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      2020 Luxury Market Forecast

      2020 Luxury Market Forecast | MyKCM

      By the end of last year, many homeowners found themselves with more equity than they realized, and at the same time, their wages were increasing. When those two factors unite, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.

      Three Things to Think About in the 2020 Luxury Housing Market

      1. Prices

      The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,

      “There’s a good link between luxury real estate prices and [economic] growth.”

      Available inventory is a key element that can impact home prices. In the upper range, the inventory is greater in comparison to the entry-level market, making moving up to a luxury home a growing reality for many buyers right now.

      2. Activity in the Market

      With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,

      “Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”

      Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.

      Buyers are also getting more for their money with greater purchasing power due to the current low-interest rates.

      3. Buyers Are Coming Back

      Keep in mind, buyers are often sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.

      The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,

      “We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”

      Bottom Line

      If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.

       

      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.

      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.

      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.

      4 Reasons to Buy a Home This Fall

      4 Reasons to Buy a Home This Fall | MyKCM

      Here are four great reasons to consider buying a home today, instead of waiting.

      1. Prices Will Continue rising

      CoreLogic’s latest Home Price Insights Report shows that home prices have appreciated by 3.6% over the last 12 months. The same report predicts prices will continue to increase at a rate of 5.8% 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 Next Year

      The Primary Mortgage Market Survey from Freddie Mac indicates that interest rates for a 30-year mortgage have recently hovered just above 3.5%. This is great news for buyers in the market right now, because low-interest rates increase your purchasing power – but don’t wait! Most experts predict 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 needed to buy your next home.

      3. Either Way, You Are Paying a Mortgage 

      There are some renters who haven’t purchased a home yet because they’re uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you’re living rent-free with your parents, you are paying a mortgage – either yours or that of your landlord.

      As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home 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 costs 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 both are on the rise.

      But what if they weren’t? Would you wait?

      Look at the actual reason you’re 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 custom renovations, maybe now is the time to buy.

      Bottom Line

      Buying a home sooner rather than later could lead to substantial savings. Let’s get together to determine if homeownership is the right choice for you and your family this fall.

       

      Homeownership is the Top Contributor to Your Net Worth

      Homeownership is the Top Contributor to Your Net Worth | MyKCM

      Many people plan to build their net worth by buying CDs or stocks or just having a savings account. Recently, however, Economist Jonathan Eggleston and Survey Statistician Donald Hays, both of the U.S. Census Bureau, shared the biggest determinants of wealth,

      “The biggest determinants of household wealth [are] owning a home and having a retirement account.” (Shown in the graph below):

      Homeownership is the Top Contributor to Your Net Worth | MyKCM

      This does not come as a surprise, as we often mention that homeownership can help you to increase your family’s wealth. This study reinforces that idea,

       “Net worth is an important indicator of economic well-being and provides insights into a household’s economic health.”

      Having equity in your home can help your family move in that direction, building toward substantial financial growth. According to the report noted above, people are not only creating net worth in the homes they live in, but many are also earning equity in rental property investments. (see below):

      :Homeownership is the Top Contributor to Your Net Worth | MyKCM

      John Paulson said it well,

      If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

      Bottom Line

      There are financial and non-financial benefits of owning a home. If you would like to increase your net worth, let’s get together so you can learn all the benefits of becoming a homeowner.

      Rent Vs. Own [INFOGRAPHIC]

      Rent Vs. Own [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Owning your own home vs. renting may lead to some great options, such as locking in your monthly payments and having the freedom to customize your living space.
      • Whether you rent or own, you have to cover someone’s mortgage costs. You may as well be doing so to build your own wealth, rather than that of your landlord.
      • Renting and owning both have up-front fees when you sign your lease or close, respectively. Think about putting that money to work for you!

      Why Now Is the Perfect Time to Sell Your House

      Why Now Is the Perfect Time to Sell Your House | MyKCM

      As a homeowner, it’s always tempting to dream about the next big project you’re going to tackle. The possibilities are endless. Should I renovate? Should I refinance? Should I stay? Should I move? The list goes on and on.

      In today’s housing market, it’s actually a great time to shift your thoughts toward selling your house and moving up into the home of your dreams. Here’s why:

      Inventory is on the rise, but there’s still an overall shortage of houses for sale (less than a 6-month supply found in a more normal market), so homes are going under contract quickly. In fact, the National Association of Realtors (NAR) Realtors® Confidence Index Survey reports that right now homes are only staying on the market for an average of 27 days. That’s less than one month, an even more accelerated pace from the 36-day trend we saw last spring.

      Why Now Is the Perfect Time to Sell Your House | MyKCM

      The same report also indicates there are more interested buyers than active sellers today, which is one of the big factors driving home prices higher.

      .Why Now Is the Perfect Time to Sell Your House | MyKCM

      Why Now Is the Perfect Time to Sell Your House | MyKCM

      This power combination provides an ideal environment for sellers aiming to close a quick sale and earn a big return as we wrap up the summer season.

      Bottom Line

      There’s still time to make a move before the school year starts and the fall weather sets in. Maybe it’s time to make a change. Let’s get together to determine if selling now is the right decision for your family.

       

      5 Reasons To Sell Your House This Spring!

      5 Reasons To Sell Your House This Spring! | MyKCM

      Here are five compelling reasons listing your home for sale this spring makes sense.

      1. Demand Is Strong

      The latest Buyer Traffic Index 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, multiple buyers are competing with each other for the same home.

      Take advantage of the buyer activity currently in the market.

      2. There Is Less Competition Now

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

      Historically, the average number of years a homeowner stayed in his or her home was six, but that number has hovered between nine and ten years since 2011. Many homeowners have a pent-up desire 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 are granted the freedom to move.

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

      3. The Process Will Be Quicker

      Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. Buyers know exactly what they can afford before home shopping. This makes the entire selling process much faster and simpler. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 47 days.

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

      If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has created a buyer’s market. This means that if you are planning on selling a starter or trade-up home, it will sell quickly, AND you’ll be able to find a premium home to call your own!

      According to CoreLogic, prices are projected to appreciate by 4.6% 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 mortgage payment) 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 is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom 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. 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 Net Worth of a Homeowner is 44x Greater Than A Renter!

      The Net Worth of a Homeowner is 44x Greater Than A Renter! | MyKCM

      Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest survey data, covering 2013-2016 was recently released.

      The study revealed that the median net worth of a homeowner was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

      These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

      Owning a home is a great way to build family wealth

      As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

      That is why, for the fifth year in a row, Gallup reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds.

      Greater equity in your home gives you options

      If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle, let’s get together to discuss the process.

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