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      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.

      Housing Inventory Hits 30-Year Low

      Housing Inventory Hits 30-Year Low

      Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

      New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

      “The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

      CoreLogic’s President & CEO, Frank Martell added,

      “Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

      While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

      Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

      Real estate is local.

      Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

      Bottom Line

      Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.

      75% of Homeowners Think Now is a Good Time to Sell!

      75% of Homeowners Think Now is a Good Time to Sell! | MyKCM

      The National Association of Realtors (NAR) recently released the findings of their Q2 Homeownership Opportunities and Market Experience (HOME) Survey. The report covers core topics like, “if now is a good time to buy or sell a home, the perception of home price changes, perceived ability to qualify for a mortgage, and [an] outlook on the U.S. economy.”

      The survey revealed that 75% of homeowners think now is a good time to sell, compared to 70% last quarter. This is a considerable increase from more than a year ago when 66% agreed.

      Even though homeowners believe that now is a good time to sell, many have not taken the step to list their homes, as inventory shortages still exist across the country. Lawrence Yun, NAR’s Chief Economist, had this to say:

      "There are just not enough homeowners deciding to sell because they’re either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy...

      As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth.”

      Bottom Line

      If you are wondering if now is a good time to sell your house, let’s get together to discuss the opportunities available in our market.

      Buyer's Market Helps Premium Home Sales Soar

      Buyer's Market Helps Premium Home Sales Soar | MyKCM

      We previously reported how a shortage of inventory in the starter and trade-up home markets is driving prices up and causing bidding wars, creating a true seller’s market. At the same time, in the premium home market, an over-abundance of inventory has started to see prices come down and put buyers in the driver’s seat, creating the beginning of a buyer’s market.

      Last week, the National Association of Realtors released their Existing Home Sales Report which shed some additional light on the impact of inventory levels on sales in each price range.

      The chart below shows the year-over-year difference in sales at each price range.

      Buyer's Market Helps Premium Home Sales Soar | MyKCM

      The under $100K range has shown declines in recent years due to the shortage of distressed homes available for sale (just 5% of sales this past month, compared to 35% in January 2012). Sales in the next two price ranges are no doubt being hindered by low inventory as buyers compete for the same home.

      NAR’s Chief Economist, Lawrence Yun, explained:

      "Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher."

      The biggest surprise? This is the first time in years where the $1M and up price range had the highest jump in sales when compared to last year and to all other price ranges (29.1%)! The two price ranges right underneath the $1M range were a close second and third. As the price went up, so did the sales!

      With additional inventory available in the higher price ranges, and the economy improving, many luxury buyers are finding it easier to find their dream homes. Yun commented,

      “The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level.”

      Bottom Line

      If you are one of the many homeowners who is looking to sell your starter or trade up home and move up to a luxury home, now is the time!

      2 Myths Holding Back Home Buyers

      2 Myths Holding Back Home Buyers | MyKCM

      In Realtor.com’s recent article, “Home Buyers’ Top Mortgage Fears: Which One Scares You?” they mention that “46% of potential home buyers fear they won’t qualify for a mortgage to the point that they don’t even try.”

      Myth #1: “I Need a 20% Down Payment”

      Buyers overestimate the down payment funds needed to qualify for a home loan. According to the First Quarter 2017 Homeownership Program Index (HPI) from Down Payment Resource, saving for a down payment was the barrier that kept 70% of renters from buying.

      Rob Chrane, CEO of Down Payment Resource had this to say,

      There are many mortgage-ready renters today, but they don’t know it. Often, homebuyers remain sidelined for years due to the down payment.

      Many believe that they need at least 20% down to buy their dream home, but programs are available that allow buyers put down as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

      Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

      The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO® score is necessary to qualify.

      Many Americans believe a ‘good’ credit score is 780 or higher.

      To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

      2 Myths Holding Back Home Buyers | MyKCM

      As you can see in the chart above, 53.2% of approved mortgages had a credit score of 600-749.

      Bottom Line

      Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

      Do You Know How Much Equity You Have in Your Home?

      Do You Know How Much Equity You Have in Your Home? | MyKCM

      CoreLogic’s latest Equity Report revealed that 91,000 properties regained equity in the first quarter of 2017. This is great news for the country, as 48.2 million of all mortgaged properties are now in a positive equity situation.

      Price Appreciation = Good News for Homeowners

      Frank Nothaft, CoreLogic’s Chief Economist, explains:

      “One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.”

      Frank Martell, President and CEO of CoreLogic, believes this is a great sign for the market in 2017 as well, as he had this to say:

      “Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”

      This is great news for homeowners! But, do they realize that their equity position has changed?

      According to the Fannie Mae’s Home Purchase Sentiment Index (HPSI), more homeowners are beginning to realize that they may have more equity than they first thought.

      This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy.

      78.8% of homeowners have significant equity (more than 20%) in their homes today!

      This means that many Americans with a mortgage have an opportunity to take advantage of today’s seller’s market. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

      Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae spoke out on this issue:

      “High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market. However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market…” 

      Bottom Line

      If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2017! Let’s get together to evaluate your situation!

      Are Home Prices Approaching Bubble Territory?

      Are Home Prices Approaching Bubble Territory? | MyKCM

      As home values continue to rise, some are questioning whether we are approaching another housing bubble. Zillow just reported that:

      “National home values have surpassed the peak hit during the housing bubble and are at their highest value in more than a decade.”

      Though that statement is correct, we must realize that just catching prices of a decade ago does not mean we are at bubble numbers. Here is a graph of median prices as reported by the National Association of Realtors (NAR).

      Are Home Prices Approaching Bubble Territory? | MyKCM

      We can see that prices rose during the early 2000s, fell during the crash and have risen since 2013.

      However, let’s assume there was no housing bubble and crash and that home prices appreciated at normal historic levels (3.6% annually) over the last ten years.

      Here is a graph comparing actual price appreciation (tan bars) with what prices would have been with normal appreciation (blue bars).

      Are Home Prices Approaching Bubble Territory? | MyKCM

      Bottom Line

      As we can see, had there not been a boom and bust, home values would essentially be where they are right now.

      If Your Home Hasn't Sold Yet? Definitely, Check the Price!

      If Your Home Hasn’t Sold Yet… Definitely Check the Price! | MyKCM

      The residential housing market has been hot. Home sales have bounced back solidly and are now at their fourth highest pace over the past year. Demand has remained strong ­throughout spring as many real estate professionals are reporting bidding wars with many homes selling above listing price. What about your house?

      If your house hasn’t sold, it could be the price.

      If your home is on the market and you are not receiving any offers, look at your price. Pricing your home just 10% above market value dramatically cuts the number of prosp­­ective buyers that will even see your house. See chart below.

      If Your Home Hasn’t Sold Yet… Definitely Check the Price! | MyKCM

      Bottom Line

      The housing market is hot. If you are not seeing the results you want, sit down with your agent and revisit the pricing conversation.

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