KCM™s Housing Predictions for 2014

KCM’s Housing Predictions for 2014 Posted: 02 Jan 2014 04:00 AM PST Making predictions in what is still a somewhat volatile housing market can be tricky. That being said, we are going to give you what we believe will be the five biggest headlines for housing in 2014. Home Sales Will Surge Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014. Supply Will Struggle to Keep Up with Demand With a dramatic increase in demand, it will be up to real estate professionals and builders to make sure there is the necessary inventory to satisfy this demand. This will be a challenge for much of the year. Interest Rates Will Increase Significantly Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end. And with that being said The Underwood Sales Group is here to help you today get the best rates and sell your home faster and for top dollar. Using the power of the Keller Williams Realty and #1 in agent count we are here to answer any questions or concerns. Please feel free to contact us at (888) 831-0736 anytime!

Congratulations Keller Williams Realty: We are #1! » KW Blog

Congratulations Keller Williams Realty: We are #1! » KW Blog.

RENT VS. BUY YOU MAKE THE CALL!

Buy or Rent: Which Makes More Sense Financially?     Every potential home buyer has to stop for at least a moment and consider this question. Today, we want to look at one of the many financial reasons to buy instead of rent: the housing expense moving forward. According to the latest Existing Home Sales Report from the National Association of Realtors, the median sales price of a home in the U.S. is $184,300. The mortgage payment (principal & interest) on that purchase would be $661.89 assuming a 20% down payment and a 3.5% mortgage interest rate. Currently, the median asking rent in the U.S. according to the Census Bureau is $717 a month. We realize that the two payments do not necessarily reflect the housing cost on a similar residence. However, that is not the point of the post. All we are saying is that the monthly housing expense on a median price home is $661.89 and the median rent is $717. We now want to discuss what will happen to these costs over time. The principal and interest portion of the mortgage payment is locked in for the next 30 years. We know real estate taxes may be included in the payment and will increase to some degree over that time. We also acknowledge that the homeowner will have occasion to spend money on repairs. They also receive many tax advantages as a homeowner. However, the actual monthly housing expense remains the same for the next 30 years. Now, let’s look at what happens to a rent payment. The best thing to do to predict the future is to study the past. Here is a graph of the median asking rent since 1988 based on Census Bureau data:   We believe rents will follow their historically pattern and increase dramatically over the next 30 years. Buyers have a choice: either lock in your housing expense or deal with the uncertainty of rental increases.

Realtors VS FSBO?

The Need for a Professional When Selling Your Home Posted: 23 Apr 2013 04:00 AM PDT   With the housing market beginning to heat up, we are afraid some sellers may consider trying to sell their house as a For Sale By Owner (FSBO). This week we will be posting on the reasons that we believe trying to sell on your own may be a mistake. – KCM Crew Anyone in the real estate industry for any length of time realizes that the education required and the resources necessary to be a true industry professional have dramatically increased over the last two decades. In today’s volatile market, it is necessary to have a true real estate professional if you want to sell your home for the best possible price in the shortest amount of time – and make sure the deal gets to the closing table! The National Association of Realtors (NAR) has recently reported that as many as 15% of all deals never make it to closing. Tighter lending requirements, stronger disclosure forms and tougher appraisal standards have all contributed to the more treacherous minefield through which today’s seller must navigate. The good news is homeowners have realized that attempting to sell their home on their own is an arduous process best left to an industry expert. According to NAR’s most recent Profile of Home Buyers and Sellers, the percentage of sellers selling on their own, known as For Sale By Owners (FSBOs), has dropped in half over the last 20 years; from 19% to 9%. Bottom Line If you are selling a home in today’s confusing real estate market, it is best to take on the services of a local real estate expert. He/she will guide you through each step of the transaction thereby increasing the likelihood that there will be fewer inconveniences for you and your family.

Renting ‘Round the U.S. [INFOGRAPHIC]

Renting ‘Round the

Renting ‘Round the U.S. [INFOGRAPHIC] Posted: 19 Apr 2013 04:00 AM PDT

Vacation Home Sales Rise in 2012

Vacation Home Sales Rise in 2012 Posted: 15 Apr 2013 04:00 AM PDT   The American desire to own a second home as a vacation home is alive and well! The National Association of Realtors analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes in the U.S. Their 2013 Investment and Vacation Home Buyers Survey shows vacation home sales improved in 2012. NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales: “We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw.” Here are the key findings from the report: Raw Numbers Vacation-Home sales rose 10.1 percent to 553,000 from 502,000 in 2011 Sales accounted for 11% of all transactions last year, unchanged from 2011 The median price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012 35% of vacation homes purchased in 2012 were distressed homes Buyer Profile The typical vacation-home buyer was 47 years old The median household income was $92,100 Buyers plan to own their recreational property for a median of 10 years 29% said they were likely to purchase another vacation home within two years 78% of all second-home buyers said it was a good time to buy (compared with 68% of primary residence buyers) Reasons for Purchasing Lifestyle factors remain the primary motivation for vacation-home buyers: 80% want to use the property for vacations or as a family retreat 27% plan to use it as a primary residence in the future 23% plan to rent to others 23% wanted to diversify their investments or saw a good investment opportunity Location 45% of vacation homes purchased last year were in the South 25% in the West 17% in the Northeast 12% in the Midwest The vacation home buyer purchased a property that was a median distance of 435 miles from their primary residence 34% were within 100 miles 46% were more than 500 miles Financing 46% of vacation-home buyers paid cash in 2012 The median down payment was 27%, the same as in 2011 Tomorrow, we will cover the findings on investment properties.

Forget Rent I want to Own! Millennials!

Millennials: Not Destined to be Life-Long Renters [INFOGRAPHIC] Posted: 12 Apr 2013 04:00 AM PDT   Shared with Permission:  Millennials Won’t Be L

3 Reasons to Sell Your House Today! (Part II)

3 Reasons to Sell Your House ToThis week, we are going to look at the three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition. – The KCM Crew

Part II – Housing Supply is Low

A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

• 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
• 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
• 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.

Based on the table above, we can see that the supply/demand ratio is showing a sellers’ market where prices appreciate. This has created positive movement in housing values in most parts of the country.

Sellers have a great opportunity right now. Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best priceday! (Part II).

Feel free to call our Real Estate Experts at (888) 831-0736 for information about your market!

The Underwood Sales Group

Keller Williams Realty Pasadena

3 Financial Reasons to Buy a Home NOW! (Part III)

3 Financial Reasons to Buy a Home NOW! (Part III) This week, we are going to look at the three financial reasons to buy a home now instead of waiting: prices are rising, interest rates are increasing and rents are skyrocketing. – The KCM Crew Part III – Rents Are Skyrocketing Whether you own or rent, you will have a monthly housing expense. The question is how that expense will change in the future. When you purchase a home, for the most part, you lock-in that monthly housing expense for the length of the mortgage you take (15 or 30 years for example). When you rent a home, your housing expense is impacted by movements in the supply and demand for rental properties. Historically, residential rental rates increase by 3.2% on an annual basis. However, in the current housing environment, there is an increasing demand for residential rental properties. This increase in demand has dramatically impacted rates. Zillow, in their most recent report, revealed that rental rates in the U.S. increased by 4.5% over the last twelve months. Other studies have projected rental rate increases of 4-5% over the next few years. The only way to have control of your housing expense is to buy. But Isn’t Buying Much More Expensive Than Renting? Not right now! As a matter of fact, with prices down and mortgage rates at historic lows, it is LESS EXPENSIVE to buy than rent in most areas. In a recent report, Trulia revealed it is cheaper to buy than rent in ALL of America’s largest regions. According to Jed Kolko, Trulia’s Chief Economist: “People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets.” However, Kolko went on to say that this opportunity may soon disappear: “Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.” Again, the only way to lock-in your monthly housing expense is to take that decision out of the hands of a landlord by owning. With both prices and interest rates set to increase, the best time to buy is right now. Courtesy of the KCM Blog Folks! & The Underwood Sales Group