Knowledge Is Power When It Comes to Appraisals and Inspections

Knowledge Is Power When It Comes to Appraisals and Inspections | MyKCM

Buyers in today’s market often have questions about the importance of getting a home appraisal and an inspection. That’s because high buyer demand and low housing supply are driving intense competition and leading some buyers to consider waiving those contingencies to stand out in the crowded market.

But is that the best move? Buying a home is one of the most important transactions in your lifetime, and it’s critical to keep your best interests in mind. Here’s a breakdown of what to expect from the appraisal and the inspection, and why each one can potentially save you a lot of time, money, and headaches down the road.

Home Appraisal

The home appraisal is a critical step for securing a mortgage on your home. As Home Light explains:

“. . . lenders typically require an appraisal to ensure that your loan-to-value ratio falls within their underwriting guidelines. Mortgages are secured loans where the lender uses your home as collateral in case you default on the agreed-upon payments.”

Put simply: when you apply for a mortgage, an unbiased appraisal – typically required by your lender – is the best way to verify the value of the home. That appraisal ensures the lender doesn’t loan you more than what the home is worth.

When buyers are competing like they are today, bidding wars and market conditions can push prices up. A buyer’s contract price may end up higher than the value of the home – this is known as an appraisal gap. In today’s market, it’s common for the seller to ask the buyer to make up the difference when an appraisal gap occurs. That means, as a buyer, you may need to be prepared to bring extra money to the table if you really want the home.

Home Inspection

Like the appraisal, the inspection is important because it gives an impartial evaluation of the home. While the appraisal determines the current value of the home, the inspection determines the current condition of the home. As the American Society of Home Inspectors puts it:

“Home inspections are the opportunity to discover major defects that were not apparent at a buyer’s showing. . . . Your home inspection is to help you make an informed decision about the house, including its condition.”

If there are any concerns during the inspection – an aging roof, a malfunctioning HVAC system, or any other questionable items – you have the option to discuss and negotiate any potential issues with the seller. Your real estate advisor can help you navigate this process and negotiate what, if any, repairs need to be made before the sale is finalized.

Keep in mind – home inspections are critical because they can shed light on challenges you may face as the new homeowner. Without an inspection, serious, sometimes costly issues could come as a surprise later on.

Bottom Line

Both the appraisal and the inspection are important steps in the homebuying process. They protect your best interests as a buyer by providing unbiased information about the home’s value and condition. Let’s connect so you have an expert guiding you throughout the entire process.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Your Home Equity Is Growing [INFOGRAPHIC]

Your Home Equity Is Growing [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re a homeowner, today’s rising equity is great news. On average, homeowners have gained $51,500 in equity since this time last year.
  • Whether it’s funding an education, fueling your next move, or starting a business, your home equity is a great tool you can use to power your dreams.
  • Ready to sell? Let’s connect to talk about how you can take advantage of your rising equity to reach your goals.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Important Distinction: Homes Are Less Affordable, Not Unaffordable

Important Distinction: Homes Are Less Affordable, Not Unaffordable | MyKCM

It’s impossible to research the subject of buying a home without coming across a headline declaring that the fall in home affordability is a crisis. However, when we add context to the most recent affordability statistics, we soon realize that, though homes are less affordable than they have been over the last few years, they are more affordable than they historically have been.

Black Knight, a premier provider of data and analytics for the mortgage industry, just released their latest Monthly Mortgage Monitor which includes a new analysis of the affordability situation. Here’s what the report reveals:

“The monthly payment required to purchase the average priced home with a 20% down 30-year fixed rate mortgage increased by nearly 20% (+$210) over the first nine months of 2021, . . . It now requires 21.6% of the median household income to make the monthly mortgage payment on the average home purchase, the least affordable housing has been since 30-year rates rose to nearly 5% back in late 2018.”

Important Distinction: Homes Are Less Affordable, Not Unaffordable | MyKCM

Basically, the report shows that homes are less affordable today than at any other time in the last three years. However, in a previous report earlier this year, Black Knight calculated that the percentage of the median household income to make the monthly mortgage payment on the average home purchase over the last 25 years was 23.6% (see graph below):Today’s payment-to-income ratio is more affordable than the average over the last 25 years. Given that context, we can see that American households still have the same ability to be homeowners as their parents did 20 years ago.

This confirms the recent analysis of ATTOM Data resources where Todd Teta, Chief Product and Technology Officer, explains:

“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why.”

Bottom Line

It’s true that it’s less affordable to buy a home today than it has been the last few years. However, it’s more affordable to buy today than the average over the last 25 years. In other words, homes are less affordable, but they’re not unaffordable. That’s an important distinction.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

What Does the Future Hold for Home Prices?

What Does the Future Hold for Home Prices? | MyKCM

If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising home prices. And while this increase in home values is great news for sellers, you may be wondering what the future holds. Will prices continue to rise with time, or should you expect them to fall?

To answer that question, let’s first understand a few terms you may be hearing right now.

It’s important to note home prices have increased, or appreciated, for 114 straight months. To find out if that trend may continue, look to the experts. Pulsenomics surveyed over 100 economists, investment strategists, and housing market analysts asking for their five-year projections. In terms of what lies ahead, experts say the market may see some slight deceleration, but not depreciation.

What Does the Future Hold for Home Prices? | MyKCM

Here’s the forecast for the next few years:As the graph above shows, prices are expected to continue to rise, just not at the same pace we’ve seen over the last year. Over 100 experts agree, there is no expectation for price depreciation. As the arrows indicate, each number is an increase, which means prices will rise each year.

Bill McBride, author of the blog Calculated Risk, also expects deceleration, but not depreciation:

“My sense is the Case-Shiller National annual growth rate of 19.7% is probably close to a peak, and that year-over-year price increases will slow later this year.”

Ivy Zelman of Zelman & Associates agrees, saying:

“. . . home price appreciation is on the cusp of flipping to a decelerating trend.”

A recent article from realtor.com indicates you should expect:

“. . . annual price increases will slow to a more normal level, . . .”

What Does This Deceleration Mean for You?

What experts are projecting for the years ahead is more in line with the historical norm for appreciation. According to data from Black Knight, the average annual appreciation from 1995-2020 is 4.1%. As you can see from the chart above, the expert forecasts are closer to that pace, which means you should see appreciation at a level that’s aligned with a more normal year.

If you’re a buyer, don’t expect a sudden or drastic drop in home prices – experts say it won’t happen. Instead, think about your homeownership goals and consider purchasing a home before prices rise further.

If you’re a seller, the continued home price appreciation is good news for the value of your house. Work with an agent to list your house for the right price based on market conditions.

Bottom Line

Experts expect price deceleration, not price depreciation over the coming years. Let’s connect to talk through what’s happening in the housing market today, where things are headed, and what it means for you.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

What Do Past Years Tell Us About Today’s Real Estate Market?

What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM

As you follow the news, you’re likely seeing headlines discussing what’s going on in today’s housing market. Chances are high that some of the more recent storylines you’ve come across mention terms like cooling or slowing when talking about where the market is headed.

But what do these terms mean? The housing market today is anything but normal, and it’s still an incredibly strong sellers’ market, especially when compared to the few years leading up to the pandemic. With that in mind, what can previous years tell us about today’s real estate market and if it’s truly slowing?

We’re Still Seeing an Above Average Number of Sales

What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM

You may see headlines about a drop in home sales. But are those headlines telling the full story? The most recent Existing Home Sales Report from the National Association of Realtors (NAR) does show a drop of about 2% from July to August. But the month-over-month decline doesn’t provide the full picture (see graph below):As the graph shows, historical context is key. Today’s home sales are well ahead of some of the more normal years that led up to the health crisis. That means buyers are still in the market, which is great news if you’re planning to list your home.

Houses Are Selling Faster Than Usual

What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM

When headlines mention the market is slowing, sellers may naturally wonder if their house will sell as quickly as they’d like. According to the most recent Realtors Confidence Index from NAR, homes are still selling at record speed (see graph below):Again, if we look back at data from previous years, we can see the average time on market17 days –  means homes are selling faster than a normal pace.

Bidding Wars Are Still the Norm

What Do Past Years Tell Us About Today’s Real Estate Market? | MyKCM

The Realtors Confidence Index from NAR also shows a drop in the average number of offers homes are receiving in August, and many headlines may simply focus there without providing the important context (see graph below):Again, it’s important to compare today’s market to trends from recent years. Currently, the average number of offers per listing is higher than 39 of the previous 45 months. That means the likelihood of a bidding war on your home is still high. And the number of offers your house receives can have a major influence on the final sale price.

So, Is the Market Slowing Down?

While there are slight declines in various month-to-month data, it’s important to keep historical context in mind when determining what’s happening in today’s market. Odeta Kushi, Deputy Chief Economist at First American, put it best recently, saying:

“It’s not the white-hot market from earlier in the year & it’s not the 2020 market benefiting from a wave of pent-up demand but make no mistake this is still a hot housing market.”

Bottom Line

Don’t let headlines make you rethink listing your home this fall. Selling today means you can still take advantage of high buyer demand, multiple offers, and a quick sale. If you’re thinking of selling your house, let’s connect and discuss why this fall is the perfect time to do so.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

The Big Question: Should You Renovate or Move?

The Big Question: Should You Renovate or Move? | MyKCM

The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3 2021. The survey reveals the following:

  • 70% of respondents want more outdoor living space
  • 69% of respondents want a home office (48% wanted multiple offices)
  • 46% of respondents want a multi-function room/flexible space
  • 42% of respondents want an au pair/in-law suite
  • 39% of respondents want an exercise room/yoga space

If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:

  1. A possible desire to relocate
  2. The difference in the cost of a renovation versus a purchase
  3. Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)

In either case, you’ll need access to capital: the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of equity.

Home Equity Is Skyrocketing

The Big Question: Should You Renovate or Move? | MyKCM

The record-setting increases in home prices over the last two years dramatically improved homeowners’ equity. The graph below uses data from CoreLogic to show the average home equity gain in the first quarter of the last nine years:Odeta Kushi, Deputy Chief Economist at First American, quantifies the amount of equity homeowners gained recently:

“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”

As a homeowner, the money you need to purchase the perfect home or renovate your current house may be right at your fingertips. However, waiting to make your decision may increase the cost of tapping that equity.

If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.

Mortgage rates are forecast to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the Federal Housing Finance Agency (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.

First Step: Determine the Amount of Equity in Your Home

If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:

  1. The current mortgage balance on your home
  2. The current value of your home

You can probably find the mortgage balance on your monthly mortgage statement. To find the current market value of your house, you can pay several hundreds of dollars for an appraisal, or you can contact a local real estate professional who will be able to present to you, at no charge, a professional equity assessment report.

Bottom Line

If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Don’t Wait for a Lower Mortgage Rate – It Could Cost You

Don’t Wait for a Lower Mortgage Rate – It Could Cost You | MyKCM

Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in January of this year, the golden window of opportunity for buyers isn’t over just yet. If you’re one of the buyers who worry they’ve missed out, rest assured today’s mortgage rates are still worth taking advantage of.

Even today, our mortgage rates are below what they’ve been in recent decades. So, while you may not be able to lock in the rate your friend got recently, you’re still in a great position to secure a rate well below what your parents and even grandparents got in years past. The key will be acting sooner rather than later.

Don’t Wait for a Lower Mortgage Rate – It Could Cost You | MyKCM
Don’t Wait for a Lower Mortgage Rate – It Could Cost You | MyKCM

In late September, mortgage rates ticked above 3% for the first time in months. And according to experts throughout the industry, mortgage rates are projected to continue rising in the months ahead. Here’s where experts say rates are headed:While a projected half percentage point increase may not seem substantial, it does have an impact when you’re buying a home. When rates rise even slightly, it affects how much you’ll pay month-to-month on your home loan. The chart below shows how it works:In this example, if rates rise to 3.55%, you’ll pay an extra $100 each month on your monthly mortgage payment if you purchase a home around this time next year. That extra money can really add up over the life of a 15 or 30-year loan.

Clearly, today’s mortgage rates are worth taking advantage of before they climb further. The rates we’re seeing right now give you a unique opportunity to afford more home for your money while keeping your monthly payment down.

Bottom Line

Waiting for a lower mortgage rate could cost you. Experts project rates will continue to rise in the months ahead. Let’s connect so you can seize this opportunity before they increase further.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Experts Agree: Homeownership Provides a Path to Long-Term Wealth

Experts Agree: Homeownership Provides a Path to Long-Term Wealth | MyKCM

A recent survey from LendingTree.com found there are multiple reasons why Americans would choose to purchase a home instead of renting. Some of the most popular non-financial reasons given include:

  • The flexibility to make the space your own
  • The pride homeownership offers
  • The sense of stability

In the same survey, 41% of respondents say they’d rather own a home than rent because of the unique way homeownership builds wealth over time.

And experts agree – the home you own is an important tool for building your net worth. Here’s what many of those experts have to say about building long-term financial stability through homeownership.

According to the National Association of Realtors (NAR):

“Homeowners who purchased a typical single-family existing-home 30 years ago at the median sales price of $103,333 with a 10% down payment loan and who sold the property at the median sales price of $357,700 in 2021 Q2 accumulated housing wealth of $349,258, . . .

Mark Fleming, Chief Economist at First American, points out that a home is truly a one-of-a-kind asset. It’s the only asset that’s both an investment and a place for you to call your own.

“The major financial advantage of homeownership is the accumulation of equity in the form of house price appreciation. . . . We won’t always have 17% house price appreciation, but we have to take into account the fact that the shelter that you’re owning is an equity-generating or wealth-generating asset.

Homeowners can leverage the wealth they generate in several ways throughout their life. Tapping into accumulated equity has long been used to pay for the cost of an education, to start a business, or to fund various other expenses. The Joint Center of Housing Studies at Harvard points out:

“. . . by paying down mortgage principal each month and participating in the long-term appreciation of home values, a family can build wealth that can be used for retirement or other needs, including helping the next generation.

Bottom Line

With home prices expected to continue to appreciate in coming years, homebuyers have an opportunity to start the long-term wealth-building process right now. Let’s connect today if you’re ready to begin your journey on the path to becoming a homeowner.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

111,285 Reasons You Should Buy a Home This Year

111,285 Reasons You Should Buy a Home This Year | MyKCM

The financial benefits of buying a home versus renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.

According to the latest research from the National Association of Realtors (NAR):

Homeownership is a key pathway to building wealth and narrowing the racial income and wealth inequality gap. Housing wealth (equity) accumulation takes time and is built up by price appreciation and paying off the mortgage.”

An increase in equity builds the wealth of the individual that owns it. This wealth can be passed down to future generations. The Federal Reserve in an addendum to their Survey of Consumer Finances explains:

“There are numerous ways families can transmit wealth and resources across generations. Families can directly transfer their wealth to the next generation in the form of a bequest. They can also provide the next generation with inter vivos transfers (gifts), for example, providing down payment support to enable a home purchase or a substantial wedding gift.”

The Federal Reserve also explains another way wealth (including the additional net worth generated by an increase in home equity) can benefit future generations:

“In addition to direct transfers or gifts, families can make investments in their children that indirectly increase their wealth. For example, families can invest in their children’s educational success by paying for college or private schools, which can in turn increase their children’s ability to accumulate wealth.”

Here’s a look at how equity can build your wealth over time when you own a home.

Equity over the Last 30 Years

The NAR research reveals that the average gain for homeowners over the last five years was $139,134 and over the last 10 years was $218,505. Looking even further back in time, the article says:

“Homeowners who purchased a typical single-family existing-home 30 years ago at the median sales price of $103,333 with a 10% down payment loan and who sold the property at the median sales price of $357,700 in 2021 Q2 accumulated housing wealth of $349,258.”

Homeownership builds household wealth which also enables households to more easily move to the home of their dreams. As Mark Fleming, the Chief Economist at First American, explains:

“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity.”

If you missed out on the equity gains over the last 30 years, don’t fret. Experts are still calling for substantial growth in equity over the next five years.

Looking Forward at the Equity To Come

The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home values (and therefore equity) to increase as follows:

  • 2021: 11.74%
  • 2022: 5.82%
  • 2023: 3.94%
  • 2024: 3.56%
  • 2025: 3.55%
111,285 Reasons You Should Buy a Home This Year | MyKCM

The survey estimates a 31.8% cumulative appreciation over the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:That’s a potential increase in household wealth of $111,285 over five years.

Bottom Line

Owning a home is one of the best ways to grow your wealth over time. House wealth can impact generations. In many cases, the largest single investment a household has is their home. As that investment appreciates in value, the financial options also increase.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Early October is the Sweet Spot for Buyers

Early October is the Sweet Spot for Buyers | MyKCM

Are you looking to buy a home? If so, we’ve got good news for you.

While there’s no denying the housing market is having a great year, many of the headlines are focused on the perks for sellers. But what about buyers today? As a buyer, you’re likely braving bidding wars and weighing low mortgage rates versus price appreciation as you search for your dream home. If you find yourself a bit discouraged, hear this: there are clear signs buyers may have more opportunities this fall.

According to realtor.com, the sweet spot for buyers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years. When applied to the current market, experts determined the ideal week to buy a home this year. The research says:

Nationally, the best time to buy in 2021 is the week of October 3-9. This week historically has shown the best balance of market conditions that favor buyers.”

So, what’s that mean for you? If you’re looking to buy a home, there’s a golden window of opportunity coming. Here’s what you can expect from that week.

Increased Housing Supply

The number of homes available for sale should increase. According to realtor.com, you can expect to see more new listings come to market the week of October 3. The findings estimate we’ll see roughly 17.6% more homes available than we saw at the start of the year.

This means you’ll have more options to choose from which should be a welcome relief in a market with tight housing supply.

Fewer Bidding Wars

With more homes available, you should also see a slight decline in the number of bidding wars. Having more options means buyers may not be competing as intensely for the homes on the market because there are more choices to go around.

This means when you write an offer, you may have less competition and a better chance of being the top bid. Just remember, it’s still important to come in with a strong offer.

Adjusted Homes Prices

As we move into the end of the year, the findings from realtor.com note this week may also be one of the peak weeks for price reductions in 2021. Historically the data shows an average of 7.0% of homes have a price reduction that week. Why? When housing supply ticks up, sellers need to look for other ways to make their house stand out.

This means, while home prices are still appreciating overall, you may see some homes with price adjustments from eager sellers. The process of closing a house takes time. To close before end of year, sellers may be more motivated this October.

Bottom Line

If you’re in the market for a home, don’t lose steam now. Data shows early October may give you the long-awaited opportunity to find the home of your dreams. Let’s connect so you have a trusted ally and advisor to help keep you motivated so you can find the perfect home for you.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Two Reasons Why Waiting a Year To Buy Could Cost You

Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM

If you’re a renter with a desire to become a homeowner, or a homeowner who’s decided your current house no longer fits your needs, you may be hoping that waiting a year might mean better market conditions to purchase a home.

To determine if you should buy now or wait, you need to ask yourself two simple questions:

  1. What will home prices be like in 2022?
  2. Where will mortgage rates be by the end of 2022?

Let’s shed some light on the answers to both of these questions.

What will home prices be like in 2022?

Three major housing industry entities project continued home price appreciation for 2022. Here are their forecasts:

Using the average of the three projections (6.27%), a home that sells for $350,000 today would be valued at $371,945 by the end of next year. That means, if you delay, it could cost you more. As a prospective buyer, you could pay an additional $21,945 if you wait.

Where will mortgage rates be by the end of 2022?

Today, the 30-year fixed mortgage rate is hovering near historic lows. However, most experts believe rates will rise as the economy continues to recover. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above:

That averages out to 3.7% if you include all three forecasts, and it’s nearly a full percentage point higher than today’s rates. Any increase in mortgage rates will increase your cost.

What does it mean for you if both home values and mortgage rates rise?

You’ll pay more in mortgage payments each month if both variables increase. Let’s assume you purchase a $350,000 home this year with a 30-year fixed-rate loan at 2.86% after making a 10% down payment. According to the mortgage calculator from Smart Asset, your monthly mortgage payment (including principal and interest payments, and estimated home insurance, taxes in your area, and other fees) would be approximately $1,899.

Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM

That same home could cost $371,945 by the end of 2022, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment, after putting down 10%, would increase to $2,166.

The difference in your monthly mortgage payment would be $267. That’s $3,204 more per year and $96,120 over the life of the loan.

If you consider that purchasing now will also let you take advantage of the equity you’ll build up over the next calendar year, which is approximately $22,000 for a house with a similar value, then the total net worth increase you could gain from buying this year is over $118,000.

Bottom Line

When asking if you should buy a home, you probably think of the non-financial benefits of owning a home as a driving motivator. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

It’s Still a Sellers’ Market [INFOGRAPHIC]

It’s Still a Sellers’ Market [INFOGRAPHIC] | MyKCM

Some Highlights

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Have You Ever Seen a Housing Market Like This?

[INFOGRAPHIC]

Have You Ever Seen a Housing Market Like This? [INFOGRAPHIC] | MyKCM

Some Highlights

  • Whether you’re buying or selling – today’s housing market has plenty of good news to go around.
  • Buyers can take advantage of today’s mortgage rates to escape rising rents and keep monthly payments affordable. Sellers can reap the benefits of multiple offers and a fast sale.
  • If this sounds like good news to you, let’s connect today so you can capitalize on the unique opportunity you have in today’s market.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Is the Number of Homes for Sale Finally Growing?

Is the Number of Homes for Sale Finally Growing? | MyKCM

An important metric in today’s residential real estate market is the number of homes available for sale. The shortage of available housing inventory is the major reason for the double-digit price appreciation we’ve seen in each of the last two years. It’s the reason many would-be purchasers are frustrated with the bidding wars over the homes that are available. However, signs of relief are finally appearing.

According to data from realtor.com, active listings have increased over the last four months. They define active listings as:

The active listing count tracks the number of for sale properties on the market, excluding pending listings where a pending status is available. This is a snapshot measure of how many active listings can be expected on any given day of the specified month.”

What normally happens throughout the year?

Is the Number of Homes for Sale Finally Growing? | MyKCM

Historically, housing inventory increases throughout the summer months, starts to tail off in the fall, and then drops significantly over the winter. The graph below shows this trend along with the month active listings peaked in 2017, 2018, and 2019.

What happened last year?

Is the Number of Homes for Sale Finally Growing? | MyKCM

Last year, the trend was different. Historical seasonality wasn’t repeated in 2020 since many homeowners held off on putting their houses up for sale because of the pandemic (see graph below). In 2020, active listings peaked in April, and then fell off dramatically for the remainder of the year.

What’s happening this year?

Is the Number of Homes for Sale Finally Growing? | MyKCM

Due to the decline of active listings in 2020, 2021 began with record-low housing inventory counts. However, we’ve been building inventory over the last several months as more listings come to the market (see graph below):There are three main reasons we may see listings continue to increase throughout this fall and into the winter.

  1. Pent-up selling demand – Homeowners may be more comfortable putting their homes on the market as more and more Americans get vaccinated.
  2. New construction is starting to take off – Though new construction is not included in the realtor.com numbers, as more new homes are built, there will be more options for current homeowners to consider when they sell. The lack of options has slowed many potential sellers in the past.
  3. The end of forbearance will create some new listings – Most experts believe the end of the forbearance program will not lead to a wave of foreclosures for several reasons. The main reason is the level of equity homeowners currently have in their homes. Many homeowners will be able to sell their homes instead of going to foreclosure, which will lead to some additional listings on the market.

Bottom Line

If you’re in the market to buy a home, stick with it. There are new listings becoming available every day. If you’re thinking of selling your house, you may want to list your home before this additional competition comes to market.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

Home Price Appreciation Is Skyrocketing in 2021. What About 2022?

Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM

One of the major story lines over the last year is how well the residential real estate market performed. One key metric in the spotlight is home price appreciation. According to the latest indices, home prices are skyrocketing this year.

Here are the latest percentages showing the year-over-year increase in home price appreciation:

The dramatic increases are seen at every price point and in all regions of the country.

Increases Are Across Every Price Point

Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM

According to the latest Home Price Index from CoreLogic, each price range is seeing at least a 19% increase year-over-year:

Increases Are Across Every Region in the Country

Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM

Every region in the country is experiencing at least a 14.9% increase in home price appreciation, according to the Federal Housing Finance Agency (FHFA):

Increases Are Across Each of the Top 20 Metros in the Country

Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM

According to the U.S. National Home Price Index from S&P Case-Shiller, every major metro is seeing at least a 13.3% growth in prices (see graph below):

What About Price Appreciation in 2022?

Prices are the result of the balance between supply and demand. The demand for single-family homes has been strong over the last 18 months. The supply of houses available for sale was near historic lows. However, there’s some good news on the supply side. Realtor.com reports:

“432,000 new listings hit the national housing market in August, an increase of 18,000 over last year.”

There will, however, still be a shortage of supply compared to demand in 2022. CoreLogic reveals:

“Given the widespread demand and considering the number of standalone homes built during the past decade, the single-family market is estimated to be undersupplied by 4.35 million units by 2022.”

Yet, most forecasts call for home price appreciation to moderate in 2022. The Home Price Expectation Survey, a survey of over 100 economists, investment strategists, and housing market analysts, calls for a 5.12% appreciation level next year. Here are the 2022 home appreciation forecasts from the four other major entities:

  1. The National Association of Realtors (NAR): 4.4%
  2. The Mortgage Bankers Association (MBA): 8.4%
  3. Fannie Mae: 5.1%
  4. Freddie Mac: 5.3%

Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years.

Bottom Line

If you owned a home over the past year, you’ve seen your household wealth grow substantially, and you’ll see another nice boost in 2022. If you’re thinking of buying, consider buying now as prices are forecast to continue increasing through at least next year.

Call me and let’s get moving! 847.630.1032 or email me at edivito@keeferealestate.com http://www.lupodivito.com

%d bloggers like this: