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      Compass Contemplations for Wednesday

      In George H. W. Bush's famous "thousand points of light" nomination acceptance speech on August 18, 1988, he called for a "kinder, gentler nation" specifically referring to volunteering and giving back. In his lifetime it is estimated he helped raise around $1 billion for various charities. As we all know, this past week President George H. W. Bush passed away. While you may or may not have agreed with his politics, one of his principals everyone can relate to - especially at Compass where Robert made this a cornerstone of his future vision for the company - is the concept of working together and giving back.

       

      DID YOU KNOW? Airbnb will soon announce that it will begin selling multi-unit buildings and houses next year, according to Fast Company. Called Backyard, is "an endeavor to design and prototype new ways of building and sharing homes," extending and bolstering their services to architecture and urban planning. Backyard could start offering small existing dwellings, according to the report, and could also sell energy-efficient building materials, stand-alone homes and multi-unit complexes. Airbnb has more than 5 million rental listings on its platform, across nearly 200 countries.


      DID YOU KNOW?  Microsoft regained its stature as the world's most valuable company after losing the title for 16 years, beating out APPLE whose stock price has dropped badly over the past few weeks. Apple lost the top spot after 6 years. GE used to have this title....(CNBC)

      DID YOU KNOW? Home price appreciation continues to moderate following a half-decade of strong growth. Market fundamentals, however, are vastly different than the pre-crisis period in the mid-2000s. US equities delivered a strong week despite the sharp oil price decrease with the S&P 500 jumping nearly 4%: lower-than-expected PCE inflation data and signs that the Fed may be easing their rate hike plan....which would be good for real estate. (Seeking Alpha)

      Compass Contemplations for Friday

      DID YOU KNOW? U.S. consumer spending increased by the most in 7 months in October. (Reuters)

      DID YOU KNOW?  Pending US Home Sales slid 2.6% in October. Contract signings were down 6.7% compared to 2017. Pending sales rose in the NORTHEAST by 0.7%. In the MIDWEST sales fell 1.8%, in the SOUTH they fell 1.1%, and in the WEST they were down 8.9%. (MARKET WATCH)

      DID YOU KNOW? Millennial spending habits are a lot like the generations that came before them, they just have less money at this point in their lives. The group born between 1981 and 1997 has fallen behind because many of them came of age during the financial crisis. (Business Insider)

      DID YOU KNOW?  The Fed is expected to raise interest rates a fourth time this year in December but stated it would be 'flexible' on plans to raise rates. (CNN)

       

      DID YOU KNOW? The Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve have proposed loosening real-estate appraisal requirements to enable a majority of U.S. homes to be bought and sold without being evaluated by a licensed human appraiser, potentially opening the door for cheaper, faster, untested property valuations based on computer algorithms. It would increase to $400,000, from $250,000, the value of homes that can be bought and sold without a human appraiser visiting a property. (WSJ)

      The #1 Reason to Not Wait Until Spring to Sell Your House

      The #1 Reason to Not Wait Until Spring to Sell Your House | MyKCM

      Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

      The #1 Reason to List Your Home in the Winter Months is Less Competition!

      Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.

      The #1 Reason to Not Wait Until Spring to Sell Your House | MyKCM

       

      As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February). 

      Temperatures aren’t the only thing that heats up in the spring – so do listings!

      The #1 Reason to Not Wait Until Spring to Sell Your House | MyKCM

      In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.

      Added Bonus: Only Serious Buyers Are Out in the Winter

      At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

      Bottom Line

      If you have been debating whether or not to sell your home and are curious about market conditions in your area, let’s get together to help you decide the best time to list your house for sale.

      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!

      COMPASS Contemplations for Thursday

      WELCOME COMPASS HOUSTON! And welcome especially to founding agent Mike Mahlstedt consistently one of the area's top professionals who represents the very best of Houston and our industry.


      DID YOU KNOW?  Debt for New York City has grown from $4,923 per person in 2000 to $10,113 in 2017, an increase of 105%. More than 700,000 jobs have been added in NYC during the past 8 years, an average of 87,500 jobs per year. The debt per capita of every US national is over $61,000. If the Japanese wanted to pay off their national debt, they would owe $90,345 each. Among OECD countries, Ireland, and Italy are next, with $62,687, and $58,693 respectively and Belgium, at $58,134. The OECD average of $50,245. (World Economic Forum)

      DID YOU KNOW? Will there be a cash infusion over the next few weeks from withdrawn hedge funds?  Today, most managers of hedge funds will find out how much of their stock/bond portfolios they need to liquidate ahead of time because those invested in hedge funds have to give notice by today if and how much they will withdraw. The stock market has been skittish over the past month, mostly due to rising interest rates, the mid-term elections, trade war concerns and reports on political wrongdoing that are about to come out. Many big investors stung by recent big losses that likely eroded confidence in hedge funds could possibly be asking for a lot of their money back. November 15th isn’t a hard and fast deadline but traditionally, 45 days to the end of the year has been the time when investors have had to notify hedge funds of withdrawals. Around $100 billion has been withdrawn in each of the past few years, but the stock market was mostly climbing during those years. (NY POST)


      DID YOU KNOW? In the past 10 years, employment in U.S. cities has grown 7% and the number of businesses in these places has grown11%, while employment has contracted in nonmetro areas and the number of businesses there has barely changed, according to Labor Department. Five cities—New York, Chicago, Dallas, Houston, San Francisco—accounted for a third of all Fortune 500 headquarters and half of Fortune 500 firms’ profits in 2017. When startups began locating in cities in the 1990s, many predicted that because the internet allowed people to work from anywhere, tech workers would scatter across the country as firms sought cheap office space. Instead, places like Silicon Valley and Seattle proved that clusters of highly skilled workers fueled innovation at a faster pace. Supercharged places that were already doing well, drew in more educated workers who wanted to live in walkable neighborhoods with nice restaurants and hip entertainment. (WSJ)

       

      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.

      Thinking of Selling Your Home? Here is Why You Need A Pro in Your Corner

      Thinking of Selling Your Home? Heres Why You Need A Pro in Your Corner | MyKCM

      With home prices on the rise and buyer demand still strong, some sellers may be tempted to try and sell their homes on their own without using the services of a real estate professional.

      Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

      Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):

      • The buyer who wants the best deal possible
      • The buyer’s agent who solely represents the best interests of the buyer
      • The buyer’s attorney (in some parts of the country)
      • The home inspection companies, which work for the buyer and will almost always find some problems with the house
      • The termite company if there are challenges
      • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
      • The appraiser if there is a question of value
      • The title company if there are challenges with certificates of occupancy (CO) or other permits
      • The town or municipality if you need to get the CO permits mentioned above
      • The buyer’s buyer in case there are challenges with the house your buyer is selling

      Bottom Line

      The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Let’s get together to discuss all that we can do to make the process easier for you.

      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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