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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.

      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!

      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.

      Today is ELECTION DAY:  Don't forget to GO OUT AND VOTE!

      DID YOU KNOW? Since 1946, there have been 18 midterm elections. Stocks were higher 12 months after every single one. Every single one. That’s 18 for 18. Even though we’ve had every possible political combination in the past 72 years. Republican president years with Democratic Congress. A democratic president with Republican Congress. A Republican president and Congress. Democratic president and Congress. Since 1946, stocks have risen an average of 17% in the year after a midterm. (Marketwatch)


      "You're gonna go a little bonkers if you work 120 hours a week." - Elon Musk

      DID YOU KNOW?  It is now rumored that Amazon will split its 'second headquarters' into TWO centers creating 25,000 jobs in each.....stay tuned. What is Amazon looking for? Skilled labor, housing, public transportation and infrastructure......and a few tax break perhaps? Amazon employs 45,000 people in Seattle alone. (WSJ)

      DID YOU KNOW? Digital Real Estate is News Corp’s fastest-growing segment, contributing 44% of the total company (Earnings before Interest, Tax, Depreciation, & Amortization) EBITDA, almost 4X those of the company’s other segments individually largely due to the relatively low-cost nature of the business. Digital Real Estate accounts for around 45% of the company’s value, especially notable since the segment only accounts for about 14% of its total revenues. News Corp owns a 61.6% interest in the REA Group (Australia and Asia) and an 80% interest in Move Inc. (realtor.com in the U.S.). (Forbes)

      Upgrade Utopia...A Great Time to Act!

       

      While many buyers in the luxury real estate markets can freeze into a 'wait-and-see' mode when pricing and sales volume drop, those willing to upgrade could experience the ultimate buying opportunity. Here is why:


      1.  Imagine you live in a $4 million home, and the market is down 20%. You'd have to sell that home for around $3,2 million, a loss of around $800,000.  Assuming you are buying a $10 million home that is also down 20%, that home should cost $2 million less, a substantive savings of around $1.2 million net.

      2.  Assume you live in a $4 million home and the markets rise 20% allowing you to sell your home for $4.8 million. Unfortunately, if the market is up 20% across the board, that $10 million home you wish to upgrade to will now cost $12 million.....it will cost you $1.2 million MORE.

      Applying BALANCE SHEET MENTALITY to your real estate needs is always wisest. Your lifetime real estate is mostly not about a single transaction. While we await election results, equity market and rising interest rates clarification, trade-war results, price-cuts, equity market roller-coasters, extreme media sensationalism 24-7 and the true results of the tax bill, opportunity always exists. Always!

       

      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.

      Happy Halloween! I hope you have a fun day today.

      DID YOU KNOW? Year-over-year gains in home prices fell below 6%, according to the latest S&P CoreLogic Case-Shiller National Home Price NSA Index. The index rose 5.8% from August 2017 to August 2018, down from last month’s annual gain of 6%. Yet home-price gains remain WELL above wage gains. (CNBC)

      DID YOU KNOW? The number of new and existing houses and condominiums sold in Southern California during September dropped nearly 18% compared with 2017, the slowest September pace since 2007, mostly attributed to rising prices and interest rates. Sales fell 22% in September compared with August. (Sales usually fall about 10% from August to September.) Sales of newly built (Higher priced)homes were 47% below the September average dating back to 1988, while sales of existing homes were 22% below their long-term average. While the median sale price was up 3.6% year over year in September, the principal and interest mortgage payment on the median-priced home was up 14.2% because mortgage rates increased about 0.8 percentage point over that period. (CNBC)

      "I don't expect a sharp turn in the housing market at this point." - Robert Shiller, Case-Shiller Index

      DID YOU KNOW? Apple product prices are going up. Airlines are paying about 40% more for fuel than a year ago and raising fares. Trucking costs are up 7% annually. U.S. manufacturers are paying roughly 8% more for aluminum, 38% more for steel. 15% more for Chinese-made quartz countertops, 10% more for imported cabinets because of tariffs, than a year ago. Paint supplier Sherwin-Williams raised prices in its own stores up to 6% in October. A Big Mac costs 4.7% more and a Domino's Pizza 5.9%more. "They" say inflation is around 2%. Hmmmmm...... (WSJ)

      "There are only 3 times you should rent a home instead of buy: 1) If you plan to move in 3 years or less  2) If you're not sure about your job  3) You plan to have kids or will need more space." - David Bach, AE Wealth Managment

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