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Is Your First Home Now Within Your Grasp? [INFOGRAPHIC]

Is Your First Home Now Within Your Grasp? [INFOGRAPHIC] | Simplifying the Market

Is Your First Home Now Within Your Grasp? [INFOGRAPHIC] | Simplifying the Market

Some Highlights:

  • According to the US Census Bureau, “millennials” are defined as 18-36-year-olds.
  • According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.
  • More and more “old millennials” (25-36) are realizing that homeownership is within their grasp now!
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Americans’ Powerful Belief in Homeownership as an Investment

American’s Powerful Belief in Homeownership as an Investment | Simplifying The Market

The Federal Reserve Bank (The Fed) recently released their 2019  Survey of Consumer Expectations Housing Survey. The survey reported that 65% of Americans believe homeownership is a good financial investment. Since 2014, the percentage has increased by over nine percent.Americans' Powerful Belief in Homeownership as an Investment | Simplifying The MarketThe Fed’s survey also showed that when the results are broken down by age, education, income, or region of the country, more than 55% of Americans in each category see homeownership as a good investment.

This coincides with a recent Gallup survey of Americans which revealed that real estate was their number one choice for the best long-term investment when compared to stocks, savings accounts or gold.

Bottom Line

Americans’ belief in residential real estate as a good financial investment continues to grow as the housing market returns to normalcy.

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

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

Homes priced at the top 25% of the price range for a particular area of the country are considered “premium homes.” In today’s real estate market, there are deals to be had at the higher end! This is great news for homeowners wanting to upgrade from their current house.

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

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

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

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

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

Luxury can mean different things to different people. To one person, luxury is a secluded home with plenty of property and privacy. To another, it could be a penthouse at the center of a bustling city. Knowing what characteristics mean luxury to you will help your agent find you the home of your dreams.

Bottom Line

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

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Is Mortgage Debt out of Control?

Is Mortgage Debt out of Control? | Simplifying The Market

The housing crisis of the last decade was partially caused by unhealthy levels of mortgage debt. Homeowners were using their homes as ATMs by refinancing and swapping their equity for cash.

When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home). As a result, they walked away. This caused prices to fall even further.

Headlines are again talking about record levels of mortgage debt, making the comparison to the challenges that preceded the housing crash. However, cumulative debt is not an important data point. If we look at the debt as a percentage of disposable personal income, we are at an all-time low.

Here’s a visual representation of mortgage debt as a percent of income:Is Mortgage Debt out of Control? | Simplifying The MarketFurthermore, according to a new report from ATTOM Data Solutions, more than 1-in-4 homes with a mortgage have at least 50% equity. The report explains:

“[O]ver 14.5 million U.S. properties were equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value — up by more than 834,000 from a year ago to a new high as far back as data is available, Q4 2013.”

Bottom Line

Unlike 2008, homeowners have a comfortable level of mortgage debt and are sitting on massive amounts of home equity. They will not be walking away from their homes if the housing market begins to soften.

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Millennials Are Increasing the Demand for Condominiums

Millennials Are Increasing the Demand for Condominiums | Simplifying The Market

When deciding to buy a home, people are presented with many different options. The type of home you buy depends on your needs, budget, and in many cases, the desired maintenance level. For many millennials, their choice has been buying a condominium!

According to CoreLogic,

Last year about 43% of all condo home-purchase mortgage applications were submitted by FTHBs… Similarly, the data show condos were more popular with young homebuyers and empty nesters. For instance, 21% of all condo home-purchase mortgage applications were submitted by buyers aged 18 to 30, compared with just 17% of all single-family home-purchase mortgage applications by the same group in 2018.”

With home prices increasing year-over-year, it makes sense millennials are buying condos instead of a single-family house. As a result, the demand for this type of home has been increasing.Millennials Are Increasing the Demand for Condominiums | Simplifying The MarketAs this graph explains,

The younger millennials are the largest cohort and are likely to drive much of the condo demand in the coming years”.

Bottom Line

If you are a millennial considering buying a home, understand that there are many options available. You may find yourself in a condominium as your first home. If you would like to determine which type of home best fits your needs, let’s get together to evaluate your options!

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Top 5 Reasons You Should NOT FSBO

Top 5 Reasons You Should NOT FSBO | Simplifying The Market

Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.

The top 5 reasons are listed below:

1. Online Strategy for Prospective Purchasers

Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 50% on the Internet
  • 28% from a Real Estate Agent
  • 7% from a yard sign
  • 1% from newspapers

The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser, if there is a question of value

4. FSBOing Has Become Increasingly Difficult

The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance of a bidding war for the property. The study found the difference in price between comparable homes of size and location is currently at an average of 6%.

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?

Bottom Line

Before you decide to take on the challenge of selling your house on your own, let’s get together to discuss your needs.

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Americans Rank Real Estate Best Investment for 6 Years Running! [INFOGRAPHIC]

Americans Rank Real Estate Best Investment for 6 Years Running! [INFOGRAPHIC] | Simplifying The Market

Americans Rank Real Estate Best Investment for 6 Years Running! [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Real estate has outranked stocks/mutual funds, gold, savings accounts/CDs, and bonds as the best long-term investment among Americans for the last 6 years.
  • Stock owners are more positive about real estate than stocks as an investment.
  • Of the 4 listed, real estate is the only investment you can also live in!
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Stop Wondering What Your Budget Is & Get Pre-Approved!

Stop Wondering What Your Budget Is & Get Pre-Approved! | Simplifying The Market

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

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Young First-Time Buyers Are Saving for Their Dream Homes

Young First-Time Buyers Are Saving for Their Dream Homes | Simplifying The Market

Young buyers (Millennials & Gen Z) have waited longer than previous generations to enter the housing market for their first home. However, this hasn’t stopped them from dreaming about the home they will eventually buy. Many spend hours searching listings and building Pinterest boards of their favorite home features.

According to a survey from Open Listings, 70% of single renters are more likely to spend their Sunday nights swiping through house listings than dating profiles.

All that time window shopping has led 45% of millennials to expect the first home they buy to be their “dream home”! They are willing to wait longer, save more for a larger down payment, and are pickier about the listings they want to tour and the features that they want to see in their first home.

Waiting a little longer to buy a home than their parents or grandparents did has also helped young buyers become more established in their careers prior to making such a large purchase. Lawrence Yun, NAR’s Chief Economist, recently commented,

“Older millennials are now entering the prime earning stages of their careers, and the size and costs of homes they purchase reflect this. Their choices are falling more in line with their Gen X and boomer counterparts.”

In some areas of the country, high competition in the starter home market forces young buyers to wait longer. The extra money they save during that time opens their search to bigger, more expensive homes.

If this trend continues, older millennials will skip the starter home altogether, going straight to a trade-up or premium home instead.

Bottom Line

If you are one of the many young renters planning on buying your first home soon, let’s get together to help determine what type of home will best suit your present and future needs.

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5 Reasons to Sell Your House This Summer

5 Reasons to Sell Your House This Summer | Simplifying The Market

Here are 5 compelling reasons listing your home for sale this summer makes sense.

1. Demand Is Strong

The latest Buyer Traffic Index from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other for the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply needed for a normal housing market. This means that, in most of the country, there are not enough homes for sale to satisfy the number of buyers.

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

Many homeowners were reluctant to list their home over the last couple of years for fear that they would not find a home to move in to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you to decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. Buyers know exactly what they can afford before home shopping. This makes the entire selling process much faster and simpler. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 43 days. (Last numbers available.)

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has created a buyer’s market. This means that if you are planning on selling a starter or trade-up home, it will sell quickly, AND you’ll be able to find a premium home to call your own!

According to CoreLogic, prices are projected to appreciate by 4.8% over the next year. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to start living the life you desire.

That is what is truly important.