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      Michael Lyons

      The #1 Reason to Not Wait Until Spring to Sell Your House

      The #1 Reason to Not Wait Until Spring to Sell Your House | MyKCM

      Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

      The #1 Reason to List Your Home in the Winter Months is Less Competition!

      Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.

      The #1 Reason to Not Wait Until Spring to Sell Your House | MyKCM

       

      As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February). 

      Temperatures aren’t the only thing that heats up in the spring – so do listings!

      The #1 Reason to Not Wait Until Spring to Sell Your House | MyKCM

      In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.

      Added Bonus: Only Serious Buyers Are Out in the Winter

      At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

      Bottom Line

      If you have been debating whether or not to sell your home and are curious about market conditions in your area, let’s get together to help you decide the best time to list your house for sale.

      The Cost of Renting vs. Buying a Home

      The Cost of Renting vs. Buying a Home [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Historically, the choice between renting or buying a home has been a tough decision.
      • Looking at the percentage of income needed to rent a median-priced home today (28.4%) vs. the percentage needed to buy a median-priced home (17.5%), the choice becomes obvious.
      • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

      Wage Increases Make Home Buying More Affordable

      Wage Increases Make Home Buying More Affordable | MyKCM

      Everyone knows that housing affordability has been negatively impacted by rising prices and increasing mortgage rates, but there is another piece to the affordability equation – wages.

      How much a family earns obviously impacts how easy or difficult it is for them to afford to own a home. Because of an improving economy, wages are finally beginning to increase – and that dramatically affects home affordability.

      According to the National Association of Realtors’ (NAR) September 2018 Housing Affordability Index, wages have increased in every region of the country:

      Wage Increases Make Home Buying More Affordable | MyKCM

      After applying current salaries, home prices, and mortgage rates to their Home Affordability Index equation, the index, though still lower than this time last year (160.1 to 146.7), increased over the last month (141.2 to 146.7). For the complete methodology used by NAR, click here.

      The percentage of income needed to own a home has also decreased each of the last three months. It currently sits at 17% which is substantially lower than historic numbers.

      Wage Increases Make Home Buying More Affordable | MyKCM

      Bottom Line

      If you are a first-time buyer or a move-up buyer who believes that purchasing a home is not within your budget, let’s get together to determine if that is still true.

      Thinking of Selling Your Home? Here is Why You Need A Pro in Your Corner

      Thinking of Selling Your Home? Heres Why You Need A Pro in Your Corner | MyKCM

      With home prices on the rise and buyer demand still strong, some sellers may be tempted to try and sell their homes on their own without using the services of a real estate professional.

      Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

      Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):

      • The buyer who wants the best deal possible
      • The buyer’s agent who solely represents the best interests of the buyer
      • The buyer’s attorney (in some parts of the country)
      • The home inspection companies, which work for the buyer and will almost always find some problems with the house
      • The termite company if there are challenges
      • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
      • The appraiser if there is a question of value
      • The title company if there are challenges with certificates of occupancy (CO) or other permits
      • The town or municipality if you need to get the CO permits mentioned above
      • The buyer’s buyer in case there are challenges with the house your buyer is selling

      Bottom Line

      The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Let’s get together to discuss all that we can do to make the process easier for you.

      Taking Fear Out of the Mortgage Process

      Taking Fear Out of the Mortgage Process | MyKCM

      A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainties about the buying process. A specific cause for concern tends to be mortgage qualification.

      For many, the mortgage process can be scary, but it doesn’t have to be!

      In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and good credit history.

      Throughout the entire home buying process, you will interact with many different professionals who will all perform necessary roles. These professionals are also valuable resources for you.

      Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

      1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score® of all closed loans in September was 731, according to Ellie Mae.
      2. Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
      3. Contact a professional – your real estate agent will be able to recommend a loan officer who can help you develop a spending plan, as well as help you determine how much of a home you can afford.
      4. Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
      5. Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) and demonstrates to home sellers that you are serious about buying!

      Bottom Line

      Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.

      Still Think You Need 15-20% Down to Buy a Home? Think Again!

      Still Think You Need 15-20% Down to Buy a Home? Think Again! | MyKCM

      According to a new study from Urban Institute, there are over 19 million millennials in 31 cities who are not only ready and willing to become homeowners, but are able to as well!

      Now that the largest generation since baby boomers has aged into prime homebuying age, there will no doubt be an uptick in the national homeownership rate. The study from Urban Institute revealed that nearly a quarter of this generation has the credit and income needed to purchase a home.

      Surprisingly, the largest share of mortgage-ready millennials lives in expensive coastal cities. These cities often attract highly skilled workers who demand higher salaries for their expertise.

      So, what’s holding these mortgage-ready millennials back from buying?

      Myths About Down Payment Requirements! 

      Most of the millennials surveyed for the study believe that they need at least a 15% down payment in order to buy a home when, in reality, the median down payment in the US in 2017 was just 5%, and many programs are available for even lower down payments!

      The study goes on to point out that:

      “Despite limited awareness, every state has programs that provide grants and loans to make homeownership more attainable, with average assistance in various states ranging from $2,436 to $21,171.”

      Bottom Line

      With so many young families now able to buy a home in today’s market, the demand for housing will continue for years to come. If you are one of the many millennials who have questions about their ability to buy in today’s market, let’s get together so we can assist you along your journey!

      Pre-Approval: Your 1st Step in Buying a Home

      Pre-Approval: Your 1st Step in Buying a Home | MyKCM

      In many markets across the country, the number of buyers searching for their dream homes outnumbers the number 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, understanding 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 through 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 homebuyers overestimate the down payment and credit scores necessary 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.

      Where Are Mortgage Interest Rates Headed In 2019?

      Where Are Mortgage Interest Rates Headed In 2019? | MyKCM

      The interest rate you pay on your home mortgage has a direct impact on your monthly payment; the higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

      Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily over the course of the next year.

      Where Are Mortgage Interest Rates Headed In 2019? | MyKCM

      How Will This Impact Your Mortgage Payment?

      Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

      According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.2% from this time last year and are predicted to be 5.1% higher next year.

      If both the predictions of home price and interest rate increases become a reality, families would wind up paying considerably more for their next homes.

      Bottom Line

      Even a small increase in interest rate can impact your family’s wealth, so don’t wait until next year! Let’s get together to evaluate your ability to purchase your dream home now.

      What's Going On With Home Prices?

      Whats Going On With Home Prices? | MyKCM

      According to CoreLogic’s latest Home Price Insights Report, national home prices in August were up 5.5% from August 2017. This marks the first time since June 2016 that home prices did not appreciate by at least 6.0% year-over-year.

      CoreLogic’s Chief Economist Frank Nothaft gave some insight into this change,

      “The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home. The slackening in demand is reflected in the slowing of national appreciation, as illustrated in the CoreLogic Home Price Index.  

      National appreciation in August was the slowest in nearly two years, and we expect appreciation to slow further in the coming year.”

      One of the major factors that has driven prices to accelerate at a pace of between 6-7% over the past two years was the lack of inventory available for sale in many areas of the country. This made houses a prized commodity which forced many buyers into bidding wars and drove prices even higher.

      According to the National Association of Realtors’ (NAR) latest Existing Home Sales Report, we are starting to see more inventorycome to market over the last few months. This, paired with patient buyers who are willing to wait to find the right homes, is creating a natural environment for price growth to slow.

      Historically, prices appreciated at a rate of 3.7% (from 1987-1999). CoreLogic predicts that prices will continue to rise over the next year at a rate of 4.7%.

      Bottom Line

      As the housing market moves closer to a ‘normal market’ with more inventory for buyers to choose from, home prices will start to appreciate at a more ‘normal’ level, and that’s ok! If you are curious about home prices in your area, let’s get together to chat about what’s going on!

      2 Factors to Watch in Today's Real Estate Market Whether Buying or Selling

      2 Factors to Watch in Todays Real Estate Market Whether Buying or Selling | MyKCM

      When it comes to buying or selling a home there are many factors you should consider. Where you want to live, why you want to buy or sell, and who will help you along your journey are just some of those factors. When it comes to today’s real estate market, though, the top two factors to consider are what’s happening with interest rates & inventory.

      Interest Rates

      Mortgage interest rates have been on the rise and are now over three-quarters of a percentage point higher than they were at the beginning of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.72% for a 30-year fixed rate mortgage last week.

      The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

      Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

      The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

      2 Factors to Watch in Todays Real Estate Market Whether Buying or Selling | MyKCM

      With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be over 5% by this time next year.

      Inventory

      A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 4.3-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 78 straight months.

      The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last three months.

      The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, in June, July, and August, inventory levels have started to increase as compared to the same time last year.

      2 Factors to Watch in Todays Real Estate Market Whether Buying or Selling | MyKCM

      This is a trend to watch as we move further into the fall and winter months. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and moving closer to a normal market.

      Bottom Line

      If you are planning to enter the housing market, either as a buyer or a seller, let’s get together to discuss the changes in mortgage interest rates and inventory and what they could mean for you. 617-901-4500.

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