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Will Housing Affordability Be a Challenge in 2017?

Will Housing Affordability Be a Challenge in 2017? | Keeping Current Matters
Some industry experts are saying that the housing market may be heading for a slowdown in 2017 based on rising home prices and a jump in mortgage interest rates. One of the data points they use is the Housing Affordability Index, as reported by the National Association of Realtors (NAR). Here is how NAR defines the index:
“The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data.”
Basically, a value of 100 means a family earning the median income earns enough to qualify for a mortgage on a median-priced home, based on the price and mortgage interest rates at the time. Anything above 100 means the family has more than enough to qualify. The higher the index, the easier it is to afford a home.

Why the concern?

The index has been declining over the last several years as home values increased. Some are concerned that too many buyers could be priced out of the market. But, wait a minute… Though the index skyrocketed from 2009 through 2013, we must realize during that time the housing crisis left the market with an overabundance of housing inventory with as many as one out of three listings being a distressed property (foreclosure or short sale). All prices dropped dramatically and distressed properties sold at major discounts. Then, mortgage rates fell like a rock. The market is recovering, and values are coming back nicely. That has caused the index to fall. However, let’s remove the crisis years and look at the current index as compared to the index from 1990 – 2008: Will Housing Affordability Be a Challenge in 2017? | Keeping Current Matters We can see that, even though prices have increased, mortgage rates are still lower than historical averages and have put the index in a better position than every year for the nineteen years before the crash.

Bottom Line

The Housing Affordability Index is in great shape and should not be seen as a challenge to the real estate market’s continued recovery. 

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on January 21st, 2017 1:05 PMLeave a Comment

Why Pre-Approval Should Be Your First Step
Why Pre-Approval Should Be Your First Step | Keeping Current Matters
In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. Freddie Mac lays out the advantages of pre-approval in the My Home section of their website: "It's highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets." One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding "your credit, debt, work history, down payment and residential history." Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:
  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

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

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on January 18th, 2017 12:44 PMLeave a Comment

You Need a Professional on Your Team When Buying a Home
You Need a Professional on Your Team When Buying a Home | Keeping Current Matters
Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to do it on their own. In today's market: you need an experienced professional!

You Need an Expert Guide if You Are Traveling a Dangerous Path

The field of real estate is loaded with land mines; you need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and is ready for you to move into can be tricky. An agent listens to your wants and needs, and can sift through the homes that do not fit within the parameters of your "dream home." A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today's market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way - from the original offer to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal - you need someone who can keep the deal together until it closes. Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family's head; the salary that puts food on their family's table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money...not cost you money.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on January 10th, 2017 10:28 AMLeave a Comment

If Your Home Hasn't Sold Yet... Check the Price!
If Your Home Hasn't Sold Yet... Check the Price! | Keeping Current Matters
The residential housing market has been hot. Home sales have bounced back solidly and are now at their second highest pace since February 2007. Demand has remained strong throughout the winter as many real estate professionals are reporting bidding wars with many homes selling above listing price. What about your house?

If your house hasn't sold, it is probably because of the price.

If your home is on the market and you are not receiving any offers, look at your price. Pricing your home just 10% above market value dramatically cuts the number of prospective buyers that will even see your house. See chart below. If Your Home Hasn't Sold Yet... Check the Price! | Keeping Current Matters

Bottom Line

The housing market is hot. If you are not seeing the results you want, sit down with your agent and revisit the pricing conversation.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on January 9th, 2017 1:41 PMLeave a Comment

Start 2017 Off Right... List Your House for Sale
Start 2017 Off Right... List Your House for Sale | Keeping Current Matters As we are about to bring in the New Year, families across the country will be deciding if this is the year that they will sell their current house and move into their dream home. Many will decide that it is smarter to wait until the spring "buyer's market" to list their house. In the past, that might have made sense. However, this winter is not like recent years. The recent jump in mortgage rates has forced buyers off the fence and into the market, resulting in incredibly strong demand RIGHT NOW!! At the same time, inventory levels of homes for sale have dropped dramatically as compared to this time last year. Here is a chart showing the decrease in inventory levels by category: Start 2017 Off Right... List Your House for Sale | Keeping Current Matters

Bottom Line

Demand for your home is very strong right now while your competition (other homes for sale) is at a historically low level. If you are thinking of selling in 2017, now may be the time.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on December 30th, 2016 9:41 AMLeave a Comment

December 28th, 2016 11:55 AM

You Need an Agent Who Will Put You First

You Need an Agent Who Will Put You First | Keeping Current Matters
When it comes to buying a home, whether you are a rookie homebuyer or have gone through the process many times, having a local real estate expert who is well versed in the neighborhood you are looking to move into, as well as the trends of that area, should be your goal. One great example of an agent who is in your corner and is always looking out for your best interests is one of the main characters on ABC's Modern Family, Phil Dunphy. For those who aren't familiar, the character Phil is a Realtor with a huge heart who always strives to do his best for his family and his clients. In one recent episode, Phil even shared the oath that he created and holds himself accountable to:
"On my honor, I promise to aid in man's quest for shelter, to recognize I'm not just in the business of houses -- I'm in the business of dreams in the shape of houses. To disclose all illegal additions, shoddy construction, murders, and ghosts. And to put my clients' needs before my own."
While this might seem silly, and it was definitely written with humor in mind, the themes of helping someone achieve the American Dream and putting a client's needs above your own are not to be taken lightly.

Bottom Line

When you make the decision to enter the housing market, as either a buyer or a seller, make sure you look for an agent who exemplifies these values and will help you through every step of the process. 

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on December 28th, 2016 11:55 AMLeave a Comment

Whether You Rent or Buy: Either Way You're Paying a Mortgage
Whether You Rent or Buy: Either Way You're Paying a Mortgage | Keeping Current Matters
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord's. As an owner, your mortgage payment is a form of 'forced savings' that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

Christina Boyle, Senior Vice President and Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:
"With a 30-year fixed rate mortgage, you'll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years - unlike rents which will continue to rise over the next three decades."

Bottom Line

This holiday season, why not give yourself the gift of homeownership? Lock in your housing costs for the next 30 years and guarantee you are the one building wealth.

 

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on December 22nd, 2016 4:26 PMLeave a Comment

Mortgage Interest Rates Just Went Up… Should I Wait to Buy?


Mortgage Interest Rates Just Went Up… Should I Wait to Buy? | Keeping Current Matters

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie MacFannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters.

This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows.

Here is a chart showing the average mortgage interest rate over the last several decades.

Mortgage Interest Rates Just Went Up… Should I Wait to Buy? | Keeping Current Matters

Bottom Line

Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago; a lower rate than your parents did twenty years ago and a better rate than your grandparents did forty years ago.


Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on December 16th, 2016 11:06 AMLeave a Comment

Home Prices: Where Will They Be in 5 Years?
Home Prices: Where Will They Be in 5 Years? | Keeping Current Matters Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. The results of their latest survey: Home values will appreciate by 4.0% over the course of 2017, 3.2% in 2018 and 3.0% the next three years (as shown below). That means the average annual appreciation will be 3.24% over the next 5 years. Home Prices: Where Will They Be in 5 Years? | Keeping Current Matters The prediction for cumulative appreciation ticked up from 18.7% to 21.4% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 10.2%. Home Prices: Where Will They Be in 5 Years? | Keeping Current Matters Bottom Line Individual opinions make headlines.

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on December 13th, 2016 12:21 PMLeave a Comment

Selling in the Winter Attracts Serious Buyers
Selling in the Winter Attracts Serious Buyers | Keeping Current Matters
A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close. It's no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest month for real estate. What is surprising, though, is that listing during the winter came in second!
"Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same."
The study goes on to say that:
"Buyers [in the winter] often need to move, so they're much less likely to make a lowball offer and they'll often want to close quickly -- two things that can make the sale much smoother."

Bottom Line

If you are debating listing your home for sale within the next 6 months, keep in mind that the spring is when most other homeowners will decide to list their homes as well. Listing your home this winter will ensure that you have the best exposure to the serious buyers who are out looking now! The study used the astronomical seasons to determine which season the listing date fell into (Winter: Dec. 21 - Mar. 20; Spring: Mar. 21 - June 20; Summer: June 21 - Sept 21; Autumn: Sept 21 - Dec. 20).

Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on December 9th, 2016 1:56 PMLeave a Comment

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