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      Millennials Are Skipping Starter Homes for Their Dream Homes

      Millennials Are Skipping Starter Homes for Their Dream Homes | MyKCM

      A new trend has begun to emerge. With home prices skyrocketing in the starter home category, many first-time homebuyers are skipping the traditional starter homes and moving right into their dream homes.

      What’s a Starter Home?

      According to the National Association of Realtors (NAR), simply put, a starter home is a one or two-bedroom home (sometimes even a small, three bedroom). “Prices vary widely by each market but starters on average cost $300,000 to $350,000 while trade-up and premium homes cost upwards of $400,000.”

      Finding Their Forever Homes Now

      A recent CNBC article revealed that there are many factors that delayed older millennials (ages 25-35) from buying a home earlier in their lives. The aftereffects of the Great Recession teaming up with larger education costs forced many to either remain living in their parent’s homes or to rent.

      With the economy continuing to improve, many millennials have been able to break into better-paying jobs which has helped spur down payment savings. As the dream of homeownership comes closer to reality, many millennials are saving for their forever homes.

      According to the latest statistics from NAR, 30% of millennials bought homes for $300,000 or more this year (up from 14% in 2013). Diane Swonk, Chief Economist at Grant Thornton weighed in saying, “They rented for longer. Now they’re going to where they want to stay.”

      More and more millennials are settling down, getting married, and starting families, which is a huge factor driving them to look for larger homes.

      Increased competition in the starter home market has also been a driving force in waiting to afford their dream homes. Inventory in the starter home market is down 14.2% from last year, according to research from Trulia. This has driven prices up and has led to bidding wars.

      Many first-time buyers who were originally looking for starter homes are realizing that for just a little bit more of an investment, they could afford trade-up or premium homes instead.

      Bottom Line

      If you plan on purchasing your first home this year, let’s get together to determine how much house you can afford. You may be pleasantly surprised.

      5 Reasons Why to Sell This Summer!

      5 Reasons Why to Sell This Summer! | MyKCM

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

      1. Demand Is Strong

      The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very 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 to buy the same home.

      Take advantage of the buyer activity currently in the market.

      2. There Is Less Competition Now

      Housing inventory has declined year-over-year for the last 35 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

      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. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

      The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you 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. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 41 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 forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

      Prices are projected to appreciate by 5.2% over the next year, according to CoreLogic. 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 the questions above. 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.

      7 Reasons Why to buy now

      In some areas of the country - especially on the high end - buyers are in 2 camps: they want an ultra-bargain or they want to wait-and-see.....

      As we experience these BUYER JITTERS in some markets these are the most valuable reasons why buying now - possibly in a market in decline in areas - is simply smart. What if a recession is coming? Why buy now? We actually may be experiencing the ULTIMATE buyers market, one where there is more choice, pricing is down and negotiability reigns AND financing is available. Here are my TOP 7 reasons why buying now makes sense:

      1. CHOICE: In most seller's markets buyers have fewer choices and often make poor ones out of desperation. Today there are many more choices. Buying the 'best of' always makes the most sense. A-grade real estate weathers storms better and escalates further in up-markets.

      2. NEGOTIABILITY:  Most markets don't allow much - if any - negotiation during a Seller's market. Being able to negotiate a price may allow you to absorb further downward movement....if it comes. If it doesn't - or if its not as much as anticipated - you may have built in an automatic upside.

      3. FINANCING:  Interest rates may be creeping up, yet they are still near historic lows. Most importantly, financing is AVAILABLE. In recessions, people lose jobs and credit dries up and usually. it becomes much tougher to obtain financing.

      4. HATE WASTE:  Every rent check is (after tax) money you will never see again. Every mortgage payment can build equity, a form of a forced savings account.

      5. TAXES: The tax deduction is smaller but $750k is nothing to sneeze at! Yes, it may be smaller, but it's still there. There are still numerous other tax benefits from owning investment real estate.

      6. COMPOUNDED INFLATION: Inflation - especially higher inflation in larger cities - is not going away. Slowly, but certainly, just like compounding interest, this elevates valuation over time. Building materials and labor costs keep rising.

      7. QUALITY OF LIFE:  Most neighborhoods and buildings with owned properties provide a superior quality of life. if you are buying on the high end, chances are you are wealthier. Life is short: live well! Wealth is a rare gift: enjoy its fruits.

      Is Now a Good Time to Rent?

      Is Now a Good Time to Rent? | MyKCM

      People often ask if now is a good time to buy a home, but nobody ever asks when it’s a good time to rent. Regardless, we want to make certain that everyone understands that today is NOT a good time to rent.

      The Census Bureau recently released their 2017 fourth quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

      Is Now a Good Time to Rent? | MyKCM

      As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.

      Bottom Line

      One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, let’s meet to determine if you are able to today!

       

      If You're Considering Selling, ACT NOW!!

      If You're Considering Selling, ACT NOW!! | MyKCM

      Definitely an aggressive headline. However, as the final data on the 2017 housing market rolls in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME!

      How did we finish 2017?

      1. New-home sales were at their highest level in a decade.
      2. Sales of previously owned homes were at their highest level in more than a decade.
      3. Starts of single-family homes were their strongest in a decade and applications to build such properties advanced to the fastest pace since August 2007.

      And Bloomberg Business just reported:

      “America’s housing market is gearing up for a robust year ahead. Builders are more optimistic, demand is strong and lean inventory is keeping prices elevated.”

      And the National Association of Realtors revealed that buyer traffic is stronger this winter than it was during the spring buying season last year.

      The only challenge to the market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is less than a four-month supply of inventory. This represents a decrease in supply of 9.7% from the same time last year.

      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 to see whether that is the case in your neighborhood.

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      3 Tips for Making Your Dream Home a Reality [INFOGRAPHIC]

       

      3 Tips for Making Your Dream Home a Reality [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Realtor.com shared their “5 Habits to Start Now If You Hope to Buy a Home.”
      • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking a lot about it.
      • Living within a budget will not only help you save money for down payments but will help you pay down other debts that might be holding you back.

      Home Sales Expected to Increase Nicely in 2018

      Home Sales Expected to Increase Nicely in 2018 | MyKCM

      Freddie MacFannie Mae, and The Mortgage Bankers Association are all projecting that home sales will increase in 2018. Here is a chart showing what each entity is projecting in sales for the remainder of this year and the next.

      Home Sales Expected to Increase Nicely in 2018 | MyKCM

      As we can see, each entity is projecting sizable increases in home sales next year. If you have considered selling your house recently, now may be the time to put it on the market.

      Don't Disqualify Yourself? 52% of Approved Loans Have A FICO® Score Under 750

      Don’t Disqualify Yourself… 52% of Approved Loans Have A FICO® Score Under 750 | MyKCM

      The results of countless studies have shown that potential home buyers, and even current homeowners, have an inflated view of what is really required to qualify for a mortgage in today’s market.

      One such study by the Wharton School of Business at the University of Pennsylvania revealed that many millennials have not yet considered purchasing homes simply because they don’t believe they can qualify for a mortgage.

      A recent article about millennials by Realtor.com explained that:

      About 72% of aspiring millennial buyers said they’re waiting because they can’t afford to buy…

      The article also explained that 29% of millennials believe their credit scores are too low to buy.The problem here is the fact that they think they will be denied a mortgage is keeping them from even attempting to apply.

      Ellie Mae’s Vice President Jonas Moe encouraged buyers to know their options before assuming that they won’t qualify for a mortgage:

      “Many potential home buyers are ‘disqualifying’ themselves. You don’t need a 750 FICO® Score and a 20% down payment to buy.”

      So, what credit score is necessary?

      Below is a breakdown of the FICO® Score distribution of all closed (approved) loans in July from Ellie Mae’s latest Origination Report.

      Don’t Disqualify Yourself… 52% of Approved Loans Have A FICO® Score Under 750 | MyKCM

      Over 52% of all approved loans had a FICO® Score under 750. Many potential home buyers believe that they need a score over 780 to qualify.

      Bottom Line

      If owning a home of your own has always been your dream and you are ready and willing to buy, or if you are a homeowner who wants to move up, find out if you are able to! Let’s get together to determine if your dreams can become a reality sooner than you thought!

      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.

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