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      What is the Cost of Waiting Until Next Year to Buy?

       

      What is the Cost of Waiting Until Next Year to Buy? | MyKCM

      We recently shared that over the course of the last 12 months, home prices have appreciated by 7.0%. Over the same amount of time, interest rates have remained historically low which has allowed many buyers to enter the market.

      As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

      The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 4.7% over the next 12 months.

      What Does This Mean as a Buyer?

      If home prices appreciate by 4.7% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

      What is the Cost of Waiting Until Next Year to Buy? | MyKCM

      Bottom Line

      If buying a home is in your plan for 2018, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

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      Feeling ?Stuck in Place'? You Aren't Alone? And There's Hope!

      Feeling 'Stuck in Place'? You Aren't Alone... And There's Hope! | MyKCM

      Whether you are a renter who is searching for your dream home or a homeowner who feels like your only option is to renovate, you have at least one thing in common: feeling stuck in place.

      According to data from the National Association of Realtors’ Profile of Home Buyers & Sellers, the average amount of time that a family stays in their home remained at 10 years in 2017. This mark ties the highest marks set in 2014 and 2016. Back in 1985, when data was first collected on this subject, homeowners stayed in their homes for an average of only 5 years.

      There are many reasons why homeowners have decided to stay and not to sell. A recent Wall Street Journal article had this to say,

      “Americans aren’t moving in part because inventory levels have fallen near multidecade lows and home prices have risen to records. Many homeowners are choosing to stay and renovate, in turn making it more difficult for renters to enter the market.” 

      Sam Khater, Deputy Chief Economist for CoreLogic, equated the lack of inventory to “not having enough oil in your car and your gears slowly [coming] to a grind.”

      Historically, a normal market (in which prices increase at the rate of inflation) requires a 6-7 month supply of inventory. There hasn’t been that much supply since August of 2012! Over the course of the last 12 months, inventory has hovered between a 3.5 to 4.4-month supply, meaning that prices have increased and buyers are still out in force!

      Challenges in the new-home construction market have “helped create a bottleneck in the market in which owners of starter homes aren’t trading up to newly built homes, which tend to be pricier, in turn creating a squeeze for millennial renters looking to get into the market.”

      “Economists said baby boomers also aren’t in a hurry to trade in the dream homes they moved into in middle age for condominiums or senior living communities because many are staying healthy longer or want to remain near their children.”

      So, what can you do if you feel stuck & want to move on?

      Don’t give up! If you are looking to move-up to an existing luxury home, there are deals to be had in the higher-priced markets. Demand is strong in the starter and trade-up home markets which means that your house will sell quickly. Let’s work together to build in contingencies that allow you more time to find your dream home; the right buyer will wait.

      Low Inventory Causes Home Prices to Maintain Fast Growth

      Low Inventory Causes Home Prices to Maintain Fast Growth | MyKCM

      The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price Report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady clip in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros.

      Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

      “Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

      What this means to sellers

      Rising prices are a homeowner’s best friend. As reported by the Washington Post in a recent article post:

      “The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.”

      What this means to buyers

      In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Dive reported, the amount of cash needed to purchase that home will also increase.

      “These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

      Bottom Line 

      If you’re thinking of selling and moving down, waiting might make sense. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

      Why Sell Now Instead of Later? The Buyers are Out Now!

      Why Sell Now instead of Later? The Buyers are Out Now | MyKCM

      Each year, most homeowners wait until the spring to sell their houses because they believe that they can get a better deal during the normal spring buyer’s market. However, recently released data suggests that a seller’s best deal may be available right now. The concept of ‘supply & demand’ reveals that the best price for an item will be realized when the supply of that item is low and the demand for that item is high. Let’s see how this applies to the current residential real estate market.

      SUPPLY

      It is no secret that the supply of homes for sale has been far below the number needed for over a year. A normal market requires six months of housing inventory to meet the demand. The latest report from the National Association of Realtors (NAR) revealed that there is currently only a 4.2-month supply.

      Supply is currently very low!!

      DEMAND

      A report that was just released tells us that demand is very strong. The most recent Foot Traffic Report (which sheds light on the number of buyers out looking at homes) disclosed that there are more buyers right now than at any other time in the last twelve months. This includes more buyers looking at homes right now than at any time during last year’s spring market.

      Demand is currently very high!! 

      Bottom Line

      Waiting until the spring to list your house for sale made sense in the past. This year is different. The best deal is probably available right now.

      5 Reasons to Hire a Real Estate Professional When Buying or Selling!

      5 Reasons to Hire a Real Estate Professional When Buying or Selling! | MyKCM

      Whether you are buying or selling a home, it can be quite an adventurous journey. This is why you need an experienced real estate professional to guide you on the path to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

      The 5 reasons you NEED a real estate professional in your corner haven’t changed, but have rather been strengthened by the projections of higher mortgage interest rates & home prices as the market continues to pick up steam.

      1. What do you do with all this paperwork?

      Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true real estate professional is an expert in his or her market and can guide you through the stacks of paperwork necessary to make your dream a reality.

      2. Ok, so you found your dream house, now what?

      There are over 180 possible steps that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you achieve your dream?

      3. Are you a good negotiator?

      So maybe you’re not convinced that you need an agent to sell your home. After looking at the list of parties that you will need to be prepared to negotiate with, you’ll soon realize the value in selecting a real estate professional. From the buyer (who wants the best deal possible) to the home inspection companies, to the appraiser, there are at least 11 different people who you will need to be knowledgeable of, and answer to, during the process.

      4. What is the home you’re buying/selling really worth?

      It is important for your home to be priced correctly from the start to attract the right buyers and shorten the amount of time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to a study by Collateral Analytics, FSBOs achieve prices significantly lower than those from similar properties sold by real estate agents:

      “FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

      Get the most out of your transaction by hiring a professional.

      5. Do you know what’s really going on in the market?

      There is so much information out there on the news and on the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?

      Dave Ramsey, the financial guru, advises:

      “When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

      Hiring an agent who has his or her finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

      Bottom Line

      You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a real estate professional?

      Thinking of Selling? You Should Do It TODAY!!

      Thinking of Selling? You Should Do It TODAY!! | MyKCM

      That headline might be a little aggressive; however, as August 2017’s housing market data begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME TODAY!

      In a recent article by CBS News, they explained that the number of existing home sales is shrinking, and Lawrence Yun, Chief Economist for the National Association of Realtors, said:

      “There should be 3 million homes on the market right now…Yet, there are only 1.9 million.”

      And this situation will be affected greatly by recent natural disasters. Yun continued by saying:

      “Before the hurricanes I would have predicted 1.35 million in new-home construction in 2018…I’ll have to scale that down now.”

      NAR, in their August 2017 Realtors® Confidence Index, indicated that:

      “Amid sustained job creation and sustained historically low mortgage rates, REALTORS® reported…that buyer demand is stronger compared to conditions one year ago… and that fifty percent of properties were on the market for less than one month when sold.”

      The only challenge to today’s market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is only a 4.2-month supply of inventory, which is down from 4.5 months one year ago.

      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 and discuss the inventory levels in your neighborhood to determine your next steps.

      4 Reasons to Sell This Fall [INFOGRAPHIC]

      4 Reasons to Sell This Fall [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Buyer demand continues to outpace the supply of homes for sale! Buyers are often competing with one another for the listings that are available!
      • Housing inventory is still under the 6-month supply that is needed for a normal housing market.
      • Perhaps the time has come for you and your family to move on and start living the life you desire.

      Why Are So Few Homes for Sale?

      Why Are So Few Homes for Sale? | MyKCM

      There is no doubt that the largest challenge in today’s housing market is a lack of housing inventory for sale. This challenge has been defined as an “overwhelming lack of supply,” and even a “straight up inventory crisis.”

      First American just released the results of a survey which sheds light on the reasons for the current lack of supply.

      The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey:

      • 47% - existing homeowners are worried that they will not be able to find a home to buy
      • 5% - first-time buyer demand is absorbing a large share of available homes
      • 3% - existing homeowners’ mortgage rates are lower than the current rates
      • 6% - insufficient or negative equity in the home
      • 6% - foreign buyer demand is absorbing a large share of available homes

      As the survey revealed, there is a shortage of current homeowners willing to put their homes on the market for one of three reasons (see numbers 1, 3 and 4 above).

      Is this an opportunity for some homeowners?

      The report on the survey explains:

      “The crowd has spoken, and it seems in many markets home buyers and sellers alike are ‘imprisoned’ by the lack of housing inventory."

      That leaves a tremendous opportunity for every homeowner not facing these concerns. If you can put your home on the market today, you are subject to far less competition than at any time in recent history. That will result in your home selling quickly and for the highest possible price.

      Bottom Line

      While many homeowners are feeling imprisoned for multiple reasons, those who are not handcuffed by these concerns have a once in a lifetime opportunity to sell their houses at a peak selling time.

      5 Reasons to Sell This Fall

      5 Reasons to Sell This Fall | MyKCM

      Here are five reasons listing your home for sale this fall 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 a home.

      Take advantage of the buyer activity currently in the market.

      2. There Is Less Competition Now

      Housing inventory is still under the 6-month supply that is 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 their home was six, but that number has jumped to an average of almost nine years since 2008. 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 time to close a loan has dropped to 43 days, after seeing a 12-month high of 48 days in January.

      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 5.0% 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.

      Home Prices Up 6.64% Across the Country! [INFOGRAPHIC]

       

      Home Prices Up 6.64% Across the Country! [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
      • In the report, home prices are compared both regionally and by state.
      • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
      • Alaska & West Virginia were the only states where home prices are lower than they were last year.
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