April 1, 2016 rummy

Some of the housing headlines are causing concern for some consumers who are in the process of either buying or selling a home. Pundits are concerned over the lack of new construction or the month-over-month sales numbers. Let’s set the record straight; 2015 was a good year for residential real estate in the United States and 2016 is starting out stronger. Here is a graph of total homes sold (new construction and existing homes) in the first two months in 2016 compared to last year:   Will this momentum continue? If we look at foot traffic (the number of purchasers…

March 24, 2016 rummy

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:   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…

March 14, 2016 rummy

  We recently reported that home prices are continuing to rise across most of the nation. This has created concern in some pundits that a housing bubble, like we saw ten years ago, is forming again. We want to explain why these concerns are unfounded. The current increase in home values can be easily explained by the theory of supply and demand. Right now, the number of families looking to purchase a home is greater than the supply of homes on the market. Here is a chart that explains how the months’ supply of housing inventory impacts home values:   According…

March 1, 2016 rummy

  There are some homeowners that have been waiting for months to get a price they hoped for when they originally listed their house for sale. The only thing they might want to consider is… If it hasn’t sold yet, maybe it’s not priced properly. After all 14,986 houses sold yesterday, 14,986 will sell today and 14,986 will sell tomorrow. 14,986! That is the average number of homes that sell each and every day in this country according to the?National Association of Realtors’ (NAR)?latest?Existing Home Sales Report. NAR reported that sales are at an annual rate of 5.59 million. Divide that number by 365 (days in a…

February 26, 2016 rummy

  The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price report earlier this month. The report revealed that home prices are not only continuing to rise but that the increases are accelerating. Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report: “Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead.” Here are the percentage increases of home prices for the last two quarters: What this means to…

February 22, 2016 rummy

Today, many real estate conversations center on housing prices and where they may be headed. That is why we 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 3.7% over the course of 2016, 3.3% in 2017 and 3.2% in the next two years, and finally 3.1% in 2020 (as…

February 18, 2016 rummy

During the recession, many young adults graduating from college were forced to move back in with their parents. This caused new household formations to drop dramatically from the long term average of 1.2 million formations annually to half that number. However, this may be the year this turns back around. According to the Urban Land Institute’s report, Emerging Trends in Real Estate, household formations will increase dramatically. They project that 3.68 million additional households will be formed in the next three years. This brings household formations back to pre-recession numbers of 1.2 million a year. What will happen in 2016? One of…

February 17, 2016 rummy

  Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400). In a Forbes article the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater. The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:   Put Your Housing Cost to Work For You Simply put, home ownership is a form of ‘forced savings’. Every time you…

February 2, 2016 rummy

Is spring closer than we think? Depending on which Groundhog you witnessed today, you may have less time than you think to get your home on the market before the busy spring season. Many sellers feel that the spring is the best time to place their home on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages. Here are five reasons to sell now.  1. Demand is Strong Foot traffic refers to the number of people out actually physically looking at homes right now….

January 19, 2016 rummy

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO. The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover. 1. What do you do with all this paperwork? Each state has different regulations regarding the…