Your "Local" Specialist Blog

July 23rd, 2016 12:25 PM

Rents Skyrocket at Highest Rate in almost a Decade

Rent Set to Exceed $535 Billion Paid Last Year | Keeping Current Matters
The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That's the strongest yearly price gain since 2007. This coincides with a report released earlier this month in which AxioMetrics announced that rents are continuing to increase in 2016. The report revealed:
  • There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the same period last year.
  • That the effective rent growth this quarter compared to last quarter was 2.3%.
  • Annual effective rent growth was positive in 49 of the top 50 markets, based on number of units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and excess construction continues.

Here is a graph to illustrate the rate of increase over the last several years:

Rent Set to Exceed $535 Billion Paid Last Year | Keeping Current Matters

Bottom Line

With rents continuing to rise and mortgage interest rates still at historic lows, meet with a local real estate professional who can help determine if you could turn your monthly rental cost into a home of your own. 

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 23rd, 2016 12:25 PMLeave a Comment

Subscribe to this blog
July 21st, 2016 10:33 AM

Baby Boomers Are On the Move

Baby Boomers Are On the Move | Keeping Current Matters According to a Merrill Lynch study"an estimated 4.2 million retirees moved into a new home last year alone." Two-thirds of retirees say that they are likely to move at least once during retirement. As one participant in the study stated:
"In retirement, you have the chance to live anywhere you want. Or you can just stay where you are. There hasn't been another time in life when we've had that kind of freedom."
The top reason to relocate cited was "wanting to be closer to family" at 29%, a close second was "wanting to reduce home expenses" at 26%. A recentFreddie Mac study found similar results, as "nearly 20 percent of Boomers said they would move closer to their grandchildren/children compared to 13 percent who said they would move to a warmer climate."

Not Every Baby Boomer Downsizes

There is a common misconception that as retirees find themselves with fewer children at home, they will instantly desire a smaller home to maintain. While that may be the case for half of those surveyed, the study found that three in ten decide to actually upsize to a larger home. Some choose to buy a home in a desirable destination with extra space for large family vacations, reunions, extended visits, or to allow other family members to move in with them. According to Merrill Lynch:
"Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations."

Bottom Line

If your housing needs have changed or are about to change, meet with a local real estate professional in your area who can help with deciding your next step.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 21st, 2016 10:33 AMLeave a Comment

Subscribe to this blog
Would You Qualify for a Mortgage Now?
Would You Qualify for a Mortgage Now? | Keeping Current Matters
The widespread myth that perfect credit and large down payments are necessary to buy a home are holding many potential home buyers on the sidelines. According to Ellie Mae's latest Origination Report, the average FICO score for all closed loans in May was 724, far lower than the 750 or 800 that many buyers believe to be true. Below is a graph of the distribution of FICO scores of approved loans in May (the latest available data): Would You Qualify for a Mortgage Now? | Keeping Current Matters Looking at the chart above, it becomes obvious that not only do you not need a 750+ credit score, but 54.9% of approved loans actually had a score between 600 and 749. More and more experts are speaking up about the fact that if potential buyers realized they could be approved for a mortgage with a credit score at, or above, 600, the distribution in the chart above would shift further to the left. Ellie Mae's Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage:
"The high median credit score is due to many millennials believing they won't qualify with the score they have - and are therefore waiting to apply for a mortgage until they have the score they think they need." (emphasis added)
CoreLogic's latest MarketPulse Report agrees that the median FICO score does not always tell the whole story:
"The observed decline in originations could be a result of potential applicants being either too cautious or discouraged from applying, more so than tight underwriting as the culprit in lower mortgage activity."
It's not just millennials who believe high credit scores and large down payments are needed. Many current homeowners are delaying moving on to a home that better fits their current needs due to a belief that they would not qualify for a mortgage today.

So what does this all mean?

Moe put it this way:
"Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy."

Bottom Line

If you are one of the many Americans who has always thought homeownership was out of their reach, meet with a local real estate professional who can help you start the process of being pre-qualified to see if you are able to buy now!

Posted in:General
Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 20th, 2016 11:41 AMLeave a Comment

Subscribe to this blog
July 5th, 2016 3:55 PM
4 Reasons to Buy This Summer!
4 Reasons to Buy This Summer! | Keeping Current Matters
Summer is here! The temperature isn't the only thing heating up right now, so too is the housing market in many areas of the country! Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic's latest Home Price Index reports that home prices have appreciated by 6.2% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.3% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years. The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac's Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will be up almost a full percentage point by this time next year. An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way You are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains:
"Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That's yet another reason owning often does--as Americans intuit--end up making more financial sense than renting."

4. It's Time to Move On with Your Life

The 'cost' of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But what if they weren't? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.


Posted in:General
Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 5th, 2016 3:55 PMLeave a Comment

Subscribe to this blog

Gap Between Homeowner's & Appraiser's Opinions Narrows Slightly

Gap Between Homeowner's & Appraiser's Opinions Narrows Slightly | Keeping Current Matters In today's housing market, where supply is very low and demand is very high, home values are increasing rapidly. One major challenge in such a market is the bank appraisal. If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank. Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser's evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months. Gap Between Homeowner's & Appraiser's Opinions Narrows Slightly | Keeping Current Matters The gap between the homeowner vs. appraiser's opinion has started to head in the right direction (closer to even), as June saw a slight decrease from May's -1.95% to -1.89% nationally. Homeowners in the western part of the country, however, have been pleasantly surprised as their homes have appraised higher than they expected. Denver received its highest HPPI last month as homes came in an average of 3.28% higher than the homeowner believed it would. Nine of the twelve metro areas that had a positive HPPI last month were located in the west. Quicken Loans' Chief Economist, Bob Walters explains:
"The hot housing markets along the West Coast are growing quicker than owners realize, giving way to higher than expected prices for buyers and more home equity for existing owners. On the other hand, the housing markets are more balanced in the East and Midwest, leading owners to be slightly over-enthusiastic about their home's appreciation."

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank's appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, meet with an experienced professional who can guide you through this, and any other, obstacle that may arise.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on June 30th, 2016 9:31 AMLeave a Comment

Subscribe to this blog
June 23rd, 2016 12:21 PM

Hurry Up and List your House TODAY!!

Hurry Up and List your House TODAY!! | Keeping Current Matters That headline might be a little aggressive. However, as the data on the 2016 housing market begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME! The May numbers are not in yet, but the April numbers were sensational. Jonathon Smoke, Chief Economist at realtor.com, explained:
"We had a triple crown of April home sales reports, so 2016 is in the pole position to earn best year of home sales in a decade."
And Freddie Mac also expressed a tremendous optimism regarding home sales for the rest of the summer:
"Home sales typically rise in the spring and summer months, and we anticipate acceleration in home sales that will surpass 2007's pace by late summer."
The only challenge to the market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is less than a five-month supply of inventory. This represents a decrease in supply of 3.6% from the same time last year.

Bottom Line

With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Contact a local real estate professional today to see whether that is the case in your neighborhood.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on June 23rd, 2016 12:21 PMLeave a Comment

Subscribe to this blog
Do Homeowners Realize Their Equity Position Has Changed?
Do Homeowners Realize Their Equity Position Has Changed? | Keeping Current Matters
Yesterday, we reported that according to CoreLogic's latest Equity Report, nearly 268,000 homeowners regained equity and are no longer underwater on their mortgage in the first quarter. Homes with negative equity have decreased by 21.5% year-over-year. A study by Fannie Mae suggests that many homeowners are not aware of how their equity position has changed as their home has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic's report shows that only 8% of homes are in that position. The study also revealed that only 37% of Americans believe that they have "significant equity" (greater than 20%), when in actuality, 74% do! Do Homeowners Realize Their Equity Position Has Changed? | Keeping Current Matters This means that 37% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing). Fannie Mae spoke out on this issue in their report:
"Homeowners who underestimate their homes' values not only underestimate their home equity, they also likely underestimate: 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes."
CoreLogic's report also revealed that if homes were to appreciate by an additional 5%, over 800,000 US households would regain positive equity.

Bottom Line

If you are one of the many homeowners who is unsure of your current equity situation and would like to know your options, contact a local real estate professional who can help.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on June 22nd, 2016 3:07 PMLeave a Comment

Subscribe to this blog

What's Happening in the Real Estate Market?

What's Happening in the Real Estate Market? | Keeping Current Matters This is a pretty common question that a potential home buyer or seller may be asking themselves. Leading economists in real estate converged in New Orleans this past week as they presented their answer to this question at the 50th Annual Real Estate Journalism Conference for the National Association of Real Estate Editors.

Here are the top takeaways from the week of presentations:

Many of the conversations at the conference came back to the impact that Millennials and first-time home buyers will have on the market in the future. Jonathan Smoke, Chief Economist for realtor.com had this to say:
"At any given time in our history, demographics would explain 60-80% of what's happening [in the market], and we are in a period of time where Millennials make up a largest demographic group according to the Census, at 84 million."
According to the National Association of Realtors (NAR), the median first-time home buyer age is 30 and many millennials are entering a prime age to drive the housing market into the future. Lawrence Yun, Chief Economist for NAR shared that myths and affordability may be holding back potential buyers:
"84% of current renters have the desire to own. While 36% believe they cannot afford a home and 60% of renters believe it would be 'difficult' to qualify for a mortgage.
Ellie Mae's Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage:
"Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy."
The National Multifamily Housing Council (NMHC) revealed that Millennials and Baby Boomers are often competing for the same housing inventory, causing a challenge as these two groups are the largest generations by population. Both groups are looking for affordable, convenient homes close to city centers and 'what's happening.'

Bottom Line

The experts agree that homeownership is still desirable across all demographic groups, with Millennials and Baby Boomers having a great impact on available supply. If your dreams include owning your own home, meet with a local real estate professional who can evaluate your ability to buy now!

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on June 17th, 2016 2:15 PMLeave a Comment

Subscribe to this blog
June 7th, 2016 4:52 PM

Wall Street Journal: Housing Recovery Picks Up Steam

Wall Street Journal: Housing Recovery Picks Up Steam | Keeping Current Matters

Yesterday, we ran a post quoting major housing experts on the increasing strength of the U.S. housing market. We were pleasantly surprised that, on the same day, the Wall Street Journal decided to run a front page story titled, “Housing Recovery Picks Up Steam” (article available to WSJ subscribers).

Wall Street Journal: Housing Recovery Picks Up Steam | Keeping Current Matters

The first paragraph of the article says it best:

“Home prices are back to near-record highs across the U.S. amid rising demand and supply constraints, a sign that the lopsided housing-market recovery of the past five years is gaining some strength.” (emphasis added).

What about the struggles in the economy?

Some openly question how the real estate market can be gaining ground if the overall economy is still struggling. According to the WSJ, it is:

“Despite the unbalanced recovery, Federal Reserve officials have seen housing as a bright spot for the U.S. economy in recent years. Residential construction has contributed to overall economic output for eight straight quarters, expanding at a 17% annual rate in a first quarter marked by slow growth in other sectors.”

Bottom Line

The housing market is gaining strength and all indicators point to an even stronger real estate market moving forward.


Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on June 7th, 2016 4:52 PMLeave a Comment

Subscribe to this blog
May 31st, 2016 2:36 PM

Unparalleled Trust Necessary Before Listing Your House

Unparalleled Trust Necessary Before Listing Your House | Keeping Current Matters
You and your family have decided to sell your house. It is now time to choose a real estate professional to help with the process. One of the major attributes this agent must possess is trustworthiness. To what degree do you need to trust them? You must have enough trust in them that you feel comfortable they will accomplish all four things below:

1. Sell possibly the largest asset your family owns

In many cases, a home is the largest asset a family has. Studies have shown that the equity many families have in their home is the largest percentage of that family's overall wealth.

2. Set the correct market value on that asset

Pricing is crucial even in the best of markets. You want to get the best price for your home without putting your house at a value that buyers will have little interest in.

3. Set the time schedule for the liquidation of that asset

Your family probably has a certain timetable for the sale of your house and the move into your next home. Coordinating the home selling process to meet certain schedules can be tricky.

4. Set a fair fee for the services required to liquidate that asset

You will need to pay a commission to an agent for selling the home and coordinating all elements of the selling transaction, including possible future negotiations (ex. with a home inspector or appraiser). That's a lot of trust. Make sure you pick a true professional to help with the sale of your home. 

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on May 31st, 2016 2:36 PMLeave a Comment

Subscribe to this blog

Archives:

My Favorite Blogs:

Sites That Link to This Blog: