring managers conducted by Statista and Upwork projects 37.5% of U.S. workers will work remotely in some capacity over the next 5 years (see chart below):<a href="https://files.simplifyingthemarket.com/2021/07/20155327/20210721-MEM-Eng-01.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98656" src="https://files.mykcm.com/2021/07/20155327/20210721-MEM-Eng-01.png" alt="Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too? | MyKCM" width="600" height="450" /></a>
Working from Home Gives You More Flexibility and More Options
If you fall in that category, working from home may provide you with opportunities you didn’t realize you had. The ongoing rise in remote work means a portion of the workforce no longer needs to be tied to a specific area for their job. Instead, it gives those workers more flexibility when it comes to where they 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 house for your money, freeing up more options for your dedicated office space and more breathing room. You could also move to an area you’ve always dreamed of <a href="https://www.simplifyingthemarket.com/2021/06/24/demand-for-vacation-homes-is-still-strong/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="vacationing" target="_blank" rel="noopener noreferrer">vacationing</a> in – somewhere near the beach, the mountains, or simply an area that features better weather and community amenities. 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 into work every day, a slightly longer commute from a more suburban or rural area could be a worthy trade-off for a home with more features, space, or comforts. After all, if you’ll still be at home part-time, why not find a home that better suits your needs?
According to the latest <a href="https://www.cre.org/external-affairs/2021-22-top-ten-issues-affecting-real-estate/" title="Top Ten Issues Affecting Real Estate" target="_blank" rel="noopener noreferrer">Top Ten Issues Affecting Real Estate</a> from The Counselors of Real Estate (CRE), many homebuyers are already taking advantage of their newfound flexibility:
“. . . after years of apparent but variant trends towards urbanization, the pandemic universally caused a movement away from urban cores, particularly for those with higher incomes who could afford to move and for lower-income individuals seeking lower costs of living.”
Bottom Line
If you’ve found what you’re looking for in a home has changed due to remote work, it may be time to make a move. Let’s connect today to start prioritizing your home needs.
2021-07-22T03:19:00-07:002021-07-22T03:26:26-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6602 It Isn't 2008, This Isn’t a Housing Bubble<img src="https://assets.site-static.com/userfiles/1482/image/20210720-KCM-Share_1.jpg" width="750" height="410" />
With home prices continuing to deliver double-digit increases, some are concerned we’re in a housing bubble like the one in 2006. However, a closer look at the market data indicates this is nothing like 2006 for three major reasons.
1. The housing market isn’t driven by risky mortgage loans.
Back in 2006, nearly everyone could qualify for a loan. The <a href="https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mortgage-credit-availability-index" title="Mortgage Credit Availability Index" target="_blank" rel="noopener noreferrer">Mortgage Credit Availability Index</a> (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130. As an example of the difference between today and 2006, let’s look at the <a href="https://www.newyorkfed.org/microeconomics/hhdc/background.html" title="volume of mortgages" target="_blank" rel="noopener noreferrer">volume of mortgages</a> that originated when a buyer had less than a 620 credit score.<a href="https://files.simplifyingthemarket.com/2021/07/19150732/20210720-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98641" src="https://files.mykcm.com/2021/07/19150732/20210720-MEM-Eng-1.png" alt="3 Charts That Show This Isn’t a Housing Bubble | MyKCM" width="600" height="450" /></a>Dr. Frank Nothaft, Chief Economist for CoreLogic, reiterates this <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="point" target="_blank" rel="noopener noreferrer">point</a>:
“There are marked differences in today’s run up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”
2. Homeowners aren’t using their homes as ATMs this time.
During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).
Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over <a href="https://www.blackknightinc.com/wp-content/uploads/2021/07/BKI_MM_May2021_Report.pdf" title="$8 billion" target="_blank" rel="noopener noreferrer">$8 billion</a>.
Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is <a href="http://www.freddiemac.com/research/datasets/refinance-stats/index.page" title="half of what it was in 2006" target="_blank" rel="noopener noreferrer">half of what it was in 2006</a>.<a href="https://files.simplifyingthemarket.com/2021/07/19150734/20210720-MEM-Eng-2.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98642" src="https://files.mykcm.com/2021/07/19150734/20210720-MEM-Eng-2.png" alt="3 Charts That Show This Isn’t a Housing Bubble | MyKCM" width="600" height="450" /></a>
3. This time, it’s simply a matter of supply and demand.
FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months.
Builders also overbuilt during the bubble but pulled back significantly over the next decade. Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Mac, <a href="http://www.freddiemac.com/perspectives/sam_khater/20210415_single_family_shortage.page" title="explains" target="_blank" rel="noopener noreferrer">explains</a> that pullback is the major factor in the lack of available inventory today:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Here’s a chart that quantifies Khater’s remarks:<a href="https://files.simplifyingthemarket.com/2021/07/19150737/20210720-MEM-Eng-3.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98643" src="https://files.mykcm.com/2021/07/19150737/20210720-MEM-Eng-3.png" alt="3 Charts That Show This Isn’t a Housing Bubble | MyKCM" width="600" height="450" /></a>Today, there are simply not enough homes to keep up with current demand.
Bottom Line
This market is nothing like the run-up to 2006. Bill McBride, the author of the prestigious Calculated Risk blog, predicted the last housing bubble and crash. This is what he has to say about <a href="https://www.theatlantic.com/ideas/archive/2021/05/us-housing-market-records/619029/" title="today’s housing market" target="_blank" rel="noopener noreferrer">today’s housing market</a>:
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while because Millennials need houses. Prices will keep rising for a while because inventory is so low."
Let's connect to discuss how the market impacts your search for a new home.<br />Give us a call at 800-633-1142 or email Info@MurphyLeeGroup.com
2021-07-20T11:48:00-07:002021-07-22T03:28:55-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6476Are We in a Housing Bubble? Experts Say No.<img width="750" height="410" src="https://files.mykcm.com/2021/06/30105125/20210701-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Are We in a Housing Bubble? Experts Say No. | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/30105125/20210701-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/30105125/20210701-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/30105125/20210701-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
The question of whether the real estate market is a bubble ready to pop seems to be dominating a lot of conversations – and everyone has an opinion. Yet, when it comes down to it, the opinions that carry the most weight are the ones based on experience and expertise.
Here are four expert opinions from professionals and organizations that have devoted their careers to giving great advice to the housing industry.
The Joint Center for Housing Studies in their <a href="https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2021.pdf" title="The State of the Nation’s Housing 2021" target="_blank" rel="noopener noreferrer">The State of the Nation’s Housing 2021</a> report:
“… conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in house prices instead reflects strong demand amid tight supply, helped along by record-low interest rates.”
<a href="https://www.reuters.com/business/us-home-prices-keep-racing-ahead-with-risks-upside-2021-05-24/" title="Nathaniel Karp" target="_blank" rel="noopener noreferrer">Nathaniel Karp</a>, Chief U.S. Economist at BBVA:
“The housing market is in line with fundamentals as interest rates are attractive and incomes are high due to fiscal stimulus, making debt servicing relatively affordable and allowing buyers to qualify for larger mortgages. Underwriting standards are still strong, so there is little risk of a bubble developing.”
<a href="https://www.theatlantic.com/ideas/archive/2021/05/us-housing-market-records/619029/" title="Bill McBride" target="_blank" rel="noopener noreferrer">Bill McBride</a> of Calculated Risk:
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while, because Millennials need houses. Prices will keep rising for a while, because inventory is so low.”
<a href="https://blog.firstam.com/economics/house-prices-are-hot-but-is-housing-overvalued" title="Mark Fleming" target="_blank" rel="noopener noreferrer">Mark Fleming</a>, Chief Economist at First American:
“Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally…
Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”
Bottom Line
All four strongly believe that we’re not in a bubble and won’t see crashing home values as we did in 2008. And <a href="https://www.simplifyingthemarket.com/2021/05/11/experts-say-home-prices-will-continue-to-appreciate/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="they’re not alone" target="_blank" rel="noopener noreferrer">they’re not alone</a> – Goldman Sachs, JP Morgan, Morgan Stanley, and Merrill Lynch share the same opinion.
2021-07-06T06:43:00-07:002021-07-05T17:46:05-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6475What Do Experts See on the Horizon for the Second Half of the Year?<img width="750" height="410" src="https://files.mykcm.com/2021/06/29150313/20210630-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="What Do Experts See on the Horizon for the Second Half of the Year? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/29150313/20210630-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/29150313/20210630-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/29150313/20210630-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
As we move into the latter half of the year, questions about what’s to come are top of mind for buyers and sellers. Near record-low mortgage rates coupled with rising home price appreciation kicked off a robust housing market in the first half of 2021, but what does the forecast tell us about what’s on the horizon?
Mortgage Rates Will Likely Increase, but Remain Low
Many experts are projecting a rise in interest rates. The latest Quarterly Forecast from Freddie Mac <a href="http://www.freddiemac.com/research/forecast/20210414_quarterly_economic_forecast.page" title="states" target="_blank" rel="noopener noreferrer">states</a>:
“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”
However, even as mortgage rates rise, the anticipated increase is expected to be modest at most, and still well below <a href="https://www.simplifyingthemarket.com/2021/03/09/how-upset-should-you-be-about-3-mortgage-rates/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="historical averages" target="_blank" rel="noopener noreferrer">historical averages</a>. Rates remaining low is good news for homebuyers who are looking to maximize their <a href="https://www.simplifyingthemarket.com/2021/03/30/how-a-change-in-mortgage-rate-impacts-your-homebuying-budget?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="purchasing power" target="_blank" rel="noopener noreferrer">purchasing power</a>. The same report from Freddie Mac goes on to say:
“While higher mortgage rates will help slow the pace of home sales and moderate house price growth, we expect overall housing market activity will remain robust. Our forecast has total home sales, the sum of new and existing home sales, at 7.1 million in 2021....”
Home Price Appreciation Will Continue, but Price Growth Will Likely Slow
Joe Seydl, Senior Markets Economist at J.P. Morgan, <a href="https://privatebank.jpmorgan.com/gl/en/insights/living/do-you-want-to-jump-into-the-us-housing-market" title="projects" target="_blank" rel="noopener noreferrer">projects</a> home prices to continue rising as well, indicating buyers interested in purchasing a home should do so sooner rather than later. Waiting for rates or home prices to fall may not be wise:
“Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”
Other experts remain optimistic about home prices, too. The graph below highlights 2021 home price forecasts from multiple industry leaders:<br /><a href="https://files.simplifyingthemarket.com/2021/06/29150315/20210630-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98423" src="https://files.mykcm.com/2021/06/29150315/20210630-MEM-Eng-1.png" alt="What Do Experts See on the Horizon for the Second Half of the Year? | MyKCM" width="600" height="450" /></a>
Inventory Remains a Challenge, but There’s Reason To Be Optimistic
Home prices are rising, but they should moderate as more housing inventory comes to market. George Ratiu, Senior Economist at realtor.com, <a href="https://www.realtor.com/research/weekly-housing-trends-view-data-week-june-19-2021/" title="notes" target="_blank" rel="noopener noreferrer">notes</a> there are signs that we may see the current inventory challenges lessen, slowing the fast-paced home price appreciation and creating more choices for buyers:
“We have seen more new listings this year compared with 2020 in 11 of the last 13 weeks. The influx of new sellers over the last couple of months has been especially helpful in slowing price gains.”
New home starts are also showing signs of improvement, which further bolsters hopes of more options coming to market. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), <a href="https://eyeonhousing.org/2021/06/single-family-starts-steady-in-may/" title="writes" target="_blank" rel="noopener noreferrer">writes</a>:
“As an indicator of the economic impact of housing, there are now 652,000 single-family homes under construction. This is 28% higher than a year ago.”
Finally, while it may not fundamentally change the market conditions we’re currently experiencing, another reason to be optimistic more homes might come to market: our improving economy. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-housing-market-potential-strengthened-in-april" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“A growing economy in the summer months has multiple implications for the housing market. Growing consumer confidence, a stronger labor market, and higher wages bode well for housing demand. While a growing economy and improving public health conditions may also spur hesitant existing owners to list their homes for sale, it’s unlikely to significantly ease the super sellers’ market conditions.”
Bottom Line
As we look at the forecast for prices, interest rates, inventory, and home sales, experts remain optimistic about what’s on the horizon for the second half of 2021. Let’s connect today to discuss how we can navigate the market together in the coming months.
2021-07-05T17:24:00-07:002021-07-05T17:27:29-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6410Demand for Vacation Homes Is Still Strong<img width="750" height="410" src="https://files.mykcm.com/2021/06/23154753/20210624-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Demand for Vacation Homes Is Still Strong | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/23154753/20210624-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/23154753/20210624-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/23154753/20210624-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
The pandemic created a tremendous interest in <a href="https://www.simplifyingthemarket.com/2021/06/07/why-you-may-want-to-cash-in-on-your-second-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="vacation homes" target="_blank" rel="noopener noreferrer">vacation homes</a> across the country. Throughout the last year, many people purchased second homes as a safe getaway from the challenges of the health crisis. With many professionals working from home and many students taking classes remotely, it made sense to see a <a href="https://www.simplifyingthemarket.com/2020/09/14/two-new-surveys-indicate-urban-to-suburban-lean/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="migration away" target="_blank" rel="noopener noreferrer">migration away</a> from cities and into counties with more vacation destinations.
The <a href="https://cdn.nar.realtor/sites/default/files/documents/2021-vacation-home-counties-report-06-15-2021.pdf" title="2021 Vacation Home Counties Report" target="_blank" rel="noopener noreferrer">2021 Vacation Home Counties Report</a> from the National Association of Realtors (NAR) shows that this increase in vacation home sales continues in 2021. The report examines sales in counties where “vacant seasonal, occasional, or recreational use housing account for at least 20% of the housing stock” and compares that data to the overall residential market.
Their findings show:
Vacation home sales rose by 16.4% to 310,600 in 2020, outpacing the 5.6% growth in total existing-home sales.
Vacation home sales are up 57.2% year-over-year during January-April 2021 compared to the 20% year-over-year change in total existing-home sales.
Home prices rose more in vacation home counties – the median existing price rose by 14.2% in vacation home counties, compared to 10.1% in non-vacation home counties.
This coincides with data released by Zelman & Associates on the <a href="https://www.simplifyingthemarket.com/2021/06/07/why-you-may-want-to-cash-in-on-your-second-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="increase in sales" target="_blank" rel="noopener noreferrer">increase in sales</a> of second homes throughout the country last year.
As the data above shows, there is still high demand for <a href="https://www.simplifyingthemarket.com/2021/04/15/why-this-is-a-great-year-to-sell-your-vacation-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="second getaway homes" target="_blank" rel="noopener noreferrer">second getaway homes</a> in 2021 even as the pandemic winds down. While we may see a rise in second-home sellers as life returns to normal, ongoing <a href="https://www.simplifyingthemarket.com/2021/06/09/home-price-appreciation-is-as-simple-as-supply-and-demand/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="low supply and high demand" target="_blank" rel="noopener noreferrer">low supply and high demand</a> will continue to provide those sellers with a good return on their investment.
Bottom Line
If you’re one of the many people who purchased a vacation home during the pandemic, you’re likely wondering what this means for you. If you’re considering selling that home as life returns to normal, you have options. There are still plenty of buyers in the market. If, on the other hand, you want to keep your second home, enjoy it! Current market conditions show that it’s a good ongoing investment.
2021-06-28T13:59:00-07:002021-06-28T14:00:30-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:63615 Things Homebuyers Need To Know When Making an Offer<img width="750" height="410" src="https://files.mykcm.com/2021/06/11132747/20210621-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="5 Things Homebuyers Need To Know When Making an Offer | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/11132747/20210621-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/11132747/20210621-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/11132747/20210621-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
When it comes to buying a house, you’re looking for the perfect place to call home. The problem is, in today’s market there just aren’t that many homes available to purchase. With <a href="https://www.simplifyingthemarket.com/2021/04/28/patience-is-the-key-to-buying-a-home-this-year/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="inventory" target="_blank" rel="noopener noreferrer">inventory</a> hovering near record lows and sky-high buyer <a href="https://www.simplifyingthemarket.com/2021/05/06/why-waiting-to-buy-a-home-could-cost-you-a-small-fortune/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="demand" target="_blank" rel="noopener noreferrer">demand</a>, a multi-offer scenario is the new normal. Here are five things to keep in mind when you’re ready to make an offer.
1. Know Your Numbers
Having a complete understanding of your budget and how much house you can <a href="https://www.simplifyingthemarket.com/2021/05/26/buying-a-home-is-still-affordable/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="afford" target="_blank" rel="noopener noreferrer">afford</a> is essential. That’s why you should connect with a lender to get <a href="https://www.simplifyingthemarket.com/2021/05/07/the-power-of-mortgage-pre-approval-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="pre-approved" target="_blank" rel="noopener noreferrer">pre-approved</a> for a loan early in the homebuying process. Taking this step shows sellers you’re a serious, qualified buyer and can give you a competitive edge in a bidding war.
2. Brace for a Fast Pace
Today’s market is dynamic and fast-paced. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" title="Realtors Confidence Index" target="_blank" rel="noopener noreferrer">Realtors Confidence Index</a> from the National Association of Realtors (NAR), the average home is on the market for just <a href="https://www.simplifyingthemarket.com/2021/05/28/homes-across-the-country-are-selling-fast-infographic-3/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="17 days" target="_blank" rel="noopener noreferrer">17 days</a> – that means from start to finish, a house for sale in today’s climate is active for roughly 2.5 weeks. A skilled agent will do everything they can to help you stay on top of every possible opportunity. And, as soon as you find the right home for your needs, that agent will help you draft and submit your best offer as quickly as possible.
3. Lean on a Real Estate Professional
While homebuying may seem like a whirlwind process to you, local real estate agents do this every day, and we know what works. That expertise can be used to give you a significant leg up on your competition. An agent can help you consider what <a href="https://www.simplifyingthemarket.com/2021/02/24/how-much-leverage-do-todays-house-sellers-have/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="levers" target="_blank" rel="noopener noreferrer">levers</a> you can pull that might be enticing to a seller, like:
Offering flexible rent-back options to give the seller more time to move out
Your ability to do a quick close or make an offer that’s not contingent on the sale of your current home
It may seem simple, but catering to what a seller may need can help your offer stand out.
4. Make a Strong, but Fair Offer
Let’s face it – we all love a good deal. In the past, offering at or near the <a href="https://www.simplifyingthemarket.com/2021/06/08/in-todays-market-listing-prices-are-like-an-auctions-reserve-price/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="asking price" target="_blank" rel="noopener noreferrer">asking price</a> was enough to make your offer appealing to sellers. In today’s market, that’s often not the case. According to <a href="https://www.cnbc.com/2021/05/21/april-existing-home-sales-drop-marking-three-straight-months-of-declines.html" title="Lawrence Yun" target="_blank" rel="noopener noreferrer">Lawrence Yun</a>, Chief Economist at NAR:
“For every listing there are 5.1 offers. Half of the homes are being sold above list price.”
In such a competitive market, emotions and prices can run high. Use an agent as your trusted advisor to make a strong, but fair offer based on market value, recent sales, and demand.
5. Be a Flexible Negotiator
If you followed tip #3, you drafted the offer with the seller’s needs in mind. That said, the seller may still counter with their own changes. Be prepared to amend your offer to include flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). Just remember, there are certain contingencies you don’t want to forego. <a href="https://myhome.freddiemac.com/blog/homeownership/20201019_5_rules_for_making_an_offer_on_a_home.page" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a> explains:
“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”
Bottom Line
When it’s time to make an offer, it’s important to consider not just what you need, but what the seller may need too. Let’s connect so you have expert advice on this step in the homebuying process to put your best offer on the table.
2021-06-21T10:26:00-07:002021-06-22T10:29:26-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6331 Housing Wealth: The Missing Piece of the Affordability Equation<img width="750" height="410" src="https://files.mykcm.com/2021/06/16101541/20210617-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Housing Wealth: The Missing Piece of the Affordability Equation | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/16101541/20210617-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/16101541/20210617-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/16101541/20210617-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
The real estate market is soaring today. Residential home values are rising, and that’s a big win for homeowners. In 2020, there was a double-digit increase in home values – a trend that’s expected to head toward similar levels this year.
However, skyrocketing prices are causing some to start questioning affordability in the current housing market. Many are quick to emphasize the fact that homes today are less affordable than they were last year. Black Knight, a leading provider of data and analytics across the homeownership life cycle, <a href="https://cdn.blackknightinc.com/wp-content/uploads/2021/06/BKI_MM_Apr2021_Report.pdf" title="just reported" target="_blank" rel="noopener noreferrer">just reported</a> on the issue.
The findings show the historical averages of the national payment to income ratio, which they define as “the share of the median income needed to make the monthly payments on the median-priced home.” Their study reveals:
The average over the last 25 years was 23.6%
The average over the last 5 years was 20.1%
The average today stands at 20.5%
Right now, housing payments are slightly less affordable than the five-year average – but only by less than ½ a percentage point. However, they’re significantly more affordable than the 25-year average. Put another way, a buyer will likely make a slightly greater financial sacrifice to afford a home right now than if they purchased a home within the last five years. On the other hand, it also means the potential financial sacrifice is not nearly as great as it was over the last 25 years.
Does making a sacrifice to buy a home today make financial sense in the long term?
Last week, the Federal Reserve announced that, in the first three months of the year, household net worth increased by <a href="https://finance.yahoo.com/news/u-household-net-worth-reaches-160000570.html" title="$968 billion" target="_blank" rel="noopener noreferrer">$968 billion</a> based solely on the values of the real estate they owned. Another report from CoreLogic reveals the average annual gain in homeowner equity was <a href="https://www.corelogic.com/" title="$33,400" target="_blank" rel="noopener noreferrer">$33,400</a> per borrower.
Homeownership continues to be the cornerstone to building personal wealth. For most Americans, their home is the largest asset they own. On top of that, the difference between the net worth of homeowners and renters is significant at every income level. Here’s a table detailing that point using data from a <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" title="study" target="_blank" rel="noopener noreferrer">study</a> done by First American:<a href="https://files.simplifyingthemarket.com/2021/06/16102320/20210617-MEM-Eng-1a.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98266" src="https://files.mykcm.com/2021/06/16102320/20210617-MEM-Eng-1a.png" alt="Housing Wealth: The Missing Piece of the Affordability Equation | MyKCM" width="600" height="450" /></a>
Owning a home is an essential steppingstone to grow a household’s net worth. Despite the slightly greater sacrifice in the percentage of monthly income you’ll spend on housing today, for most homebuyers, the payoff of starting to build equity now will be worth it.
Bottom Line
Since prices have risen dramatically over the past 18 months, it’s slightly less affordable to buy a home today than it was a year ago. However, when you consider the equity gain and weigh the long-term benefits of building your net worth, you may question if you can afford not to buy now.
2021-06-19T06:17:00-07:002021-06-19T06:19:43-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6302 Don’t Wait To Sell Your House<img width="750" height="410" src="https://files.mykcm.com/2021/06/11124143/20210616-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Don’t Wait To Sell Your House | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/11124143/20210616-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/11124143/20210616-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/11124143/20210616-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
We’re in the ultimate sellers’ market right now. If you’re a homeowner thinking about selling, you have a huge advantage in today’s housing market. High buyer demand paired with very few houses for sale makes this the optimal time to sell for those who are ready to do so. Whatever the move you want to make looks like, here’s an overview of what’s creating the prime opportunity to sell this summer.
High Buyer Demand
Demand is strong, and buyers are actively searching for homes to purchase. In the <a href="https://cdn.nar.realtor/sites/default/files/documents/REALTOR_Confidence_Index_052021.pdf" title="Realtors Confidence Index Survey" target="_blank" rel="noopener noreferrer">Realtors Confidence Index Survey</a> published monthly by the National Association of Realtors (NAR), buyer traffic is considered “very strong” in almost every state. Homebuyers aren’t just great in number right now – they’re also determined to find their dream home. NAR shows the average home for sale today receives five offers from hopeful buyers. These increasingly frequent bidding wars can drive up the price of your house, which is why high demand from competitive homebuyers is such a win for this summer’s sellers.
Low Inventory of Houses for Sale
Purchaser demand is so high, the market is running out of available homes for sale. Danielle Hale, Chief Economist at realtor.com, <a href="https://money.com/covid-housing-shortage-timeline-sellers/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“For most sellers listing sooner rather than later could really pay off with less competition from other sellers and potentially a higher sales price... They’ll also avoid some big unknowns lurking later in the year, namely another possible surge in COVID cases, rising interest rates and the potential for more sellers to enter the market.”
NAR also <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" title="reveals" target="_blank" rel="noopener noreferrer">reveals</a> that unsold inventory sits at a 2.4-months’ supply at the current sales pace. This is far lower than the historical norm of a 6.0-months’ supply. Homes are essentially selling as fast as they’re hitting the market. Below is a graph of the <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-04-2021-single-family-only-2021-05-21.pdf" title="existing inventory" target="_blank" rel="noopener noreferrer">existing inventory</a> of single-family homes for sale:<a href="https://files.simplifyingthemarket.com/2021/06/11124146/20210616-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98219" src="https://files.mykcm.com/2021/06/11124146/20210616-MEM-Eng-1.png" alt="Don’t Wait To Sell Your House | MyKCM" width="600" height="450" style="display: block; margin-left: auto; margin-right: auto;" /></a>
On a local level
Southern Ocean County isn't immune to the lack of inventory. May of 2021 there are less than 25% of the homes for sale as in May of 2016.
<img src="https://assets.site-static.com/userfiles/1482/image/Invnroty.png" width="1024" height="768" />
New Construction
At the same time, homebuilders are increasing construction this year, but they can’t keep up with the growing demand. While reporting on the inventory of newly constructed homes, the U.S. Census Bureau <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“The seasonally‐adjusted estimate of new houses for sale at the end of April was 316,000. This represents a supply of 4.4 months at the current sales rate.”
What Does This Mean for You?
If you’re thinking of putting your house on the market, don’t wait. A seller will always negotiate the best deal when demand is high and supply is low. That’s exactly what’s happening in the real estate market today.
Bottom Line
As vaccine rollouts progress and we continue to see the economy recover, <a href="https://www.simplifyingthemarket.com/2021/05/19/sellers-are-ready-to-enter-the-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="more houses" target="_blank" rel="noopener noreferrer">more houses</a> will come to the market. Don’t wait for the competition in your neighborhood to increase. If you’re ready to make a move, now is the time to sell. Let’s connect today to get your house listed at this optimal moment in time.
2021-06-16T08:10:00-07:002021-06-16T09:17:24-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6294Hope Is on the Horizon for Today’s Housing Shortage<img width="750" height="410" src="https://files.mykcm.com/2021/06/11120049/20210615-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Hope Is on the Horizon for Today’s Housing Shortage | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/11120049/20210615-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/11120049/20210615-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/11120049/20210615-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
The major challenge in today’s housing market is that there are more buyers looking to purchase than there are homes available to buy. Simply put, supply can’t keep up with demand. A normal market has a 6-month supply of homes for sale. Anything over that indicates it’s a buyers’ market, but an inventory level below that threshold means we’re in a <a href="https://www.simplifyingthemarket.com/2021/03/29/what-it-means-to-be-in-a-sellers-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="sellers’ market" target="_blank" rel="noopener noreferrer">sellers’ market</a>. Today’s inventory level sits far below the norm.
According to the <a href="https://www.nar.realtor/newsroom/existing-home-sales-decline-2-7-in-april" title="Existing Home Sales Report" target="_blank" rel="noopener noreferrer">Existing Home Sales Report</a> from the National Association of Realtors (NAR):
“Total housing inventory at the end of April amounted to 1.16 million units, up 10.5% from March's inventory and down 20.5% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, slightly up from March's 2.1-month supply and down from the 4.0-month supply recorded in April 2020. These numbers continue to represent near-record lows.”
Basically, while we are seeing some improvement, we’re still at near-record lows for housing inventory (as shown in the graph below). Here’s why. Since the pandemic began, sellers have been cautious when it comes to putting their homes on the market. At the same time that fewer people are listing their homes, more and more people are trying to buy them thanks to today’s low<a href="https://www.simplifyingthemarket.com/2021/05/05/are-interest-rates-expected-to-rise-over-the-next-year/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title=" mortgage rates" target="_blank" rel="noopener noreferrer"> mortgage rates</a>. The influx of buyers aiming to capitalize on those rates are purchasing this <a href="https://www.simplifyingthemarket.com/2021/04/23/this-isnt-a-bubble-its-simply-lack-of-supply-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="limited supply" target="_blank" rel="noopener noreferrer">limited supply</a> of homes as quickly as they’re coming to market.<a href="https://files.simplifyingthemarket.com/2021/06/11120054/20210615-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98214" src="https://files.mykcm.com/2021/06/11120054/20210615-MEM-Eng-1.png" alt="Hope Is on the Horizon for Today’s Housing Shortage | MyKCM" width="600" height="450" /></a>This inventory shortage doesn’t just apply to existing homes that are already built. When it comes to <a href="https://www.simplifyingthemarket.com/2021/04/28/patience-is-the-key-to-buying-a-home-this-year/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="new construction" target="_blank" rel="noopener noreferrer">new construction</a>, builders are trying to do their part to bring more newly built homes into the market. However, due to challenges with things like lumber supply, they’re also not able to keep up with demand. In their <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" title="Monthly New Residential Sales report" target="_blank" rel="noopener noreferrer">Monthly New Residential Sales report</a>, the United States Census Bureau states:
“The seasonally‐adjusted estimate of new houses for sale at the end of April was 316,000. This represents a supply of 4.4 months at the current sales rate.”
<a href="https://files.simplifyingthemarket.com/2021/06/11120051/20210615-MEM-Eng-2.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98213" src="https://files.mykcm.com/2021/06/11120051/20210615-MEM-Eng-2.png" alt="Hope Is on the Horizon for Today’s Housing Shortage | MyKCM" width="600" height="450" /></a>Sam Khater, Chief Economist at Freddie Mac, <a href="http://www.freddiemac.com/perspectives/sam_khater/20210415_single_family_shortage.page" title="elaborates" target="_blank" rel="noopener noreferrer">elaborates</a>:
“In the span of five decades, entry level construction fell from 418,000 units per year in the late 1970s to 65,000 in 2020.
While in 2020 only 65,000 entry-level homes were completed, there were 2.38 million first-time homebuyers that purchased homes. Not all renters looking to purchase their first home were in the market for entry-level homes, however, the large disparity illustrates the significant and rapidly widening gap between entry-level supply and demand.”
Despite today’s low inventory, there is hope on the horizon.
Regarding existing home sales, Sabrina Speianu, Senior Economic Research Analyst at realtor.com, <a href="https://www.realtor.com/research/may-2021-data/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“In May, newly listed homes grew by 5.4% on a year-over-year basis compared to the earlier days of the COVID-19 pandemic last year…
In May, the share of newly listed homes compared to active daily inventory hit a historical high of 44.4%, 17.3 percentage points higher than last year and 15.1 percentage points above typical levels seen in 2017 to 2019. This is a reflection of quickly selling homes and, for buyers, it means that while they can expect fresh new listings every week, they will have to be prepared to move quickly on desirable homes.”
As for newly built homes, builders are also confident about what’s ahead for housing inventory. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), <a href="https://eyeonhousing.org/2021/05/hmi-building-materials-top-housing-concerns/" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“Builder confidence in the market remains strong due to a lack of resale inventory, low mortgage interest rates, and a growing demographic of prospective home buyers.”
Things are starting to look up for residential real estate inventory. As the country continues to reopen, <a href="https://www.simplifyingthemarket.com/2021/05/19/sellers-are-ready-to-enter-the-housing-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="more houses" target="_blank" rel="noopener noreferrer">more houses</a> are likely to be listed for sale. However, as long as buyer demand remains high, it will take time for the balance between supply and demand to truly neutralize.
Bottom Line
Although it may be challenging to find a house to buy in today’s market, there is hope on the horizon. <a href="https://www.simplifyingthemarket.com/2021/06/14/the-right-expert-will-guide-you-through-this-unprecedented-market/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="Let’s connect" target="_blank" rel="noopener noreferrer">Let’s connect</a> to talk about your home search so we can find your dream home this summer.
2021-06-15T13:16:00-07:002021-06-15T13:17:21-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6287The Right Expert Will Guide You Through This Unprecedented Market<img width="750" height="410" src="https://files.mykcm.com/2021/06/10162916/20210614-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Right Expert Will Guide You Through This Unprecedented Market | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/10162916/20210614-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/10162916/20210614-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/10162916/20210614-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
In a normal market, it’s good to have an experienced guide coaching you through the process of buying or selling a home. That person can advise you on important things like <a href="https://www.simplifyingthemarket.com/2021/06/09/home-price-appreciation-is-as-simple-as-supply-and-demand/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="pricing" target="_blank" rel="noopener noreferrer">pricing</a> your home correctly or the first <a href="https://www.simplifyingthemarket.com/2020/12/04/the-path-to-homeownership-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="steps" target="_blank" rel="noopener noreferrer">steps</a> to take when you’re ready to buy. However, the market we’re in today is far from normal. As a result, an expert isn’t just good to have by your side – an expert is essential.
Today’s housing market is full of extremes. <a href="https://www.simplifyingthemarket.com/2021/04/21/planning-to-move-you-can-still-secure-a-low-mortgage-rate-on-your-next-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="Mortgage rates" target="_blank" rel="noopener noreferrer">Mortgage rates</a> hovering near record-lows are driving high <a href="https://www.simplifyingthemarket.com/2021/05/26/buying-a-home-is-still-affordable/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="buyer demand" target="_blank" rel="noopener noreferrer">buyer demand</a>. On the other hand, an absence of <a href="https://www.simplifyingthemarket.com/2021/05/13/your-house-could-be-the-oasis-in-an-inventory-desert/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="sellers" target="_blank" rel="noopener noreferrer">sellers</a> is creating record-low housing inventory. This imbalance in supply and demand is leading to a skyrocketing rate of bidding wars and more houses selling <a href="https://www.simplifyingthemarket.com/2021/06/08/in-todays-market-listing-prices-are-like-an-auctions-reserve-price/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="over" target="_blank" rel="noopener noreferrer">over</a> their asking price. This is driving home price <a href="https://www.simplifyingthemarket.com/2021/05/11/experts-say-home-prices-will-continue-to-appreciate/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="appreciation" target="_blank" rel="noopener noreferrer">appreciation</a> and gains in home <a href="https://www.simplifyingthemarket.com/2021/05/20/should-i-move-or-refinance/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="equity" target="_blank" rel="noopener noreferrer">equity</a>. These market conditions aren’t just extreme – they can be overwhelming. Having a trusted expert to coach you through the process of buying and selling a home gives you clarity, confidence, and success through each step.
Here are just a few of the ways a real estate expert is invaluable:
Contracts – We help with the disclosures and contracts necessary in today’s heavily regulated environment.
Experience – We’re well-versed in real estate and experienced with the entire sales process, including how it’s changed over the past year.
Negotiations – We act as a buffer in negotiations with all parties throughout the entire transaction while advocating for your best interests.
Education – We simply and effectively explain today’s market conditions and decipher what they mean for your individual goals.
Pricing – We help you understand today’s real estate values when setting the price of your home or making an offer to purchase one.
A real estate agent can be your essential guide through this unprecedented market, but truth be told, not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding the right agent should be your top priority when you’re ready to buy or sell a home.
So, how do you choose the right expert?
It starts with trust. You’ll have to be able to trust the advice your agent is going to give you, so make sure you’re connected to a true professional. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. A true professional expert can, however, give you the best possible advice based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will help you plan the steps to take for success, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions toward your goals. That’s exactly what you want and deserve.
Bottom Line
It’s crucial right now to work with a real estate expert who understands how the market is changing and what that means for home buyers and sellers. If you’re planning to make a move this year, let’s connect so you have someone who can answer your questions, give you the best advice, and guide you along the way.
2021-06-14T17:10:00-07:002021-06-14T17:14:53-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6286Why This Is Not Like 2008 Again<img width="750" height="410" src="https://files.mykcm.com/2021/06/09161403/20210610-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Why This Is Not Like 2008 Again | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/09161403/20210610-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/09161403/20210610-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/09161403/20210610-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
During the Great Recession, just over a decade ago, the financial systems the world depended on started to collapse. It created a panic that drove some large companies out of business (ex. Lehman Brothers) and many more into <a href="https://www.forbes.com/sites/steveschaefer/2011/08/10/the-great-recessions-biggest-bankruptcies-where-are-they-now/?sh=4592abc24b7e" title="bankruptcy" target="_blank" rel="noopener noreferrer">bankruptcy</a>.
The financial crisis that accompanied the current pandemic caused hardship to certain industries and hurt many small businesses. However, it hasn’t rattled the world economy. It seems that a year later, things are slowly getting back to normal for many companies.
Why is there a drastic difference between 2008 and now?
In a <a href="https://www.realtytrac.com/blog/the-big-real-estate-news-no-one-is-covering/" title="post" target="_blank" rel="noopener noreferrer">post</a> from RealtyTrac, they explain:
“We changed the rules. We told banks they needed more reserves and that they could no longer underwrite toxic mortgages. It turns out that regulation — properly done — can help us navigate financial minefields.”
Here are the results of that regulation, captured in a graph depicting the number of failed banks since 2007.<a href="https://files.simplifyingthemarket.com/2021/06/09161358/20210610-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98196" src="https://files.mykcm.com/2021/06/09161358/20210610-MEM-Eng-1.png" alt="Why This Is Not Like 2008 Again | MyKCM" width="600" height="450" /></a>
What was different this time?
The post mentioned above explains:
“In 2008 the government saw the foreclosure meltdown as a top-down problem and set aside $700 billion for banks under the Troubled Asset Relief Program (TARP). Not all of the $700 billion was used, but the important point is that the government did not act with equal fervor to help flailing homeowners, millions of whom lost their homes to foreclosures and short sales.
This time around the government forcefully moved to help ordinary citizens. Working from the bottom-up, an estimated $5.3 trillion went to the public in 2020 through such mechanisms as the Paycheck Protection Program (PPP), expanded unemployment benefits, tax incentives, and help for local governments. So far this year we have the $1.9 billion American Rescue Plan with millions of $1,400 checks as well as proposals to spend trillions more on infrastructure…Bank deposits increased by nearly $2 trillion during the past year and credit card debt fell.”
Bottom Line
Many have suffered over the past year. However, the economic toll of the current recession was nowhere near the scope of the Great Recession, and it won’t result in a housing crisis.
2021-06-12T17:05:00-07:002021-06-14T17:08:52-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6288Home Price Appreciation Is as Simple as Supply and Demand<img width="750" height="410" src="https://files.mykcm.com/2021/06/08165524/20210609-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Home Price Appreciation Is as Simple as Supply and Demand | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/08165524/20210609-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/08165524/20210609-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/08165524/20210609-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Home price appreciation continues to <a href="https://www.simplifyingthemarket.com/2021/06/07/why-you-may-want-to-cash-in-on-your-second-home/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="accelerate" target="_blank" rel="noopener noreferrer">accelerate</a>. Today, prices are driven by the simple concept of supply and demand. Pricing of any item is determined by how many items are available compared to how many people want to buy that item. As a result, the strong year-over-year home price appreciation is simple to explain. The demand for housing is up while the supply of homes for sale hovers at historic lows.
Let’s use three maps to show how this theory continues to affect the residential real estate market.
Map #1 – State-by-state price appreciation reported by the Federal Housing Finance Agency (<a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" title="FHFA" target="_blank" rel="noopener noreferrer">FHFA</a>) for the first quarter of 2021 compared to the first quarter of 2020:<a href="https://files.simplifyingthemarket.com/2021/06/08165519/20210609-MEM-Eng-1.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98189" src="https://files.mykcm.com/2021/06/08165519/20210609-MEM-Eng-1.png" alt="Home Price Appreciation Is as Simple as Supply and Demand | MyKCM" width="600" height="450" /></a>As the map shows, certain states (colored in red) have appreciated well above the national average of 12.6%.
Map #2 – The change in state-by-state inventory levels year-over-year reported by <a href="https://www.realtor.com/research/data/" title="realtor.com" target="_blank" rel="noopener noreferrer">realtor.com</a>:<a href="https://files.simplifyingthemarket.com/2021/06/08165515/20210609-MEM-Eng-2.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98188" src="https://files.mykcm.com/2021/06/08165515/20210609-MEM-Eng-2.png" alt="Home Price Appreciation Is as Simple as Supply and Demand | MyKCM" width="600" height="450" /></a>Comparing the two maps shows a correlation between change in listing inventory and price appreciation in many states. The best examples are Idaho, Utah, and Arizona. Though the correlation is not as easy to see in every state, the overall picture is one of causation.
The reason prices continue to accelerate is that housing inventory is still at all-time lows while demand remains high. However, this may be changing.
Is there relief around the corner?
The report by realtor.com also shows the monthly change in inventory for each state.
Map #3 – State-by-state changes in inventory levels month-over-month reported by <a href="https://www.realtor.com/research/data" title="realtor.com" target="_blank" rel="noopener noreferrer">realtor.com</a>:<a href="https://files.simplifyingthemarket.com/2021/06/08165512/20210609-MEM-Eng-3.png?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-98187" src="https://files.mykcm.com/2021/06/08165512/20210609-MEM-Eng-3.png" alt="Home Price Appreciation Is as Simple as Supply and Demand | MyKCM" width="600" height="450" /></a>As the map indicates, 39 of the 50 states (plus the District of Columbia) saw increases in inventory over the last month. This may be evidence that homeowners who have been afraid to let buyers in their homes during the pandemic are now putting their houses on the market.
We’ll know for certain as we move through the rest of the year.
Bottom Line
Some are concerned by the rapid price appreciation we’ve experienced over the last year. The maps above show that the increases were warranted based on great demand and limited supply. Going forward, if the number of homes for sale better aligns with demand, price appreciation will moderate to more historical levels.
2021-06-10T18:09:00-07:002021-06-14T18:11:23-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:6289Why You May Want To Cash in on Your Second Home<img width="750" height="410" src="https://files.mykcm.com/2021/06/03153705/20210607-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Why You May Want To Cash in on Your Second Home | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2021/06/03153705/20210607-KCM-Share.jpg 750w, https://files.mykcm.com/2021/06/03153705/20210607-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2021/06/03153705/20210607-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
When stay-at-home mandates were enforced last year, many households realized their homes didn’t really fulfill their new lifestyle needs. An office (in some cases two), a media room, space for children to learn, a gym, and a large yard are all examples of amenities that became highly desirable almost overnight.
Zelman & Associates recently reported that <a href="https://www.zelmanassociates.com/research/reports/2021/05/real-estate-broker-survey-continued-price-surge-re" title="sales" target="_blank" rel="noopener noreferrer">sales</a> of primary residences grew by 9% in 2020. That increase in demand was met by the lowest supply of homes for sale in history. High demand and low supply caused prices to skyrocket over the past twelve months. Here are three home price indexes released most recently that show how home values have risen:
<a href="https://www.fhfa.gov/Media/PublicAffairs/Pages/US-House-Prices-Rise-12pt6-Percent-over-the-Last-Year-Up-3pt5-Percent-in-the-First-Quarter.aspx" title="FHFA Agency House Price Index" target="_blank" rel="noopener noreferrer">FHFA Agency House Price Index</a> shows a 13.9% increase
<a href="https://www.corelogic.com/insights-download/home-price-index.aspx" title="CoreLogic Home Price Insights Report" target="_blank" rel="noopener noreferrer">CoreLogic Home Price Insights Report</a> shows an 11.3% increase
<a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20210525-1381359/1381359_cshomeprice-release-0525.pdf" title="S&amp;P Case-Shiller U.S. National Home Price Index" target="_blank" rel="noopener noreferrer">S&P Case-Shiller U.S. National Home Price Index</a> shows a 13.2% increase
Prices increased by double digits in every region of the country and in 19 of 20 major metros. Chicago was the only exception, where prices still rose by 9%.
What does this mean to those who purchased a second home during the pandemic?
Many people didn’t want to give up a home in the city or close to their office. Instead, they purchased a larger second home farther away and moved there to stay safe and have more space. According to the same Zelman report, sales for second homes rose an astonishing 27% in 2020.
That large second-home retreat on a lake or in the mountains would demand a higher price than the average house. Let’s assume a buyer purchased such a home for $500,000. Assuming the middle 13.2% appreciation shown above, that home would now be worth about $566,000.
Those who bought second homes to improve their lifestyle during the height of the pandemic, or those who just wanted to be in a safer environment, also made a great investment.
What should these homeowners do now as the pandemic is receding, and the economy is reopening?
The buyers of those second homes now have a decision to make. Many will move back to the original home they still own (the one that’s closer to work, friends, and family). Should they keep the second home? That could depend on answers to questions like these:
Now that you may have to go back to the office (at least a few days a week) and students are required to physically attend school, would you still use the second house enough to warrant the expenses of an additional home?
Would you go to the second home on most weekends, or would you return to the movie theater, attend sporting events, eat out at fine restaurants, or spend your time traveling again?
Bottom Line
If you purchased a larger second home during the pandemic, you were able to make day-to-day life much easier for those important to you. You also made it much safer. However, with those goals already accomplished, you now need to decide whether to continue paying the extra expenses or sell the house and cash in your profit. If you decide selling makes sense, let’s connect today to discuss the value of your second home.
2021-06-07T01:22:00-07:002021-06-15T01:24:08-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:47205 Tips for Homebuyers Who Want to Make a Competitive Offer<img width="750" height="410" src="https://files.mykcm.com/2020/11/19112023/20201130-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="5 Tips for Homebuyers Who Want to Make a Competitive Offer | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2020/11/19112023/20201130-KCM-Share.jpg 750w, https://files.mykcm.com/2020/11/19112023/20201130-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2020/11/19112023/20201130-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Today’s real estate market has high <a href="https://www.simplifyingthemarket.com/2020/10/28/buyer-interest-is-growing-among-younger-generations/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="buyer interest" target="_blank" rel="noopener noreferrer">buyer interest</a> and low housing <a href="https://www.simplifyingthemarket.com/2020/11/17/homes-for-sale-are-rapidly-disappearing/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="inventory" target="_blank" rel="noopener noreferrer">inventory</a>. With so many buyers competing for a limited number of homes, it’s more important than ever to know the ins and outs of making a confident and competitive offer. Here are five keys to success for this important stage in the homebuying process.
1. Listen to Your Real Estate Agent
A recent <a href="http://www.freddiemac.com/blog/homeownership/20201019_5_rules_for_making_an_offer_on_a_home.page" title="article" target="_blank" rel="noopener noreferrer">article</a> from Freddie Mac offers guidance on making an offer on a home in today’s market. Right off the bat, it points out how emotional this can be for buyers and why trusted professionals can help you stay focused on the most important things:
“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”
Your real estate professional should be your primary source for answers to the questions you have when you’re ready to make an offer.
2. Understand Your Finances
Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to reach out to your lender to get pre-approved for a loan early in the homebuying process. Only 44% of today’s prospective homebuyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. It shows sellers you’re a serious, qualified buyer and can give you a competitive edge if you enter a <a href="https://www.simplifyingthemarket.com/2020/10/16/how-to-prepare-for-a-bidding-war-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="bidding war" target="_blank" rel="noopener noreferrer">bidding war</a>.
3. Be Ready to Move Quickly
According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" title="Realtors Confidence Index" target="_blank" rel="noopener noreferrer">Realtors Confidence Index</a>, published monthly by the National Association of Realtors (NAR), the average property being sold today is receiving more than three offers and is only on the market for a few weeks. These are both results of today’s competitive market, showing how important it is to stay agile and vigilant in your search. As soon as you find the right home for your needs, be prepared to work with your agent to submit an offer as quickly as possible.
4. Make a Fair Offer
It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t submit an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this part of the process will help you stay competitive:
“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”
5. Be a Flexible Negotiator
After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. Your position can be strengthened with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). There are, however, certain contingencies you don’t want to forego. Freddie Mac explains:
“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”
Bottom Line
Today’s competitive market makes it more important than ever to make a strong offer on a home, and a trusted expert can help you rise to the top along the way.
2020-12-01T09:44:00-07:002020-12-01T09:46:50-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:4666Chances of Another Foreclosure Crisis? “About Zero Percent.”<img width="750" height="410" src="https://files.mykcm.com/2020/11/16165023/20201118-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Chances of Another Foreclosure Crisis? “About Zero Percent.” | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2020/11/16165023/20201118-KCM-Share.jpg 750w, https://files.mykcm.com/2020/11/16165023/20201118-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2020/11/16165023/20201118-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
There seems to be some concern that the 2020 economic downturn will lead to another foreclosure crisis like the one we experienced after the housing crash a little over a decade ago. However, there’s one major difference this time: a robust forbearance program.
During the housing crash of 2006-2008, many felt homeowners should be forced to pay their mortgages despite the economic hardships they were experiencing. There was no empathy for the challenges those households were facing. In a 2009 Wall Street Journal article titled <a href="https://www.wsj.com/articles/BL-DVB-7851" title="Is Walking Away From Your Mortgage Immoral?" target="_blank" rel="noopener noreferrer">Is Walking Away From Your Mortgage Immoral?</a>, John Courson, Chief Executive of the Mortgage Bankers Association, was asked to comment on those not paying their mortgage. He famously said:
“What about the message they will send to their family and their kids?”
Courson suggested that people unable to pay their mortgage were bad parents.
What resulted from that lack of empathy? Foreclosures mounted.
This time is different. There was an immediate understanding that homeowners were faced with a challenge not of their own making. The government quickly jumped in with a mortgage forbearance program that relieved the financial burden placed on many households. The program allowed many borrowers to suspend their monthly mortgage payments until their economic condition improved. It was the right thing to do.
What happens when forbearance programs expire?
Some analysts are concerned many homeowners will not be able to make up the back payments once their forbearance plans expire. They’re concerned the situation will lead to an onslaught of foreclosures.
The banks and the government learned from the challenges the country experienced during the housing crash. They don’t want a surge of foreclosures again. For that reason, they’ve put in place <a href="https://www.simplifyingthemarket.com/2020/10/21/why-todays-options-will-save-homeowners-from-foreclosure/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="alternative ways" target="_blank" rel="noopener noreferrer">alternative ways</a> homeowners can pay back the money owed over an extended period of time.
Another major difference is that, unlike 2006-2008, today’s homeowners are sitting on a record amount of <a href="https://www.simplifyingthemarket.com/2020/10/02/rising-home-equity-can-power-your-next-move-infographic/?a=108807-d6c8f96ed3f2a0891ac0f84bcb0a1c3a" title="equity" target="_blank" rel="noopener noreferrer">equity</a>. That equity will enable them to sell their houses and walk away with cash instead of going through foreclosure.
Bottom Line
The differences mentioned above will be the reason we’ll avert a surge of foreclosures. As Ivy Zelman, a highly respected thought leader for housing and CEO of Zelman & Associates, said:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
2020-11-20T12:26:00-07:002020-11-20T12:28:24-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:4647Why Working from Home May Spark Your Next Move
<img width="750" height="410" src="https://files.mykcm.com/2020/11/12171924/20201116-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Why Working from Home May Spark Your Next Move | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2020/11/12171924/20201116-KCM-Share.jpg 750w, https://files.mykcm.com/2020/11/12171924/20201116-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2020/11/12171924/20201116-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" />
If you’ve been <a href="https://www.mykcm.com/2020/08/06/how-is-remote-work-changing-homebuyer-needs/" title="working from home">working from home</a> this year, chances are you’ve been at it a little longer than you initially expected. Businesses all over the country have figured out how to operate remotely to keep their employees healthy, safe, and productive. For many, it may be carrying into next year, and possibly beyond.
While the pandemic continues, Americans are re-evaluating their homes, floorplans, locations, needs, and more. Some need more space, while others need less. Whether you’re renting or own your home, if remote work is part of your future, you may be thinking about <a href="https://www.mykcm.com/2020/10/28/buyer-interest-is-growing-among-younger-generations/" title="moving">moving</a>, especially while today’s mortgage rates are so low.
A recent study from Upwork <a href="https://www.upwork.com/press/releases/economist-report-remote-workers-on-the-move" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Anywhere from 14 to 23 million Americans are planning to move as a result of remote work.”
To put this into perspective, last year, 6 million homes were sold in the U.S. This means roughly 2 – 4X as many people are considering moving now, and there’s a direct connection to their ability to work from home.
The same study also notes while 45.3% of people are planning to stay within a 2-hour drive from their current location, 41.5% of the people who are citing working from home as their primary reason for making a move are willing to look for a home more than 4 hours away from where they live now (See graph below):<a href="https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1.jpeg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" class="aligncenter wp-image-96453" src="https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1.jpeg" alt="Why Working from Home May Spark Your Next Move | MyKCM" width="600" height="450" srcset="https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1.jpeg 2539w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-600x450.jpeg 600w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-1024x768.jpeg 1024w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-768x576.jpeg 768w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-1536x1152.jpeg 1536w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-2048x1536.jpeg 2048w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-100x75.jpeg 100w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-1046x784.jpeg 1046w, https://files.mykcm.com/2020/11/12171927/20201116-MEM-Eng-1-1484x1113.jpeg 1484w" sizes="(max-width: 600px) 100vw, 600px" /></a>In some cases, moving a little further away from your current location might mean you can get <a href="https://www.mykcm.com/2020/09/22/the-cost-of-a-home-is-far-more-important-than-the-price/" title="more">more</a> home for your money. If you have the opportunity to work remotely, you may have more options available by expanding your search. Upwork also indicates, of those surveyed:
“People are seeking less expensive housing: Altogether, more than half (52.5%) are planning to move to a house that is significantly more affordable than their current home.”
Whether you can eliminate your daily commute to the office, or you simply need more space to work from home, your plans may be changing. If that’s the case, it’s time to connect with a local real estate professional to assess your evolving needs and determine your path together.
Bottom Line
This has been a year of change, and what you need in a home is no exception. Let’s connect today to make sure you have expert guidance on your side to help you find a home that fits your remote work needs.
2020-11-17T10:53:00-07:002020-11-17T11:00:10-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:4633Homeownership Is a Key to Building Wealth<img width="750" height="410" src="https://assets.site-static.com/userfiles/1482/image/20201110-KCM-mlg2.jpg" class="attachment-entry size-entry wp-post-image" alt="Homeownership Is a Key to Building Wealth | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2020/11/09104210/20201110-KCM-Share.jpg 750w, https://files.mykcm.com/2020/11/09104210/20201110-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2020/11/09104210/20201110-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" />
<article id="post-96424" class="post-96424 post type-post status-publish format-standard has-post-thumbnail hentry category-buyers category-sellers category-pricing category-rent-vs-buy">
For years, real estate has been considered the best <a href="https://www.mykcm.com/2020/07/10/americans-rank-real-estate-best-investment-for-7-years-running-infographic/" title="investment">investment</a> you can make. A major reason for this is due to the net worth a household gains through homeownership. In fact, according to the <a href="https://www.federalreserve.gov/publications/files/scf20.pdf" title="2019 Survey of Consumer Finance Data" target="_blank" rel="noopener noreferrer">2019 Survey of Consumer Finance Data</a> from the Federal Reserve, for the average homeowner:
“…a primary home accounts for 90% of the total wealth of a family in the U.S.”
How do homeowners gain wealth?
Most large purchases, like cars and appliances, depreciate in value as they age, so it’s understandable to question how owning a home can increase wealth over time. In a simple equation, the National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/metro-area-wealth-gains-from-homeownership-as-of-2020-q2" title="explains" target="_blank" rel="noopener noreferrer">explains</a> how the combination of paying your mortgage and home price appreciation grow overall wealth:
Principal Payments + Price Appreciation Gains = Housing Wealth Gain
As home values increase and you make payments toward your home loan, you’ll gain wealth through equity. The same article from NAR also addresses how wealth gains tend to play out over time:
“Housing wealth accumulation takes time and is built up by paying off the mortgage debt and by price appreciation. And while home prices can fall, home prices tend to recover and go up over the longer term. As of September 2020, the median sales price of existing home sales was $311,800, a 35% gain since July 2006 when prices peaked at $230,000.”
Taking a look at how equity has grown for the typical homeowner, it’s clear to see how real estate is a sound long-term investment. NAR notes:
“Nationally, a person who purchased a typical home 30 years ago would have typically gained about $283,000 as of the second quarter of 2020.” (See graph below):
<a href="https://files.mykcm.com/2020/11/09104212/20201110-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" class="aligncenter wp-image-96426" src="https://files.mykcm.com/2020/11/09104212/20201110-MEM-Eng-1.jpg" alt="Homeownership Is a Key to Building Wealth | MyKCM" width="600" height="450" srcset="https://files.mykcm.com/2020/11/09104212/20201110-MEM-Eng-1.jpg 1000w, https://files.mykcm.com/2020/11/09104212/20201110-MEM-Eng-1-600x450.jpg 600w, https://files.mykcm.com/2020/11/09104212/20201110-MEM-Eng-1-768x576.jpg 768w, https://files.mykcm.com/2020/11/09104212/20201110-MEM-Eng-1-100x75.jpg 100w" sizes="(max-width: 600px) 100vw, 600px" /></a>
Bottom Line
Whether you’re a current homeowner planning to put your <a href="https://www.mykcm.com/2020/10/02/rising-home-equity-can-power-your-next-move-infographic/" title="equity">equity</a> toward a new home or have hopes of buying your first home soon, homeownership will always be a great opportunity to build your net worth and overall wealth. Owning a home is truly an investment in your financial future.
</article>
2020-11-14T10:43:00-07:002020-11-14T11:00:19-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:4562Rent vs. Buy: How to Decide What’s Best for You
<img width="750" height="410" src="https://files.mykcm.com/2020/11/02123707/20201103-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Rent vs. Buy: How to Decide What’s Best for You | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2020/11/02123707/20201103-KCM-Share.jpg 750w, https://files.mykcm.com/2020/11/02123707/20201103-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2020/11/02123707/20201103-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" />
According to the U.S. Census Bureau, <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="median rent" target="_blank" rel="noopener noreferrer">median rent</a> continues to rise. With today’s <a href="https://www.mykcm.com/2020/10/28/buyer-interest-is-growing-among-younger-generations/" title="low mortgage rates">low mortgage rates</a>, there’s great opportunity for current renters to make a move into homeownership that stretches each dollar a little bit further.
While the best timeline to buy a home is different for everyone, the question remains: Should I continue renting or is it time for me to buy? The answer depends on your current situation and your future plans, so here are some thoughts to help you decide if you’re ready to own a home of your own.
1. Rent Will Continue to Increase
This is one of the top reasons why renters decide to move because in most cases, rent will continue increasing each year. As noted above, the U.S. Census Bureau recently released its quarterly homeownership <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="report" target="_blank" rel="noopener noreferrer">report</a>, and as the graph below shows, median rent is climbing year after year. When you own a home, you’ll lock in your monthly payment for the life of your loan, creating consistency and predictability in your payments.<a href="https://files.mykcm.com/2020/11/02123708/20201103-MEM-Eng-1.jpg" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" class="aligncenter wp-image-96314" src="https://files.mykcm.com/2020/11/02123708/20201103-MEM-Eng-1.jpg" alt="Rent vs. Buy: How to Decide What’s Best for You | MyKCM" width="600" height="450" srcset="https://files.mykcm.com/2020/11/02123708/20201103-MEM-Eng-1.jpg 1000w, https://files.mykcm.com/2020/11/02123708/20201103-MEM-Eng-1-600x450.jpg 600w, https://files.mykcm.com/2020/11/02123708/20201103-MEM-Eng-1-768x576.jpg 768w, https://files.mykcm.com/2020/11/02123708/20201103-MEM-Eng-1-100x75.jpg 100w" sizes="(max-width: 600px) 100vw, 600px" /></a>
2. Freedom to Customize
This is a big decision-making point for many people who want to be able to paint, renovate, and make home upgrades. In many cases, landlords determine all of these selections and prefer you do not alter them as a renter. As a homeowner, you have the freedom to decorate and personalize your home to truly make it your own.
3. Privacy
When renting, your landlord has access to your space in case of an emergency. If you own your home, however, you’re the one to decide who can come inside. Given today’s health concerns around the pandemic, this may be a growing priority for you.
4. Flexibility for Relocation
If you’re renting, it may be easier to move quickly should you have a job transfer or simply decide it’s time for a change. When you’re a homeowner and need to sell your house, this might take a little more time. Today, however, with the housing market’s <a href="https://www.mykcm.com/2020/10/29/three-ways-low-inventory-is-a-win-for-sellers/" title="low inventory">low inventory</a>, this may no longer be the case. Homes are selling at a <a href="https://www.mykcm.com/2020/10/23/selling-your-house-is-the-right-move-right-now-infographic/" title="record-breaking">record-breaking</a> pace, so you may have more flexibility than you think.
5. Building Equity
When you pay your rent, your landlord earns the <a href="https://www.mykcm.com/2020/10/02/rising-home-equity-can-power-your-next-move-infographic/" title="equity">equity</a> the property gains. If you own your home, the benefits of your investment go directly toward your <a href="https://www.mykcm.com/2020/10/26/two-important-impacts-of-home-equity/" title="net worth">net worth</a>. This is savings you’ll be able to use in the future for things like sending children to college, starting a new business, buying a bigger home, or simply downsizing to save for retirement.
6. Tax Advantages
When you own your home, there are additional advantages that work in your favor as well. You can deduct things like your property taxes and mortgage interest (Always make sure you check with your accountant to see which tax-deductible benefits apply to your situation). When you rent, however, the tax benefits are directed to your landlord.
Bottom Line
It’s up to you to decide if you’d prefer to <a href="https://www.mykcm.com/2020/08/28/the-cost-of-renting-vs-buying-a-home-infographic-4/" title="rent or buy">rent or buy</a>, and it’s different for every person. If you’d like to learn more about the pros and cons of each, as well as <a href="https://www.mykcm.com/2020/10/27/how-down-payment-assistance-opens-the-door-to-homeownership/" title="resources">resources</a> to help you along the way, let’s connect to discuss your options. This way, you can make a confident and informed decision with a trusted expert on your side.
2020-11-03T10:10:00-07:002020-11-03T10:12:23-07:00Curtis Leetag:murphyleegroup.com,2012-09-20:33971st Time Homebuyer Grant<img src="https://assets.site-static.com/userfiles/1482/image/florida-down-payment-assistance.jpg" width="650" height="434" />
The NJHMFA Down Payment Assistance Program (DPA) provides $10,000 for qualified first-time homebuyers to use as down payment and closing cost assistance when purchasing a home in New Jersey. The DPA is an interest-free, five-year forgivable second loan with no monthly payment.
<br />To participate in this program, the DPA must be paired with an <a href="https://theroadhomenj.com/index.html#msg-box8-10">NJHMFA first mortgage loan</a>. The first mortgage loan is a competitive 30-year, fixed-rate government-insured loan, originated through an NJHMFA participating lender. Certain restrictions such as maximum household income and purchase price limits apply. <a href="http://www.njhousing.gov/homeownership/buyers/first/" target="_blank">View the income and purchase price limits here.</a><br /><br />Our NJHMFA's participating lender will help walk you through program qualification details including income and purchase price limits, and help you complete the application process.
Do I Qualify for This Program?
Are you a first-time homebuyer with a credit score of 620 or greater?<br />You're considered a first-time homebuyer if you have not owned a home within the previous three years.<br /><br />
Are you planning to purchase a home in New Jersey?<br />This program applies to homes to be used as a primary residence in all <br />Counties of New Jersey.
If Your credit is under 620 or you don't know your credit, we have a mortgage representative who can help with other mortgage programs and/or credit repair.
If you answered YES to the questions above, Register below and we'll be happy to provide more information on the program.
2020-03-08T18:25:00-07:002020-03-08T18:30:42-07:00Curtis Lee