Housing Bubble ? – Experts say….

A Housing Bubble? Industry Experts Say NO!

A Housing Bubble? Industry Experts Say NO! | MyKCMWith residential home prices continuing to appreciate at levels above historic norms, some are questioning if we are heading toward another housing bubble (and subsequent burst) like the one we experienced in 2006-2008.

Recently, five housing experts weighed in on the question.

Rick Sharga, Executive VP at Ten-X:

“We’re definitely not in a bubble.”

“We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but…while prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars.”

Christopher Thornberg, Partner at Beacon Economics:

“There is no direct or indirect sign of any kind of bubble.”

“Steady as she goes. Prices continue to rise. Sales roughly flat.…Overall this market is in an almost boring place.”

Bill McBride, Calculated Risk:

“I wouldn’t call house prices a bubble.”

“So prices may be a little overvalued, but there is little speculation and I don’t expect house prices to decline nationally like during the bust.”

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices:

“Housing is not repeating the bubble period of 2000-2006.”

“…price increases vary unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”

Bing Bai & Edward Golding, Urban Institute:

“We are not in a bubble and nowhere near the situation preceding the 2008 housing crisis.”

“Despite recent increases, house prices remain affordable by historical standards, suggesting that home prices are tracking a broader economic expansion.”

It’s an excellent time to get involved in real estate! Just ask some of my clients! Let’s talk 413.301.4614

ToriDentonRealtor.com

Helping you make the right MOVE – one HOME at a time!

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The Truth About Homeowner Equity

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Weeding out the deceit & falsehoods of the housing market media:

A recent article from a reputable news source was titled: Here’s why some homeowners still can’t sell. In the opening bullets of the article, the author claimed, “Negative equity is one of the main reasons why there are so few homes for sale.” This really could not be further from the truth! The article then goes on to soften that stance but we want to bring better clarity to the equity situation.

A recent report from CoreLogic (which was quoted in the article) revealed that over 80% of all homes now have “significant equity,” which means the home has over 20% equity in their home. This level of equity allows the homeowner to easily sell their home if they so desire.

If eight out of ten homeowners now have significant equity in their homes, it is hard to make the claim that lack of equity is “one of the main reasons why there are so few homes for sale.”

Massachusetts and Connecticut both support the data showing a huge number homeowners with significant equity!

Here is a map showing the percentage of homes in each state which currently have significant equity:

The Truth About Homeowner Equity | MyKCM

Bottom Line

If you are one of many homeowners who is debating selling your home and are wondering how much equity you have accumulated, let’s get together to determine if now is the time to sell your home, update, move up or down-size!

Let’s make a good strategy together! 413.301.4614 – tedenton109@gmail.com

Tori Denton, PSA, CMHS, Realtor®

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ToriDentonRealtor.com

Helping you make the right MOVE – One HOME at a time!

Do You Know What to do with the Equity in Your Home?

BOTTOM LINE:

If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2017! Let’s get together to evaluate your situation!

That’s what I did with Rodney and Sara – they used the equity in their first home to purchase a new, bigger home that fits the WHOLE family- dogs, toys and all!

Smart move – they went to the closing table owing NOTHING!

WOW! You could do the same…  Let’s talk about your next dream home!

My website

Email: tedenton109@gmail.com

Call or text – 413.301.4614 –

You may not sell a house every week, but I kind of do 🙂

                              Let me give you a hand!

The FACTS:

Do You Know How Much Equity You Have in Your Home? | MyKCM

 

CoreLogic’s latest Equity Report revealed that 91,000 properties regained equity in the first quarter of 2017. This is great news for the country, as 48.2 million of all mortgaged properties are now in a positive equity situation.

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.”

Frank Martell, President and CEO of CoreLogic, believes this is a great sign for the market in 2017 as well, as he had this to say:

Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”

This is great news for homeowners! But, do they realize that their equity position has changed?

According to the Fannie Mae’s Home Purchase Sentiment Index (HPSI), more homeowners are beginning to realize that they may have more equity than they first thought.

This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy.

78.8% of homeowners have significant equity (more than 20%) in their homes today!

This means that many Americans with a mortgage have an opportunity to take advantage of today’s seller’s market. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae spoke out on this issue:

“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market. However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market…” 

 

Here’s WHY You Should BUY

Real Estate Mogul: Here’s Why You Should Buy | MyKCM

Real Estate mogul, Sean Conlon, host of The Deed: Chicago on CNBC, was recently asked the question, should you buy? Or should you rent a house?

 

Conlon responded:

“I am a true believer that you save every penny and you buy your first house… and that is still the fastest path to wealth in this country.”

Conlon went on to suggest that first-time buyers put down 10-20% “if they can make it work,” and to remain in their home at least 4-5 years to see a return on their investment.

Who is Sean Conlon, and why should you listen to his advice?

Within a few years of working in the real estate industry, Conlon had established himself as one of the leading agents in the United States and has founded 3 billion-dollar brokerages dealing in residential, commercial and investment sales. Since immigrating to America from the United Kingdom in 1990, he believes very strongly in the American Dream and the role that homeownership plays in achieving it. Conlon is quoted on his website as saying:

“I treat people the way I would like to be treated if I went in to buy a house and I work harder than anybody I know. I think if you do that in America, you will always succeed.”

Bottom Line

Homeownership is an investment you can leverage against in the future that not only provides shelter and safety but also helps you build your family’s wealth. If you are debating whether or not to purchase a home this year, let’s get together to discuss the opportunities available in today’s market!

Home Prices: Where Will They Be in 5 Years?

My clients make good decisions because they are well-educated… the transaction is well-executed, and the CLOSING is well-delivered! Here’s a sample of the information I provide to my clients (short & sweet, just the meat – no fillers):
Home Prices: Where Will They Be in 5 Years? | MyKCM

Today, many real estate conversations center on housing prices and where they may be headed. That is why I like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.0% over the course of 2017, 3.2% in 2018 and 3.0% the next three years (as shown below). That means the average annual appreciation will be 3.24% over the next 5 years.

Home Prices: Where Will They Be in 5 Years? | MyKCM

The prediction for cumulative appreciation ticked up from 18.7% to 21.4% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 10.2%.

Home Prices: Where Will They Be in 5 Years? | MyKCM

In A Nutshell

Individual opinions make headlines but I believe this survey is a fairer depiction of future values. Who wouldn’t want to make an average of 21% on a 5 year investment?

The market is still appreciating. That means it’s good to be a buyer OR a seller at this time… If you are a seller your house has appreciated and you have significant equity in your house allowing you to MOVE UP to your dream home. If you are a buyer, you still have plenty of appreciation left in a new home and if purchasing your first home (at historically LOW interest rates) you are STILL making a great INVESTMENT!

Got questions?? I’ve got answers – let me add some value to your financial knowledge database! My clients make good decisions because they are well-educated, the transaction is well-executed, and the CLOSING is well-delivered!

Contact me today to learn more! 413.301.4614 OR tedenton109@gmail.com

Thoughts on Multi-generational Living…

Multi-generational homes are coming back in a big way!

In the 1950s, about 21%, or 32.2 million Americans shared a roof with their grown children or parents. According to a recent Pew Research Center report, the number of multi-generational homes dropped to as low as 12% in 1980 but has shot back up to 19%, roughly 60.6 million people, as recently as 2014.

Multi-generational households typically occur when adult children (over the age of 25) either choose to, or need to, remain living in their parent’s home, and then have children of their own. These households also occur when grandparents join their adult children and grandchildren in their home.

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Large Farmhouse – Westfield (Wyben), MA

12 beautifully updated rooms!

6 bedrooms, eat-in country kitchen, formal dining room, living room, heated 4-season room, sitting room, 1st floor laundry, garage, mountain views – on just over 1 acre!

According to the National Association of Realtors’ (NAR) 2016 Profile of Home Buyers and Sellers, 11% of home buyers purchased multi-generational homes last year. The top 3 reasons for purchasing this type of home were:

  • To take care of aging parents (19%)
  • Cost savings (18%, up from 15% last year)
  • Children over the age of 18 moving back home (14%, up from 11% last year)

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Multi-family Home in Historic District – Granville, MA

3 Bedrooms, 2 livingrooms, 2 kitchens… private or interior entrance, decks, porches, balcony.

Walk to town green, on over 3 acres!

Donna Butts, Executive Director of Generations United, points out that,

“As the face of America is changing, so are family structures. It shouldn’t be a taboo or looked down upon if grown children are living with their families or older adults are living with their grown children.”

For a long time, nuclear families (a couple and their dependent children) became the accepted norm, but John Graham, co-author of “Together Again: A Creative Guide to Successful Multi-generational Living,” says, “We’re getting back to the way human beings have always lived in – extended families.”

ONE good reason is basic economics… you can buy more house with more people, split the utilities and food… and if it’s going to take a village to raise your children, why not have your village all under one roof!

Carmen Multhauf, co-author of the book “Generational Housing: Myth or Mastery for Real Estate,” brings to light the fact that rents and home prices have been skyrocketing in recent years. She says that, “The younger generations have not been able to save,” and often struggle to get good-paying jobs.

In light of this – it makes really good sense for some family units to explore the multi-generational alternative!

The two homes pictured in this blog are for sale and offer the convenience  of location, space and personal areas as well as shared areas! Contact me today to discuss this article, tour these houses, or learn more about the multi-generational living option!

cell/text: 413.301.4614 or tedenton109@gmail.com

Bottom Line

Multi-generational households are making a comeback. While it is a shift from the more common nuclear home, these households might be the answer that many families are looking for as home prices continue to rise in response to a lack of housing inventory.

3 Simple Steps to 3%

3 steps to 3percent

Start today.. contact me or your lender and discuss what your first step needs to be. You may be more ready than you think!

If you can gather first, last, and security deposit to rent … why not put that same cash to work as a down payment on your OWN home! Rents can be substantially higher than a mortgage… after all you are always paying a mortgage – why pay your landlord’s when you could be building equity for yourself!

 

Got questions?? I’ve got answers – contact me to day!

Further Proof This Isn’t a Housing Bubble

Further Proof This Isn’t a Housing Bubble | Simplifying The Market

Two weeks ago, we posted a blog which explained that current increases in home prices were the result of the well-known concept of supply & demand and should not lead to conversations of a new housing bubble. Today, we want to look at home prices as compared to current incomes.

Here is a graph showing the monthly mortgage payment on a median priced home in the U.S. over the last 25 years:

Further Proof This Isn’t a Housing Bubble | Simplifying The Market

 

Mortgage payments are currently well below the historic average over that time period. Purchasers are not overextending themselves to buy a home like they did on the run-up to the housing crash.

Lawrence Yun, the Chief Economist at the National Association of Realtors, recently explained in a Forbes article:

“Even though home prices are climbing far above people’s income, exceptionally low mortgage rates have permitted people to buy a home without overstretching their budget. For someone making a 20% down payment, the monthly mortgage payment at today’s mortgage rates would take up 15% of a person’s gross income. During the bubble years, it was reaching 25% of income. The long-term historical average is around 20%. Therefore, a middle-income household does not need to overstretch their budget much if at all to buy a typical home.”

Bottom Line

Due to low interest rates, demand for housing has dramatically increased. This has caused a jump in home prices. However, low interest rates have also allowed the monthly cost of buying a home to remain well below historic norms. We are in a strong housing market, not a housing bubble.

Inventory is the issue here – No bubble here! Would you like to know more?? Contact me with your questions or concerns about today’s market. My clients are educated before they make life changing decisions – not educated by them!

I believe every buyer and seller should have the information necessary to make their own qualified decisions… I provide information, advice, guidance, and follow-up…. Let’s work together and make your REALTY dreams a REALITY!

What’s going on with Falling Interest Rates??

    Is now the best time to act on Falling Interest Rates???

The headlines agree mortgage interest rates have dropped substantially below initial projections.

Are you one of the many who are considering purchasing a home or moving up to their dream home??

Let’s take a minute and review what’s happening in our market right now and draw some conclusions about market timing in 2015…

A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR) provides insight into one major factor in the decline in interest rates, the price of crude oil.

“As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.”

You may have noticed that filling your gas tank has become substantially less expensive in recent months. The average in Westfield is $2.05, not long ago we were looking at more than double that price!  The average US household is projected to save around $550 in 2015.

So what’s the connection to Interest Rates?

“Lower oil prices mean lower inflation rate, which pushes down mortgage rates.”

Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%.

Primary Mortgage Market Survey

“The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas.”

How long will rates stay low?

No one really knows how long oil prices will continue to support low mortgage rates. In a New York Times article, the author points to the fact that “adding hundreds of billions of dollars to consumer spending” could start to have a “counter effect” on rates as the economy continues to strengthen.

So what’s the conclusion:

Don’t wait too long

The low interest rates we are currently experiencing are not going to stay around forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015.

Interest Rates 2015 | Keeping Current Matters

The NAR reports: “At the median home price of $205,300, a 0.75 percentage point drop in mortgage rates will yield savings of about $1,000 annually.”

If you are in a position to buy a home make sure that you meet with a local real estate professional with their finger on the pulse of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.

To learn more about your local market or discuss this article please feel free to contact me!

Tori Denton, REALTOR®

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