Category Archives for "First Time Home Buyers"

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Looking to Upgrade Your Current Home? Now’s the Time to Move-Up!

Looking to Upgrade Your Current Home? Now’s the Time to Move-Up! | Simplifying The Market

In every area of the country, homes that are priced at the top 25% of the price range for that area are considered to be Premium Homes. In today’s real estate market there are deals to be had at the higher end! This is great news for homeowners who want to upgrade from their current house and move-up to a premium home.

Much of the demand for housing over the past couple years has come from first-time buyers looking for their starter home, which means that many of the more expensive homes that have been listed for sale have not seen as much interest.

This mismatch in demand and inventory has created a Buyer’s Market in the luxury and premium home markets according to the ILHM’s latest Luxury Report. For the purpose of the report, a luxury home is defined as one that costs $1 million or more.

“A Buyer’s Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/or price point.”

The authors of the report were quick to point out that the current conditions at the higher end of the market are no cause for concern,

“While luxury homes may take longer to sell than in previous years, the slower pace, increased inventory levels and larger differences between list and sold prices, represent a normalization of the market, not a downturn.”

Luxury can mean different things to different people. It could mean a secluded home with a ton of property for privacy to one person, or a penthouse in the center of it all for someone else. Knowing what characteristics you are looking for in a premium home and what luxury means to you will help your agent find your dream home.

Bottom Line

If you are debating upgrading your current house to a premium or luxury home, now is the time!

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Homebuyers Shouldn’t Worry About 2008 All Over Again

Last week, realtor.com released a survey of active home shoppers (those who plan to purchase their next home in 1 year or less). The survey asked their opinion on an impending recession and its possible impact on the housing market.

Two major takeaways from the survey:

  • 42% believe a recession will occur this year or next (another 16% said 2021)
  • 59% believe the housing market would fare the same or worse than it did in 2008

Why all the talk about a recession recently?

Over the last year, four separate surveys have been taken asking when we can expect the next recession to occur:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs
  4. The National Association of Business Economics

70% of all respondents to the four surveys believe that a recession will occur in 2019 or 2020 with an additional 18% saying 2021.

However, we must realize that a recession does not mean we will experience another housing crash. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, a dramatic fall in home values helped cause it.

However, according to research done by CoreLogic, home values weren’t negatively impacted as they were in 2008 during the previous four recessions:

Homebuyers Shouldn’t Worry About 2008 All Over Again | Simplifying The Market

During the four recessions prior to 2008, home values depreciated only once (at a level that was less than 2%). The other three times home values appreciated, twice well above the historic norm of 3.6%.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained that there’s no reason to panic right now, even if we may be headed for a recession.

“We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

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5 Reasons To Sell Your House This Spring!

5 Reasons To Sell Your House This Spring! |Simplifying The Market

Here are five compelling reasons listing your home for sale this spring makes sense.

1. Demand Is Strong

The latest Buyer Traffic Index from the National Association of Realtors (NAR) shows that buyer demand remains 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 for the same 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 needed for a normal housing market. This means that, in most of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, the average number of years a homeowner stayed in his or her home was six, but that number has hovered between nine and ten years since 2011. Many homeowners have a pent-up desire to move, as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners are granted the freedom to move.

Many homeowners were reluctant to list their home over the last couple of years for fear that they would not find a home to move in to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you to 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. Buyers know exactly what they can afford before home shopping. This makes the entire selling process much faster and simpler. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 47 days.

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 created a buyer’s market. This means that if you are planning on selling a starter or trade-up home, it will sell quickly, AND you’ll be able to find a premium home to call your own!

According to CoreLogic, prices are projected to appreciate by 4.6% over the next year. 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 these questions. 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.

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How to Put Your Housing Cost to Work for You

How to Put Your Housing Cost to Work for You | Simplifying The Market

There has been a lot written about the benefits of homeownership. One benefit that continues to rise to the top is the added wealth homeowners gain simply by paying their mortgage while their home increases in value over time.

The National Association of Realtors (NAR) recently broke down the equity gained from price appreciation and principal payments in their Economists Outlook Blog. Homeowners who purchased their homes five years ago have already gained almost $80,000 in equity over that time with 80% of the gains coming from price appreciation.

For a homeowner who purchased their home 30 years ago, they have gained nearly $250,000 in equity with 70% coming from price increases. The full results can be seen in the chart below.

How to Put Your Housing Cost to Work for You | Simplifying The Market

According to the Home Price Expectation Survey, a family who purchased a median priced home this January can expect to gain more than $42,000 over the next five years simply from price appreciation alone.

Bottom Line

Your home is one of the only investments you can live inside as you pay it off over time. If you are ready to use your housing costs to build wealth, let’s get together to discuss how to make your dream a reality.

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Data Says April is the Best Month to List Your Home for Sale

Data Says April is the Best Month to List Your Home for Sale | Simplifying The Market

The spring housing market is off to the races! The inventory of homes for sale is increasing, buyers are out in force, and interest rates have remained low, piquing the interest of buyers and sellers previously on the fence about making a move.

New research from realtor.com shows that the first week of April is actually the best time to list your house for sale! The report used “trends in median listing prices, views per property on realtor.com, home price drops, median days on market, and number of listings on the market over the last three years,” to determine a ranking for every week of the year.

Listing your home in the first week of April contributes 14x more property views, 5% less competition from other home sellers, and results in the home being sold 6 days faster!

Below is a graph indicating the average score for each month of the year.

Data Says April is the Best Month to List Your Home for Sale | Simplifying The Market

It should come as no surprise that April and May dominate as the top months to sell. 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, often leading to bidding wars.

However, there is one caveat worth mentioning. When broken down by metro, realtor.com noticed that while warmer climates share an overall trend, they have different top sales months. The best month to get the most exposure in Miami, FL, for instance, is August, while in Phoenix, AZ, June leads 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, 41% of homes sold last month were on the market for less than 30 days! If you list now, you’ll have a really good chance to sell in April or May, setting yourself up for the most exposure!

Bottom Line

Let’s get together to discuss the market conditions in our area to get you the most exposure to the buyers ready and willing to make a move!

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The Enormous Divide Between the Headline and the Truth

The Enormous Divide Between the Headline and the Truth | Simplifying The Market

“I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage.” – John Stuart Mill (1840s)

Even back in the mid-1800s, people knew that negative news sells. That is still true today. All forms of media realize that they will get more eyeballs, clicks, likes, and engagement by posting something negative. However, they must realize that negative headlines impact markets.

Just last week, the National Association of Home Builders released a survey revealing:

“Negative media reports making buyers cautious was a significant problem for 48% of builders in 2018, but 62% expect it to be a problem in 2019.”

Even today, good news is headlined with a negative spin in order to get attention. Here are two recent examples from mainstream media:

Actual Headline #1: Cash-out refis are back – will homes become ATMs again?

The real story: The headline is accurate – to a point. It is true that the percentage of refinances in which the homeowner received cash at the closing has increased to levels that existed in 2006. However, the actual amount of equity homeowners “cashed-out” compared to a decade ago isn’t close.

The dollar amount cashed-out last year was $63 billion. That seems like a really large number until we compare it to 2006, when homeowners cashed-out $321 billion. That is more than five times the current amount.

In 2006, people did use their homes as ATMs. They purchased new cars, boats, and lavish vacations. Today, the cashed-out equity is being used to consolidate debt, as seed capital for a new business, or to help a child with their college tuition.

Actual Headline: Consumer Debt hits $4 Trillion. Americans are diving deeper and deeper into debt.

The real story: The first sentence of the headline is accurate. The second sentence couldn’t be further from the truth. Total consumer debt is the highest it has ever been. That’s because the population continues to grow, and so does the economy (prices and wages).

The important number is how that total debt ranks as a percentage of disposable personal income. That percentage is the lowest ever recorded!! People are not “diving deeper and deeper into debt”. The exact opposite is true. They have less debt now than ever before.

Bottom Line

If you are thinking about buying or selling a home, it is important that you have a true professional handling your real estate needs. Someone who knows the truth about the current economy and its potential impact on the housing market.

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Your Tax Refund Is The Key To Homeownership!

Your Tax Refund Is The Key To Homeownership! | Simplifying The Market

According to data released by the Internal Revenue Service (IRS), Americans can expect an estimated average refund of $3,143 this year when filing their taxes. This is down slightly from the average refund of $3,436 last year.

Tax refunds are often thought of as ‘extra money’ that can be used toward larger goals. For anyone looking to buy a home in 2019, this can be a great jump start toward a down payment!

The map below shows the average tax refund Americans received last year by state.

Your Tax Refund Is The Key To Homeownership! | Simplifying The Market

Many first-time buyers believe that a 20% down payment is required to qualify for a mortgage. Programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae all allow for down payments as low as 3%. Veterans Affairs Loans allow many veterans to purchase a home with 0% down.

If you started your down payment savings with your tax refund check this year, how close would you be to a 3% down payment?

The map below shows what percentage of a 3% down payment is covered by the average tax refund by taking into account the median price of homes sold by state.Your Tax Refund Is The Key To Homeownership! | Simplifying The MarketThe darker the blue, the closer your tax refund gets you to homeownership! For those in Oklahoma looking to purchase their first homes, their tax refund could potentially get them 85% closer to that dream!

Bottom Line

Saving for a down payment can seem like a daunting task. But the more you know about what’s required, the more prepared you can be to make the best decision for you and your family! This tax season, your refund could be your key to homeownership!

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Is Your House Priced To Sell Immediately (PTSI)?

In today’s real estate market, with more houses coming to market every day and eager buyers searching for their dream home, setting the right price for your house is one of the most important things you can do.

According to CoreLogic’s latest Home Price Index, home values have risen at over 6% a year over the past two years, but have started to slow to 4.4% over the last 12 months. By this time next year, CoreLogic predicts that home values will be 4.6% higher.

With prices slowing from their previous pace, homeowners must realize that pricing their homes a little OVER market value to leave room for negotiation will actually dramatically decrease the number of buyers who will see their listing! (see the chart below)Is Your House Priced To Sell Immediately (PTSI)? | Simplifying The MarketInstead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be negotiating with a buyer over the price, but will instead have multiple buyers competing with each other over the house.

The key to selling your house in 2019 is making sure your house is Priced To Sell Immediately (PTSI)! That way, your home will be seen by the most buyers and will sell at a great price before more competition comes to market!

Bottom Line

If you are debating listing your house for sale, let’s get together to discuss how to price your home appropriately for our area and maximize your exposure this Spring Market!

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Do 46 Million Millennials Know They Are Mortgage Ready?

Do 46 Million Millennials Know They Are Mortgage Ready? | Simplifying The Market

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”, meaning they meet the qualifications to be approved for a mortgage today!

  • a FICO Score ≥ 620
  • a Back-End Debt to Income Ratio ≤ 25%
  • no Foreclosures or Bankruptcies in the last 7 years
  • no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line

If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, let’s get together to help guide you on your path to homeownership!

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