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Move-Up Buyers

Why Are So Few Homes for Sale?

Why Are So Few Homes for Sale? | Simplifying The MarketThere is no doubt that the largest challenge in today’s housing market is a lack of housing inventory for sale. This challenge has been defined as an “overwhelming lack of supply,” and even a “straight up inventory crisis.”First American just released the results of a survey which sheds light on the reasons for the current lack of supply.The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey:
  • 47% – existing homeowners are worried that they will not be able to find a home to buy
  • 5% – first-time buyer demand is absorbing a large share of available homes
  • 3% – existing homeowners’ mortgage rates are lower than the current rates
  • 6% – insufficient or negative equity in the home
  • 6% – foreign buyer demand is absorbing a large share of available homes
As the survey revealed, there is a shortage of current homeowners willing to put their homes on the market for one of three reasons (see numbers 1, 3 and 4 above).

Is this an opportunity for some homeowners?

The report on the survey explains:
“The crowd has spoken, and it seems in many markets home buyers and sellers alike are ‘imprisoned’ by the lack of housing inventory.”
That leaves a tremendous opportunity for every homeowner not facing these concerns. If you can put your home on the market today, you are subject to far less competition than at any time in recent history. That will result in your home selling quickly and for the highest possible price.

Bottom Line

While many homeowners are feeling imprisoned for multiple reasons, those who are not handcuffed by these concerns have a once in a lifetime opportunity to sell their houses at a peak selling time.

More Americans Say Now is a Good Time to Sell!

More Americans Say Now is a Good Time to Sell! | Simplifying The MarketRecently released data from Fannie Mae’s National Housing Survey revealed that rising home prices were the catalyst behind an eight-point jump in the net percentage of respondents who say now is a good time to sell. The index is now 21 points higher than it was this time last year.Overall, 62% of Americans surveyed said that now is a good time to sell (up from 58%), while 26% of respondents said that now is not a good time to sell (down from 30%). The net score is the difference between the two percentages, or 36%.According to CoreLogic, home prices are now up 6.7% over last year and 78.8% of homeowners with a mortgage in the US now have significant equity (defined as 20% or more).As home prices have increased, more and more homeowners have realized that now is a good time to sell their homes in order to take advantage of the extra equity they now have.At the same time, however, rising prices have had the exact opposite impact on the good-time-to-buy scale as many buyers are nervous that they will not be able to afford a home; the net score dropped 5 points to 18%.Doug Duncan, Vice President & Chief Economist at Fannie Mae, had this to say,
“In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today. The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”
Buyer demand continues to outpace the supply of homes for sale, which has driven prices up across the country. Until the supply starts to better match demand, there will be a gap between the sentiments surrounding buying and selling.

Bottom Line

If you are considering listing your home for sale this year, now is the time!

Home Sales Expected to Increase Nicely in 2018

Home Sales Expected to Increase Nicely in 2018 | Simplifying The MarketFreddie MacFannie Mae, and The Mortgage Bankers Association are all projecting that home sales will increase in 2018. Here is a chart showing what each entity is projecting in sales for the remainder of this year and the next.Home Sales Expected to Increase Nicely in 2018 | Simplifying The MarketAs we can see, each entity is projecting sizable increases in home sales next year. If you have considered selling your house recently, now may be the time to put it on the market.

Report: Homeownership Is a Precondition of the American Dream

Report: Homeownership Is a Precondition of the American Dream | Simplifying The MarketHearth just released their 2017 State of the American Dream report which showed that Americans still see homeownership as an integral piece of the American Dream. The report confirmed that “all generations–including millennials–agree homeownership is very important to achieving the American Dream.Americans ranked “owning a home I love” higher than any other options (including “starting a family” and “finding a fulfilling career”) as an important part of the American Dream.Despite some claims that homeownership’s importance to the American Dream is in decline, the report found that the dream of homeownership remains strong.Of Americans who said they think achieving the American Dream is important, 70% think homeownership is important to the dream, and 41% think homeownership is very important to the dream.

What about Millennials?

Hearth addresses the desires of millennials by explaining:
“Contrary to popular opinion, millennials who want to achieve the American Dream are 5% more likely than Baby Boomers to think homeownership is important. And two-thirds of millennial renters view homeownership as important to the American Dream. Although millennials are often portrayed as fickle and transient, they actually seek the stability of homeownership even more than their parents.”

Other Key Findings from the Report:

  • Homeowners are 126% more likely than non-homeowners to view homeownership as a way to build wealth. Nevertheless, homeowners still overwhelmingly associated homeownership with a family living space.
  • Homeowners are 24% more likely than non-homeowners to see homeownership as an achievement that reflects hard work.
  • Millennials are 77% more likely than baby boomers to see a home primarily as a way to build wealth.
  • Baby boomers are 98% more likely than millennials to see a home as a way to pass wealth down to children or family.
  • Millennials are 29% more likely than baby boomers to see a home as an achievement that reflects hard work–an outcome we expected given that many millennials are still working hard to afford their first homes.

Bottom Line

The report concluded:
“This survey revealed a powerful finding: Across demographic groups, homeownership remains a precondition of the American Dream.”

Looking for Your Dream Home?

Looking for Your Dream Home? Know What You Want vs. What You Need | Simplifying The Market

Looking For Your Dream Home?

In this day and age of being able to shop for anything anywhere, it is really important to know what you’re looking for when you start your home search.If you’ve been thinking about buying your dream home for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest.  They start looking at the countless homes listed for sale through rose-colored glasses.Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now?The first step in your home buying process should be getting pre-approved for your mortgage. This allows you to know your budget before you find your dream home that is way outside of it.The next step is to list all the features of a home that you would like, and to qualify them as follows:
  • ‘Must-Haves’ – if this property does not have these items, then it shouldn’t even be considered (ex: distance from work or family, number of bedrooms/bathrooms).
  • ‘Should-Haves’ – if the property hits all of the ‘must-haves’ and some of the ‘should-haves,’ it stays in contention but does not need to have all of these features.
  • ‘Absolute-Wish List’ – if we find a property in our budget that has all of the ‘must-haves,’ most of the ‘should-haves,’ and ANY of these, it’s the winner!

Bottom Line

Having this list fleshed out before starting your search will save you time and frustration. It will also let your agent know what features are most important to you before starting to show you houses in your desired area.

4 Reasons to Buy a Home This Fall!

4 Reasons to Buy a Home This Fall! | Simplifying The Market

Here are four great reasons to consider buying a home today!

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.0% over the next year.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 hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase 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 

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 have 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?

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

14,904 Homes Sold Yesterday… Did Yours?

14,904 Homes Sold Yesterday… Did Yours? | Simplifying The MarketThere are some homeowners who are patiently waiting to get the price they hoped for when they originally listed their houses for sale. Something these homeowners might want to take into consideration is the fact that if their homes haven’t sold yet, maybe they’re not priced properly.

After all, 14,904 houses sold yesterday, 14,904 will sell today, and 14,904 will sell tomorrow.

14,904!

This is the average number of homes that sell each and every day in this country, according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales are at an annual rate of 5.44 million. Divide that number by 365 (days in a year) and we can see that, on average, over 14,904 homes sell every day.The report from NAR also revealed that there is currently only a 4.2-month supply of inventory available for sale. 6 months inventory is considered ‘historically normal’.This means that there are not enough homes available for sale to satisfy all of the buyers who currently are out in the market in record numbers.

Bottom Line

We realize that you want to get fair market value for your home. However, if it hasn’t sold in today’s active real estate market, perhaps you should reconsider your current asking price.

Want to Grow Your Family’s Wealth?

How Your Home’s Value Grows Your Family’s Wealth | Simplifying The Market

Want to grow your family's wealth?

Over the next five years, home prices are expected to appreciate 3.64% per year on average and to grow by 18.4% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

So, what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchased and closed on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?How Your Home’s Value Grows Your Family’s Wealth | Simplifying The MarketSince the experts predict that home prices will increase by 5.0% this year alone, the young homeowners will have gained $12,500 in equity in just one year.Over a five-year period, their equity will increase by nearly $49,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Bottom Line

Homeownership is something to be proud of!  But it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!Glen Hagen - Licensed Sales Agent - Realty Connect USA - 516-429-9399

Empty Nesters: Best to Remodel or Time to Sell?

Empty Nesters: Best to Remodel or Time to Sell? | Simplifying The MarketYour children have finally moved out. You and your spouse now live alone in a four-bedroom colonial (or a similar type of house). You have two choices to make:
  1. Remodel your house to fit your current lifestyle and needs
  2. Sell your house and purchase the perfect home
Based on the record of dollars spent on remodeling and renovations, it appears that many homeowners are deciding on number one. But, is that the best long-term solution?If you are an empty nester currently living in a 3-4-bedroom home, you probably bought it at a time when your children were the major consideration. Along with a large home, you more than likely also considered school district, the size of the property and the makeup of other families living in the neighborhood (example: you wanted a block with other kids your children could play with and a backyard large enough to accommodate that).Remodeling your home to meet your current needs might mean combining two bedrooms to make one beautiful master suite and changing another bedroom into the massive walk-in closet you always wanted. However, if you live in a neighborhood that historically attracts young families, you may be dramatically undermining the value of your house by cutting down the number of bedrooms and making it less desirable to the typical family moving onto your block.And, according to a recent study, you will recoup only 64.4% of a remodeling project’s investment dollars if you sell in the future.Your home is probably at its highest value as it stands right now.  Instead of remodeling your house, it may make better financial sense to sell your current home and purchase a home that was built specifically to meet your current lifestyle and desires.In many cases, this well-designed home will give you exactly what you want in less square footage than your current home.

Bottom Line

If you are an empty nester living in a house that no longer fits your needs, consider checking out other homes in your area.  Homes that would meet your lifestyle needs before taking on the cost and hassle of remodeling your current house.

Putting Down Less Than 10%

Number of Buyers Putting Down Less Than 10% Hits 7-Year High | Simplifying The Market

Putting Down Less Than 10%

According to Black Knight Financial Service’s Mortgage Monitor Report, 1.5 million Americans have purchased a home with down payments under 10% over the last 12 months. This is great news for buyers as this marks a 7-year high!Many mortgage programs offered by agencies like Freddie Mac and Fannie Mae allow buyers to put down as low as 3% to purchase their dream homes. The strength of the housing market has aided buyers who used low-down-payment programs to buy. As a recent CNBC article points out,
“Defaults on recent low down payment loans, so far, are slow. But that is as much a factor of the good credit quality as it is the strength of the housing market. Home prices are rising incredibly fast, meaning those borrowers are gaining equity in their homes quickly.”
Low down payments aren’t just great for first-time homebuyers. These programs have allowed homeowners who want to capitalize on the equity they have in their homes. They use the profit from their sale to pay off high-interest credit cards, fund education or even start a business.According to a new Census Report, the Annual Survey of Entrepreneurs, home equity was used to start 7.3% of all businesses in the United States, which equates to over 284,000! The industries that saw the most growth from home equity are accommodation & food services, manufacturing and, retail trade.

Bottom Line

Gone are the days of ‘20% down or no mortgage.'  What could you build with the equity in your house? Let’s get together today to evaluate your ability to achieve your dreams!