Your "Local" Specialist Blog

Lack of Inventory Challenging Many Housing Markets

Posted: 17 Mar 2016 04:00 AM PDT

Lack of Inventory Challenging Many Housing Markets | Keeping Current Matters Going into the 2016 spring market, the biggest challenge the real estate industry has is the lack of available housing inventory for sale. Here are a few experts and their thoughts on the subject:

David Crowe, Chief Economist for the National Association of Home Builders:

“Many sellers may not have an absolute decision as to whether to buy an existing home or a new home. So the low inventory of existing homes is locking them in place.”

Ralph McLaughlin, Chief Economist with Trulia:

“We are in a time of short supply, which is great news for sellers because they will likely be faced with multiple offers due to the little inventory out there…Buyers will be up against a lot of other people and against a short supply of existing homes.”

Lawrence Yun, Chief Economist with NAR:

“First-time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors. Without a much-needed boost in new and existing-homes for sale in their price range, their path to homeownership will remain an uphill climb.”

Fitch Ratings:

“One important issue that has restrained sales and starts is inventory. On an absolute basis, inventory has not expanded as much as in past recoveries, leading to less selection for buyers. This is especially true for existing home sales but is evident for new home construction as well. When it comes to U.S. housing inventory, more is better." 

Jonathan Smoke, Chief Economist for Realtor.com:

“The increase in sales is resulting in continued tighter-than-tight supply—measured by NAR to be four months in January.  For you non-economists out there, that metric measures the number of months it would take to sell the current inventory of available homes, at the current pace. Got it? Six to seven months’ worth of homes on the market is considered normal; four months is cray-cray.”
Agents: The spring buying season is upon us. Join us later today for a free webinar to discover “KCM’s 3 Step Action Plan to Dominating This Spring”.

Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on March 18th, 2016 2:00 PMLeave a Comment

Subscribe to this blog
March 7th, 2016 3:57 PM
Put Your Housing Cost To Work For You!

Posted: 07 Mar 2016 04:00 AM PST

Put Your Housing Cost To Work For You! | Keeping Current Matters
There are many young people debating whether they should renew the lease on their apartment or sign a contract to purchase their first home. As we have said before, mortgage interest rates are still near historic lows and rents continue to rise.

Housing Cost & Net Worth

Whether you rent or buy, you have a monthly housing cost.

As a buyer, you are contributing to YOUR net worth.

Every mortgage payment is a form of what Harvard University’s Joint Center for Housing Studies calls “forced savings.”
“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”
The principal portion of your mortgage payment helps build your net worth through building the equity you have in your home.

As a renter, you are contributing to YOUR LANDLORD’S net worth.

Below is an example of the home equity that would be accrued over the course of the next five years if you had purchased a home in January; based on the results of the Home Price Expectation Survey. Put Your Housing Cost To Work For You! | Keeping Current Matters In this example, simply by paying your mortgage, you would have increased your net worth by over $44,000!

Bottom Line

Use your monthly housing cost to your advantage! Meet with a local real estate professional who can explain the opportunities available in your market.

Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on March 7th, 2016 3:57 PMLeave a Comment

Subscribe to this blog
Thinking of Buying A Home? What Are You Waiting For?

Posted: 23 Feb 2016 04:00 AM PST

Thinking of Buying A Home? What Are You Waiting For? | Keeping Current Matters
With spring right around the corner, you may be wondering if you should wait to enter the housing market. Here are four great reasons to consider buying a home today instead of waiting.
  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 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years. The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
  1. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained below 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost three-quarters of a percentage point by this time next year. An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
  1. Either Way You Are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
  1. 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 it is 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.

Bottom Line

If you are ready and willing to buy, find out if you are able to. Meet with a local real estate professional who can help you find your dream home.

Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on February 23rd, 2016 1:12 PMLeave a Comment

Subscribe to this blog
December 24th, 2014 9:34 AM

New York Times: Homeownership is Best Way To Build Wealth


New York Times: Homeownership is Best Way To Build Wealth | Keeping Current Matters

The New York Times recently published an editorial entitled, Homeownership and Wealth Creation.” The housing market has made a strong recovery, not only in sales and prices, but also in the confidence of consumers and experts as an investment.

The article explains:

“Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.”

Many of the points that were made in the article are on track with the research that the Federal Reserve has also conducted in their Survey of Consumer Finances.

The study found that the average net worth of a homeowner ($194,500) is 36x greater than that of a renter ($5,400).

One reason for this large discrepancy in net worth is the concept of ‘forced savings’ created by having a mortgage payment and was explained by the Times:

“Homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month.”

“Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.”

Bottom Line

“As a means to building wealth, there is no practical substitute for homeownership.” If you are a renter who is considering making a purchase, sit with a local real estate professional who can explain the benefits of signing a contract to purchase over renewing your lease!


Posted in:Buy a Home and tagged: Buy a Home
Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on December 24th, 2014 9:34 AMLeave a Comment

Subscribe to this blog

Archives:

My Favorite Blogs:

Sites That Link to This Blog: