After all 13,808 houses sold yesterday, 13,808 will sell today and 13,808 will sell tomorrow.

13,808!

Bottom Line

After all 13,808 houses sold yesterday, 13,808 will sell today and 13,808 will sell tomorrow.

13,808!

Bottom Line

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case. 

• Bragging about their success
• Bragging about their company’s success

You have many agents from which to choose. Pick someone who truly cares.

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case. 

• Bragging about their success
• Bragging about their company’s success

You have many agents from which to choose. Pick someone who truly cares.

“As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.”

So what does that have to do with Interest Rates?

“Lower oil prices mean lower inflation rate, which pushes down mortgage rates.”

“The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas. But there may be some layoffs in oil-producing states.”

How long will rates stay low?

“If firms start hiring again, and wages increase — that’s when the level of all interest rates in the U.S. would increase.” 

Don’t wait too long

Bottom Line

1. What do you do with all this paperwork?

2. Ok, so you found your dream house, now what?

3. Are you a good negotiator?

4. What is the home you’re buying/selling really worth?

5. Do you know what’s really going on in the market?

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Bottom Line:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

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 the space

2. Where are home values headed?

• Home values will appreciate by 4% in 2015.
• The cumulative appreciation will be 23.5% by 2019.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 15.1% by 2019.

3. Where are mortgage interest rates headed?

Bottom Line

“Economists see several reasons why 2015 might be a banner year for homebuying — and not just in San Francisco and Miami.”

“If you have been thinking about purchasing a home, the first half of 2015 might be a good time.”

“As rent increases, it simply makes more sense to buy a home.”

Bottom Line

“Economists see several reasons why 2015 might be a banner year for homebuying — and not just in San Francisco and Miami.”

“If you have been thinking about purchasing a home, the first half of 2015 might be a good time.”

“As rent increases, it simply makes more sense to buy a home.”

Bottom Line

The second sale may have just become more difficult.

“Starting Jan. 26, Fannie plans to offer mortgage lenders access to proprietary home valuation databases that they can use to assess the accuracy and risks posed by the reports submitted by appraisers.”  “The Fannie data will flag possible errors in the appraiser’s work before the lender commits to fund the loan, will score the appraisal for overall risk of inaccuracy and may provide as many as 20 alternative “comps” — properties in the area that have sold recently and are roughly comparable to the house the lender is considering for financing but were not used by the appraiser.”

Why is this happening?

“Excessive valuations create the risk of future losses to lenders and investors if the borrower defaults and the house goes to foreclosure.”

What is the process now?

As a seller:

As a buyer:

What happens after January 26th?

“The bottom line, appraisers say, is this could lead to delays to closings and higher costs, as well as a depression of prices in markets where prices are rising. Appraisers complain that if they have to justify every step of their comps for their valuation, rather than those coming from the one-size-fits-all evaluation from Fannie, it will delay closing, throw off buyer and seller timetables, and delay real estate broker commissions.”

Bottom Line

Here's hoping 2015 is a great year for you both personally & professionally.

Here's hoping 2015 is a great year for you both personally & professionally.

Taking Your Home off the Market

“Well, we didn’t really want to sell the house anyway. This idea of making a move right now probably doesn’t make sense.”

“What made us originally put our home up for sale?”

Re-Listing with your Existing Agent

For Sale by Owner

List with a New Agent

Taking Your Home off the Market

“Well, we didn’t really want to sell the house anyway. This idea of making a move right now probably doesn’t make sense.”

“What made us originally put our home up for sale?”

Re-Listing with your Existing Agent

For Sale by Owner

List with a New Agent

“We are projecting a 4 percent rise in sales to 5.6 million, which would mark the highest level of annual sales since 2007.”

“We are projecting a 4 percent rise in sales to 5.6 million, which would mark the highest level of annual sales since 2007.”

There’s No Place Like Home

1. It means having a good place to raise children & provide them with a good education

2. You have a physical structure where you & your family feel safe

3. It allows you to have more space for your family

4. It gives you control over what you do with your living space, like renovations and updates

5. Owning a home is a good way to build up wealth that can be passed along to my family

Bottom Line

Bottom Line

Bottom Line

"Roughly 42 percent of millennials say they want to buy a home in the next one to five years, compared to just 31 percent of Generation X, and by the end of 2015 millennials will become the largest home-buying age group. The lack of home-buying activity from millennials thus far is decidedly not because this generation isn't interested in homeownership, but instead because younger Americans have been delaying getting married and having children, two key drivers in the decision to buy that first home. As this generation matures, they will become a home-buying force to be reckoned with."

“Households headed by millennials will see significant growth as a reflection of economic gains. Millennials will also drive two-thirds of household formations over the next five years. Next year's addition of 2.75 million jobs and increased household formation will be the two key factors driving first-time buyer sales.”

Has the Millennial Home Buyer already re-entered the market?

Bottom Line

“Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.”

“Homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month.” “Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.”

Bottom Line

Below are the headlines from three separate news releases issued over a one month period:

11/3/2014 - Millions of Potential New Households Waiting Out the Recovery

11/11/2014 - Experts: First-Time Homebuyers' Weak Finances Holding Back Housing Market

And then, the contrarian view:

12/2/2014 - In 2015, Millennials Will Be Biggest Home Buying Group

Bottom Line

What will that mean to home sales next year?

“While higher interest rates generally detract from housing activity, when they occur with strong job and income growth the net result can be increases in household formations, construction, and home sales. Our view for 2015 is exactly that, namely, income and job growth offset the negative effect of higher interest rates and translate into gains for the nation’s housing market.”

Bottom Line

“The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3% down. These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices.”

Will these programs create future challenges?

“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans.”

Here are the direct links to the guidelines for each program:

“The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3% down. These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices.”

Will these programs create future challenges?

“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans.”

Here are the direct links to the guidelines for each program:

"Landlords should still be able to push asking rent increases on to their tenants."

"Rents are rising because of strong demand that supply hasn't kept up with. Nearly all the new households are renters, and young people moving out of their parents' homes will keep fueling rental demand."

Where are rents headed in 2015?

"Home value appreciation will continue to cool down, from roughly 6 percent now to around 2.5 percent by the end of 2015. But rents will see no such slowdown, and will continue to grow around 3.5 percent annually throughout 2015. As renters' costs keep going up, I expect the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market."

“Paying more on rent makes it harder for would-be homebuyers to save for a down payment."

Bottom Line

"Landlords should still be able to push asking rent increases on to their tenants."

Here is a graph showing what actually did happen:

Here is a graph showing what actually did happen: