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      Homeownership is a Cornerstone of the American Dream

      Homeownership is a Cornerstone of the American Dream |MyKCM

      “The rumors of my death are greatly exaggerated.”

      The famous quote attributed to Mark Twain can apply to homeownership in the United States today. During the housing bubble of the last decade, the homeownership rate soared to over sixty-nine percent. After the crash, that percentage continued to fall for the next ten years.

      That led to speculation that homeownership was no longer seen as a major component of the American Dream. That belief became so widespread that the term “renters’ society” began to be used by some to define American consumers.

      However, the latest report by the Census Bureau on homeownership shows that over the last two years, the percentage of homeowners has increased in each of the last eight quarters.

      Homeownership is a Cornerstone of the American Dream |MyKCM

      Going forward…

      It appears the homeownership rate will continue to increase.

      The 2019 Aspiring Home Buyers Profile recently released by the National Association of Realtors revealed that 84% of non-owners want to own a home in the future. That percentage increased from 73% earlier last year.

      Bottom Line

      In the United States, the concept of homeownership as part of the American Dream is very much alive and well

      Compass Contemplations for Wednesday

      WELCOME, WELCOME to Alain Pinel Realtors who over the past 30 years have become leaders in the Bay Area, known for their luxury offering and strong culture. 

      DID YOU KNOW? More than 50% of the executives recently surveyed by KPMG said Silicon Valley will cease to dominate global tech innovation within the next 4 years, as New York, Boston, Beijing, London and other cities continue their evolution into tech innovation powerhouses, citing factors that include an expansion of tech investing in cities and regions outside of San Jose, Palo Alto and Menlo Park, Calif. Their top pick for the next leading source of technology innovation was New York—up from No. 3 in 2018—followed by Beijing, Tokyo and London. Other U.S. cities that ranked in the top 10 were Boston and Austin, Texas. Washington, D.C., placed 13th. 23% named the U.S. as having the biggest global impact on technology, down from 34% in a similar survey last year. (WSJ)

       

      DID YOU KNOW?  Speak to any developer or builder and they will let you know how their costs have risen in the past 12 months: American consumers have been saddled with $69 billion in added costs because of the tariffs the U.S. imposed in 2018, including on $250 billion on Chinese imports as well as levies on steel and aluminum, according to a study released by a quartet of economists working on a National Science Foundation grant. (WSJ)

       

      DID YOU KNOW? About 63% of the world’s wealthiest said they grew richer in 2018, thanks in part to stock market gains and global economic growth. These individuals also expect their wealth to increase over the next year. Confidence was highest in the U.S., where 80% of individuals worth $30 million and more expect to be better off over the next year. Over 47,000 people in the USA are worth $30 million plus. (WSJ) 

       

      DID YOU KNOW?  I have personally never witnessed more creative photography angles than those being used to photograph 220 Central Park South - the uber-tower that houses the USA's most expensive penthouse sale:  all are either blocking out - or photo-shopping out - it's next door neighbor that looms several hundred feet taller.....

      Compass Contemplations for Wednesday

      Good morning,

      DID YOU KNOW?  In the mortgage business, about 70% used to be focused on re-financing and only 30% on new mortgages. As rates rise and pressure from automation and online financing options also rises, this ratio is changing fast!

       

      DID YOU KNOW? I am especially thankful that Compass has ZERO DEBT: Total US corporate debt has swelled from around $4.9 trillion in 2007 to nearly $9.1 trillion in 2018, surging 86%. Why should debt worry us? Rising interest rates make this debt more expensive to service. Several of our competitors carry enormous debt. Realogy (Coldwell Banker, Sotheby's, Corcoran, Century 21, Better Homes and Gardens, etc) has over $3.5 billion in debt. (Securities Industry and Financial Markets Association). Realogy's 20% stock plummet yesterday, may well be a barometer on the changing housing market and shifting trends in the brokerage business. As well as growing concerns about mounting corporate debt.

       

      DID YOU KNOW? Total emigration from California to other states between 2006 and 2017 was 1.24 million, according to the Census Bureau, yet only third highest in the nation behind New York and Illinois. More people are leaving New York City for California than moving in, but the ones who move either way tend to be between the ages of 18 - 34. Only 3,000 people older than 35 moved permanently from California to New York City in 2017. More than 15,000 people (6%) moved to New York City from Florida and Texas. These figures do not factor in wealthier people who may keep multiple residences. (WSJ)

       

      DID YOU KNOW? Walmart's e-commerce Q4 2018 sales rose 43% and for 2019 it's calling for internet sales to be up another 35% becoming the most potent threat to Amazon's e-tail dominance, not too shabby for a 57-year old company!

      What are the Benefits of Becoming a Homeowner?

      What are the Benefits of Becoming a Homeowner? | MyKCM
       

      Every family has a list of important dates. We celebrate birthdays, anniversaries, pet adoptions…and the list goes on. For 64.4 percent of households in the United States, this list includes the day they became a homeowner for the first time!

      Why is this date important? Homeownership is not just a roof over your head! It represents shelter, stability, wealth, and pride! For decades, homeownership has been an important part of the American Dream!

      However, many people question if the next generations see the same benefits of homeownership as their predecessors.

      In case we have forgotten, some of those benefits are:

       

      Non-Financial Benefits

       

      1) Educational Achievement: Homeownership has a positive impact on academic achievement, including reading and math performance in children 3-12 years old.

      2) Civic Participation: “Owning a home means owning a part of the neighborhood.” Homeowners have a stronger connection to their neighborhood and are more committed to volunteer.

      3) Health Benefits: Adjusting for a range of demographic, socioeconomic and housing-related characteristics, homeowners have a substantial health advantage over renters.

      4) Public Assistance: The report shows 47% of homeowners use their home equity credit lines to help pay other debts, diminishing their need for public assistance.

      5) Property Maintenance and Improvement: A well-maintained home not only generates benefits through consumption and safety, but a high-quality structure also raises mental health.

      6) Pride of Ownership: This place is unique as it is “yours.” You can customize it according to your likes and personality.

      In addition to financial benefits, homeownership also brings significant social benefits. These not only pertain to the family, but extend to the communities, the state, and the country!

      Financial Benefits

       

      Buying a home is an investment in your future!

      1. Appreciation: On average, home prices are appreciating annually at a rate of 3.6%. This helps to create a safety net.
      2. Forced Savings: Your mortgage is like a forced savings plan! With each payment, you are reducing the principal of your loan.
      3. Home Equity: Homeownership builds equity every single month. You can later use that equity to start a business, send your children to college, etc.
      4. Net Worth: A homeowners’ net worth is 44x greater than renters! This gives you the financial freedom to invest.
      5. Stability: Rent prices increase 4% annually! A fixed mortgage payment allows you to save for future projects and guard against inflation.
      6. Tax Benefits: The government has created tax benefits to encourage customers to purchase. (Talk to your CPA to see which benefits apply to you).

      Bottom Line

      Homeownership is and will always be part of the American Dream! There are many financial and non-financial benefits to take advantage of when owning a home. If owning a home is part of your dream, contact a local real estate professional to help you with the process!

      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.

      Compass Contemplations for Wednesday

      DID YOU KNOW? Could this be the re-invention of the mall? Google is expanding in L.A. Google has leased the current site of Westside Pavilion shopping mall in West Los Angeles that it will turn into a 584,000 square-foot office campus. Westside Pavilion was once one of the city’s premier shopping venues and a cultural touchstone for generations of LA residents. In recent years the mall fell behind flashier competitors such as the Grove and the refurbished Westfield Century City malls. Online shopping also took a toll, and anchor stores Macy’s and Nordstrom departed.(CNBC)


      DID YOU KNOW? 24% of people surveyed in the USA spent more than 80% of their time working remotely in 2012. That grew to 31% by 2016. (Gallup)

      DID YOU KNOW?  What is the most in-demand soft skill of 2019? Creativity. For those looking to cultivate this skill, LinkedIn recommends the following courses: Creativity Bootcamp, The Five-Step Creative Process, and Creativity: Generate Ideas in Greater Quantity and Quality. (Linkedin)

      DID YOU KNOW?  While Tesla weathers relentless roller-coaster press, it sold nearly as many of its vehicles in 2018 (over 245,000) than it did in every prior year combined, back to 2003. The Tesla 3 was the best-selling luxury car of 2018 (145,846 units). Next was the Lexus RX (111,641 units). While the Model 3 was supposed to be the 'mass-market' affordable model, at $45,000 it is far from that. The more affordable (35k) version comes soon.....which could boost sales significantly further. (CNBC)

      DID YOU KNOW? U.S. carbon emissions rose 3.4% in 2018, after 3 years of declines. The effects of a strong economy outstripped a sharp decline in the number of power plants burning coal to generate electricity. Carbon emissions were still down 11.2% from 2005 levels. Diesel and jet fuel use rose 3% from additional trucking and air traffic. The Paris agreement target to reduce all greenhouse-gas emissions by 26%-28% from 2005 levels by 2025, requires the U.S. to cut emissions by 2.6% on average over the next 7 years. (WSJ)

      DID YOU KNOW? In San Jose (CA), nearly half (49.3%) of all housing sales involve co-buyers as of the 2nd quarter of 2018. Other cities where 25% or more sales involve multiple buyers include San Francisco, Honolulu, Seattle, Miami, Boston and Durham, N.C. 26.2% of FHA-insured mortgage borrowers received assistance from a family member to afford the down payment, up from 22% in 2011. (Marketwatch)
       

      Top Renovations to Complete Before You Sell Your House

      Top Renovations to Complete Before You Sell Your House [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • If you are planning on listing your house for sale this year, here are the top four home improvement projects that will net you the most Return on Investment (ROI).
      • Minor bathroom renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
      • Upgrading your landscaping or curb appeal helps get buyers in the door. These upgrades rank as the 2nd and 4th best renovations for returns on investment.

      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!
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