Tag Archives: real estate

Net Worth of Homeowners 44X Greater than Renters

Posted on October 12, 2017 | Leave a comment

 

Net Worth of Homeowners 44X Greater than Renters | MyKCM

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey data, covering 2013-2016 was released two weeks ago.

The study revealed that the 2016 median net worth of homeowners was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why, for the fourth year in a row, Gallup reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds.

Greater equity in your home gives you options

If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle, let’s get together to discuss the process.

Leave a comment

Posted in Daily Updates

Tagged , , , , , , , , ,

A Tale of Two Markets: A 6-Month Update

Posted on October 4, 2017 | Leave a comment

 

A Tale of Two Markets: A 6-Month Update | MyKCM

Six months ago, we reported that the mismatch between the type of inventory of homes for sale and the demand of buyers in the US was causing the formation of two markets.

In the starter and trade-up home categories, there were significantly more buyers than there were homes for sale, causing a seller’s market. In the premium, or luxury, home categories, the opposite was true as there was a surplus of these homes compared to the buyers that were out searching for their dream homes, which created a buyer’s market.

According to the National Association of Realtors latest Existing Home Sales Report, the inventory of existing homes for sale in today’s market is at a 4.2-month supply. Inventory is now 6.5% lower than this time last year, marking the 27th consecutive month of year-over-year decreases.

Looking at the latest report from Trulia, we can see that not much has changed, and in fact, recent natural disasters across the country have made inventory conditions even more dire.

Trulia’s market mismatch score measures the search interest of buyers against the category of homes that are available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”

The results of their latest analysis are detailed in the chart below.

A Tale of Two Markets: A 6-Month Update | MyKCM

Nationally, buyers are searching for starter and trade-up homes and are coming up short with the listings available, which is leading to a highly competitive seller’s market in these categories.

Premium homebuyers, on the other hand, have the best chance of less competition and more inventory of listings in their price range with a 14.7-point surplus, which is creating more of a buyer’s market.

Bottom Line

Real estate is local. If you are thinking about buying OR selling this fall, let’s get together to discuss the exact market conditions in your area.

Leave a comment

Posted in Daily Updates

Tagged , , , , , , , , , , ,

Study: FSBOs Don’t Save Real Estate Commission

Posted on August 25, 2017 | Leave a comment

 

Study: FSBOs Don’t Save Real Estate Commission | MyKCM

One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)

Why would FSBOs net less money than if they used an agent?

The study makes several suggestions:

  • “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
  • “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
  • “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

Three conclusions from the study:

  1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
  2. The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
  3. The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.

Leave a comment

Posted in Daily Updates

Tagged , , , , , , , , , ,

Housing Inventory Hits 30-Year Low

Posted on August 9, 2017 | Leave a comment

 

Housing Inventory Hits 30-Year Low

Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

CoreLogic’s President & CEO, Frank Martell added,

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

Real estate is local.

Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

Bottom Line

Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.

Leave a comment

Posted in Daily Updates

Tagged , , , , , , ,

Thinking of Selling? You Should Act NOW!

Posted on July 18, 2017 | Leave a comment

 

Thinking of Selling? You Should Act NOW! | MyKCM

If you thought about selling your house this year, now more than ever may be the time to do it! The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.

Lawrence Yun, Chief Economist at the National Association of Realtors, recently commented:

“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

Yun goes on to say:

“Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction, including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.

Leave a comment

Posted in Daily Updates

Tagged , , , , , , , ,

Gallup: Real Estate is Best Long-Term Investment 4 Years Running

Posted on May 10, 2017 | Leave a comment

 

Gallup: Real Estate is Best Long-Term Investment 4 Years Running | MyKCM

Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.

For the fourth year in a row, Real Estate has come out on top as the best long-term investment! This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26%. The full results are shown in the chart below.

Gallup: Real Estate is Best Long-Term Investment 4 Years Running | MyKCM

The study makes it a point to draw attention to the contrast of the sentiment over the last four years compared to that of 2011-2012, when gold took the top slot with 34% of the votes. Real estate and stocks took second and third place, respectively, while still in recovery from the Great Recession.

Bottom Line

As the real estate market has recovered, so has the belief of the American people in the stability of housing as a long-term investment.

Leave a comment

Posted in Daily Updates

Tagged , , , , , , ,

Real Estate Mogul: Here’s Why You Should Buy

Posted on April 26, 2017 | Leave a comment

 

Real Estate Mogul: Here’s Why You Should Buy | MyKCM

Real Estate mogul, Sean Conlon, host of The Deed: Chicago on CNBC, was recently asked the question, should you buy? Or should you rent a house?

Conlon responded:

“I am a true believer that you save every penny and you buy your first house… and that is still the fastest path to wealth in this country.”

Conlon went on to suggest that first-time buyers put down 10-20% “if they can make it work,” and to remain in their home at least 4-5 years to see a return on their investment.

Who is Sean Conlon, and why should you listen to his advice?

Within a few years of working in the real estate industry, Conlon had established himself as one of the leading agents in the United States and has founded 3 billion-dollar brokerages dealing in residential, commercial and investment sales. Since immigrating to America from the United Kingdom in 1990, he believes very strongly in the American Dream and the role that homeownership plays in achieving it. Conlon is quoted on his website as saying:

“I treat people the way I would like to be treated if I went in to buy a house and I work harder than anybody I know. I think if you do that in America, you will always succeed.”

Bottom Line

Homeownership is an investment you can leverage against in the future that not only provides shelter and safety but also helps you build your family’s wealth. If you are debating whether or not to purchase a home this year, let’s get together to discuss the opportunities available in today’s market!

Leave a comment

Posted in Daily Updates

Tagged , , , , , , , ,

The Importance of Using a Real Estate Professional to Sell Your Home

Posted on April 10, 2017 | Leave a comment

 

The Importance of Using a Professional to Sell Your Home | MyKCM

When a homeowner decides to sell their house, they obviously want the best possible price for it with the least amount of hassles along the way. However, for the vast majority of sellers, the most important result is actually getting their homes sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. According to the National Association of Realtors’ 2016 Profile of Home Buyers & Sellers, the percentage of buyers who used the internet in their home search increased to 94%.

However, the report also revealed that 96% of buyers who used the internet when searching for homes purchased their homes through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their homes directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the home they will buy (50%), to negotiate the terms of the sale (47%) & price (36%), or to help understand the process (61%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who have used agents to buy their homes has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Leave a comment

Posted in Daily Updates

Tagged , , , , , ,

Buying this Spring? Be Prepared for Bidding Wars

Posted on April 5, 2017 | Leave a comment

Buying this Spring? Be Prepared for Bidding Wars | Simplifying The Market

 

Traditionally, spring is the busiest season for real estate. Buyers come out in force and homeowners list their houses for sale hoping to capitalize on buyer activity. This year will be no different!

Buyers have already been out in force looking for their dream homes and more are on their way, but the challenge is that the inventory of homes for sale has not kept up with demand, which has lead to A LOT of competition for the homes that are available.

A recent Bloomberg article touched on the current market conditions:

“It’s the 2017 U.S. spring home-selling season, and listings are scarcer than they’ve ever been. Bidding wars common in perennially hot markets like the San Francisco Bay area, Denver and Boston are now also prevalent in the once slow-and-steady heartland, sending prices higher and sparking desperation among buyers across the country.”

Sam Khater, Deputy Chief Economist at CoreLogic went on to explain why buyers are flocking to the market in big numbers:

“In today’s market, many buyers think the trough in [interest] rates is over. If you don’t get in now, it’s just going to be worse later. Rates will be higher, prices will be higher, and maybe inventory selection will be lower.”

In some markets, “thirty-five percent of properties are selling within the first week or two of hitting the market.” Homes are selling at a rapid clip in places like:

  • Denver, CO
  • Seattle, WA
  • Oakland, CA
  • Grand Rapids, MI
  • Boise, ID
  • Madison, WI
  • Omaha, NE

Bottom Line

Let’s get together to discuss your exact market conditions and help you create a strategy to secure your new home in this competitive atmosphere!

Leave a comment

Posted in Daily Updates

Tagged , , , , , , ,

Builder Confidence Hits 11yr High

Posted on March 9, 2017 | Leave a comment

Builder Confidence Hits 11-Year High | Simplifying The Market

In many areas of the country, there are not enough homes for sale to satisfy the number of buyers looking to purchase their dream homes. Experts have long proposed that a ramp-up in new, single-family home construction would be one of the many ways to overcome this inventory shortage.

According to a recent survey conducted by the National Association of Home Builders (NAHB) and Wells Fargo, housing market confidence amongst builders reached an 11-year high last month.

What Does High Confidence Mean for the Housing Market?

In a recent interview, Rob Dietz, Chief Economist and SVP for NAHB, put it this way:

“Higher market confidence will translate into more building and more inventory in 2017. We expect single-family construction to grow 10 percent next year.”

With 2016 marking the best year in real estate sales in over a decade, a 10 percent ramp-up in single-family construction will only aid in making 2017 an even greater year.

According to the latest US Census data, sales of newly constructed homes were up 3.7% over January 2016 as they reached a seasonally adjusted annual rate of 555,000. Dietz went on to comment:

“We can expect further growth in new home sales throughout the year, spurred on by employment gains and a rise in household formations. As the supply of existing homes remains tight, more consumers will turn to new construction.”

Bottom Line

With the weather and the real estate market heating up this spring, there will be a surge of new construction coming to the market soon

Leave a comment

Posted in Daily Updates

Tagged , , , , , , , ,