COVID19 and the Real Estate Market, July 2020 Update

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When stay-at-home orders became widespread in March, many assumed that the economic shutdown and ensuing uncertainty would cause prospective home buyers to put their plans on hold. And they did, for a while. But just a few months later, it looks like staying in has caused buyers to be even more ready for a move.

In fact, according to a recent article from Housingwire, 53 percent of home buyers say they are more likely to buy a home in the next year because of the pandemic – compared to 27 percent who said they hadn’t changed their plans and 20 percent who said they’d be less likely to buy. Why would the coronavirus make home buyers more enthusiastic to buy? The vast majority said mortgage rates. Rates were already favorable to start the year but are now at record lows. That makes buying more affordable and presents movers with an opportunity to lock in a historically low rate.

Another reason is Americans have been able to save money during lockdown because they’ve been spending less. That means more money set aside for a down payment. Perhaps the most relatable reason survey respondents gave, though, belongs to the 28 percent who said they were ready to make a move because they’d been stuck in their small space for so long.

While the housing market has been hit hard by the coronavirus – with home sales predicted to suffer the biggest year-over-year decline in 12 years – expectations for its recovery are far more optimistic. In fact, according to one recent analysis from Nationwide, home sales could be back to 2019 levels as soon as next year.

Are you ready to look for a new home? Start your search by visiting https://nexthomevictors.realgeeks.com/dani-hallsell/

To your health, Dani

Source: Luxury Mortgage

Housing Market Update, June 2020

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We are halfway through 2020, and what should be the peak home-selling season. However, in these unprecedented times, the real estate industry as a whole is still recovering slowly. Here is a June 2020 Housing Market Update.

Home Sellers Are Starting to Come Back

The number of homes for sale has been lagging for years. It’s been among the housing market’s main challenges. That’s because a lack of available homes combined with rising buyer demand leads to steady price increases and declining affordability. While that can be good for homeowner equity, it’s bad for buyers – especially first-time buyers who don’t have the benefit of cashing in their equity to help fund a home purchase.

This continuing imbalance only got worse when the coronavirus led to stay-at-home orders across the country. That caused some buyers to delay their plans, but also has led to homeowners to think twice before putting their home up for sale. This caused new listings to plummet. In fact, according to realtor.com, the national inventory of homes for sale is down nearly 20 percent from last year.

The good news, though, is things are starting to get better. By the end of May, the number of new listings had improved in 45 of the 50 largest U.S. markets compared to the month before. While they’re still down, the fact that the rate of decline has gotten smaller is an indication that home sellers are starting to return to the market. If the trend continues, it’ll lead to a healthier and more balanced housing market.

Home Prices Increase 5.4% in April

The housing market, like any market, is a balance of supply and demand. Conditions are a reflection of how many buyers and sellers there are, rather than the strength or weakness of the overall economy. For example, when coronavirus mitigation efforts shut down much of the country’s economy, there was a lot of speculation about what would happen to prices. Though the economy suffered, home prices didn’t.

In fact, they rose. According to the most recent CoreLogic Home Price Index Report, home prices increased 5.4 percent in April over last year at the same time. Not only did they improve, but they also did so at a stronger pace than last April when they were up just 3.6 percent. So, why did home price gains accelerate while the economy was suffering a severe downturn?

When stay-at-home orders went into place, many home sellers pulled their listings and decided to wait a while before selling. The corresponding drop in for-sale inventory meant there were more home buyers than homes for sale, which led to more competition for available homes, bidding wars, and higher prices.

Mortgage Rates Hit Another Low

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, average mortgage rates hit another low last week. Rates were down week-over-week for most loan categories. The declines helped push demand for home purchase loans higher. In fact, requests for loan applications to buy homes rose another 5 percent from last week and are now 18 percent higher than they were at the same time last year.

Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the numbers are encouraging, but challenges remain. “Purchase applications continued their recent ascent, increasing 5 percent last week and 18 percent compared to a year ago. The pent-up demand from home buyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring.”

“However, there are still many households affected by widespread job losses and the current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months,” Kan said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

If you have any real estate related questions, I’m always happy to talk with you. You can find my contact information on the right side of this page.

To your health and safety, Dani

Source: Luxury Mortgage

Forecast Calls for Housing Market Rebound Later This Year

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Typically, economic forecasts rely on a mix of current and historical data. If you understand where things are today and what’s happened in the past, you can make an educated guess about what the future might look like. This becomes harder, though, when there aren’t obvious historical precedents to use for comparison.

Despite this, Freddie Mac’s most recent quarterly forecast attempts to predict how well the housing market will endure the economic impact of the coronavirus. So, what do they see? According to Sam Khater, Freddie Mac’s chief economist, we may begin to see a rebound during the second half of the year.

Specifically, Freddie Mac sees home sales and price increases slowing this year before rebounding in 2021.

Source: National Association of REALTORS

Start your Ann Arbor Area home search today by visiting https://nexthomevictors.realgeeks.com/dani-hallsell/

To your health, Dani

Ann Arbor Area Board of REALTORS® Reports Washtenaw County March Real Estate Statistics

Total residential home & condominium sales dropped 6.6% along with single-family home sales decreasing by 1.5% compared to this time last year. New single-family home listings decreased in March, with a 13% fall compared to this time last year. However, the average single-family home listing price rose by 11%. During this past March 202 single family homes were reported sold.

In March, new condominium listings went down with a 12% decrease. However, condominium sales saw an increase of 35% compared to last year. The average condominium list price also rose by 0.2% and the sales price increased by 0.4% compared to that of 2019. During this past March, 69 condominiums were reported sold.

Year to date 724 residential home & condominium listings sold between January 1st and March 31st. Single-family home sales saw 556 listings reported sold during this time frame.

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Looking to the Future: What the Experts Are Saying

Looking to the Future: What the Experts Are Saying | MyKCM

As our lives, our businesses, and the world we live in change day by day, we’re all left wondering how long this will last. How long will we feel the effects of the coronavirus? How deep will the impact go? The human toll may forever change families, but the economic impact will rebound with a cycle of downturn followed by economic expansion like we’ve seen play out in the U.S. economy many times over.

Here’s a look at what leading experts and current research indicate about the economic impact we’ll likely see as a result of the coronavirus. It starts with a forecast of U.S. Gross Domestic Product (GDP).

According to Investopedia:

“Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.”

When looking at GDP (the measure of our country’s economic health), a survey of three leading financial institutions shows a projected sharp decline followed by a steep rebound in the second half of this year:Looking to the Future: What the Experts Are Saying | MyKCMA recent study from John Burns Consulting also notes that past pandemics have also created V-Shaped Economic Recoveries like the ones noted above, and they had minimal impact on housing prices. This certainly gives hope and optimism for what is to come as the crisis passes.

With this historical analysis in mind, many business owners are also optimistic for a bright economic return. A recent PricewaterhouseCoopers survey shows this confidence, noting 66% of surveyed business owners feel their companies will return to normal business rhythms within a month of the pandemic passing, and 90% feel they should be back to normal operation 1 to 3 months after:Looking to the Future: What the Experts Are Saying | MyKCMFrom expert financial institutions to business leaders across the country, we can clearly see that the anticipation of a quick return to normal once the current crisis subsides is not too far away. In essence, this won’t last forever, and we will get back to growth-mode. We’ve got this.

Bottom Line

Lives and businesses are being impacted by the coronavirus, but experts do see a light at the end of the tunnel. As the economy slows down due to the health crisis, we can take guidance and advice from experts that this too will pass.

To your health, Dani

January 10th, National Cut Your Energy Costs Day

National Cut Your Energy Costs Day [INFOGRAPHIC] | MyKCM

  • On January 10th of each year, “National Cut Your Energy Costs Day” encourages consumers to reduce their overall energy costs by improving home efficiency.
  • According to Freddie Mac, a typical U.S. family spends $2,200 per year on energy bills. By making energy efficient upgrades, you could reduce your energy bills by up to 30%.
  • To assess the energy efficiency of your home and see how it measures up, take a moment to check out Home Energy Yardstick to calculate your estimated opportunity. Don’t forget to have your energy bills nearby!

 

4 Reasons to Buy a Home This Fall

4 Reasons to Buy a Home This Fall | MyKCM

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 Insights Report shows that home prices have appreciated by 3.6% over the last 12 months. The same report predicts prices will continue to increase at a rate of 5.8% 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 Next Year

The Primary Mortgage Market Survey from Freddie Mac indicates that interest rates for a 30-year mortgage have recently hovered just above 3.5%. This is great news for buyers in the market right now, because low interest rates increase your purchasing power – but don’t wait! Most experts predict rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and 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 needed to buy your next home.

3. Either Way, You Are Paying a Mortgage 

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

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home 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 costs 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 both are on the rise.

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

Look at the actual reason you’re buying and decide if 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 custom renovations, maybe now is the time to buy.

Bottom Line

Buying a home sooner rather than later could lead to substantial savings. Let’s get together to determine if homeownership is the right choice for you and your family this fall.

Ready to start looking for a new home? Begin your search at https://nexthomevictors.realgeeks.com/dani-hallsell/ .  Have a real estate related question? Call, text or email me; I answer questions for free!

Dani

 

5 Tips for Starting Your Home Search

5 Tips for Starting Your Home Search | MyKCM

In today’s market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared. Here are five tips from realtor.com’s article“How to Find Your Dream Home—Without Losing Your Mind.”

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you’re serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage. Even if you’re in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach. This will help you avoid the disappointment of falling in love with a home well outside your price range.

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Before you start your search, list all the features of a home you would like. Qualify them as ‘must-haves’‘should-haves’, or ‘absolute-wish list’ items. This will help you stay focused on what’s most important.

3. Research and Choose a Neighborhood Where You Want to Live

Every neighborhood has unique charm. Before you commit to a home based solely on the house itself, take a test-drive of the area. Make sure it meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that will best serve those needs. Just because you’ve narrowed your search to a zip code doesn’t mean you need to tour every listing in that vicinity. An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy and making notes on the listing sheet to document what you love and don’t love about each property you visit.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.

Are you thinking about buying a home? Download my free Buyers Guide, “Things to consider when buying a home”. And start you home search at mynexthome.com.

Dani

Existing-Home Sales Report Indicates Now Is a Great Time to Sell

Existing-Home Sales Report Indicates Now Is a Great Time to Sell | MyKCM

The best time to sell anything is when demand for that item is high and the supply of that item is limited. The latest Existing-Home Sales Report released by the National Association of Realtors (NAR), reveals that demand for housing continues to be strong, but the supply is struggling to keep pace. With this trend likely continuing throughout 2020, now is a great time to sell your house.

THE EXISTING-HOME SALES REPORT

The most important data revealed in this report was not actually sales. In reality, it was the inventory of homes for sale (supply). The report explained:

  • Total housing inventory at the end of August decreased 2.6% to 1.86 million homes available for sale.
  • Unsold inventory is lower than the 4.3-month figure recorded in August 2018.
  • This represents a 1-month supply at the current sales pace.

According to Lawrence Yun, Chief Economist at NAR,

“Sales are up, but inventory numbers remain low and are thereby pushing up
home prices.”

In real estate, there is a simple guideline that often applies here. Essentially, when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see greater appreciation. Between a 6 to 7-month supply is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and can expect depreciation in home values (see below):Existing-Home Sales Report Indicates Now Is a Great Time to Sell | MyKCM

As we mentioned before, there is currently a 4.1-month supply of homes on the market, and houses are going under contract fast. The Existing Home Sales Report also shows that 49% of properties were on the market for less than a month when they were sold. In August, properties sold nationally were typically on the market for 31 days. As Yun notes, this should continue,

“As expected, buyers are finding it hard to resist the current rates…The desire to take advantage of these promising conditions is leading more buyers to the market.” 

Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market, and supply will fail to catch up with demand if a sizable supply does not enter the market.

Bottom Line

If you are going to sell, now may be the time to take advantage of the ready, willing and able buyers who are out there searching for your house to become their dream home.

Visit  https://www.nexthomevictors.com/cma/property-valuation/ to get an idea of what your home is worth in today’s market!

Dani

Mid-Year Housing Market Update: Three Things to Know Today

Mid-Year Housing Market Update: Three Things to Know Today | MyKCM

Shifting trends and industry-leading research are pointing toward some valuable projections about the status of the housing market for the rest of the year.

If you’re thinking of buying or selling, or if you just want to know what experts are saying is on the horizon, here are the top three things to put on your radar as we head into the coming months:

  1. Home prices are appreciating at a more normal rate: Home prices have been appreciating for about ten years now. Experts at the Home Price Expectation Survey, Mortgage Bankers Association, Freddie Mac, and Fannie Mae are forecasting continued growth throughout the next year, although it should be leveling-off to normal appreciation (3.6%), as we move into 2020.
  2. Interest rates are low: Over the past 30 years, the average mortgage rate in the United States has been 8.27%, and rates even peaked as high as 18% in the 1980s. Today, at 3.81%, the rate is considerably lower than the historical 30-year average. Although experts predict it may climb into the low 4% range in the near future, that’s still remarkably lower than our running average, suggesting a great time to get more for your money over the life of your loan.
  3. An impending recession does not mean there will be a housing crash: Although expert research studies such as those found in the Duke Survey of American CFOs and the National Association of Business Economics, are pointing toward a recession beginning within the next 18 months, a potential recession isn’t expected to be driven by the housing industry. That means we likely won’t experience a devastating housing crash like the country felt in 2008. Expert financial analyst Morgan Housel tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

In fact, during 3 of the 5 last U.S. recessions, housing prices actually appreciated:Mid-Year Housing Market Update: Three Things to Know Today | MyKCM

Bottom Line

With prices appreciating and low interest rates available, it’s a perfect time to buy or sell a home. Let’s get together to discuss how you can take the next step in the exciting journey of homeownership.

Ready to see what homes are available today? Visit https://nexthomevictors.realgeeks.com/dani-hallsell/

Dani