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      Why To Not Wait Until Spring to Make a Move

      Why Not to Wait Until Spring to Make a Move | MyKCM

      The housing market recovery coming into the new year has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, and the current market conditions are truly making this winter an ideal time to make a move. Here’s a dive into some of the biggest wins for homebuyers this season.

      1. Mortgage Rates Are Historically Low

      In 2020, mortgage rates hit all-time lows 16 times. Continued low rates have set buyers up for significant long-term gains. In fact, realtor.com notes:

      “Given this means homes could cost potentially tens of thousands less over the lifetime of the loan.”

      Essentially, it’s less expensive to borrow money for a home loan today than it has been in years past. Although mortgage rates are expected to remain relatively low in 2021, even the slightest increase can make a big difference in your payments over the lifetime of a home loan. So, this is a huge opportunity to capitalize on right now before mortgage rates start to rise.

      2. Equity Is Growing

      According to John Burns Consulting58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear.

      In addition, CoreLogic notes the average equity homeowners gained since last year is $17,000. That’s a tremendous amount of forced savings for homeowners, and an opportunity to use this increasing equity to make a move into a home that fits your changing needs this season.

      3. Home Prices Are Appreciating

      According to leading experts, home prices are forecasted to continue appreciating. Today, many experts are projecting more moderate home price growth than last year, but still moving in an upward direction through 2021.

      Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home before prices rise even higher is a strong long-term investment.

      4. There Are Not Enough Homes for Sale

      With today’s low inventory of homes on the market, which is contributing to this home price appreciation, sellers are in the driver’s seat. The competition is high among buyers, so homes are selling quickly.

      Making a move while so many buyers are looking for homes to purchase may mean your house rises to the top of the buyer pool. Selling your house before more listings come to the market in the traditionally busy spring market might be your best chance to shine.

      Bottom Line

      If you’re considering making a move, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect to get you set up for homebuying success in the new year.

       

      Is it Time to Move into a Single-Story Home?

       

      Is it Time to Move into a Single-Story Home? | MyKCM

      Once the kids have left the nest, you may be wondering what to do with all of the extra space in your home. Chances are, you don’t need four bedrooms anymore, and it may be a great time to sell your house and downsize, maybe even into a single-story home. You’ve likely gained significant equity if you’ve lived in your home for a while, so making a move while demand for your current house is high could be your best step forward toward the retirement goals you set out to achieve several years ago.

      The dilemma, though, is where to go next. A big concern for many homeowners who are ready to sell is finding a home to move into, given today’s lack of houses available for sale. There is, however, some good news: the number of single-family 1-story homes being built today is on the rise, improving your odds of finding the right home for your changing needs. In a recent article, The National Association of Home Builders (NAHB) explains:

      “Nationwide, the share of new homes with two or more stories fell from 53% in 2018 to 52% in 2019, while the share of new homes with one story grew from 47% to 48%.”

      Here’s a map showing the breakdown of newly constructed homes being built by region, and the percentage of 1-story and 2-story homes in that mix:Is it Time to Move into a Single-Story Home? | MyKCM

      What are the benefits of buying a one-story home?

      Still not sure about buying a single-story home? An article from Home Talk covers several advantages of switching from two floors to one:

      1. Energy Efficient

      “It is easier to heat and cool a single-story house [than] it would be to regulate the temperatures of a multi-story house.”

      Most single-story homes only need one heating or cooling unit, and they typically stay cooler than a two-story home, both of which can lead to significant savings.

      2. Easier to Maintain

      “Doing a general cleaning in a single story requires less effort and you will be able to see all areas that need cleaning and the areas are easily accessible.”

      Cleaning and maintenance of a single-story home can take less time and effort, and better upkeep helps improve the overall value of the home.

      3. Accessible for Everyone

      “A single-story house can be accessed by anyone, whether they are young children or the senior citizens.”

      If you’re looking for a house that provides a safe and easily accessible environment at any age, a single-story home may be optimal.

      4. Good Resell Potential

      “When buying a single-story house, you should consider the resale value should you think of reselling it in case of a circumstance that can happen. Look at the growth rate of that area. Due to the high demand of these types of houses it is [easy] to resell them and depending on the growth rate of an area, it increases in value significantly.”

      Single-story homes have a lot of benefits and are often in higher demand. This bodes well for future resale opportunities.

      Bottom Line

      There are many benefits to downsizing into a one-story home. Doing so while demand for your current house is high might make it easier than ever to make a move. Let’s connect if you’re ready to purchase the single-story home you need while homes are so affordable today.

       

       

      The Top Reasons People Are Moving This Year

       

       

      The Top Reasons People Are Moving This Year | MyKCM

      Today, Americans are moving for a variety of different reasons. The current health crisis has truly re-shaped our lifestyles and our needs. Spending extra time where we currently live is enabling many families to re-evaluate what homeownership means and what they find most important in a home.

      According to Zillow:

      “In 2020, homes went from the place people returned to after work, school, hitting the gym or vacationing, to the place where families do all of the above. For those who now spend the majority of their hours at home, there’s a growing wish list of what they’d change about their homes, if possible.” 

      With a new perspective on homeownership, here are some of the top reasons people are reconsidering where they live and making moves this year.

      1. Working from Home

      Remote work is becoming the new norm in 2020, and it’s continuing on longer than most initially expected. Many in the workforce today are discovering they don’t need to live close to the office anymore, and they can get more for their money if they move a little further outside the city limits. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) notes:

      “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

      If you’ve tried to convert your guest room or your dining room into a home office with minimal success, it may be time to find a larger home. The reality is, your current house may not be optimally designed for this kind of space, making remote work and continued productivity very challenging.

      2. Virtual Schooling

      With school about to restart this fall, many districts are beginning the new academic year online. Education Week is tracking the reopening plans of schools across the country, and as of August 21, 21 of the 25 largest school districts are choosing remote learning as their back-to-school instructional model, affecting over 4.5 million students.

      With a need for a dedicated learning space, it may be time to find a larger home to provide your children with the same kind of quiet room to focus on their schoolwork, just like you likely need for your office work.

      3. A Home Gym

      Staying healthy and active is a top priority for many Americans. With various levels of concern around the safety of returning to health clubs across the country, dreams of space for a home gym are growing stronger. The Home Builders Association of Greater New Orleans explains:

      “For many in quarantine, a significant decrease in activity is more than a vanity issue – it’s a mental health issue.”

      Having room to maintain a healthy lifestyle at home – mentally and physically – may prompt you to consider a new place to live that includes space for at-home workouts.

      4. Outdoor Space

      Especially for those living in an apartment or a small townhouse, this is a new priority for many as well. Zillow also notes the benefits of being able to use yard space throughout the year:

      “People want more space in their next home, and one way to get it is by turning part of the backyard into a functional room, ‘an outdoor space for play as well as entertaining or cooking.’”

      You may, however, not have the extra square footage today to have these designated areas – indoor or out.

      Moving May Be Your Best Option

      If you’re clamoring for extra space to accommodate your family’s changing needs, making a move may be your best bet, especially while you can take advantage of today’s low mortgage rates. Low rates are making homes more affordable than they have been in years. According to Black Knight:

      “Buying power for those shopping for a home is up 10% year over year, with home buyers able to afford nearly $32,000 more home than they could have 1 year ago while keeping their monthly payment the same.”

      It’s a great time to get more home for your money, just when you need the extra space.

      Bottom Line

      People are moving for a variety of different reasons today, and many families’ needs have changed throughout the year. If you’ve been trying to decide if now is the time to buy a new home, let’s connect to discuss your needs.


       

      #1 Financial Benefit of Homeownership: Family Wealth

       

      #1 Financial Benefit of Homeownership: Family Wealth | MyKCM

      While growing up, we were taught by our parents and grandparents that owning a home is a financially savvy move. They explained how a mortgage is like a “forced savings plan.” When you pay rent, that money is lost forever. When you make a mortgage payment, much of that money accumulates as equity in the home. So, what exactly is equity? The equity in your home is the amount of money you can sell it for minus what you still owe on the mortgage. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe. That reduction of your mortgage every month increases your equity. A recent study by CoreLogic explained that homeowners gained substantial equity over the last twelve months, and are essentially sitting on large sums of cash in their homes. In the study, Frank Nothaft, Chief Economist for CoreLogic explained:
      “The CoreLogic Home Price Index recorded a quickening of home price gains during the fourth quarter of 2019, helping to boost home equity wealth. The average family with a mortgage had a $7,300 gain in home equity during the past year, and a total of $177,000 in home equity wealth.”
      For most families, their home is their largest financial asset. This increase in equity drives the net worth, or family wealth, of the homeowner. Renters are not earning that benefit. Instead, they’re building the net worth of their landlord.

      Bottom Line

      Home price growth will moderate during the pandemic. But once a cure is available, most experts agree that home values will again begin to appreciate at levels similar to what we’ve seen over the last several years. In the long run, our family elders will be proven correct: owning a home is a savvy financial move.

      Will the Housing Market Turn Around This Year?

       

      Will the Housing Market Turn Around This Year? | MyKCM
       

      Today, many people are asking themselves if they should buy or sell a home in 2020. Some have shifted their plans or put them on hold over the past couple of months, and understandably so. Everyone seems to be wondering if the market is going to change and when the economy will turn around. If you’re trying to figure out what’s going to happen and how to play your cards this year, you’re not alone.

      This spring in the 2020 NAR Flash Survey: Economic Pulse, the National Association of Realtors (NAR) has been tracking the behavior changes of homebuyers and sellers. In a reaction to their most recent survey, Lawrence Yun, Chief Economist at NAR, noted the beginnings of a turn in the market:

      “After a pause, home sellers are gearing up to list their properties with the reopening of the economy…Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

      What does the survey indicate about sellers?

      Sellers are positioning themselves to make moves this year. More than 3 in 4 potential sellers are preparing to sell their homes once stay-at-home orders are lifted and they feel more confident, which means more homes will start to be available for interested buyers.Will the Housing Market Turn Around This Year? | MyKCM

      Just this week, Zillow also reported an uptick in listings, which is great news for the health of the market:

      “The number of new for-sale listings overall has shown improvement, up 5.9% last week from the previous week. New listings of the most-expensive homes…are now seeing the biggest resurgence, up 8%. The uptick is likely a sign sellers are feeling more confident because of improving buyer demand, as newly pending sales have also jumped up during the same period.”

      What does the survey note about buyers?

      The recent pandemic has clearly impacted buyer preferences, showing:

      • 5% of the respondents said buyers are shifting their focus from urban to suburban areas.
      • 1 in 8 Realtors report changes in desired home features, with home offices, bigger yards, and more space for their families becoming increasingly important.
      • Only 17% said buyers stopped looking due to concerns about their employment or loss of a job.

      As we’ve mentioned before, buyer demand is strong right now, and many are simply waiting for more inventory to become available so they can make a move, especially as the country begins to reopen.

      Bottom Line

      If you’re thinking about putting your house on the market, let’s connect today. There’s a good chance an eager buyer is looking for a home just like yours.

      How Technology is Helping Buyers Navigate the Home Search Process

      How Technology is Helping Buyers Navigate the Home Search Process [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • A recent realtor.com survey revealed that buyers are still considering moving forward with the homebuying process, even if they can’t see the home in-person.
      • While they still prefer to physically see a home, virtual home tours and accurate listing information top the list of tech specs buyers find most helpful in today’s process.
      • Let’s connect today to determine how technology can help power your home search.

      How the Housing Market Benefits with Uncertainty in the World

      How the Housing Market Benefits with Uncertainty in the World | MyKCM

      It’s hard to listen to today’s news without hearing about the uncertainty surrounding global markets, the spread of the coronavirus, and tensions in the Middle East, just to name a few. These concerns have caused some to question their investment plans going forward. As an example, in Vanguard’s Global Outlook for 2020, the fund explains,

      “Slowing global growth and elevated uncertainty create a fragile backdrop for markets in 2020 and beyond.”

      Is there a silver lining to this cloud of doubt?

      Some worry this could cause concern for the U.S. housing market. The uncertainty, however, may actually mean good news for real estate.

      Mark Fleming, Chief Economist at First American, discussed the situation in a recent report,

      “Global events and uncertainty…impact the U.S. economy, and more specifically, the U.S. housing market…U.S. bonds, backed by the full faith and credit of the U.S. government, are widely considered the safest investments in the world. When global investors sense increased uncertainty, there is a ‘flight to safety’ in U.S. Treasury bonds, which causes their price to go up, and their yield to go down.”

      Last week, in a HousingWire article, Kathleen Howley reaffirmed Fleming’s point,

      “The death toll from the coronavirus already has passed Severe Acute Respiratory Syndrome, or SARS, that bruised the world’s economy in 2003…That’s making investors around the world anxious, and when they get anxious, they tend to sell off stocks and seek the safe haven of U.S. bonds. An increase in competition for bonds means investors, including the people who buy mortgage-backed bonds, have to take lower yields. That translates into lower mortgage rates.”

      The yield from treasury bonds is the rate investors receive when they purchase the bond. Historically, when the treasury rate moves up or down, the 30-year mortgage rate follows. Here’s a powerful graph showing the relationship between the two over the last 48 years:

      Popular Perspective Delivers Gift to U.S. Housing Market | MyKCM

      How might concerns about global challenges impact the housing market in 2020? Fleming explains,

      “Even a small change in the 10-year Treasury due to increased uncertainty, let’s say a slight drop to 1.6 percent, would imply a 30-year, fixed mortgage rate as low as 3.3 percent. Assuming no change in household income, that would mean a house-buying power gain of $21,000, a five percent increase.”

      Bottom Line

      For a multitude of reasons, 2020 could be a challenging year. It seems, however, real estate will do just fine. As Fleming concluded in his report:

      “Amid uncertainty, the house-buying power of U.S. consumers can benefit significantly.”

      2020 Home Buying Checklist

      2020 Homebuying Checklist | MyKCM

      Some Highlights:

      • If you’re thinking of buying a home, plan ahead and stay on the right track, starting with pre-approval.
      • Being proactive about the homebuying process will help set you up for success in each step.
      • Make sure to work with a trusted real estate professional along the way, to help guide you through the homebuying steps specific to your area.

       

      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.

       

      Compass Contemplations for Thursday

      Good morning,

      DID YOU KNOW?  Mortgage application volume decreased 9.2% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The week’s results also include an adjustment for the Thanksgiving holiday. Refinance weakness caused the overall drop. Those applications fell 16% for the week but were 61% higher than the same week a year ago. (CNBC)

       

      DID YOU KNOW?  In 2000, just before the Bush tax cuts and a recession, U.S. governments collected 28.3% of GDP in taxes. Today that figure has dropped to 24.3% of GDP in 2018, the 4th lowest in the OECD and down from 26.8% a year earlier and 25.9% in 2016. (WSJ)


      DID YOU KNOW?  Realtor.com predicts sales of existing homes will fall 1.8% compared with 2019. Home prices will flatten nationally, increasing just 0.8% annually, but in 25% of the 100 largest metropolitan markets, prices will fall. These include Chicago, Dallas, Las Vegas, Miami, St. Louis, Detroit, and San Francisco. Millennials will dominate the housing market, accounting for 50% of all mortgages by spring, according to the forecast. Just short of 5 million millennials will turn 30, which is when many people buy their first home, and the oldest will turn 39.

      DID YOU KNOW? According to its 2019 U.S. Vacation Home Counties Report, between 2013 to 2018, the median sales price in vacation home counties increased at a slightly higher pace of 36% compared to the pace of increase of all existing and new homes sold, at 31%. (NAR)

      DID YOU KNOW? National home prices increased 3.5% year over year in October 2019 and are forecast to increase by 5.4% from October 2019 to October 2020. The October 2019 HPI gain was down from the October 2018 gain of 5.2% and was up a bit from the September 2019 gain of 3.3%.  Home prices have been increasing year over year in a narrow range of 3.2% to 3.5% over the past six months, indicating that the rate of home price growth is leveling off. (CORE LOGIC)

      DID YOU KNOW?  As a percentage of disposable income, we have the lowest debt service to income obligations in 40 years in the USA. (JP MORGAN)
       
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