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      Blog :: 2016

      Homeowner's Net Worth Is 45x Greater Than A Renter's

      Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

      In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that by the end of 2016, the net worth gap will widen even further to 45 times greater.

      The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

      Homeowner’s Net Worth Is 45x Greater Than a Renter’s | MyKCM

      Put Your Housing Cost to Work for You

      As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

      The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

      “Though there will always be a discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

      Bottom Line

      If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s get together and evaluate your ability to buy today!

      The Impact Your Interest Rate Has on Purchasing Power

       

      The Impact Your Interest Rate Has on Your Buying Power [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Your monthly housing cost is directly tied to the price of the home you purchase and the interest rate you secure for your mortgage.
      • Over the last 30 years, interest rates have fluctuated greatly with rates in the double digits in the 1980s, all the way down to the near 4% we are experiencing now.
      • Your purchasing power is greatly impacted by the interest rate you secure. Act now before rates go up!

      Why You Shouldn't Take Your House Off the Market During the Holidays

       

      If you are one of the many homeowners who is debating taking your home off the market for the next few weeks, don’t! You will miss the great opportunity you have right now!

      The latest Existing Home Sales Report from The National Association of Realtors (NAR), revealed that the inventory of homes for sale has dropped to a 4.3-month supply.

      Historically, a 6-month supply is necessary for a ‘normal’ market, explained below:

      Why You Shouldn’t Take Your House Off the Market During the Holidays | MyKCM

      There are more buyers that are ready, willing, and able to buy now than there have been in years! The supply of homes for sale is not keeping up with the demand of these buyers.

      Bottom Line

      Home prices are appreciating in this seller’s market. Making your home available over the next few weeks will give you the most exposure to buyers who will be competing against each other to buy it.

      Selling in the Winter Attracts Serious Buyers

      Selling in the Winter Attracts Serious Buyers | MyKCM

      A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close.

      It’s no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest month for real estate. What is surprising, though, is that listing during the winter came in second!

      “Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same.”

      The study goes on to say that:

      “Buyers [in the winter] often need to move, so they’re much less likely to make a lowball offer and they’ll often want to close quickly — two things that can make the sale much smoother.”  

      Bottom Line

      If you are debating listing your home for sale within the next 6 months, keep in mind that the spring is when most other homeowners will decide to list their homes as well. Listing your home this winter will ensure that you have the best exposure to the serious buyers who are out looking now!

      The study used the astronomical seasons to determine which season the listing date fell into (Winter: Dec. 21 – Mar. 20; Spring: Mar. 21 – June 20; Summer: June 21 – Sept 21; Autumn: Sept 21 – Dec. 20).

      Home Prices: Where will They Be in 5 Years?

      Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

      Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

      The results of their latest survey:

      Home values will appreciate by 4.0% over the course of 2017, 3.2% in 2018 and 3.0% the next three years (as shown below). That means the average annual appreciation will be 3.24% over the next 5 years.

      Home Prices: Where Will They Be in 5 Years? | MyKCM

      The prediction for cumulative appreciation ticked up from 18.7% to 21.4% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 10.2%.

      Home Prices: Where Will They Be in 5 Years? | MyKCM

      Bottom Line

      Individual opinions make headlines. We believe this survey is a fairer depiction of future values.

      4 Great Reasons to Buy Your Dream Home This Winter

      4 Reasons to Buy Your Dream Home This Winter | MyKCM

      As the temperature in many areas of the country starts to cool down, you might think that the housing market will do the same. This couldn’t be further from the truth! Here are 4 reasons you should consider buying your dream home this winter instead of waiting for spring!

      1. Prices Will Continue to Rise

      CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

      The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

      2. Mortgage Interest Rates are Projected to Increase

      Your monthly housing cost is as much related to the price you pay for your home as it is to the mortgage interest rate you secure.

      Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage are currently at 4.08%. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

      An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

      3. Either Way You’re Paying a Mortgage

      There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.

      As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

      Are you ready to put your housing cost to work for you?

      4. It’s Time to Move on with Your Life

      The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

      But what if they weren’t? Would you wait?

      Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

      If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

      Existing Home Sales Surge Forward Through Fall [INFOGRAPHIC]

      Existing Home Sales Surge Forward Through Fall [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report.
      • First-time homebuyers made up 33% of all sales in October.
      • Homes are selling quickly with 43% of homes on the market for less than a month.
      • A limited supply continues to drive up prices for the 56th consecutive month.

      Why Waiting Until After the Holidays to Sell Isn't a Smart Decision

      Why Waiting Until After the Holidays to Sell Isn’t a Smart Decision | MyKCM

      Every year at this time, many homeowners decide to wait until after the holidays to put their homes on the market for the first time, while others who already have their homes on the market decide to take them off until after the holidays. Here are six great reasons not to wait:

      1. Relocation buyers are out there. Companies are not concerned with holiday time and if the buyers have kids, they want them to get into school after the holidays. 
      1. Purchasers that are looking for a home during the holidays are serious buyers and are ready to buy.
      1. You can restrict the showings on your home to the times you want it shown. You will remain in control.
      1. Homes show better when decorated for the holidays. 
      1. There is less competition for you as a seller right now. Let’s take a look at listing inventory as compared to the same time last year:

      Why Waiting Until After the Holidays to Sell Isn’t a Smart Decision | MyKCM

      1. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge reaching new heights in 2017, which will lessen the demand for your house.

      Bottom Line

      Waiting until after the holidays to sell your home probably doesn't make sense.

      Buying a Home? 4 Demands to Make on Your Real Estate Agent.

      Are you thinking of buying a home? Are you dreading having to walk through strangers’ houses? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of buying. A great agent is always worth more than the commission they charge, just like a great doctor or great accountant.

      You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish an average agent from a great one.

      Here are the top 4 demands to make of your real estate agent when buying a home:

      1. Tell the Truth About the Price

      When making an offer on the home you want to buy, make sure that your agent walks you through their plan for getting both the seller – and the bank – to accept that price. Too many agents will just take the offer that you suggest and then try to ‘work’ both you and the seller in the negotiating phase later. In a competitive market, you need an agent who is going to help you make the best ‘initial offer’ so that you stand out from the crowd. Every house in today’s market must be sold twice – first to you and then to your bank.

      The second sale may be more difficult than the first. When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the selling price when performing the appraisal for the bank. A red flag should be raised if your agent is not discussing this with you at the time of the original offer.

      2. Understand the Timetable with Which Your Family is Dealing

      You will be moving your family into a new home. Whether the move revolves around the start of the new school year or a new job, you will be trying to put the move to a plan.

      This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. Your agent cannot pick the exact date of your move, but they should exert any influence they can to make it work.

      3. Remove as Many of the Challenges as Possible

      It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

      Remember: If you have an agent who was weak negotiating with you on parts of the purchase offer, don’t expect them to turn into a superhero when they are negotiating with the seller for you and your family.

      4. Find the Right HOUSE!

      There is a reason you are putting yourself and your family through the process of moving.

      You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with buying. Do not allow your agent to forget these motivations. Make sure that they don’t worry about your feelings more than they worry about your family; if they discover something needs to be done in order to attain your goal, insist that they have the courage to inform you.

      Good agents know how to deliver good news. Great agents know how to deliver tough news. In today’s market, YOU NEED A GREAT AGENT!

      Do You Know the Cost of Renting vs. Buying? [INFOGRAPHIC]

      Do You Know the Cost of Renting vs. Buying? [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Historically, the choice between renting or buying a home has been a close decision.
      • Looking at the percentage of income needed to rent a median priced home today (30%) vs. the percentage needed to buy a median priced home (15%), the choice becomes obvious.
      • Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!
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