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      Compass Contemplations for Wednesday

       

      Good morning,

       

      And a very happy VALENTINE'S DAY to you! 

       

      DID YOU KNOW? J.P. Morgan Chase moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called 'JPM Coin,' the digital 'cryptocurrency' token created by engineers at the bank to instantly settle payments between clients. (CNBC)

       

      DID YOU KNOW? Signs that the Federal Reserve may be done with its yearslong campaign to raise interest rates are sending ripples through fixed-income markets, holding down interest rates for a wide swath of borrowers. Low Treasury yields are a boon for stocks because they hold down borrowing costs for companies and push some yield-seeking investors out of government bonds and into other types of assets. They also could provide a lift to the housing market. (WSJ)

       

      DID YOU KNOW?  Airbus will cease production of its monster-sized A-380.....maybe planes are not that dis-similar to houses where jumbo-sized is also waning in demand? (WSJ)

       

      DID YOU KNOW? Housing investments make up as much as 18% of the U.S. growth rate, so why is housing not faring as well as the robust US economy? Here are some reasons:

      1. Student Debt: Home buyers 36 years old and younger comprised some 34% of the market in 2016 (NAR). Millennials are the largest customer base for mortgages, but student debt continues to weigh heavily on their personal finances with 46% having a median student loan balance of $25,000. According to a survey, 49% of home buyers said that student debt prohibited them from obtaining a loan.

      2. Housing shortages: There aren’t enough houses on the market. In 2017, there were 1.25 million new homes in the country, yet the U.S. requires 1.62 million houses each year. The 370,000 shortfall puts intense upward pressure on home prices. Because of the surge in prices, home purchase sentiment has fallen - a 12% decrease in Fannie Mae’s sentiment index - home buyers aren’t as keen on purchasing a home, opting to rent instead. 

      3.  Low Interest rate addiction: home buyers enjoyed super-low-interest rates for almost 10 years. New mortgages and refinancing was more affordable. Now financing has become more expensive, and home buyers are highly attuned to the increase in their payment amounts. Add in rising operating costs due to higher inflation and higher real estate taxes..... (Marketwatch)   

       

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        What is the Cost of Waiting Until Next Year to Buy?

        What is the Cost of Waiting Until Next Year to Buy? [INFOGRAPHIC] | MyKCM

        Some Highlights:

        • The cost of waiting to buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
        • Freddie Mac predicts interest rates to rise to 5.1% by the end of 2019.
        • CoreLogic predicts home prices to appreciate by 4.8% over the next 12 months.
        • If you are ready and willing to buy your dream home, find out if you are able to!

        Selling Your Home? Make Sure the Price is Right!

        Selling Your Home? Make Sure the Price is Right! | MyKCM

        If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price.

        In today’s shifting real estate market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as they were able to just last year.

        They will have to employ the same strategy: be the closest without going over!

        As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!

        Over the last six months, more inventory has come to market while the months’ supply of inventory available has dropped. This means that the demand for homes to buy is still very strong throughout the country!

        Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the homes when in reality nothing was wrong, the price was just too high!

        Bottom Line

        If you are thinking about listing your home for sale this year, let’s get together to properly price your home from the start!

        Is the Recent Dip in Interest Rates Here to Stay?

        Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

        Interest rates for a 30-year fixed rate mortgage climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey.

        After the first week of 2019, rates have continued their downward trend. As Freddie Mac’s Chief Economist Sam Khater notes, this is great news for homebuyers. He states,

        “Mortgage rates declined to start the new year with the 30-year fixed-rate mortgage dipping to 4.51 percent. Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”

        In some areas of the country, the combination of rising interest rates and rising home prices had made some first-time buyers push pause on their home searches. But with more inventory coming to market, continued price growth, and interest rates slowing, this is a great time to get back in the market!

        Will This Trend Continue?

        According to the latest forecasts from Fannie Maethe Mortgage Bankers Associationand the National Association of Realtorsmortgage rates will increase over the course of 2019, but not at the same pace they did in 2018. You can see the forecasts broken down by quarter below.

        Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

        Bottom Line

        Even a small increase (or decrease) in interest rates can impact your monthly housing cost. If buying a home in 2019 is on your short list of goals to achieve, let’s get together to find out if you are able to today.

        Compass Contemplations for Wednesday

        DID YOU KNOW? Could this be the re-invention of the mall? Google is expanding in L.A. Google has leased the current site of Westside Pavilion shopping mall in West Los Angeles that it will turn into a 584,000 square-foot office campus. Westside Pavilion was once one of the city’s premier shopping venues and a cultural touchstone for generations of LA residents. In recent years the mall fell behind flashier competitors such as the Grove and the refurbished Westfield Century City malls. Online shopping also took a toll, and anchor stores Macy’s and Nordstrom departed.(CNBC)


        DID YOU KNOW? 24% of people surveyed in the USA spent more than 80% of their time working remotely in 2012. That grew to 31% by 2016. (Gallup)

        DID YOU KNOW?  What is the most in-demand soft skill of 2019? Creativity. For those looking to cultivate this skill, LinkedIn recommends the following courses: Creativity Bootcamp, The Five-Step Creative Process, and Creativity: Generate Ideas in Greater Quantity and Quality. (Linkedin)

        DID YOU KNOW?  While Tesla weathers relentless roller-coaster press, it sold nearly as many of its vehicles in 2018 (over 245,000) than it did in every prior year combined, back to 2003. The Tesla 3 was the best-selling luxury car of 2018 (145,846 units). Next was the Lexus RX (111,641 units). While the Model 3 was supposed to be the 'mass-market' affordable model, at $45,000 it is far from that. The more affordable (35k) version comes soon.....which could boost sales significantly further. (CNBC)

        DID YOU KNOW? U.S. carbon emissions rose 3.4% in 2018, after 3 years of declines. The effects of a strong economy outstripped a sharp decline in the number of power plants burning coal to generate electricity. Carbon emissions were still down 11.2% from 2005 levels. Diesel and jet fuel use rose 3% from additional trucking and air traffic. The Paris agreement target to reduce all greenhouse-gas emissions by 26%-28% from 2005 levels by 2025, requires the U.S. to cut emissions by 2.6% on average over the next 7 years. (WSJ)

        DID YOU KNOW? In San Jose (CA), nearly half (49.3%) of all housing sales involve co-buyers as of the 2nd quarter of 2018. Other cities where 25% or more sales involve multiple buyers include San Francisco, Honolulu, Seattle, Miami, Boston and Durham, N.C. 26.2% of FHA-insured mortgage borrowers received assistance from a family member to afford the down payment, up from 22% in 2011. (Marketwatch)
         

        Top Renovations to Complete Before You Sell Your House

        Top Renovations to Complete Before You Sell Your House [INFOGRAPHIC] | MyKCM

        Some Highlights:

        • If you are planning on listing your house for sale this year, here are the top four home improvement projects that will net you the most Return on Investment (ROI).
        • Minor bathroom renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
        • Upgrading your landscaping or curb appeal helps get buyers in the door. These upgrades rank as the 2nd and 4th best renovations for returns on investment.

        Where is the Housing Market Headed in 2019?

        Where is the Housing Market Headed in 2019? [INFOGRAPHIC] | MyKCM

        Some Highlights:

        • ­Interest rates are projected to increase steadily throughout 2019, but buyers will still be able to lock in a rate lower than their parents or grandparents did when they bought their homes!
        • Home prices will rise at a rate of 4.8% over the course of 2019 according to CoreLogic.
        • All four major reporting agencies believe that home sales will outpace 2018!

        Compass Contemplations for Monday

        DID YOU KNOW? Bigger state and local tax collections, propelled in part by an acceleration in sales-tax receipts from consumer spending, is boosting capital projects and driving a municipal borrowing boom. Spending on transportation infrastructure in October was up 15% from a year earlier. State tax revenues grew 6.3% in the second quarter of 2018 compared with an average second-quarter growth rate of 2.5% for the previous eight years Local infrastructure spending may accelerate. (WSJ)

        DID YOU KNOW? Apple is also expanding its presence in San Diego as part of its plan to expand its operations across the country. While its $1 billion campus in Austin, Texas made headlines this week, it will also "establish new sites" in San Diego, Seattle, and Culver City, California. The San Diego, Seattle and Culver City sites would each have more than 1,000 workers, Apple announced. Apple will add 20,000 jobs in the U.S. by 2023. (10news)

        DID YOU KNOW? Approximately 80% of all population growth since 2000 in Texas has been in the four large metropolitan areas: Dallas-Fort Worth, San Antonio, Austin and Houston. Between 2000 and 2016, according to the Bureau of Labor Statistics, or BLS, Austin expanded its employment by over 50%, while Houston, Dallas and San Antonio grew above 30%, more than twice the growth of New York and three time that of San Francisco and Los Angeles. Texas added 3 million people between 2010 and 2016 - including 940,000 migrants from other states. In comparison, California lost more than 500,000 domestic migrants to other states and New York lost nearly one million.  Since 2000, New York, Chicago, Los Angeles and Boston grew by under 10%. (Daily Beast)

        “We don’t have any of the early signs of recession. Yet, we have a market where despite 20% earnings growth, the price-earnings ratios have fallen 20%. This tells us the market is pricing in recession in 2019. We just don’t think that is going to happen.” - Steve Chiavarone, Federated

         DID YOU KNOW? New York, Connecticut, Louisiana, California, Florida, and Massachusetts ranked worst in income inequality. The fastest growing income inequality is in Montana, California, Maine, Rhode Island and Idaho. (CNBC)

        Compass Contemplations for Wednesday

        In George H. W. Bush's famous "thousand points of light" nomination acceptance speech on August 18, 1988, he called for a "kinder, gentler nation" specifically referring to volunteering and giving back. In his lifetime it is estimated he helped raise around $1 billion for various charities. As we all know, this past week President George H. W. Bush passed away. While you may or may not have agreed with his politics, one of his principals everyone can relate to - especially at Compass where Robert made this a cornerstone of his future vision for the company - is the concept of working together and giving back.

         

        DID YOU KNOW? Airbnb will soon announce that it will begin selling multi-unit buildings and houses next year, according to Fast Company. Called Backyard, is "an endeavor to design and prototype new ways of building and sharing homes," extending and bolstering their services to architecture and urban planning. Backyard could start offering small existing dwellings, according to the report, and could also sell energy-efficient building materials, stand-alone homes and multi-unit complexes. Airbnb has more than 5 million rental listings on its platform, across nearly 200 countries.


        DID YOU KNOW?  Microsoft regained its stature as the world's most valuable company after losing the title for 16 years, beating out APPLE whose stock price has dropped badly over the past few weeks. Apple lost the top spot after 6 years. GE used to have this title....(CNBC)

        DID YOU KNOW? Home price appreciation continues to moderate following a half-decade of strong growth. Market fundamentals, however, are vastly different than the pre-crisis period in the mid-2000s. US equities delivered a strong week despite the sharp oil price decrease with the S&P 500 jumping nearly 4%: lower-than-expected PCE inflation data and signs that the Fed may be easing their rate hike plan....which would be good for real estate. (Seeking Alpha)

        Hallways in Your Home

        Hallways

        Often I am amazed at how overlooked some hallways are. These are the hallways within homes and as well as those that lead up to apartments. Too often a hallway is treated like a neglected cousin, and in doing so a tremendous opportunity may be overlooked.

         

        Yesterday while approaching an apartment I noticed the hallway from the elevator to the apartment was simply bland at best. Maybe this was part of the architect's 'vision', and maybe this may read well in a publication, but from a human perspective I found the experience somewhat depressing..... and a lost opportunity. That 'lead-up' that a hallway provides to an entry or the transition to another room or set of rooms has the ability to set a tone or build up excitement of what is to come. Hallways should be viewed as (mostly) narrower rooms, not wasted space.

         

        So what can be done to enhance a hallway? Smaller art pieces are perfectly suited to this setting, the kind that you'd like to view close-up. A collection of family/friend photos works well too, especially artfully displayed. Take note of the flooring, the lighting, maybe a wall covering that sets a more intimate and inviting message? Maybe a wider internal hallway has the capacity to house a small home office? Hallways are decorating opportunities, not unusable annoyances. They can be decorated beautifully and also engineered to accommodate specific uses.

         

        Look closely at all hallways, especially those that lead up to a home: they often set the tone for a showing as the rooms are revealed. First impressions matter. Pauses between rooms matter too.

         

        Have a terrific Tuesday!

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