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      Blog :: 05-2018

      Moving Up to Your Dream Home? Don't Wait!

      Moving Up to Your Dream Home? Dont Wait! | MyKCM

      Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.

      Where are home values today compared to the beginning of the year?

      While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:

      • January: Prices were up 0.5% over the month before.
      • February: Prices were up 1% over the month before.
      • March: Prices were up 1.4% over the month before.

      Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.

      How can prices rise while mortgage rates increase?

      Freddie Mac explained in a recent Insight Report:

      “In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

      Bottom Line

      If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.

      Real Estate Tops Best Investment Poll for 5th Year Running

      Real Estate Tops Best Investment Poll for 5th Year Running | MyKCM

      Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.

      For the fifth year in a row, real estate has come out on top as the best long-term investment!

      This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26%. The full results are shown in the chart below.

      Real Estate Tops Best Investment Poll for 5th Year Running | MyKCM

      The study makes it a point to draw attention to the contrast in the sentiment over the last five years compared to that of 2011-2012, when gold took the top slot with 34% of the votes. Real estate and stocks took second and third place, respectively, while still in recovery from the Great Recession.

      Bottom Line

      As the real estate market has recovered, so has the belief of the American people in the stability of housing as a long-term investment.

      5 Ways Tax Reform Has Impacted the 2018 Housing Market

      5 Ways Tax Reform Has Impacted the 2018 Housing Market | MyKCM

      Starting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double-digit price depreciation and suggested that buyer demand could drop like a rock. There was even sentiment that homeownership could lose its coveted status as a major component of the American Dream.

      Now that the first quarter numbers are in, we can begin to decipher the actual that impact tax reform has had on the real estate market.

      1. Has tax reform killed off home buyer demand? The answer is “NO.”

      According to the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,” buyer demand has increased each month over the last three months and is HIGHER than it was for the same months last year. Buyer demand is not down. It is up.

      2. Have the tax changes affected America’s belief in real estate as a long-term investment? The answer is “NO.”

      Two weeks ago, Gallup released its annual survey which asks Americans which asset they believed to be the best long-term investment. The survey revealed:

      “More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.” 

      The survey also showed that the percentage of Americans who believe real estate is the best long-term investment was unchanged from a year ago.

      3. Has the homeownership rate been negatively impacted by the tax changes? The answer is “NO.”

      Not only did the homeownership rate not crash, it increased when compared to the first quarter of last year according to data released by the Census Bureau.

      In her latest Z Report,” Ivy Zelman explains that tax reform didn’t hurt the homeownership rate, but instead, enhanced it:

      “We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

      4. Has the upper-end market been crushed by new State and Local Taxes (SALT) limitations? The answer is “NO.”

      In the National Association of Realtors latest Existing Home Sales Report it was revealed that:

      • Sales between $500,000 and $750,000 were up 4.5% year-over-year
      • Sales between $750,000 and $1M were up 15.1% year-over-year
      • Sales over $1M were up 17.3% year-over-year

      5. Will the reforms in the tax code cause home prices to tumble over the next twelve months? The answer is “NO.”

      According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

      Bottom Line

      The doomsday scenarios that some predicted based on tax reform fears seem to have already blown over based on the early housing industry numbers being reported.

      50% of Homes Sold in 30 Days in March [INFOGRAPHIC]

      50% of Homes Sold in 30 days in March [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • The National Association of REALTORS® recently surveyed their members for their Confidence Index.
      • The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
      • Homes sold in less than 60 days in 35 out of 50 states and Washington D.C.
      • Homes typically went under contract in 30 days in March!

      This Just In: Data Says May is the Best Month to Sell Your Home

      This Just In: Data Says May is the Best Month to Sell Your Home | MyKCM

      According to a newly released study by ATTOM Data Solutions, selling your home in the month of May will net you an average of 5.9% above estimated market value for your home.

      For the study, ATTOM performed an “analysis of 14.7 million home sales from 2011 to 2017” and found the average seller premium achieved for each month of the year. Below is a breakdown by month:

      This Just In: Data Says May is the Best Month to Sell Your Home | MyKCM

      ATTOM even went a step further and broke their results down by day.

      Top 5 Days to Sell:

      • June 28th – 9.1% above market
      • February 15th – 9.0% above market
      • May 31st – 8.3% above market
      • May 29th – 8.2% above market
      • June 21st – 8.1% above market

      It should come as no surprise that May and June dominate as the top months to sell and that 4 of the top 5 days to sell fall in those two months. The second quarter of the year (April, May, June) is referred to as the Spring Buyers Season when competition is fierce to find a dream home, which often leads to bidding wars.

      One caveat to mention though, is that when broken down by metroATTOM noticed that while warmer climates share in the overall trend, it turns out that they have different top months for sales. The best month to get the highest price in Miami, FL, for instance, was January, and Phoenix, AZ came in with November leading the charge.

      If you’re thinking of selling your home this year, the time to list is NOW! According to the National Association of Realtors, homes sold in an average of just 30 days last month! If you list now, you’ll have a really good chance to sell in May or June, setting yourself up for getting the best price!

      Bottom Line

      Let’s get together to discuss the market conditions in our area and get you the most exposure to the buyers who are ready and willing to buy!

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