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      Compass Contemplations for Thursday

      Good morning,

      DID YOU KNOW?  Mortgage application volume decreased 9.2% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The week’s results also include an adjustment for the Thanksgiving holiday. Refinance weakness caused the overall drop. Those applications fell 16% for the week but were 61% higher than the same week a year ago. (CNBC)

       

      DID YOU KNOW?  In 2000, just before the Bush tax cuts and a recession, U.S. governments collected 28.3% of GDP in taxes. Today that figure has dropped to 24.3% of GDP in 2018, the 4th lowest in the OECD and down from 26.8% a year earlier and 25.9% in 2016. (WSJ)


      DID YOU KNOW?  Realtor.com predicts sales of existing homes will fall 1.8% compared with 2019. Home prices will flatten nationally, increasing just 0.8% annually, but in 25% of the 100 largest metropolitan markets, prices will fall. These include Chicago, Dallas, Las Vegas, Miami, St. Louis, Detroit, and San Francisco. Millennials will dominate the housing market, accounting for 50% of all mortgages by spring, according to the forecast. Just short of 5 million millennials will turn 30, which is when many people buy their first home, and the oldest will turn 39.

      DID YOU KNOW? According to its 2019 U.S. Vacation Home Counties Report, between 2013 to 2018, the median sales price in vacation home counties increased at a slightly higher pace of 36% compared to the pace of increase of all existing and new homes sold, at 31%. (NAR)

      DID YOU KNOW? National home prices increased 3.5% year over year in October 2019 and are forecast to increase by 5.4% from October 2019 to October 2020. The October 2019 HPI gain was down from the October 2018 gain of 5.2% and was up a bit from the September 2019 gain of 3.3%.  Home prices have been increasing year over year in a narrow range of 3.2% to 3.5% over the past six months, indicating that the rate of home price growth is leveling off. (CORE LOGIC)

      DID YOU KNOW?  As a percentage of disposable income, we have the lowest debt service to income obligations in 40 years in the USA. (JP MORGAN)
       

      5 Reasons to Sell This Winter

      5 Reasons to Sell This Winter | MyKCM

      Below are five compelling reasons to list your house this winter.

      1. Demand Is Strong

      The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase, and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.

      Take advantage of the buyer activity currently in the market.

      2. There Is Less Competition Now

      Inventory is still under the 6-month supply needed for a normal housing market. This means in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market.

      Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

      Many homeowners were reluctant to list their homes over the last couple of years, for fear they would not find a home to move into. That is all changing now as more homes come to the market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.

      3. Buyers Are Serious at This Time of Year

      Traditionally, homeowners think about spring as a great time to list their homes, when more buyer traffic may be out there actively searching. In the winter, however, the buyers who are seeking a home – whether for relocation or otherwise – are serious ones. They’re ready to make offers and they’re eager to move, often quickly. Your house may be exactly what they’re looking for, so listing when other potential sellers are holding off may be your best opportunity to shine.

      4. There Will Never Be a Better Time to Move Up

      If your next move will be into the premium or luxury market, now is the time to move up. There is currently ample inventory for sale at higher price ranges. This means if you’re planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that now. Demand for your entry-level home is high, and inventory in the luxury or premium market is too.

      According to CoreLogic, prices are projected to appreciate by 5.6% over the next year. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and in your mortgage) if you wait.

      5. It’s Time to Move On With Your Life

      Look at the reason you decided to sell in the first place and determine whether it’s worth waiting. Is money more important than being with family? Are you ready to go on with your life the way you think you should?

      Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market this winter. Perhaps the time has come for you and your family to move on and start living the life you desire.

      That is what is truly important.

       

       

      The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein

      The True Cost of Not Owning Your Home

      The True Cost of Not Owning Your Home | MyKCM

      There are great advantages to owning a home, yet many people continue to rent. The financial benefits are just some of the reasons why homeownership has been a part of the long-standing American dream.

      Realtor.com reported that:

      “Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option…as people get more savings in their pockets, buying becomes the better option.”

      Why is owning a home financially better than renting?

      Here are the top 5 financial benefits of homeownership:

      1. Homeownership is a form of forced savings.
      2. Homeownership provides tax savings.
      3. Homeownership allows you to lock in your monthly housing cost.
      4. Buying a home is less expensive than renting.
      5. No other investment lets you live inside of it.

      Studies have also shown that a homeowner’s net worth is 44x greater than that of a renter.

      A family that purchased a median-priced home at the start of 2019 would build more than
      $37,750 in family wealth over the next five years with projected price appreciation alone.

      Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!

      Bottom Line

      Owning a home has many social and financial benefits that cannot be achieved by renting. Let’s connect to determine if buying a home is your best move.

       

       

      The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

      Baby Boomer Billions

      The 74 million US Babyboomers (born 1946-1964) are a hot topic these days, being blamed for many of society's current ills. I won't touch that subject. But I will remind everyone yet again how important this demographic is as it relates to wealth and buying power, and a continued force to be reckoned with in the economy at large. Here are some facts to ponder as so many of us continue to fixate on younger generations when its the baby boomers that are the generation we should never, ever ignore....in fact, they should be an important focus of our marketing!

       

      1)  Almost 20% of Americans over the age of 65 were employed or actively looking for work in 2018: that is up from less than 12% twenty years ago. (The youngest baby boomers, born in 1964, turned or will turn 55 this year.)
      2)  Americans inherited $427 billion in 2016, according to the most recent data available, up 119% from 1989 after adjusting for inflation. Those who have inherited wealth also are older. The average age of recipients over the past 30 years rose from 41 to 51. More than 25% of bequests now go to people who are 61 or older.
      3)  Americans who are younger than 50 held only 16% of investable assets in 2016, a decline from 31% in 1989, according to the Fed's Survey of Consumer Finances. The remainder is held by households 50 and older.
      4) The median household age 65 to 75 in 1989 held eight times more wealth than families headed by 25- to 35-year-olds. 
      5) In 2016 the median baby boomer had close to 13 times more wealth than average millennials. 
      6) During the next 30 years, a staggering $36 trillion is expected to flow from Baby Boomers to Generation X, those born between the early 60's and the late 70's. (Most stats from Bloomberg, thanks to Jaques Cohen)

      This Babyboomer wealth has its upside, besides being a potent home-buying audience. Inheritance will reduce the burden on younger taxpayers to fund Babyboomers' retirement. And younger generations can expect lots of gifting prior to death too, a trend that keeps growing even on a more junior level.

      Expert Advice: 3 Benefits to Owning a Home

      Expert Advice: 3 Benefits to Owning a Home | MyKCM

      Success is something often worth repeating, and Brent Sutherland, a Certified Financial Planner, and Real Estate Investor has certainly made his way in a momentum-driving direction. Here are 3 tips he shares from a recent piece in Business Insider on the benefits of owning real estate:

      1. Real estate diversifies your income

      “While it is certainly important to be properly diversified with your investments, it is even more important to be diversified with your income. This is because the largest financial risk for most of you is the loss of your primary source of income, which is typically in the form of a day job.”

      The article highlights how having multiple sources of income, such as those derived from real estate investments, can eventually lead to relying less and less on a day job. Sound dreamy? It can be. When done well, real estate investments may eventually open up your time and the financial freedom to explore other things, like travel and other aspirations you may have for the future, particularly in the golden years of retirement.

      2. Real estate produces near-immediate results

      “You can achieve and feel the results almost immediately. Property improvements are visible and tangible. You can cash, spend, and invest rent payments. Today! Not 30 years in the future.”

      Currently, home prices are appreciating in all price ranges, and just last week CoreLogic announced their 12-month home value projection at 5.6%, an increase from 4.5% noted earlier this summer. With that in mind, real estate today is definitely driving immediate results!

      3. Passive income can help you become financially independent sooner

      “If you need $40,000 a year to live, you could alternatively invest in assets that generate an 8% cash-on-cash return. This is a very reasonable assumption. And it means you would only need to save a total of $500,000 (instead of $1 million). Yet, your investments would still meet your annual household living needs.

      While returns, taxes, and inflation can, of course, affect your timeline, cash-flowing real-estate is a clear asset.”

      Homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity in your home, bringing you one step closer to true financial independence.

      Bottom Line

      If you want to increase your savings and overall net worth, real estate is a great way to go. To learn how you can make it happen, let’s get together to discuss the process.

      Buyer Demand Growing in Every Region

      Buyer Demand Growing in Every Region | MyKCM

      Buyers are out in full force this fall, increasing the demand for homebuying in all four regions of the country.

      According to the latest ShowingTime Showing Index,

      “Home showing activity was up again nationwide with a 4.6 percent rise in traffic, as the traditionally slow fall season began with a marked boost in buyer interest.”

      Buyers clearly have the right idea, as mortgage rates have dropped over a full percentage point since the fall of 2018. They’ve hovered in a historically low range since this summer, making the overall cost of homeownership significantly more attractive and affordable.

      Here’s the breakdown of how ShowingTime reports current buyer traffic patterns across the country:

      “The West Region, which until August had experienced 18 consecutive months of flagging home buyer traffic, lead the four regions in year-over-year improvement with an 8.9 percent increase in buyer activity.

      The South followed with a 6.4 percent increase, the largest such improvement in the region since April 2018, with the Northeast Region’s 5.6 percent increase the next largest among the four regions.

      The Midwest’s more modest 0.8 percent year-over-year growth rounded out the nation’s promising month.”

      Buyer Demand Growing in Every Region | MyKCMWith ShowingTime reporting “nationwide growth for the second consecutive month, a first since December 2017 – January 2018”, it’s one more reason why selling your house this winter is the way to go. List while buyers are on the market before the competition with other sellers pops up in your neighborhood.

      Bottom Line

      If you’re thinking of waiting until spring to sell, think again! Let’s get together to discuss listing your house now while buyer traffic is actively surging throughout the country.

      Millennials: Here's Why the Process is Well Worth It.

      Millennials: Heres Why the Process is Well Worth It. | MyKCM

      Millennials have waited longer than any other generation to become homeowners, but the wait for this cohort is just about over.

      According to National Mortgage News,

       “Millennials, those young adults now aged 23 to 38, are now entering their peak household formation and homebuying years.

      If you’re a Millennial, you’re already well aware that you’re among a generation of those who favor fast-paced, real-time answers – and results. When you’re ready to make a decision, it’s go-time, and you probably want the latest technology at your fingertips to make it happen.

      National Mortgage News agrees, stating,

      “Millennials are different than previous generations—not only in their delayed homebuying but also in how they approach interactions with financial institutions, including mortgage lenders. Taking a picture of a check on their phone and depositing it without visiting a branch is not novel, it’s the way Millennials learned to do banking. They expect real-time access to account and transaction data and are frustrated when it’s not available.”

      Here’s the catch – the overall speed of the homebuying process can take some time, and it might feel like it is slowing you down. When you’re ready to buy, you can make an offer and go under contract quickly, but the rest of the process might take a little longer. The same article explains why:

      “When Millennials apply for a loan, the mortgage lender must qualify the borrower and determine who owns the property, how much the property is worth, and the property’s risk profile. Traditionally, this has been one of the most time-consuming and fragmented parts of the mortgage process…There are many moving pieces, each data point being sourced from a different provider, which can ultimately lead to a lengthy or delayed process.

       What has historically been accepted as the process norm does not align with the expectations of the most prominent generation in the home buying market today. Millennials have come to expect rapid, digital workflows in their daily purchase decisions, and in their mind, the home buying process shouldn’t be any different.”

      So, where do you go from here?

       If you’re pre-approved for a mortgage, that will help speed things up. But the steps it takes and the time to finalize a loan with most traditional lenders may feel like an eternity to you and your generational peers. Don’t worry, though – it’s well worth the wait when you finally get the keys to your new castle!

      The financial benefits of homeownership, like increasing your net worth by building equity, and the non-financial benefits, like being able to customize and improve your space, will ultimately set you on the course to happiness, success, overall satisfaction, and much, much more.

      Bottom Line

      If you’re feeling like it’s go-time, let’s get together and get the process moving to determine if homeownership is your next best step.

       

       

      The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

      Compass Contemplations for Halloween

      HAPPY HALLOWEEN!  (be careful out there today......)

       

      DID YOU KNOW? Yesterday the Federal Reserve cut interest rates for the third time this year and began to downplay expectations of further cuts for now. The policy statement signaled a potentially higher bar for rate reductions after the latest move, which will drop the target for the federal funds rate to a range between 1.5% and 1.75%.

      DID YOU KNOW? Vancouver-based Westbank Corp. has landed $450 million in construction financing for a planned 47-story downtown tower -- replete with a cantilevered rooftop pool, gardens and apple orchard. (BLOOMBERG)


      DID YOU KNOW? Seattle's economy grew at three times the rate of the median U.S. city last year—8.4%, or 7% net of inflation. It’s home to not only Amazon but also to Boeing, Costco, Nordstrom, and Starbucks.

       

      DID YOU KNOW? Last month, the median home price inside the Austin city limits leaped 11.9% to $406,000, an all-time high for any September. The number of single-family home sales inside the city limits increased by almost 15% to 798 sales. (Austin Board of Realtors)


      DID YOU KNOW? Chicago's Mayor Lori Lightfoot is proposing a transfer tax in Chicago: .55% for sales under $500,000; .95% for sales between $500,000 -$1 million; 1.5% for sales of $1-3 million and 2.55 % for sales over $10 million. Be careful Chicago: Manhattan raised mansion/transfer taxes in July of this year and market activity plummetted! (Chicago Tribune)

      Compass Contemplations for Wednesday

      DID YOU KNOW? Wall Street is bracing for what seems almost assuredly to be a third interest rate cut in as many meetings of the Federal Reserve this afternoon. (Marketwatch)

       

      DID YOU KNOW? The other night I attended a very civilized agent soiree at a chic listing of Steve Dawson. The guest speaker was Robert Couturier, one of the great interior designers to the super-wealthy. Here were some key takeaways:
      * The very wealthy used to spend MUCH more on their furnishings relative to the cost of the property compared to today.
      * Quality furniture costs have come down sharply, especially with less emphasis on antiques that used to cost a fortune.
      * Interiors are and always have been fashionable.
      * Building dining rooms is an old concept that has come back: in the old grand buildings of Manhattan, most had smaller kitchens and a dining hall. Some had TINY kitchens.
      * People should decorate for themselves, not for visitors: chances are you will never please your visitors! Surround yourself with things you love, that work for you and your lifestyle.
      *Very tall ceilings in small rooms can deliver an effect similar to being stuck in a well.
      * Be aware that when you have a gorgeous view of a large body of water during the day, at night that view could be a sea of black.

      DID YOU KNOW? In 2010, average Chinese workers saved 39 cents of every dollar of income. Today, it is 33 cents. Many young Chinese save nothing at all. Household bank balances have soared more than 1000% since 2000, faster than the nearly 800% expansion in GDP during that period—a wealth accumulation unmatched by any country in modern times. Households will owe 68 cents per dollar of GDP by 2024. U.S. consumer debt is 78 cents per dollar. (WSJ)

      DID YOU KNOW? An estimated 3,788,235 people born in the USA in 2018, a 2% decrease from 2017 and the lowest number of births in any year since 1986, according to a report published by the National Center for Health Statistics. The birthrate among women in their early 20s declined 5% in 2018 and has dropped an average of 4% each year since 2007. It is now 1,728 births per 1,000 women (similar to England, but 15% higher than in Canada). Without immigration, the US population size would be in decline.  (NY TIMES)

      Buying a home can be SCARY…Until you know the FACTS

      Buying a home can be SCARYUntil you know the FACTS [INFOGRAPHIC] | MyKCM

      Some Highlights:

      Many potential homebuyers believe they need a 20% down payment and a 780 FICO® score to qualify to buy a home. This stops many people from even trying to jump into homeownership! Here are some facts to help take the fear out of the process:

      • 71% of buyers who purchased homes have put down less than 20%.
      • 78.1% of loan applications were approved last month.
      • In September, the average credit score for approved loans was 737.
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