Home Selling โ€ข Homebuying โ€ข Real Estate โ€ข September 28, 2022

What Experts Say Will Happen with Home Prices Next Year

What Experts Say Will Happen with Home Prices Next Year

What Experts Say Will Happen with Home Prices Next Year | MyKCM

Experts are starting to make their 2023 home price forecasts. As they do, most agree homes will continue to gain value, just at a slower pace. Over the past couple of years,ย home pricesย have risen at an unsustainable rate, leaving many to wonder how long it would last. If youโ€™re asking yourself:ย whatโ€™s ahead for the price of my home,ย know that experts are now answering this question, and its welcome news for homeowners who may have been led by the media to believe their home would lose value.

Historically, home prices have appreciated at a rate nearย 4%. For 2023, the average of six major forecasters noted below is 2.5%.ย While one,ย Zelman & Associates, is calling for depreciation, the other five are calling for appreciation. The graph below outlines each expert forecast to show where they project home prices are going in the coming year.

What Experts Say Will Happen with Home Prices Next Year | MyKCM

To understand why experts are calling for appreciation next year, look to the economics of supply and demand. Dave Ramsey, Financial Expert,ย saysย this:

โ€œThe root issue of what drives house prices almost always isย supply and demand . . .โ€ย  ย 

Two things are driving home prices upward. First, theย undersupplyย of homes on the market is an issue we continue to face in this country. We still donโ€™t haveย enough homesย on the market for theย number of peopleย that want to buy them. To further that point, weโ€™re still in aย sellersโ€™ marketย nationally, and in that scenario, home prices tend to appreciate.

Second, millennials are moving through their peak homebuying years. Since theyโ€™re the largest demographic behind the baby boomers, demand isnโ€™t going away any time soon.

Bottom Line

Experts are calling for home prices to appreciate next year, although at a slower pace than the previous three years. The reason for this is simple. The dynamics of supply and demand are playing out in real estate and will continue for many years to come.

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Home Selling โ€ข Real Estate โ€ข September 28, 2022

Top Reasons Homeowners Are Selling Their Houses Right Now

Top Reasons Homeowners Are Selling Their Houses Right Now

Top Reasons Homeowners Are Selling Their Houses Right Now | MyKCM

Some people believe thereโ€™s a group of homeowners who may be reluctant toย sell their housesย because they donโ€™t want to lose the historically low mortgage rate they have on their current home. You may even have the same hesitation if youโ€™reย thinking about sellingย your house.

Dataย shows 51% of homeowners have a mortgage rate under 4% as of April this year. And while itโ€™s true mortgage rates are higher than that right now, there are other non-financial factors to consider when it comes to making a move. In other words, your mortgage rate is important, but you may have other things going on in your life that make a move essential, regardless of where rates are today. As Jessica Lautz, Vice President of Demographics and Behavioral Insights at theย National Association of Realtorsย (NAR),ย explains:

โ€œHome sellers have historically moved when something in their lives changedย โ€“ a new baby, a marriage, a divorce or a new job. . .ย .โ€

So, if youโ€™re thinking about selling your house, it may help to explore the other reasons homeowners are choosing to make a move today. Theย 2022 Summer Sellers Surveyย byย realtor.comย asked recent home sellers why they decided to sell. The visual below breaks down how those homeowners responded:

Top Reasons Homeowners Are Selling Their Houses Right Now | MyKCM

As the visual shows, an appetite for different features or the fact that their current home could no longer meet their needs topped the list for recent sellers. Additionally, remote work and whether or not they need a home office or are tied to a specific physical office location also factored in, as did the desire to live close to their loved ones.

Theย realtor.comย surveyย summarizes the findings like this:

โ€œThe primary reason homeowners decided to sell in the last year was the realization that, after so much time spent at home,ย they wanted different features and amenities, such as walkability, outdoor space, pool, etc. . . .ย โ€

If you, like the homeowners they surveyed, find yourself wanting features, space, or amenities your current home just canโ€™t provide, it may be time to consider listing your house for sale.

Even with todayโ€™s mortgage rates, your lifestyle needs may be enough to motivate you to make a change. The best way to find out whatโ€™s right for you is to partner with a trustedย real estate professionalย who can provide expert guidance and advice throughout the process. They can help walk you through your options, so you can make a confident decision based on what matters most to you and your loved ones.

Bottom Line

While the financial reasons for moving are important, thereโ€™s often far more to consider. Non-financial reasons can also be a significant motivating factor. If you need help weighing the pros and cons of selling your house, letโ€™s connect today.

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Home Selling โ€ข Real Estate โ€ข September 26, 2022

Watching the Stock Market? Check the Value of Your Home for Good News.

Watching the Stock Market? Check the Value of Your Home for Good News.

Watching the Stock Market? Check the Value of Your Home for Good News. | MyKCM

While watching the stock market recently may have started to feel pretty challenging, checking the value of your home should come as welcome relief in this volatile time. If youโ€™re a homeowner, yourย net worthย got a big boost over the past few years thanks to rising home prices. And that increase in your wealth came in the form of home equity. Hereโ€™s how it works.

Equity is the current value of your home minus what you owe on the loan.ย Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially. And whileย rising inventoryย andย mortgage ratesย have cooled the market some in recent months, home prices nationally remain strong.

Thatโ€™s why, according to the latestย Homeowner Equity Insightsย fromย CoreLogic,ย the average homeowner equity has grown by $60,000 over the last 12 months.ย While thatโ€™s the national number, if you want to know what happened, on average, over the past year in your area, look at the map below fromย CoreLogic:

Watching the Stock Market? Check the Value of Your Home for Good News. | MyKCM

Why This Is So Important Right Now

Lawrence Yun, Chief Economist at theย National Association of Realtorsย (NAR), helpsย explainย why this matters so much today:

โ€œ. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter.ย Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.โ€

While equity helps increase your overall net worth, it can also help you achieve other goals like buying your next home. When you sell your current house, the equity you built up comes back to you in the sale, and it may be just what you need to cover a large portion โ€“ if not all โ€“ of the down paymentย on your next home.

Bottom Line

Thereโ€™s volatility in todayโ€™s stock market, but home equity is still incredibly strong. To find out just how much equity you have in your current home, letโ€™s connect.

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Home Selling โ€ข Real Estate โ€ข September 23, 2022

Will My House Still Sell in Todayโ€™s Market?

Will My House Still Sell in Todayโ€™s Market?

Will My House Still Sell in Todayโ€™s Market? | MyKCM

If recent headlines about the housing market cooling and buyer demand moderating have you worried youโ€™ve missed yourย chance to sell, hereโ€™s what you need to know.ย Buyer demand hasnโ€™t disappeared, itโ€™s just eased from the peak intensity we saw over the past two years.

Buyer Demand Then and Now

During the pandemic,ย mortgage ratesย hit record lows, and that spurred a significant rise in buyer demand.ย This year, as rates increased due to factors like risingย inflation, buyer demand pulled back or softened as a result.ย Theย latest dataย fromย ShowingTimeย confirms this trend (see graph below):

Will My House Still Sell in Todayโ€™s Market? | MyKCM

The orange bars in the graph above represent the last few months of data and the clear cooldown in the volume of home showings the market has seen since mortgage rates started to rise. But context is important. To get the full picture of where today’s demand stands, let’s look at the July data for the past six years (see graph below):

Will My House Still Sell in Todayโ€™s Market? | MyKCM

This second visual makes it clear that, while moderating compared to the frenzy in 2020 and 2021, showing activity is still beating pre-pandemic levels โ€“ and those pre-pandemic years were great years for the housing market. That goes to show thereโ€™s still demand if youย sell your houseย today.

What That Means for You When You Sell

The key to selling in a changing market is understanding where the housing market is now. Itโ€™s not the same market we had last year or even earlier this year, but that doesnโ€™t mean the opportunity to sell has passed.

While things have cooled a bit, itโ€™s still aย sellersโ€™ market. If you work with a trusted local expert to price your house at theย current market value,ย the demand is still there, and it should sell quickly. According to aย recent surveyย fromย realtor.com, 92% of homeowners who sold in August reported being satisfied with the outcome of their sale.

Bottom Line

Buyer demand hasnโ€™t disappeared, itโ€™s just moderated this year. If youโ€™re ready to sell your house today, letโ€™s connect so you have expert insights on how the market has shifted and how to plan accordingly for your sale.

Let’s Chat!

Homebuying โ€ข Homeownership โ€ข Real Estate โ€ข September 22, 2022

A Crucial First Step: Mortgage Pre-Approval [INFOGRAPHIC]

A Crucial First Step: Mortgage Pre-Approval [INFOGRAPHIC]

A Crucial First Step: Mortgage Pre-Approval [INFOGRAPHIC] | MyKCM

Some Highlights

  • Mortgageย pre-approvalย means a lender has reviewed your finances and, based onย factorsย like your income, debt, and credit history, determined how much youโ€™reย qualified to borrow.
  • Beingย pre-approvedย for a loan can give you clarity while planning yourย homebuying budget, confidence in your ability to secure a loan, and helps sellers know your offer is serious.
  • Connect with a trusted professional to learn more and start your homebuying process today.

Let’s Chat!

Homebuying โ€ข Real Estate โ€ข September 21, 2022

Buyers Are Regaining Some of Their Negotiation Power in Todayโ€™s Housing Market

Buyers Are Regaining Some of Their Negotiation Power in Todayโ€™s Housing Market

Buyers Are Regaining Some of Their Negotiation Power in Todayโ€™s Housing Market | MyKCM

If you’re thinking about buying a home today, there’s welcome news. Even though itโ€™s still aย sellersโ€™ market, itโ€™s a more moderate sellersโ€™ market than last year. And the days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close.

Today, you should have less competition and more negotiating power as a buyer. Thatโ€™s because the intensity of buyer demand andย bidding warsย is easing this year. So, if bidding wars were the biggest factor that had you sitting on the sidelines, here are two trends that may be just what you need to re-enter the market.

1. The Return of Contingencies

Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But now, fewer people are waiving theย inspectionย and appraisal.

Theย latest dataย from theย National Association of Realtorsย (NAR) shows the percentage of buyers waiving their home inspection and appraisal is declining. And aย recent surveyย fromย realtor.comย confirms more sellers are accepting offers that include these conditions today.ย According to their August study:

  • 95%ย of sellers reported buyers requested a home inspection
  • 67%ย of sellers negotiated with buyers on repairs as a result of the inspection findings

This goes to show buyers are more able to include these conditions in their offers today and negotiate as needed based on the outcome of the inspection.

2. Sellers Are More Willing To Help with Closing Costs

Generally, closing costs range betweenย 2% and 5%ย of the purchase price for the home. Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyerโ€™s closing costs to sweeten the deal. This didn’t happen as much during the peak buyer frenzy over the past two years.

Today, as the market shifts and demand slows, data fromย realtor.comย suggests this is making a comeback. Aย recent articleย showsย 32% of sellers paid some or all of their buyerโ€™s closing costs. This may be a negotiation tool youโ€™ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.

Bottom Line

Regardless of the extremely competitive housing market of the past several years, todayโ€™s data suggests negotiations are starting to come back on the table. This is good news if you’re planning to enter the housing market. To find out how the market is shifting in our area,

 

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Uncategorized โ€ข September 19, 2022

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble?

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble?

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

The talk of aย housing bubbleย in the coming year seems to be at a fever pitch as rising mortgage rates continue to slow down an overheated real estate market. Over the past two years, home prices have appreciated at an unsustainable pace causing many to ask:ย are things just slowing down, or is a crash coming?

To answer this question, there are two things we want to understand. The first is the reality of the shift in todayโ€™s housing market. And the second is what experts are saying about home prices in the coming year.

The Reality of the Shift in Todayโ€™s Housing Market

The reality is weโ€™re seeing an inflection point in housing supply and demand. According toย realtor.com, active listings have increased more than 26% over last year, while showings from the latestย ShowingTimeย Showing Indexย have decreased almost 17% from last year (see graph below). This is an inflection point for housing because, over the past two years, weโ€™ve seen a massive amount of demand (showings) and not enough homes available for sale for the number of people that wanted to buy. That caused the market frenzy.

Today, supply and demand look very different, and the market is slowing down from the pace weโ€™ve seen. This offers proof of the sudden slowdown so many people are feeling.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

What Experts Are Saying About Home Prices in the Coming Year

Right now, most experts are forecasting home price appreciation in 2023, but at a much slower pace than the last two years. The average of the six forecasters below is for nationalย home pricesย to appreciate by 2.5% in the coming year. Only one of the six is calling for home price depreciation.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

When we look at the shift taking place along with what experts are saying, we can conclude the national real estate market is slowing down but isย not a bubbleย getting ready to burst. This isnโ€™t to say that a few overheated markets wonโ€™t experience home price depreciation, but there isnโ€™t a case to be made for a national housing bubble.

Bottom Line

The real estate market is slowing down, and thatโ€™s causing many to fear weโ€™re in a housing bubble. What weโ€™ve experienced in the housing market over the past two years were historic levels of demand and constrained supply. That led to homes going up in value at a record pace. While some overheated markets may experience price depreciation in the short term, according to experts, the national real estate market will appreciate in the coming year.

 

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Homebuying โ€ข Real Estate โ€ข September 13, 2022

Three Things Buyers Can Do in Todayโ€™s Housing Market

Three Things Buyers Can Do in Todayโ€™s Housing Market

Three Things Buyers Can Do in Todayโ€™s Housing Market | MyKCM

Itโ€™s clear the 2022 housing market has been defined by risingย mortgage rates. With rates on the rise, itโ€™s also become more costly to purchase a home. According to theย National Association of Realtorsย (NAR):

โ€œCompared to one year ago, the monthly mortgage payment rose to $1,944 from $1,265, an increase of 53.7%.โ€

If youโ€™re thinking ofย buying a homeย or have been trying to recently, thatโ€™s a big increase in a monthly mortgage payment โ€“ and it may be causing you to press pause on your plans. This jump is making homes less affordable, especially compared to the last two years when mortgage rates were at historic lows.

The good news is you can navigate todayโ€™s housing market and this rising rate environment with a fewย simple tips. Here are three things you may want to consider to help make yourย homeownershipย goals a reality.

1. Expand Your Search Area and Criteria

If youโ€™ve been looking for a home in the city center or a specific area thatโ€™s starting to feel out of your price range, you may want to try looking a little further out in a location that could be more affordable. Expanding your search location or re-prioritizing the items on your wish list can open up opportunities you havenโ€™t considered, and that could help you afford more of what you need (and want) in a home. Asย CNETย notes:

โ€œArea growth is likely to keep pace with the market, which means that the outskirts of town might be hopping within five years. Consider stepping out of your ideal location by searching in the nearby cities. You may find better prices and more square footage.โ€

2. Explore Alternative Financing Options

Working with a trusted lender to learn about the different loan types and options is essential too. According toย Nerd Wallet:

โ€œA variety of mortgages are available with varying down payment and eligibility requirements.โ€

Experts know how to point you in the right direction when it comes to exploring ways to find the best home loan for your situation. With rising mortgage rates making it more costly to finance a home today, there may be an ideal option out there your loan officer can introduce you to. This could make a home purchase more affordable and within your financial reach over the life of your loan.

3. Look for Grants, Gift Funds, and Down Payment Assistance

There are also many options available when it comes to securing the funding you need to purchase a home. One valuable resource to explore isย downpaymentresource.com. Searching for specific down payment assistance options available in your local community could be a game changer when it comes to taking your first step toward homeownership. Asย NARย indicates:

โ€œMany local governments and non-profit organizations offer down-payment assistance grants and loans, targeted to area borrowers and often with specific borrower requirements.โ€

Plus, there are programs and special benefits for individuals working in certain professions or with unique statuses, including teachers, doctors and nurses, and veterans.

Ultimately, that means there are many federal, state, and local programs available for you to explore. The best way to do that is to connect with a localย real estate professionalย and your lender to learn more about whatโ€™s available in your area.

Bottom Line

If youโ€™ve been searching for a home and have found yourself stepping out of the process because youโ€™re worried about rising costs, letโ€™s connect. Having a team of local advisors on your side may be just what you need to guide your search in a new and more affordable direction.

 

Let’s Chat!

Home Selling โ€ข Homeownership โ€ข Real Estate โ€ข September 12, 2022

Getting Your House Ready To Sell? Work with an Agent for Expert Advice

Getting Your House Ready To Sell? Work with an Agent for Expert Advice

Getting Your House Ready To Sell? Work with an Agent for Expert Advice | MyKCM

In a market thatโ€™sย shiftingย as fast as it is today, many homeowners wonder what, if anything, needs to be renovated before theyย sell their house. Thatโ€™s where a trusted real estate professional comes in. They can help you think through todayโ€™s market conditions and how they impact what you should โ€“ and shouldnโ€™t โ€“ do before selling your house.

Here are some considerations a professional will guide you through.

What You Need To Know About Your Local Market

Since the supply ofย homes for saleย has increased so much this year, todayโ€™s buyers have more options than they had last year. That may mean youโ€™re not able to ignore some of those repairs or cosmetic updates you could have skipped in previous months. As a recent article fromย realtor.comย says:

โ€œTo stand out in the market, sellers should make their home attractive to buyers, which usually means some selective updates.โ€

The key word here isย selective. Since itโ€™s still aย sellersโ€™ market, focusing on a few key areas may be enough to make your house stand out from other options. And since inventory is still low overall, itโ€™s also possible buyers may be willing to handle the renovations themselves once they move in. It all depends on buyer demand and the available inventory in your local area. For advice on whatโ€™s happening in your market and what to do to make your house show well, lean on a professional.

Not All Renovation Projects Are Equal

In addition to making sure your house makes a good first impression, youโ€™ll also want to consider the return on your investment (ROI) for any renovations. According to theย 2022 Remodeling Impact Reportย from theย National Association of Realtorsย (NAR), here are the projects that could net you the best return when you sell your house (see visual below):

Getting Your House Ready To Sell? Work with an Agent for Expert Advice | MyKCM

Again, your real estate advisor is your best resource. When your agent comes to your house for a walk-thru and consultation, theyโ€™ll use their expertise to offer any insight into what you may need to repair, replace, or refinish. They also know what other sellers are doing before listing their homes and how buyers are reacting to those upgrades to help steer you in the right direction. As Dr. Jessica Lautz, Vice President of Demographics and Behavioral Insights for NAR,ย explains:

โ€œThis year, the winner was hardwood flooring. Hardwood floor refinishing and putting in new wood flooring had the most significant value, . . .โ€

How To Draw Buyer Attention to the Upgrades Youโ€™ve Made

For any projects youโ€™ve already completed or for those you plan to do before listing, make sure yourย real estate professionalย knows. Theyโ€™re not just an advisor to help you decide where to focus your efforts, theyโ€™re also skilled at highlighting any upgrades in your listing. That way, potential buyers know about the features that may help sell them on the house.

No matter what, contact a local real estate professional for expert advice on what work needs to be done and how to make it as appealing as possible to future buyers. Every home is different, so a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

In todayโ€™s shifting market, itโ€™s important to spend your time and money wisely when youโ€™re getting ready to move. Letโ€™s connect to find out where to focus your efforts before you sell.

Let’s Chat!

Homebuying โ€ข Homeownership โ€ข Mortgage โ€ข Real Estate โ€ข September 9, 2022

Why Itโ€™s So Important To Hire a Pro [INFOGRAPHIC]

Why Itโ€™s So Important To Hire a Pro [INFOGRAPHIC]

Why Itโ€™s So Important To Hire a Pro [INFOGRAPHIC] | MyKCM

Some Highlights

  • If youโ€™re thinking ofย buyingย orย sellingย a home, youโ€™ll want a trustedย real estate professionalย on your side for their industry experience and expert insights.
  • The right advisor utilizes the latest technology and can help you navigate todayโ€™sย home pricingย and market values, the contracts and fine print, and the negotiations youโ€™ll face.
  • Letโ€™s connect so you have expert advice each step of the way.