J. Kent Erickson, Broker Associate
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The Ultimate Truth about Housing Affordability

Posted by on May 31, 2019 in Mortgage & Finances, Real Estate Market | 0 comments

There have been many headlines decrying an “affordability crisis” in the residential real estate market. While it is true that buying a home is less affordable than it had been over the last ten years, we need to understand why and what that means. On a monthly basis, the National Association of Realtors (NAR), produces a Housing Affordability Index. According to NAR, the index… “…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.” Their methodology states: “To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income...

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2 Things You Need to Know to Properly Price Your Home

Posted by on May 28, 2019 in Home Inspection, Mortgage & Finances, Real Estate Market, Selling a Home | 0 comments

In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly. In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal. Every month, the Home Price Perception Index (HPPI) measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is. Over the last five months, the gap...

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4 Most Popular Bottom Line Investments in America

Posted by on May 26, 2019 in Mortgage & Finances, Real Estate Investments | 0 comments

Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks, gold, and savings accounts. For the sixth year in a row, real estate has come out on top as the best long-term investment! That has not always been the case. Gallup explains: “Between 2008 and 2010, covering most of the Great Recession period that saw plummeting home and stock values, Americans were as likely to name savings accounts or CDs as the best long-term investment as they were to name stocks or real estate.” This year’s results showed that 35% of Americans chose real estate, followed by stocks at 27%. The full results are shown in the chart below. Bottom Line Now that the real estate market has recovered, so has the belief of the American people in the stability of...

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Boomerang Buyers: Don’t Be Afraid to Buy a Home Again!

Posted by on May 24, 2019 in Buying a Home, Real Estate Market | 0 comments

According to CoreLogic, from 2006 to 2014 “there were 7.3 million housing foreclosures and 1.9 million short sales.” The hesitation some Americans feel after experiencing a foreclosure brings to mind the old saying: “Fool me once- shame on you. Fool me twice- shame on me.” According to the 2019 Home Buyer Report from NerdWallet, “Thirteen percent of Americans have lost a home due to a financial event such as foreclosure in the past 10 years. More than 6 in 10 of them (61%) have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again.” This makes sense. They don’t want to go through the same pain again. As a cornerstone of the American dream, nobody wants to lose homeownership. But let’s illustrate this simply: Recall learning to ride your first bike during your childhood. Did you stop...

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Are Older Generations Really Not Selling Their Homes?

Posted by on May 22, 2019 in Real Estate Market, Selling a Home | 0 comments

Many studies suggest one of the main reasons for the inventory shortage in today’s market of homes for sale is that older generations have chosen to “age in place” over moving. The 2019 Home Buyers & Sellers Generational Trend Report by NAR clarifies this point! NAR’s findings show that Baby Boomers (43%) and the Silent Generation (12%) made up 56% of sellers in 2018! This means the majority of sellers last year were over the age of 54. This also shows these generations ARE moving! The report also shared the reasons why they chose to move. According to the research, the top reason was a desire to be closer to friends and family. Below is a full breakdown: As we can see, they have plenty of reasons to sell their current home! But what type of homes are they trading in? Once again, the...

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