Category Archives: For Realtors

A Housing Bubble? Industry Experts Say NO!

A Housing Bubble? Industry Experts Say NO! | Simplifying The Market

With residential home prices continuing to appreciate at levels above historic norms, some are questioning if we are heading toward another housing bubble (and subsequent burst) like the one we experienced in 2006-2008.

Recently, five housing experts weighed in on the question.

Rick Sharga, Executive VP at Ten-X:

“We’re definitely not in a bubble.”

“We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but…while prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars.”

Christopher Thornberg, Partner at Beacon Economics:

“There is no direct or indirect sign of any kind of bubble.”

“Steady as she goes. Prices continue to rise. Sales roughly flat.…Overall this market is in an almost boring place.”

Bill McBride, Calculated Risk:

“I wouldn’t call house prices a bubble.”

“So prices may be a little overvalued, but there is little speculation and I don’t expect house prices to decline nationally like during the bust.”

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices:

“Housing is not repeating the bubble period of 2000-2006.”

“…price increases vary unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”

Bing Bai & Edward Golding, Urban Institute:

“We are not in a bubble and nowhere near the situation preceding the 2008 housing crisis.”

“Despite recent increases, house prices remain affordable by historical standards, suggesting that home prices are tracking a broader economic expansion.”

Powered by WPeMatico

Low Inventory Causes Home Prices to Maintain Fast Growth

Low Inventory Causes Home Prices to Maintain Fast Growth | Simplifying The Market

The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price Report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady clip in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros.

Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

“Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

What this means to sellers

Rising prices are a homeowner’s best friend. As reported by the Washington Post in a recent article post:

“The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.”

What this means to buyers

In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Dive reported, the amount of cash needed to purchase that home will also increase.

“These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

Bottom Line 

If you’re thinking of selling and moving down, waiting might make sense. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

The Difference an Hour Makes in Real Estate [INFOGRAPHIC]

The Difference an Hour Makes This Fall in Real Estate [INFOGRAPHIC] | Simplifying The Market

Every Hour in the US Housing Market: 

  • 624 Homes Sell
  • 347 Homes Regain Positive Equity
  • Median Home Values Go Up $1.13

Powered by WPeMatico

Hispanics Aim to Own. How Can Real Estate Agents Help?

Hispanic relocation homeownership stats.

Most people, if given the financial ability to do so, would prefer to own a home rather than rent one. In many major cities and around the nation, rent prices are increasing, year by year. Many studies show that renting can cost the same amount (or even more!) than owning a home.

As a real estate or mortgage lending professional, it’s important to communicate the financial attainability of homeownership to potential clients – as many of them prefer homeownership over renting.

Take U.S. Hispanics, for example. According to the 2016 State of Hispanic Homeownership Report published by The National Association of Real Estate Professionals (NAHREP), 9 out of 10 Hispanics would rather own a home than rent. Among those who would relocate, a majority of them (62%) say they would purchase a home instead of renting.

As demographics continue to shift (currently 17% of the U.S. population is Hispanic), it presents tremendous opportunity for industry professionals who work with diverse homebuyers. According to the Harvard Joint Center for Housing Studies, there will be 13.6 million new household formations between 2015 and 2025, and 9.7 million of those will be from diverse segments. Of that 9.7 million, 47% will be Hispanic.

There is no better time than now to expand your customer base and offer your services to the fastest growing demographic in housing – a demographic that, overall, prefers owning versus renting.

How to Save on a Mortgage Payment Whether Buying or Selling

How to Save on a Mortgage Payment Whether Buying or Selling | Simplifying The Market

In Trulia’s recent reportRent vs. Buy: Roommate Edition, they examined the impact that renting with a roommate has in determining whether it is more expensive to rent or buy. The study explains:

“Since we started keeping track in 2012, it’s been a better deal to buy than rent in America’s largest housing markets – and for much of that time it hasn’t been close.”

It then goes on to ask the question:

“But does the equation change for renters who share their rent with a roommate?”

The report reveals:

“While the standard rent vs. buy analysis reveals buying is cheaper than renting in all of the nation’s 100 largest metros, this doesn’t hold true for those choosing between renting with a roommate and buying a starter home.”

It seems obvious that sharing the cost of renting your living space by taking in a roommate dramatically decreases your housing expense (which is exactly what the report concluded), but it got us thinking.

What if you purchased a home and took in that same roommate?

The savings you would gain by adding a roommate would also occur if you purchased a home. This presents an opportunity for a list of possible purchasers. Here are two examples:

  1. The first-time buyer: As the report explains, many young adults already live with a roommate. If they purchased a new home, perhaps that roommate (or someone else) would be willing to rent a room in their new house. The rent could help offset the mortgage payment.
  2. The empty-nester seller looking to move: Their home may no longer fit their current lifestyle. They may now be looking for something a little smaller with all the bedrooms on the ground level. These families may be able to open a bedroom to an older family member (parents, aunts & uncles, etc.). This would kill two birds with one stone.

A smaller, move-down home is almost impossible to find in the current housing market. If the seller-turned-buyer takes on a tenant, they could buy a more expensive home knowing that the additional monies needed to pay the mortgage would be offset with the additional monies they receive in rent. Secondly, the older couple (ex. parents) could get a housing option that probably far surpasses anything else available to them in the current market.

Bottom Line

Considering the concept of renting a portion of your house to be able to purchase the perfect home may make sense to many families. You will need to decide if it is right for you.

Powered by WPeMatico