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      Feeling ?Stuck in Place'? You Aren't Alone? And There's Hope!

      Feeling 'Stuck in Place'? You Aren't Alone... And There's Hope! | MyKCM

      Whether you are a renter who is searching for your dream home or a homeowner who feels like your only option is to renovate, you have at least one thing in common: feeling stuck in place.

      According to data from the National Association of Realtors’ Profile of Home Buyers & Sellers, the average amount of time that a family stays in their home remained at 10 years in 2017. This mark ties the highest marks set in 2014 and 2016. Back in 1985, when data was first collected on this subject, homeowners stayed in their homes for an average of only 5 years.

      There are many reasons why homeowners have decided to stay and not to sell. A recent Wall Street Journal article had this to say,

      “Americans aren’t moving in part because inventory levels have fallen near multidecade lows and home prices have risen to records. Many homeowners are choosing to stay and renovate, in turn making it more difficult for renters to enter the market.” 

      Sam Khater, Deputy Chief Economist for CoreLogic, equated the lack of inventory to “not having enough oil in your car and your gears slowly [coming] to a grind.”

      Historically, a normal market (in which prices increase at the rate of inflation) requires a 6-7 month supply of inventory. There hasn’t been that much supply since August of 2012! Over the course of the last 12 months, inventory has hovered between a 3.5 to 4.4-month supply, meaning that prices have increased and buyers are still out in force!

      Challenges in the new-home construction market have “helped create a bottleneck in the market in which owners of starter homes aren’t trading up to newly built homes, which tend to be pricier, in turn creating a squeeze for millennial renters looking to get into the market.”

      “Economists said baby boomers also aren’t in a hurry to trade in the dream homes they moved into in middle age for condominiums or senior living communities because many are staying healthy longer or want to remain near their children.”

      So, what can you do if you feel stuck & want to move on?

      Don’t give up! If you are looking to move-up to an existing luxury home, there are deals to be had in the higher-priced markets. Demand is strong in the starter and trade-up home markets which means that your house will sell quickly. Let’s work together to build in contingencies that allow you more time to find your dream home; the right buyer will wait.

      Mortgage Interest Rates Are Going Up? Should I Wait to Buy?

      Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeksFreddie Mac, along with Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors, is calling for mortgage rates to continue to rise over the next four quarters.

      This has caused some purchasers to lament the fact that they may no longer be able to get a rate below 3.5%. 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 Are Going Up... Should I Wait to Buy? | MyKCM

      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.

      Low Inventory Causes Home Prices to Maintain Fast Growth

      Low Inventory Causes Home Prices to Maintain Fast Growth | MyKCM

      The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price Report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady clip in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros.

      Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

      “Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

      What this means to sellers

      Rising prices are a homeowner’s best friend. As reported by the Washington Post in a recent article post:

      “The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.”

      What this means to buyers

      In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Dive reported, the amount of cash needed to purchase that home will also increase.

      “These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

      Bottom Line 

      If you’re thinking of selling and moving down, waiting might make sense. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

      Why Sell Now Instead of Later? The Buyers are Out Now!

      Why Sell Now instead of Later? The Buyers are Out Now | MyKCM

      Each year, most homeowners wait until the spring to sell their houses because they believe that they can get a better deal during the normal spring buyer’s market. However, recently released data suggests that a seller’s best deal may be available right now. The concept of ‘supply & demand’ reveals that the best price for an item will be realized when the supply of that item is low and the demand for that item is high. Let’s see how this applies to the current residential real estate market.

      SUPPLY

      It is no secret that the supply of homes for sale has been far below the number needed for over a year. A normal market requires six months of housing inventory to meet the demand. The latest report from the National Association of Realtors (NAR) revealed that there is currently only a 4.2-month supply.

      Supply is currently very low!!

      DEMAND

      A report that was just released tells us that demand is very strong. The most recent Foot Traffic Report (which sheds light on the number of buyers out looking at homes) disclosed that there are more buyers right now than at any other time in the last twelve months. This includes more buyers looking at homes right now than at any time during last year’s spring market.

      Demand is currently very high!! 

      Bottom Line

      Waiting until the spring to list your house for sale made sense in the past. This year is different. The best deal is probably available right now.

      5 Reasons to Hire a Real Estate Professional When Buying or Selling!

      5 Reasons to Hire a Real Estate Professional When Buying or Selling! | MyKCM

      Whether you are buying or selling a home, it can be quite an adventurous journey. This is why you need an experienced real estate professional to guide you on the path to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

      The 5 reasons you NEED a real estate professional in your corner haven’t changed, but have rather been strengthened by the projections of higher mortgage interest rates & home prices as the market continues to pick up steam.

      1. What do you do with all this paperwork?

      Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true real estate professional is an expert in his or her market and can guide you through the stacks of paperwork necessary to make your dream a reality.

      2. Ok, so you found your dream house, now what?

      There are over 180 possible steps that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you achieve your dream?

      3. Are you a good negotiator?

      So maybe you’re not convinced that you need an agent to sell your home. After looking at the list of parties that you will need to be prepared to negotiate with, you’ll soon realize the value in selecting a real estate professional. From the buyer (who wants the best deal possible) to the home inspection companies, to the appraiser, there are at least 11 different people who you will need to be knowledgeable of, and answer to, during the process.

      4. What is the home you’re buying/selling really worth?

      It is important for your home to be priced correctly from the start to attract the right buyers and shorten the amount of time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to a study by Collateral Analytics, FSBOs achieve prices significantly lower than those from similar properties sold by real estate agents:

      “FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

      Get the most out of your transaction by hiring a professional.

      5. Do you know what’s really going on in the market?

      There is so much information out there on the news and on the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?

      Dave Ramsey, the financial guru, advises:

      “When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

      Hiring an agent who has his or her finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

      Bottom Line

      You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a real estate professional?

      Buying Remains Cheaper Than Renting in 39 States, including MA!

      Buying Remains Cheaper Than Renting in 39 States! | MyKCM

      In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

      The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!

      A study by GoBankingRates looked at the cost of renting vs. owning a home at the state level and concluded that in 39 states, it is actually ‘a little’ or ‘a lot’ cheaper to own (represented by the two shades of blue in the map below).

      Buying Remains Cheaper Than Renting in 39 States! | MyKCM

      One of the main reasons owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that the current interest rate on a 30-year fixed rate mortgage is 3.91%.

      Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

      Bottom Line

      Buying a home makes sense socially and financially. If you are one of the many renters who would like to evaluate your ability to buy this year, let’s get together and find you your dream home.

      Thinking of Selling? You Should Do It TODAY!!

      Thinking of Selling? You Should Do It TODAY!! | MyKCM

      That headline might be a little aggressive; however, as August 2017’s housing market data begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME TODAY!

      In a recent article by CBS News, they explained that the number of existing home sales is shrinking, and Lawrence Yun, Chief Economist for the National Association of Realtors, said:

      “There should be 3 million homes on the market right now…Yet, there are only 1.9 million.”

      And this situation will be affected greatly by recent natural disasters. Yun continued by saying:

      “Before the hurricanes I would have predicted 1.35 million in new-home construction in 2018…I’ll have to scale that down now.”

      NAR, in their August 2017 Realtors® Confidence Index, indicated that:

      “Amid sustained job creation and sustained historically low mortgage rates, REALTORS® reported…that buyer demand is stronger compared to conditions one year ago… and that fifty percent of properties were on the market for less than one month when sold.”

      The only challenge to today’s market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is only a 4.2-month supply of inventory, which is down from 4.5 months one year ago.

      Bottom Line

      With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Let’s get together and discuss the inventory levels in your neighborhood to determine your next steps.

      4 Reasons to Sell This Fall [INFOGRAPHIC]

      4 Reasons to Sell This Fall [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Buyer demand continues to outpace the supply of homes for sale! Buyers are often competing with one another for the listings that are available!
      • Housing inventory is still under the 6-month supply that is needed for a normal housing market.
      • Perhaps the time has come for you and your family to move on and start living the life you desire.

      More Than Half of All Buyers Are Surprised by Closing Costs

      More Than Half of All Buyers Are Surprised by Closing Costs | MyKCM

      According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.

      After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.

      “Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

      Bankrate.com gathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.

      More Than Half of All Buyers Are Surprised by Closing Costs | MyKCM

      Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. According to Freddie Mac,

      “Closing costs are typically between 2 and 5% of your purchase price.”

      Bottom Line

      Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

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