The Past – home appreciation over the last 12 months

The Present – home appreciation over the last month

The Future – home appreciation projected over the next 12 months

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1. Why am I buying a home in the first place?

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of that space

2. Where are home values headed?

What does that mean to you?

3. Where are mortgage interest rates headed?

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1. It will relieve some of the pent-up buying demand that is causing price appreciation to continue to increase well above historic norms.
2. It will give better opportunities to many current homeowners who want to sell but can’t find an adequate home to move in to.

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1. It will relieve some of the pent-up buying demand that is causing price appreciation to continue to increase well above historic norms.
2. It will give better opportunities to many current homeowners who want to sell but can’t find an adequate home to move in to.

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage.  These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

• Government recording costs
• Appraisal fees
• Credit report fees
• Lender origination fees
• Title services (insurance, search fees)
• Tax service fees
• Survey fees
• Attorney fees
• Underwriting fees

Is there any way to avoid paying closing costs?

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Buyer Demand

Seller Supply

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1. Exposure to Prospective Buyers

2. Results Come from the Internet

• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspapers

3. There Are Too Many People to Negotiate With

• 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 More And More Difficult

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

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Some Highlights:

• Existing home inventory is down 10.1% from last year.
• A lack of inventory explains the modest increase in home sales (0.8% year-over-year) despite strong buyer demand.
• Existing home prices increased 5.1% year-over-year, which is directly related to the lack of inventory.

Some Highlights:

• Existing home inventory is down 10.1% from last year.
• A lack of inventory explains the modest increase in home sales (0.8% year-over-year) despite strong buyer demand.
• Existing home prices increased 5.1% year-over-year, which is directly related to the lack of inventory.

In today’s housing market, is it better to rent or buy a home?

“Housing prices, in general, continue to slow and when considered in light of the recent trends in the Buy vs. Rent Index signal that ownership remains an excellent investment for the majority of Americans.”

Bottom Line

1. Prices Will Continue to Rise

2. Mortgage Interest Rates Remain at Historic Lows

3. Either Way You Are Paying a Mortgage

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

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

1. Prices Will Continue to Rise

2. Mortgage Interest Rates Remain at Historic Lows

3. Either Way You Are Paying a Mortgage

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

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

“The havoc during the last cycle was the result…of speculation fueled by loose credit. That’s the exact opposite of what we have today.”

1. Some first time buyers will, in fact, purchase a newly constructed home.
2. Many current homeowners will move-up (or move-down) to a new construction and then put their current home on the market.

“The havoc during the last cycle was the result…of speculation fueled by loose credit. That’s the exact opposite of what we have today.”

1. Some first time buyers will, in fact, purchase a newly constructed home.
2. Many current homeowners will move-up (or move-down) to a new construction and then put their current home on the market.

1. Understand How Much You Can Afford

“While it's not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

2. Act Fast

“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”

3. Make a Solid Offer

“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.” 

4. Be Prepared to Negotiate

“It's likely that you'll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you'll be glad you did your homework first to understand how much you can afford.   Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”

Bottom Line

Price Appreciation = Good News for Homeowners

“Home-value gains have played a large part in restoring home equity. The CoreLogic Home Price Index (HPI) for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index. Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”

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Some Highlights:

• The National Association of REALTORS® surveyed their members for their Confidence Index
• The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
• Homes sold in less than 60 days in 38 out of 50 states and Washington D.C.
• Homes sold in less than 30 days in 17 states

Some Highlights:

• The National Association of REALTORS® surveyed their members for their Confidence Index
• The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
• Homes sold in less than 60 days in 38 out of 50 states and Washington D.C.
• Homes sold in less than 30 days in 17 states

“Our research indicates that not owning a home has a sizable financial cost, as renters miss out on low mortgage rates and are hit by higher rents. This phenomenon may exacerbate inequality in our society, as those wealthy enough to invest in real estate benefit from lower interest rates, whereas minorities and younger Americans, hit by rising rents and student debt, risk being locked out of homeownership.”

What proof exists that owning is financially better than renting?

• Housing is typically the one leveraged investment available
• You're paying for housing whether you own or rent
• Owning is usually a form of “forced savings”
• There are substantial tax benefits to owning
• Owning is a hedge against inflation

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Mortgage Credit Availability Over the Last Three Years

Mortgage Credit Availability Today Compared to 2006

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How Will This Impact Your Mortgage Payment?

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Some Highlights:

• The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
• In the report, home prices are compared both regionally and by state.
• Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
• Vermont was the only one state where home prices are actually lower than they were last year.

Some Highlights:

• The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
• In the report, home prices are compared both regionally and by state.
• Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
• Vermont was the only one state where home prices are actually lower than they were last year.

Here are five reasons why you should consider selling your house this fall: 

1. Demand Is Strong

2. There Is Less Competition Now

3. The Process Will Be Quicker

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

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

That is what is truly important.

Here are five reasons why you should consider selling your house this fall: 

1. Demand Is Strong

2. There Is Less Competition Now

3. The Process Will Be Quicker

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

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

That is what is truly important.

After all, 14,767 houses sold yesterday, 14,767 will sell today and 14,767 will sell tomorrow.

14,767!

Bottom Line

The Housing Market Is Finally Starting to Look Healthy – The NY Times

“It has been an excruciatingly long time coming, but the housing sector in the United States is finally getting healthy. Thank millennials and thank homebuilders who are starting to produce more of the starter houses young people demand.”

Why the U.S. Housing Market Is Good and Getting Even Better – The Street

“Interest rates are so low now that a family can buy the median-priced U.S. home on income of less than $45,000 a year -- about $11,000 less than the median household income. And half of America's houses are cheaper than that.” 

“The havoc during the last cycle was the result of building too many homes and of speculation fueled by loose credit. That’s the exact opposite of what we have today.” (emphasis added)

The Housing Market Is Finally Starting to Look Healthy – The NY Times

“It has been an excruciatingly long time coming, but the housing sector in the United States is finally getting healthy. Thank millennials and thank homebuilders who are starting to produce more of the starter houses young people demand.”

Why the U.S. Housing Market Is Good and Getting Even Better – The Street

“Interest rates are so low now that a family can buy the median-priced U.S. home on income of less than $45,000 a year -- about $11,000 less than the median household income. And half of America's houses are cheaper than that.” 

“The havoc during the last cycle was the result of building too many homes and of speculation fueled by loose credit. That’s the exact opposite of what we have today.” (emphasis added)

What if the bubble & bust didn’t occur?

Bottom Line

Don’t Become Trapped

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

It’s Cheaper to Buy Than Rent

“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”  “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

Know Your Options

"It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.  It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Bottom Line

“The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data.”

Why the concern?

But, wait a minute…

Bottom Line

1. Price to Rent Ratio
2. Price to Income Ratio
3. Mortgage Transactions
4. House Flipping

“Loose credit was one of the main culprits of the housing crisis. Mortgage lending expanded dramatically as unhealthy housing speculation reached its peak and was met by the highest level of credit availability as measured by the Mortgage Bankers Association. The index measures the overall mortgage credit condition by the share of home sales financed by mortgages. This metric does not capture credit quality, but it does set a view of the importance of financing in supporting the housing market.”

“Heightened flipping activity is a clear indication of speculation in the real estate market. A property is considered as a speculative flip if the property is sold twice within 12 months and with positive profit. Flipping is a normal part of a healthy housing market. In an inflated housing market, expectations about short-term profit from pure price appreciation are very high; therefore, the level of flipping activity would show evidence of being heightened.”

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