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      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.

      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.

      5 Things You Should Know Before Moving to Boston

      For every Bostonian hopeful planning to pack their bags and head northeast, there are plenty of reasons to go forward with the big move. With over a quarter million college students, Boston reaps all the benefits of a youthful population brimming with innovation and enterprise. Boston even beats out both New York and Los Angeles as a top city for venture-capital investment, creating the perfect cradle for the young entrepreneur looking to delve into the startup industry. Before loading the moving truck, consider the following before you take off and don’t forget to pack your snow shovel.

      Boston loves Sports

      The Patriots. The Red Sox. The Bruins. The Celtics. You may not be a sports fan, but it is absolutely necessary to consider that many Bostonians are. For the non-sports fans considering a move the The Hub, keeping track of game schedules will prove to be immensely helpful when mapping out travel time through and around the city. The influx of sports fans from around the city and surrounding area will affect your commute, it would be wise to keep note of who plays who even if you won’t be tracking the scoreboard.

      Techies

      Over recent years, Boston and its neighboring cities, Charles River and Cambridge have developed an attractive corporate culture laying host to big pharma and tech giants like Google, Amazon, and Microsoft. Boston has positioned itself to become a hotbed for hundreds of tech startups given the city’s proximity to some of America’s leading universities. In particular, Cambridge’s Kendall Square, neighboring MIT, demonstrates a thriving startup scene home to eager students and recent graduates.

      College Town, USA

      Boston and its surrounding suburbs boast some of America’s most elite universities including a host of Ivy’s and exceptionally prestigious institutions like Harvard University, MIT, Tufts University, Boston College, Boston University, Emerson College, Northeastern University, Dartmouth, Brown, and Yale to name a few. With over 30 colleges and universities within Boston’s greater metropolitan area, it’s safe to say that Boston is truly a college city and enjoys a multitude of benefits through university partnerships.

      Quick Getaways

      A staycation in Boston warrants a trip to one of the city’s many craft breweries. Although beer brewing has always been a Boston staple, the industry has seen impressive jumps with over one hundred different breweries now calling Boston home. Many breweries offer tours including Harpoon Brewery and of course, Samuel Adams. Keep in mind that while most bars around the city shutdown at 2 AM, the metro system stops running generally between 12:30 AM and 1:00 AM.

      If you find yourself looking for an escape outside the city limits, quiet destination spots like Cape Cod, Martha’s Vineyard, and Nantucket are within reach of a reasonable drive for a day trip or weekend vacation during the warmer months. Even without a car, many nearby vacation spots are accessible by bus, train, or ferry ride. Many Boston residents seek outdoor excursions enjoying the lakes and mountains of New Hampshire, Vermont, and Maine.

      Massachusetts winters are sometimes harsh. It’s not uncommon for Boston to receive several feet of snow during relatively frequent snowstorms. In general, wintertime temperatures dip down to the high teens and low twenties. During the cooler seasons, consider hitting a ski lodge. Even without the slopes, what better way to enjoy below freezing temps than posted fireside inside a rustic New England cabin

      The T

      The Massachusetts Bay Transit Authority or “The T” is at the heart of a Bostonian’s everyday commute. If you’re uninterested in paying additional fees for street parking, prefer to sidestep paying to park in a garage, and often find yourself forgetting to check your parking meter, then embracing public transportation may be the best option for you. It would be wise to consider selecting a home or apartment by a stop on the same color line you need to take to get to work. By reducing the number of transfer stops, your commute time will significantly decrease as opposed to having to jump trains every morning. Although living within walking distance from a T station would be ideal, expect to pay a hefty fee. These locations are sought after and typically expensive locations.

      Triple Deckers

      Apartment shopping in Boston means scouring the depths of Craigslist for apartment listings. Most available apartments are known as “triple deckers” or “three deckers” depending on who you ask. These buildings are owner-occupied two to three family houses rented to tenants for a lease on the second and third floor. These homes are unique to New England and are generally held as a staple experience to living in Boston. Triple deckers are often older homes, individually managed, and come with less luxuries than new apartment buildings, specifically in-unit laundry hookups. Considering that the average Boston renter pays roughly one-thousand dollars a month, settling for an in-building laundry facility in one of these homes will have a trade off for substantially cheaper rent.

      Just before you unload the moving van, think about reserving your very own moving permit online through Boston City Hall. Most apartments within the city are accompanied by a September 1st move in date to accommodate (for better or worse) all of the many college students moving back to campus in the fall. Imagine the entire city is moving in on the same day and prepare to plan accordingly. If you are considering moving in at any other time of the year, subletting an apartment would be a solid option.

       

      Home Prices Up 6.64% Across the Country! [INFOGRAPHIC]

       

      Home Prices Up 6.64% Across the Country! [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
      • In the report, home prices are compared both regionally and by state.
      • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
      • Alaska & West Virginia were the only states where home prices are lower than they were last year.

      58% of Homeowners See a Drop in Home Values Coming

      58% of Homeowners See a Drop in Home Values Coming | MyKCM

      According to the recently released Modern Homebuyer Survey from ValueInsured58 percent of homeowners think there will be a “housing bubble and price correction” within the next 2 years.

      After what transpired just ten years ago, we can understand the concern Americans have about the current increase in home prices. However, this market has very little in common with what happened last decade.

      The two major causes of the housing crash were:

      1. A vast oversupply of housing inventory caused by home builders building at a pace that far exceeded historical norms.
      2. Lending standards that were so relaxed that unqualified buyers could easily obtain financing thus enabling them to purchase a home.

      Today, housing inventory is at a 20-year low with new construction starts well below historic norms and financing a home is anything but simple in the current mortgage environment. The elements that precipitated the housing crash a decade ago do not exist in today’s real estate market.

      The current increase in home prices is the result of a standard economic equation: when demand is high and supply is low, prices rise.

      If you are one of the 58% of homeowners who are concerned about home values depreciating over the next two years and are hesitant to move up to the home of your dreams, take comfort in the latest Home Price Expectation Survey.

      Once a quarter, a nationwide panel of over one hundred economists, real estate experts and investment & market strategists are surveyed and asked to project home values over the next five years. The experts predicted that houses would continue to appreciate through the balance of this year and in 2018, 2019, 2020 and 2021. They do expect lower levels of appreciation during these years than we have experienced over the last five years but do not call for a decrease in values (depreciation) in any of the years mentioned.

      Bottom Line

      If you currently own a home and are thinking of moving-up to the home your family dreams about, don’t let the fear of another housing bubble get in the way as this housing market in no way resembles the market of a decade ago.

      Housing Inventory Hits 30-Year Low

      Housing Inventory Hits 30-Year Low

      Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

      New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

      “The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

      CoreLogic’s President & CEO, Frank Martell added,

      “Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

      While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

      Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

      Real estate is local.

      Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

      Bottom Line

      Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.

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