Our mobile site is optimized for smaller screens.

TRY IT NO THANKS
  • Boston Condos
+ Advanced Search

      buy

      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

      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!

      Compass Contemplations for Thursday

       

      DID YOU KNOW? Housing starts fell 5.3% in September from the prior month to a seasonally adjusted annual rate of 1.201 million, according to the Commerce Department. Residential building permits, which can signal how much construction is in the pipeline, also fell, declining 0.6% from August to an annual pace of 1.241 million last month. Housing-starts data are volatile from month to month and can be subject to large revisions. September’s 5.3% drop for starts came with a margin of error of 11.3 percentage points. (WSJ)


      DID YOU KNOW? U.S. home-builder confidence ticked up in October after pulling back from a multi-decade high in recent months. (WSJ)

       

      DID YOU KNOW?  Household wealth in the U.S. continues to surge. China has replaced Japan in 2nd place. Aggregate global wealth rose by $14 trillion to $317 trillion in the 12 months prior to mid-year 2018, a 4.6% growth rate. Rising wealth was largely due to increases in non-financial assets owned by the middle-class. Total wealth and wealth per adult in the U.S. have grown every year since 2008, even when total global wealth suffered a reversal in 2014 and 2015. The U.S. has accounted for 40% of all increments to world wealth since 2008, and 58% of the rise since 2013. (Global Wealth Report 2018)

       

      DID YOU KNOW? Consumers filed the fewest requests for a mortgage since late 2014 last week as most home borrowing costs reached their highest levels in more than 7 years.

       

      DO YOU WANT PROOF? .....of how every "Compass experience" matters?  This summer, a Compass Agent in LA successfully and smoothly sold the home of their clients. Those clients then asked their agent if perhaps they knew a Compass agent in New York who could help sell their parents apartment on the Upper East Side. It had been on the market for quite some time with a different agent at a different firm and they felt they had such a positive experience with Compass LA they wanted to try a change ......this time with Compass New York. With the introduction to Compass NY and an agent who specializes on the Upper East Side, the home was re-listed, staged, and beautified. After just 13 days on the market, it entered into a contract and closed within 45 days. There is no better public relation for ALL of us if we ALL focus on QUALITY EXPERIENCES AND RESULTS.

      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.

      sign up RECEIVE THE LATEST LISTINGS & SAVE SEARCHES Already a member? Sign in here