Gwinnett County Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local single family market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!  We are your local parkview and brookwood school real estate expert.  Give Harry a call at 404-213-6811 and find out how Harry Patel can help you sell your home for the most money and least hassle.

June 7, 2021

REAL ESTATE TERMS

 

A


Adjustable Rate Mortgage: (ARM):  
A home loan that can adjust the interest based upon market rates after the set fixed period on the note has expired. Generally an ARM will carry a lower interest rate than a fixed rate mortgage but is considered riskier because the interest rate is not fixed for the life of the loan.

Amortization: A term used to describe the process of paying off a loan over a predetermined period of time at a specific interest rate. The amortization of a loan includes payment of interest and a portion of the outstanding principal balance during each payment cycle.

Amortization Schedule: Provided by mortgage lenders, the schedule shows how over the term of your mortgage the principal portion of the mortgage payment increases and the interest portion of the mortgage payment decreases.

Annual Percentage Rate (APR): A term used in the Truth-In-Lending Act to represent the full cost of a loan. Stated as a yearly rate, APR includes base interest rate, loan origination fee (points), commitment fees, prepaid interest and other credit costs that may be paid by buyer.

Application Fee: The fee that a mortgage lender charges to apply for a mortgage to cover processing costs.

Appraisal: A professional analysis, including references to sales of comparable properties, used to estimate the value of the property.

Appraiser: A professional who conducts an analysis of the property, including references to sales of comparable properties in order to develop an estimate of the value of the property. The appraiser’s report is called an “appraisal”.

Appreciation: An increase in the property’s value due to changes in market conditions, the opposite of depreciation.

Assessed Value: The value that a public taxing authority places upon personal property for the purposes of taxation.

Assumable Mortgage: A mortgage that can be taken over and “assumed” by the buyer when a property is sold. This type of mortgage is quite popular if the seller has a low interest rate and the market rates are considerably higher.

B

Balloon Mortgage: A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.

Bankruptcy: Legally declared unable to pay your debts as they become due. Bankruptcy can severely impact your ability to borrow money. Talk to a credit counselor as soon as you realize you are having problems paying your bills on time to try to prevent bankruptcy.

C

Closing (Closing Date): When the real estate transaction between buyer and seller is completed. The buyer signs the mortgage documents and the closing costs are paid. The sale of the property is finalized by delivery of deed and the disbursement of funds necessary to the sale or loan transaction. Also known as the settlement date. In Washington, Sellers and Buyers sign documents one to two days prior to Close.

Closing Costs (Settlement Costs): The costs to complete the real estate transaction. These costs are in addition to the price of the home and are paid at closing. They include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other costs. Ask a lender or real estate professional for a complete list of closing cost items.

Condominium: A unit in a multiunit building. The owner of a condominium unit owns the unit itself and has the right, along with other owners, to use the common areas but does not own the common elements such as the exterior walls, floors and ceilings or the structural systems outside of the unit; these are owned by the condominium association. There are usually condominium association fees for maintenance for building and property upkeep, taxes and insurance on the common areas and reserves for improvements.

Counter-offer: An offer made in return by the person who rejects the previous offer.

Credit Bureau: A company that gathers information on consumers who use credit and sells that information in the form of a credit report to lenders.

Credit History: A credit history is the record of your usage of credit. It is a list of individual consumer debts and an indication as to whether or not these debts were paid back in a timely fashion or “as agreed”. Credit institutions have developed a complex recording system of documenting your credit history.

Credit Report: A document used by the credit industry to examine an individual’s use of credit. It provides information on money that individuals have borrowed from credit institutions and a history of payments.

Credit Score (FICO): A computer-generated number that summarizes an individual’s credit profile and predicts the likelihood that a borrower will repay future obligations.

D

Debt-To-Income Ratio: A comparison of gross income to housing and total monthly expenses.

Deed: The document that transfers ownership of a property.

Default: The inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms.

Deposit: See Earnest money.

Delinquency: Failure of a borrower to make timely mortgage payments under a loan agreement.

Discount Point: Paid at closing and calculated as a percentage the total loan amount, discount points are prepaid interest used to reduce the interest rate on a loan.

Down Payment: The portion of a home’s purchase price that is paid in cash and is not part of the home loan.

E

Earnest Money Deposit: The deposit you make to show in good faith that you are committed to buying the home. The deposit will not be refunded to you after the seller accepts your offer unless one of the sales contract contingencies is not satisfied. Your earnest money deposit is credited back at closing towards down payment or closing costs if the offer is accepted.

Escrow Account: A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes and homeowners insurance.

F

Fair Housing Act: A law that prohibits discrimination in all facets of the homebuying process on the basis of race, color, national origin, religion, sex, familial status, or disability.

Fair Market Value: The hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.

Fannie Mae: Federal National Mortgage Association (FNMA); a federally-chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, Fannie Mae supplies funds that lenders may loan to potential homebuyers.

FHA: Federal Housing Administration; established in 1934 to advance homeownership opportunities for all Americans; assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults; this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.

Fixed-Rate Mortgage: A home loan with an unchanging interest rate for the life of the loan and constant principal and interest payments.

Flood Insurance: Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.

Foreclosure: A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.

Freddie Mac: Federal Home Loan Mortgage Corporation (FHLM); a federally-chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders with funds for new homebuyers.

G

Ginnie Mae: Government National Mortgage Association (GNMA); a government-owned corporation overseen by the U.S. Department of Housing and Urban Development, Ginnie Mae pools FHA-insured and VA-guaranteed loans to back securities for private investment; as with Fannie Mae and Freddie Mac, the investment income provides funding that may then be lent to eligible borrowers by lenders.

Good Faith Estimate: An estimate of all closing fees including pre-paid and escrow items as well as lender charges; must be given to the borrower within three days after submission of a loan application.

H

Homeowner’s Insurance: A policy that protects you and the lender from fire or flood which damages the structure of the house; a liability, such as an injury to a visitor to your home; or damage to your personal property, such as your furniture, clothes or appliances. Homeowner’s insurance: an insurance policy that combines protection against damage to a dwelling and its contents with protection against claims of negligence or inappropriate action that result in someone’s injury.

Housing Expense Ratio: The percentage of your gross monthly income that goes toward paying for your housing expenses.

Home Inspection: A professional inspection of a home to review the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.

Home Warranty: Offers protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner’s insurance.

Housing Counseling Agency: Provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and homebuying.

HUD: The U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws.

HUD-1 Settlement Statement: A final listing of the costs of the mortgage transaction. It provides the sales price, and down payment, as well as the total settlement costs required from the buyer and seller.

I

Index: A measurement used by lenders to determine changes to the interest rate charged on an adjustable rate mortgage after the fixed period of the loan has expired.

Inflation: The number of dollars in circulation exceeds the amount of goods and services available for purchase; inflation results in a decrease in the dollar’s value.

Interest: The cost you pay to borrow money. It is the payment you make to a lender for the money it has lent to you. Interest is usually expressed as a percentage of the amount borrowed.

Interest Rate: The cost to borrow money expressed as a percentage.

Insurance: Protection against a specific loss over a period of time that is secured by the payment of a regularly scheduled premium.

J

Judgement: A legal decision; when requiring debt repayment, a judgement may include a property lien that secures the creditor’s claim by providing a collateral source.

K

L


Lien: A claim or charge on property for payment of some debt. With respect to a mortgage, it is the right of the lender to take the title to your property if you default and do not make the payments due on the mortgage.

Loan: Money borrowed with intent to repay.

Loan Fraud: Purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Loan-To-Value (LTV) Ratio: A percentage calculated by dividing the amount borrowed by the price of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.

Lock-In: Since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.

Loss Mitigation: A process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan.

Loan Origination Fees: The fee paid to your mortgage lender for their services of processing the mortgage application. This fee is usually in the form of a percentage of the loan amount.

Low Down Payment Feature: A loan program that requires little or no money down to purchase.

M

Margin: An amount the lender adds to an index to determine the interest rate on an adjustable rate mortgage.

Market Value: The current value of your home based on what a willing purchaser would pay. The value determined by an appraisal is often used to determine market value.

Mortgage: A loan secured by a lien on your home and property that secures the promise to repay a loan. In some states the term mortgage is also used to describe the document you sign to show that you have granted the lender a lien on your home; other states use a deed of trust document instead of a mortgage. It may also be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage is usually the purchase price of the home minus your down payment.

Mortgage Broker: An independent finance professional that specializes in bringing together borrowers and lender to facilitate real estate mortgages.

Mortgage Insurance (MI or PMI): A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance may be required for borrowers with a down payment of less than 20% of the home’s purchase price.

Mortgage Lender: The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing.

Mortgage Rate: The cost or the interest rate you pay to borrow the money to buy your house.

Mortgage Banker: A company that originates loans and resells them to secondary mortgage lenders like Fannie Mae or Freddie Mac.

N

O

Offer: A formal bid from the homebuyer to the home seller to purchase a home, generally put forth in writing.

Origination: The process of preparing, submitting, and evaluating a loan application; generally includes a credit check, verification of employment, and a property appraisal.

Origination Fee: Paid at closing and calculated as a percentage the total loan amount, origination points are paid to the mortgage company originating the loan for their services.

Open House: When the seller’s real estate agent opens the seller’s house to the public. You do not need a real estate agent to attend an open house.

P

PITI: Principal, Interest, Taxes, and Insurance: The four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and insurance goes into an escrow account to cover the fees when they are due.

PMI: See mortgage insurance.

Pre-Approval: Lender commits to lend to a potential borrower for generally 30 to 45 days; commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.

Pre-Approval Letter: A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. It also shows a home seller that you are a serious buyer.

Pre-Qualify: A lender informally determines the maximum amount an individual is eligible to borrow.

Pre-Qualification Letter: A letter from a mortgage lender that states that you are pre-qualified to buy a home but does not commit the lender to a particular mortgage amount.

Pre-Foreclosure Sale: Allows a defaulting borrower to sell the mortgaged property to satisfy the loan and avoid foreclosure. Also known as a Short Sale.

Premium: An amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Prepayment: Payment of the mortgage loan before the scheduled due date; may be subject to a prepayment penalty.

Principal: The amount of money borrowed to buy your house or the amount of the loan that has not yet been paid back to the lender. This does not include the interest you will pay to borrow that money. The principal balance (sometimes called the outstanding or unpaid principal balance) is the amount owed on the loan at any given time. It is the original loan amount minus the total repayments of principal you have made to date.

Points: Paid at closing and calculated as a percentage the total loan amount. For example, if a loan is made for $50,000, one point equals $500.

Predatory Lending: Abusive lending practices that include making a mortgage loan to an individual who does not have the income to repay it or repeatedly refinancing a loan, charging high points and fees each time and “packing” credit insurance on to a loan.

Q

R

Radon: A toxic gas found in the soil beneath a house that can contribute to cancer and other illnesses.

Replacement Cost: The cost to replace damaged personal property without a deduction for depreciation.

Rate Cap: The limit on the amount that the interest rate on an ARM can increase or decrease during any one adjustment period.

Ratified Sales Contract: A contract that shows both you and the seller of the house have agreed to your offer. This offer may include sales contingencies, such as obtaining a mortgage of a certain type and rate, obtaining acceptable inspections on the home, making repairs, closing by a certain date, etc.

Real Estate Professional: An individual who provides services in buying and selling homes. The real estate professional is paid a percentage of the home sale price by the seller. Unless you have specifically contracted with a buyer’s agent, the real estate professional represents the interest of the property seller. Real estate professionals may be able to refer you to local lenders or mortgage brokers, but are generally not involved in the lending process.

Refinancing: Paying off one loan by obtaining another; refinancing is generally done to secure better loan terms (like a lower interest rate).

REALTOR®: A real estate agent or broker who is a member of the NATIONAL ASSOCIATION OF REALTORS, and its local and state associations.

RESPA: Real Estate Settlement Procedures Act; a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.

S

Securities: A financial form that shows the holder owns a share or shares of a company (stock) or has loaned money to a company or government organization (bond).

Settlement: Another name for closing.

Subordinate: To place in a rank of lesser importance or to make one claim secondary to another.

Survey: A property diagram that indicates legal boundaries, easements, encroachments, rights of way, improvement locations, etc.

Sweat Equity: Using labor to build or improve a property as part of the down payment.

T

Title: The right to, and the ownership of, land by the owner. Title is sometimes used to mean the evidence or proof of ownership of land; although another term used for that is “deed”.

Title Insurance: Insurance that protects lenders and homeowners against loss of their interest in the property because of legal problems with the title.

Truth In Lending Act (TILA): Federal law which requires disclosure of a truth in lending statement for consumer loans. The statement includes a summary of the total cost of credit such as the APR and other specifics of the loan.

U

Underwriting: The process a lender uses to determine loan approval. It involves evaluating the property, the borrower’s credit, and ability to pay the mortgage.

Uniform Residential Loan Application: A standard mortgage application that your lender will ask you to complete. The form requests your income, assets, liabilities and a description of the property you plan to buy, among other things.

V

W

Warranties: Written guarantees of the quality of a product and the promise to repair or replace defective parts free of charge.

X

Y

Z

June 6, 2021

April 2021 Home Sales Report

April 2021 Sales and Average Sales Price Overview

There were 7,273 closings for Residential Single Family Detached in April 2021. This reflects an increase of 23% over April 2020.

There were 1,744 closings for Residential Single Family Attached in April 2021. This reflects an increase of 55% over April 2020.

The average sale price for Residential Single Family Detached was $417,018 for April 2021 vs. $330,748 for April 2020.

The average sale price for Residential Single Family Attached was $320,917 for April 2021 vs. $290,893 for April 2020.

YTD 2021 Sales and Average Sales Price Overview

There were 25,302 closings for Residential Single Family Detached for YTD 2021. This reflects an increase of 9% over YTD 2020.

There were 6,209 closings for Residential Single Family Attached for YTD 2021. This reflects an increase of 31% over YTD 2020.

The Residential Detached Average Sales Price YTD through April 2021 was $386,893 vs. $318,966 for YTD 2020. This represents an increase of 21% for YTD 2021 vs. YTD 2020.

The Residential Attached Average Sales Price YTD through April 2021 was $312,298 for YTD through April 2021 vs. $284,461 for YTD 2020. This represents an increase of 10% for YTD 2021 vs. YTD 2020.

April 2021 Active Inventory Overview

Active inventory level for Residential Single Family Detached continues to drop with 6,288 active listings as of the end of April 2021 vs. 16,640 active Residential Single Family Detached listings as of the end of April 2020. This represents drop in active inventory for Residential Single Family Detached of 62%.

Active inventory level for Residential Single Family Attached continues to drop with 1,979 active listings as of the end of April 2021 vs. 3,720 active Residential Single Family Attached listings as of the end of April 2020. This represents drop in active inventory for Residential Single Family Attached of 47%.

Total Active Listings All Property Types

April 2021 March 2021 April 2020

14,845 14,134

28,733

There were 13,455 new listings entered for all property types in April 2021 vs. 10,467 new listings entered for all property types in April 2020. Total new listings entered for all property types in YTD 2021 was 46,683 vs. 45,858 new listings entered for all property types in YTD 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: FMLS

June 6, 2021

Invest in Home Remodels With Personal Health and Wellness In Mind

Guest Article by Natalie Jones, homeownerbliss.info

With so many people staying in due to the pandemic, concerns about maintaining the health of our homes are on the rise. Issues that are easy to ignore when you are out and about all day become more pressing when you’re home all the time for months on end. Even if you have plans to eventually relocate, it’s a good idea to invest in home improvements that can enhance personal wellness. Local real estate expert Harry Patel offers guidance on some of the more effective and affordable ways to make your single family home healthier and more appealing to potential buyers.

Start by decluttering.

A messy, disorganized house takes its toll both physically and mentally. Numerous studies have linked clutter to negative feelings, and even increased anxiety and depression. Clutter can detract from one’s physical well-being too. Clutter makes it difficult to clean, so dust and allergens accumulate, and dirty areas can harbor harmful bacteria and mold. Living in clutter can even lead to physical injury: disorganized clutter puts one at risk of tripping and falling.

Simplify, simplify, simplify.

Tidying up has to go beyond simply moving all your possessions into boxes or closets. You need to sort through and get rid of things you don’t need that are taking up space. This is especially important if you plan to put your single-family home on the market soon. Opening a closet and having a heap of junk fall out may be funny on television, but in real life, it makes a bad impression. Once you have created a new space in your home, it will be easier to make healthy choices like working out or meditating. You could also set aside a spare room for reading and relaxation. 

Do a deep clean.

Once the clutter is out of the way, clean your house as thoroughly as possible. If you have any curtains, give them a good wash. Blinds should be wiped down with a gentle cleanser or vinegar solution.  Carpets should not only be vacuumed but also shampooed to get rid of deeply ingrained dust and grime. Give all your furnishings and baseboards a good dusting—and don’t neglect light fixtures and ceiling fans, either. Removing accumulated dust will decrease allergens and make your home brighter and more appealing.

Get rid of any potential toxins.

One of the easiest ways to minimize toxins in the home is to switch out chemical-based cleaners with more natural or gentle ones. Look for varieties like Mrs. Meyer’s, Seventh Generation or Dr. Bronner’s, which you can find at stores like Walmart or Target. If you buy online, you can usually dig up Target coupons or Walmart promotions.

Be mindful of the plastics you are using too, especially for food storage since many contain harmful substances. Install a water filtration system if you have concerns about heavy metals or microorganisms in your water supply. You can also reduce harmful toxins by simply adding a few houseplants to your interior—this will also improve your ambiance and brighten your mood.

Go green when you renovate.

Changes that are worth investing in for home appeal and future resale include painting, floor remodels, and landscaping improvement. Be sure to look into eco-friendly options when you consider these or other updates. If you’re fixing your lighting, for example, purchase eco-friendly bulbs and materials—or see how you can open or alter windows to increase the natural lighting in your home. If your walls or trim need to be repainted, try some of the nontoxic environmentally friendly paints on the market.

Work with a good contractor.

For other alterations, such as flooring or window replacement, you may require the help of a professional. Shop around for a reliable and affordable contractor who will work with you on eco-friendly renovations. Instead of carpet, consider using sustainable material such as bamboo or cork, or environmentally friendly materials like concrete or reclaimed hardwood. If you decide the exterior of your home also needs a refresh, talk to a landscaping contractor about setting up a low water use yard.

It doesn’t take much to make your home a healthier place, and changes to your environment can even help you develop better wellness habits. Renovating your single-family home with an eye toward health and wellness can also make it more appealing to buyers. With so much extra time at home right now, take the opportunity to make your home the healthy retreat you need.

If you are thinking of selling your home or are in search of a new single family home in Gwinnett County, contact Harry Patel Real Estate.

Image via Pixabay

 

 

 

 

 

 

May 31, 2021

Buying a Single Family Home Is Still Affordable

 

Buying a Home Is Still Affordable | MyKCM

The last year has put emphasis on the importance of one’s home. As a result, some renters are making the jump into homeownership while some homeowners are re-evaluating their current house and considering a move to one that better fits their current lifestyle. Understanding how housing affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down the optimal window of time in which to make a purchase of Single Family Homes.

There are three main factors that go into determining how affordable homes are for buyers:

  1. Mortgage Rates
  2. Mortgage Payments as a Percentage of Income
  3. Home Prices

The National Association of Realtors (NAR) produces a Housing Affordability Index. It takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:Buying a Home Is Still Affordable | MyKCMThe blue bar represents today’s affordability. We can see that homes are more affordable now than they’ve been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market for almost one hundred years.

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it’s more affordable to buy a home today than at any time in the last eight years.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Summary

 

If you feel ready to buy, purchasing a home this summer may save you a significant amount of money over time based on historical affordability trends. Let’s connect today to determine if now is the right time for you to make your move.

Single Family Homes For Sale - Lilburn - Lawrenceville - Stone Mountain - Snellville - Grayson

 

Sell my Lilburn, Lawrenceville, Snellville, Tucker, Grayson, or Stone Mountain Home Now!
May 29, 2021

Sellers Are Ready To Enter the Housing Market

 

Sellers Are Ready To Enter the Housing Market | MyKCM

One of the biggest questions in real estate today is, “When will sellers return to the housing market?” An ongoing shortage of home supply has created a hyper-competitive environment for hopeful buyers, leading to the ultimate sellers’ market. However, as the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.

The Home Purchase Sentiment Index (HPSI) by Fannie Mae recently noted the percentage of consumer respondents who say it’s a good time to sell a home increased from 61% to 67%. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, indicates:

Consumer positivity regarding home-selling conditions nearly matched its all-time high.” (See graph below):

Sellers Are Ready To Enter the Housing Market | MyKCMFannie Mae isn’t the only expert group noticing a rise in the percentage of people thinking about selling. George Ratiu, Senior Economist at realtor.comshares:

“The results of a realtor.com survey . . . showed that one-in-ten homeowners plans to sell this year, with 63 percent of those, looking to list in the next 6 months. Just as encouragingly, close to two-thirds of sellers plan to sell their homes at prices under $350,000, which would offer a tremendous boost to affordable housing for first-time buyers.”

 

Bottom Line

If you’re considering selling your house, don’t wait for more competition to pop up in your neighborhood. Let’s connect today to explore the benefits of selling your house now before more homes come to the market.

May 19, 2021

Experts Say Home Prices Will Continue Upward

 

Experts Say Home Prices Will Continue to Appreciate | MyKCM

It’s clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for “When is the housing market going to crash?” has actually spiked 2450% over the past month.

In addition, Jim Dalrymple II of Inman News notes:

“One of the most noteworthy things that came up in Inman’s conversations with agents was that every single one said they’ve had conversations with clients about whether or not the market is heading into a bubble.”

To alleviate some of these concerns, let’s look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here are their statements on the issue:

Goldman Sachs’ Research Note on Housing:

“Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. ... consumer surveys indicate that household buying intentions are now the highest in 20 years. … As a result, the model projects double-digit price gains both this year and next.

 

Morgan Stanley, Thoughts on the Market Podcast:

“Unlike 15 years ago, the euphoria in today's home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”

Merrill Lynch’s Capital Market Outlook:

“There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.”

Summary 

 

If you’re concerned about making the decision to buy or sell right now, let’s connect to discuss what’s happening in our local market.

May 16, 2021

When It Comes To Selling a House, Your Time Is Money

 

When It Comes To Selling a House, Your Time Is Money [INFOGRAPHIC] | MyKCM

Some Highlights

      • Selling a house is no small task. If you decide to try to do it on your own, keep in mind you’ll be responsible for all the expert-level work of a real estate professional.

 

  • The vital tasks an agent manages for you include listing and marketing your house, handling legal documentation, negotiating with all parties, and navigating local laws and regulations.
  • If you’re ready to sell while the market is in your favor, let’s connect to make sure you have the professional expertise you need every step of the way.

 

 

May 13, 2021

Why Waiting to Buy a Home Could Cost You a Small Fortune

Why Waiting to Buy a Home Could Cost You a Small Fortune | MyKCM

Many people are sitting on the fence trying to decide if now’s the time to buy a home. Some are renters who have a strong desire to become homeowners but are unsure if buying right now makes sense. Others may be homeowners who are realizing that their current home no longer fits their changing needs.

To determine if they should buy now or wait another year, they both need to ask two simple questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

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

Where will home prices be a year from now?

If you average the most recent projections from the major industry forecasters, the expectation is home prices will increase by 7.7%. Let’s take a house that’s valued today at $325,000 as an example.

If the buyer makes a 10% down payment ($32,500), they’ll end up borrowing $292,500 for their mortgage. Applying the projected rate of home price appreciation, that same house will cost $350,025 next year. With a 10% down payment ($35,003), they’d then have to borrow $315,022.

Therefore, as a result of rising home prices alone, a prospective buyer will have to put down an additional $2,503 and borrow an additional $22,523 just for waiting a year to make their move.

Where will mortgage rates be a year from now?

Today, mortgage rates are hovering around 3%. However, most experts believe they’ll rise as the economy continues to recover. Any increase in the mortgage rate will also increase a purchaser’s cost. Here are the forecasts for the first quarter of 2022 from four major entities:

  • Freddie Mac – 3.5%
  • Fannie Mae – 3.5%
  • National Association of Realtors – 3.5%
  • Mortgage Bankers Association – 3.9%

The projections average out to 3.6% among these four forecasts, a jump up from where they are today.

What does it mean to you if home values and mortgage rates increase?

A buyer will pay a lot more in mortgage payments each month if both of these variables increase. Assuming a buyer purchases a $325,000 home this year with a 30-year fixed-rate loan at 3% after making a 10% down payment, their monthly principal and interest payment would be $1,233.

That same home one year from now could be $350,025, and the mortgage rate could be 3.6% (based on the industry forecasts mentioned above). That monthly principal and interest payment, after putting down 10%, totals $1,432.

The difference in the monthly mortgage payment would be $199. That’s $2,388 more per year and $71,640 over the life of the loan.

Add to that the approximately $25,000 a house with a similar value would build in home equity this year as a result of home price appreciation, and the total net worth increase a purchaser could gain by buying this year is nearly $100,000. That’s a small fortune.

Bottom Line

When asking if they should buy a home, many potential buyers think of the nonfinancial benefits of owning a home. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

May 11, 2021

The Power of Mortgage Pre-Approval

The Power of Mortgage Pre-Approval [INFOGRAPHIC] | MyKCM

Some Highlights 

  • Mortgage pre-approval means a lender has reviewed your finances and, based on factors like your income, debt, and credit history, determined how much you’re qualified to borrow.
  • Being pre-approved for a loan can give you clarity while planning your homebuying budget, confidence in your ability to secure a loan, and a competitive edge in a bidding war.
  • In today’s market, connecting with a lender to get pre-approved may be the game-changer that helps you secure your dream home.
May 11, 2021

3 Graphs Showing Why You Should Sell Your House Now

3 Graphs Showing Why You Should Sell Your House Now | MyKCM

There’s no doubt that 2021 is the year of the seller when it comes to the housing market. If you’re a homeowner thinking of moving to better suit your changing needs, now is the perfect time to do so. Low mortgage rates are in your favor when you’re ready to purchase your dream home, and high buyer demand may give you the leverage you need to negotiate the best contract terms on the sale of your house. Here’s a look at what’s driving this sellers’ advantage and why there’s so much opportunity for homeowners who are ready to move this season.

1. Historically Low Inventory

The National Association of Realtors (NAR) explains:

 “Total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February's inventory . . . Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February's 2.0-month supply and down from the 3.3-month supply recorded in March 2020.”

Even with a slight rise in the number of houses for sale this spring, inventory remains near an all-time low (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMHigh buyer interest is creating a major imbalance between supply and demand, but as the small uptick in inventory shows, sellers are beginning to reenter the market. Selling your house now enables you to take advantage of buyer demand and get the most attention for your house – before more listings come to the market later this year.

2. Frequent Bidding Wars

As a result of the supply and demand imbalance, homebuyers are entering bidding wars at an accelerating rate. NAR reports the average number of bids received on the most recently closed sales is 4.8 offers. This number has doubled since the first quarter of 2020 (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMAs buyers face increasingly tough competition while searching for homes to purchase, they’re more likely to be flexible and generous in their negotiations. This gives a seller the opportunity to choose the best buyer for their needs and be selective about things like time to close, contingencies, renovations, and more. Working with your trusted agent is the best way to determine how to navigate the negotiation process when selling your house.

3. Days on the Market

In today’s market, sellers aren’t waiting very long to find a buyer for their house, either. NAR reports:

Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. 83% of the homes sold in March 2021 were on the market for less than a month.” (See graph below):

3 Graphs Showing Why You Should Sell Your House Now | MyKCMNAR Chief Economist Lawrence Yun explains:

"The sales for March would have been measurably higher, had there been more inventory…Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”

Bottom Line

If you’re thinking about moving, these three graphs clearly show that it’s a great time to sell your house. Let’s connect today so you can learn more about the opportunities in our local area.