J. Kent Erickson, Broker Associate
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Home Prices Up 6.34% Across the Country! [INFOGRAPHIC]

Posted by on Dec 10, 2018 in Uncategorized | 0 comments

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...

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Further Proof It’s NOT 2008 All Over Again

Posted by on Dec 7, 2018 in Uncategorized | 0 comments

Home sales numbers are leveling off, the rate of price appreciation has slowed to more historically normal averages, and inventory is finally increasing. We are headed into a more normal housing market. However, some are seeing these adjustments as red flags and are suggesting that we are headed back to the same challenges we experienced in 2008. Today, let’s look at one set of statistics that prove the current market is nothing like the one that preceded the housing crash last decade. The previous bubble was partially caused by unhealthy levels of mortgage debt. New purchasers were putting down the minimum down payment, resulting in them having little if any equity in their homes. Existing homeowners were using their homes as ATMs by refinancing and swapping their equity for cash. When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home) so they walked away which caused prices to fall even further. When this happened, even more homeowners found themselves in negative equity situations which caused them to walk away as well, and so a vicious cycle formed. Today, the equity situation is totally different. According to a new report from ATTOM Data Solutions more than 1-in-4 homes with a mortgage have at least 50% equity. The report explains: “…nearly 14.5 million U.S. properties were equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value…The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage.” In addition, according to the U.S. Census Bureau, 30.3% of homes in the country have no mortgage on them. Almost 50% of all homes have at least 50% equity. If we take both numbers, the 30.3% of all homes without a mortgage and the 17.9% with at least 50% equity (25.7% of the 69.3% of homes with a mortgage), we realize that 48.2% of all homes in the country have at least 50% equity. Bottom Line Unlike 2008, almost half of the homeowners in the country are sitting on massive amounts of home equity. They will not be walking away from their homes if the housing market begins to...

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24% of Renters Believe Winter is the Best Time to Buy a Home

Posted by on Dec 5, 2018 in Uncategorized | 0 comments

In real estate, the spring is often seen as the ideal time to buy or sell a house. The term “Spring Buyer’s Season” exists for a reason, as renters and those looking to move on from their current home thaw out from the winter and hit the market ready to buy. According to Bank of America’s annual Home Buyer Insights Report, 41% of renters surveyed agree that spring is the best time to buy a home. The surprising result, however, is that when ranking the seasons, winter comes in second at 24%. In many areas of the country, the spring and summer are the most competitive seasons for buyers. Families with children often want to move over the summer to make sure that their kids are ready for school in the fall. This often leads those families who haven’t found homes to buy to push pause on their search in the fall and winter months. This creates a great environment for buyers to find a home with less competition. According to moving.com, scheduling a move during the winter months also comes with the best price. “If you define ‘best’ by cost then, generally speaking, you are more likely to save on a move during the late September to April window. Demand for movers usually slows down during this time frame and rates are low.” There are also many benefits to listing your house for sale during the winter months as well! As we recently mentioned, buyers who are out in the winter are serious about wanting to find a home, and there is traditionally less competition on the market which gives you greater exposure to those buyers. Bottom Line As always, the best time to buy or move all depends on each individual buyer or seller’s goals and needs. If you are one of the many who would like to make a move this winter, let’s get together to create a plan to make it...

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The #1 Reason to Not Wait Until Spring to Sell Your House

Posted by on Dec 4, 2018 in Uncategorized | 0 comments

Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition! The #1 Reason to List Your Home in the Winter Months is Less Competition! Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.   As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February).  Temperatures aren’t the only thing that heats up in the spring – so do listings! In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house. Added Bonus: Only Serious Buyers Are Out in the Winter At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping. Bottom Line If you have been debating whether or not to sell your home and are curious about market conditions in your area, let’s get together to help you decide the best time to list your house for...

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Buyers: Don’t Be Surprised by Closing Costs!

Posted by on Nov 30, 2018 in Uncategorized | 0 comments

Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage? By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs. But what are closing costs anyway? According to Trulia: “Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.)” Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. As mentioned before, Closing costs are typically between 2% and 5% of your purchase price. Trulia continues to give great advice, saying that: “…understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.” Bottom Line Speak with your lender and agent early and often to determine how muchyou’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward...

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7 Reasons to List Your House For Sale This Holiday Season

Posted by on Nov 28, 2018 in Uncategorized | 0 comments

Every year at this time there are many homeowners who decide to wait until after the holidays to list their homes for the first time, while others who already have their homes on the market decide to take them off until after the holidays. Here are seven great reasons not to wait: Relocation buyers are out there. Many companies are still hiring throughout the holidays and need their new employees in their new positions as soon as possible. Purchasers who are looking for homes during the holidays are serious buyers and are ready to buy now. You can restrict the showings on your home to the times you want it shown. You will remain in control. Homes show better when decorated for the holidays. There is minimal competition for you as a seller right now. Inventory of homes for sale traditionally slows in the late fall, early winter. Let’s take a look at listing inventory as compared to the same time last year: The desire to own a home doesn’t stop when the holidays come. Buyers who were unable to find their dream homes during the busy spring and summer months are still searching! The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge and reach new heights which will lessen the demand for your house in 2019. Bottom Line  Waiting until after the holidays to sell your home probably doesn’t make...

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The Cost of NOT Owning Your Home

Posted by on Nov 26, 2018 in Uncategorized | 0 comments

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed. Zillow recently reported that: “In reality, buying or renting a home is an intensely personal decision, with emotional and even financial considerations that go beyond whether to invest in this one (admittedly large) asset. Looking strictly at housing market numbers, there is a concrete point at which buying a home makes more financial sense than renting it.” What proof exists that owning is financially better than renting? 1. We recently highlighted the top 5 financial benefits of homeownership: Homeownership is a form of forced savings. Homeownership provides tax savings. Homeownership allows you to lock in your monthly housing cost. Buying a home is cheaper than renting. No other investment lets you live inside of it. 2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter. 3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2017 could build more than $48,000 in family wealth over the next five years. 4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin!! Bottom Line Owning a home has always been, and will always be, better from a financial standpoint than...

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Are Homeowners Renovating to Sell or to Stay?

Posted by on Nov 23, 2018 in Uncategorized | 0 comments

Over the past few years, two trends have emerged in the housing market: Home renovations have shot up Inventory of homes available for sale on the market has dropped A ‘normal’ housing market is defined by having a 6-month supply of homes for sale. According to the latest Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply. This low inventory environment has many current homeowners worried that they would be unable to find a home to buy if they were to list and sell their current houses, which is causing many homeowners to instead renovate their homes in an attempt to fit their needs. According to Home Advisor, homeowners spent an average of $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers. A new study from Zillow asked the question, “Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, what would you do?” Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below.   More and more studies are coming out about the intention that many Americans have to ‘age in place’ (or retire in the area in which they live). Among retirees, 91% would prefer to renovate than spend their available funds on a down payment on a new home. If their current house fits their needs as far as space and accessibility are concerned, then a renovation could make sense. But if renovations will end up changing the identity of the home and impacting resale value, then the renovations may end up costing them more in the long run. With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this low-competition environment could net you more money than your renovations otherwise would. Bottom Line If you are one of the many homeowners who is thinking about remodeling instead of selling, let’s get together to help you make the right decision for you based on the demand for your house in today’s...

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75% of Renters Have Been Misinformed

Posted by on Nov 21, 2018 in Uncategorized | 0 comments

Recently, multiple headlines have been written asserting that homeownership is less affordable today than at any other time in the last decade. Though the headlines are accurate, they lack context and lead too many Americans to believe that they can’t partake in a major part of the American Dream – owning a home. In 2008, the housing market crashed and home values fell by as much as 60% in certain markets. This was the major trigger to the Great Recession we experienced from 2008 to 2010. To come back from that recession, mortgage interest rates were pushed down to levels that were never seen before. For the last ten years, you could purchase a home at a dramatically discounted price and attain a mortgage at a historically low mortgage rate. Affordability skyrocketed. Now that home values have returned to where they should be, and mortgage rates are beginning to increase, it is less affordable to own a home than it was over the last ten years. However, what is not being reported is that it is MORE AFFORDABLE to own a home today than at any other time since 1985 (when data was first collected on this point). If you take out the years after the crash, affordability today is greater than it has been at almost any time in American history. This has not been adequately reported which has led to many Americans believing that they cannot currently afford a home. As an example, the latest edition of Freddie Mac’s Research: Profile of Today’s Renter reveals that 75% of renters now believe it is more affordable to rent than to own their own homes. This percentage is the highest ever recorded. The challenge is that this belief is incorrect. Study after study has proven that in today’s market, it is less expensive to own a home than it is to rent a home in the United States. Thankfully, some are starting to see this situation and accurately report on it. The National Association of Realtors, in their 2019 Housing Forecast, mentions this concern: “While the U.S. is experiencing historically normal levels of affordability, potential buyers may be staying out of the market because of perceived problems with affordability.” Bottom Line If you are one of the many renters who would like to own their own homes, let’s get together to find out if homeownership is affordable for you right...

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Why Has Housing Supply Increased as Sales Have Slowed Down?

Posted by on Nov 19, 2018 in Uncategorized | 0 comments

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers. For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared. NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift, “This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.” Let’s take a deeper look: Interest Rates Since January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months. “The rise in [mortgage] rates paired with this very strong price appreciation absolutely is slowing housing,” saidFannie Mae’s Chief Economist Doug Duncan. Even though rates are higher than they’ve been in a decade, they still remain below the average for the 1970s, 80s, 90s, and 2000s! Mismatch of Inventory Elizabeth Mendenhall, President of NAR, said it best, “Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.” Prices of starter and trade-up homes have appreciated faster than their higher-priced counterparts. Over the last 5 years, the lowest-priced homes have appreciated by 47% while the highest-priced homes have appreciated by only 24%. According to the Institute of Luxury Home Market’s Luxury Market Report, the $1M-and-up price range is now experiencing a buyer’s market. This means that supply (inventory) has finally caught up with demand and buyers are in the driver’s seat when it comes to negotiations. Additionally, many listings in this price range have experienced price cuts in order to entice buyers to put in offers. Natural Disasters Although not fully to blame for the national shortage in sales and inventory, natural disasters like Hurricane Florence, Hurricane Michael, and the wildfires on the West Coast have certainly had an impact. Bottom Line Additional inventory coming to market could help normalize the housing market and allow incomes to catch up to home prices. For more information about sales and inventory in our area, let’s get together so we can help you make the best decision for you and your...

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