• June 19, 2018
    Top 5 Reasons You Shouldn’t FSBO

    Top 5 Reasons You Shouldn’t FSBO | MyKCM

    In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

    Here are the top five reasons:

    1. Exposure to Prospective Buyers

    According to the 2017 Profile of Home Buyers and Sellers from NAR, last year 95% of buyers search online for a home. That is in comparison to only 15% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

    2. Results Come from the Internet

    Where did buyers find the home they actually purchased?

    • 49% on the internet
    • 31% from a Real Estate Agent
    • 7% from a yard sign
    • 1% from newspapers

    The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

    3. There Are Too Many People to Negotiate With

    Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale by Owner:

    • The buyer who wants the best deal possible
    • The buyer’s agent who solely represents the best interest of the buyer
    • The buyer’s attorney (in some parts of the country)
    • The home inspection companies, which work for the buyer and will almost always find some problems with the house
    • The appraiser if there is a question of value

    4. FSBOing Has Become More And More Difficult

    The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

    5. You Net More Money When Using an Agent

    Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

    study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more, by not listing with an agent. One of the main reasons for the price difference at the time of sale is:

    “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. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6% this year.

    Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?

    Bottom Line

    Before you decide to take on the challenges of selling your house on your own, let’s get together to discuss your needs.




    June 18, 2018
    How A Lack of Inventory Impacts the Housing Market

    How A Lack of Inventory Impacts the Housing Market | MyKCM

    The housing crisis is finally in the rear-view mirror as the real estate market moves down the road to a complete recovery. Home values are up, home sales are up, and distressed sales (foreclosures and short sales) have fallen to their lowest points in years. The market will continue to strengthen in 2018.

    However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. Buyer demand naturally increases during the summer months, but supply is not keeping up.

    Here are the thoughts of a few industry experts on the subject:

    Lawrence Yun, Chief Economist at National Association of Realtors

    “The worsening inventory crunch through the first three months of the year inflicted even more upward pressure on home prices in a majority of markets. Following the same trend over the last couple of years, a strengthening job market and income gains are not being met by meaningful sales gains because of unrelenting supply and affordability headwinds.”

    Sam Khater, Chief Economist for Freddie Mac

    “As we head into late spring, the demand for purchase credit remains rock solid, which should set us up for another robust summer home sales season. While this year’s high rates – up 50 basic points from a year ago – have put pressure on the budgets of some home shoppers, weak inventory levels are what’s keeping the housing market from a stronger sales pace.”

    Javier Vivas, Director of Economic Research for Realtor.com

    “The dynamics of increased competition and buyer frustration are unlikely to change…In fact, the direction of the trend is pointing to a growing mismatch between the pool of prospective buyers and existing inventory.”

    Bottom Line

    If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.




    June 15, 2018
    Top 4 Home Renovations for Max ROI [INFOGRAPHIC]

    Top 4 Home Renovations for Max ROI [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Whether you are selling your home, just purchased your first home or are a homeowner planning to stay put for a while, there is value in knowing which home improvement projects will net you the most Return On Investment (ROI).
    • Minor bathroom renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
    • Upgrading your landscaping or curb appeal helps get buyers in the door. These upgrades rank as the 2nd and 4th renovations for returns on investment.




    June 14, 2018
    Are Lending Standards Too Loose…or Too Tight?

    Are Lending Standards Too Loose…or Too Tight? | MyKCM

    With home values appreciating at record rates, some are concerned that we may be heading for another housing bubble like the one we experienced a decade ago. One of the major culprits of that housing boom and bust was the loosening of standards for mortgage credit.

    In a study done at the University of North Carolina immediately after the crisis, it was revealed that:

    “Lenders began originating large numbers of high risk mortgages from around 2004 to 2007, and loans from those vintage years exhibited higher default rates than loans made either before or after.”

    A study by John V Duca, John Muellbauer, and Anthony Murphy concluded that those risky mortgages caused the housing crisis:

    “Our findings indicate that swings in credit standards played a major, if not the major, role in driving the recent boom and bust in US house prices.”

    How do today’s mortgage standards compare to those from 2004 to 2007?

    The Mortgage Bankers’ Association tracts mortgage standards in their Mortgage Credit Availability Index (MCAI). A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. While the chart below shows the index going back to that period between 2004 and 2007 when loose standards caused the housing bubble, we can see that, though the index has risen slightly over the last several years, we are nowhere near the standards that precipitated the housing crisis.

    Are Lending Standards Too Loose…or Too Tight? | MyKCM

    Bottom Line

    If anything, standards today are too tight and are preventing some qualified buyers from getting the mortgage credit they deserve.




    June 13, 2018
    Parents Say Kids’ Opinions Matter Big When Buying a Home

    Parents Say Kids’ Opinions Matter Big When Buying a Home | MyKCM

    A recent survey conducted by Harris Poll and released by SunTrust Mortgage found that “55% of homeowners with a child under the age of 18 at the time when they purchased their home said that the opinion of their offspring played a major role in their home buying decision.”

    When the results were broken down by the parent’s age, millennials (those 18-36) led the way with 74% of homeowners saying that their child’s opinion was a factor in choosing which home to buy. Eighty-three percent of renters believe that their child’s opinion would be a deciding factor when looking to purchase a home.

    So what features in a home are most important to kids?

    Parents Say Kids’ Opinions Matter Big When Buying a Home | MyKCM

    Coming in at 57%, it should come as no surprise that gaining their own bedrooms was the top most-desirable feature of any home for kids, followed by a large back yard to play in at 34%.

    Todd Chamberlain, Head of Mortgage Banking at SunTrust explained the reasoning behind the survey,

    “As a parent of two kids, I know from experience that including children in the home buying process is not only fun for the whole family, but also educational for our homebuyers of tomorrow.”

    Bottom Line

    If you’re thinking about selling your home this year, make sure to highlight all the kid-friendly features your home has to offer so that you can sway the real decision makers.




    June 12, 2018
    When Is a Good Time to Rent? Not Now!

    When Is a Good Time to Rent? Not Now! | MyKCM

    People often ask if now is a good time to buy a home, but nobody ever asks whether or not it’s a good time to rent. Regardless, we want to make certain that everyone understands that now is NOT a good time to rent.

    The Census Bureau recently released their 2018 first quarter median rent numbers. According to their report, here is a graph showing rent increases from 1988 until today:

    When Is a Good Time to Rent? Not Now! | MyKCM

    As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.

    Bottom Line

    One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, let’s meet to determine if you are able to today!

     


    June 11, 2018
    Days on The Market Drops to New Low in April

    Days on The Market Drops to New Low in April | MyKCM

    According to recently released data from the National Association of Realtors (NAR), the median number of days that a home spent on the market hit a new low of 26 days in April, as 57% of homes were on the market for under a month.

    NAR’s Chief Economist, Lawrence Yun, had this to say,

    “What is available for sale is going under contract at a rapid pace. Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”

    Strong buyer demand, a good economy, and a low inventory of new and existing homes for sale created the perfect storm to accelerate the time between listing and signing a contract.

    The chart below shows the median days on the market from April 2017 to April 2018:

    Days on The Market Drops to New Low in April | MyKCM

    Bottom Line

    If you are a homeowner who is debating whether or not to list your home for sale, know that national market conditions are primed for a quick turnaround! Let’s get together to discuss exactly what’s going on in our area, today!


    June 8, 2018
    The Cost of Renting vs. Buying [INFOGRAPHIC]

    The Cost of Renting vs. Buying [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Historically, the choice between renting or buying a home has been a tough decision.
    • Looking at the percentage of income needed to rent a median-priced home today (28.8%) vs. the percentage needed to buy a median-priced home (17.1%), the choice becomes obvious.
    • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!




    June 7, 2018
    Did Tax Reform Kill the Luxury Market? NOT SO FAR!

    Did Tax Reform Kill the Luxury Market? NOT SO FAR! | MyKCM

    The new tax code limits the deduction of state and local property taxes, as well as income or sales taxes, to a total of $10,000. When the tax reform legislation was put into law at the beginning of the year, some experts felt that it could have a negative impact on the luxury housing market.

    Capital Economics:

    “The impact on expensive homes could be detrimental, with a limit on the MID raising taxes for those that itemize.”

    Mark Zandi of Moody’s Analytics:

    “The impact on house prices is much greater for higher-priced homes, especially in parts of the country where incomes are higher and there are thus a disproportionate number of itemizers, and where homeowners have big mortgages and property tax bills.”

    The National Association of Realtors (NAR) predicted price declines in “high cost, higher tax areas” because of the tax changes. They forecasted a depreciation of 6.2% in New Jersey and 4.8% in Washington D.C. and New York.

    What has actually happened?

    Here are a few metrics to consider before we write-off the luxury market:

    1. According to NAR’s latest Existing Home Sales Report, here is the percent change in sales from last year:

    • Homes sales between $500,000 – $750,000 are up 11.9%
    • Homes sales between $750,000 – $1M are up 16.8%
    • Homes sales over $1,000,000 are up 26.7%

    2. In a report from Trulia, it was revealed that searches for “premium” homes as a percentage of all searches increased from 38.4% in the fourth quarter of 2017 to 41.4% in the first quarter of 2018.

    3. According to an article from Bloomberg:

    “Median home values nationally rose 8 percent in March compared with a year earlier, while neighborhoods of San Francisco and San Jose, California, have increased more than 25 percent.

    Prices in affluent areas in Delaware and New York, such as the Hamptons, also surged more than 20 percent.”

    Bottom Line

    Aaron Terrazas, Zillow’s Senior Economist, probably summed up real estate’s luxury market the best:

    “We are seeing the opposite of what was expected. We have certainly not seen the doomsday predictions play out.”




    June 6, 2018
    Homeowners & Appraisers See the Most Eye-to-Eye on Price in 3 Years

    Homeowners & Appraisers See the Most Eye-to-Eye on Price in 3 Years | MyKCM

    In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5% (or more) over the next twelve months. One major challenge in such a market is the bank appraisal.

    When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the same neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

    Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

    March 2015 marked the first month of a three-year gap between what an appraiser and a homeowner believed a home was worth. That gap widened to 2.65% in September 2015 and had consistently hovered between 1.0% and 2.0% through November 2017.

    The chart below illustrates the changes in home price estimates over the last three years:

    Homeowners & Appraisers See the Most Eye-to-Eye on Price in 3 Years | MyKCM

    In the latest release, the disparity was the narrowest it has been since March 2015, as the gap between appraisers and homeowners was only -0.33%. This is important for homeowners to note as even a .33% difference in appraisal could equate to thousands of dollars that a buyer or seller has to come up with at closing (depending on the price of the home).

    Bill Banfield, Executive VP of Capital Markets at Quicken Loans urges homeowners to find out how their local markets have been impacted by supply and demand: 

    “The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process. The Home Price Perception Index is a way to illustrate the differences of opinion, and these differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home.”

    Bottom Line

    Every house on the market must be sold twice; once to a prospective buyer and then again to the bank (through the bank’s appraisal). With escalating prices, the second sale may be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacles that may arise.




    June 5, 2018
    4 Steps to Follow When Presenting an Offer in Today’s Market!

    4 Steps to Follow When Presenting an Offer in Today’s Market! | MyKCM

    So, you’ve been searching for that perfect house to call a ‘home,’ and you’ve finally found it! The price is right, and in such a competitive market, you want to make sure that you make a great offer so that you can guarantee that your dream of making this house yours comes true!

    Below are 4 steps provided by Freddie Mac to help buyers make offers, along with some additional information for your consideration:

    1. Determine Your Price

    “You’ve found the perfect home and you’re ready to buy. Now what? Your real estate agent will be by your side, helping you determine an offer price that is fair.”

    Based on your agent’s experience and key considerations (like similar homes recently sold in the same neighborhood or the condition of the house and what you can afford), your agent will help you to determine the offer that you are going to present.

    Getting pre-approved will not only show home-sellers that you are serious about buying, but it will also allow you to make your offer with confidence because you’ll know that you have already been approved for a mortgage in that amount.

    2. Submit an Offer

    “Once you’ve determined your price, your agent will draw up an offer, or purchase agreement, to submit to the seller’s real estate agent. This offer will include the purchase price and terms and conditions of the purchase.”

    Talk with your agent to find out if there are any ways in which you can make your offer stand out in this competitive market! A licensed real estate agent who is active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer.

    3. Negotiate the Offer

    “Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or to adjust the closing date. In these cases, the seller’s agent will submit a counteroffer to your agent, detailing their desired changes, at this time, you can either accept the offer or decide if you want to counter.

    Each time changes are made through a counteroffer, you or the seller have the option to accept, reject or counter it again. The contract is considered final when both parties sign the written offer.”

    If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller or even cancel the contract altogether.

    4. Act Fast

    The inventory of homes listed for sale has remained well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.

    Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as quickly as possible.

    Bottom Line 

    Whether buying your first home or your fifth, having a local real estate professional who is an expert in his or her market on your side is your best bet in making sure the process goes smoothly. Let’s talk about how we can make your dreams of homeownership a reality!




    June 4, 2018
    4 Reasons Why Summer Is a Great Time to Buy a Home!

    4 Reasons Why Summer Is a Great Time to Buy a Home! | MyKCM

    Here are four great reasons to consider buying a home today instead of waiting.

    1. Prices Will Continue to Rise

    CoreLogic’s latest Home Price Insights reports that home prices have appreciated by 7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

    Home values will continue to appreciate for years. Waiting no longer makes sense.

    2. Mortgage Interest Rates Are Projected to Increase

    Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have increased by half a percentage point already in 2018 to around 4.5%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

    An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

    3. Either Way, You Are Paying a Mortgage

    There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    Are you ready to put your housing cost to work for you?

    4. It’s Time to Move on with Your Life

    The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

    But what if they weren’t? Would you wait?

    Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

    If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.




    June 1, 2018
    Top Reasons to Own Your Home [INFOGRAPHIC]

    Top Reasons to Own Your Home [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • June is National Homeownership Month!
    • Now is a great time to reflect on the many benefits of homeownership that go way beyond the financial.
    • What reasons do you have to own your own home?




    May 31, 2018
    Will Home Prices Fall as Mortgage Rates Rise?

    Will Home Prices Fall as Mortgage Rates Rise? | MyKCM

    Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

    However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

    Mark FlemingFirst American’s Chief Economist:

    “Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market…

    The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

    Terry LoebsFounder of Pulsenomics:

    “Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

    Laurie GoodmanCodirector of the Housing Finance Policy Center at theUrban Institute:

    “Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

    Industry reports are also calling for substantial home price appreciation this year. Here are three examples:

    Bottom Line

    As Freddie Mac reported earlier this year in their Insights Report“Nowhere to go but up? How increasing mortgage rates could affect housing,”

    “As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”




    May 30, 2018
    Millennials Are Skipping Starter Homes for Their Dream Homes

    Millennials Are Skipping Starter Homes for Their Dream Homes | MyKCM

    A new trend has begun to emerge. With home prices skyrocketing in the starter home category, many first-time homebuyers are skipping the traditional starter homes and moving right into their dream homes.

    What’s a Starter Home?

    According to the National Association of Realtors (NAR), simply put, a starter home is a one or two-bedroom home (sometimes even a small, three bedroom). “Prices vary widely by market but starters on average cost $150,000 to $250,000 while trade-up and premium homes cost upwards of $300,000.”

    Finding Their Forever Homes Now

    A recent CNBC article revealed that there are many factors that delayed older millennials (ages 25-35) from buying a home earlier in their lives. The aftereffects of the Great Recession teaming up with larger education costs forced many to either remain living in their parent’s homes or to rent.

    With the economy continuing to improve, many millennials have been able to break into better-paying jobs which has helped spur down payment savings. As the dream of homeownership comes closer to reality, many millennials are saving for their forever homes.

    According to the latest statistics from NAR, 30% of millennials bought homes for $300,000 or more this year (up from 14% in 2013). Diane Swonk, Chief Economist at Grant Thornton weighed in saying, “They rented for longer. Now they’re going to where they want to stay.”

    More and more millennials are settling down, getting married, and starting families, which is a huge factor driving them to look for larger homes.

    Increased competition in the starter home market has also been a driving force in waiting to afford their dream homes. Inventory in the starter home market is down 14.2% from last year, according to research from Trulia. This has driven prices up and has led to bidding wars.

    Many first-time buyers who were originally looking for starter homes are realizing that for just a little bit more of an investment, they could afford trade-up or premium homes instead.

    Bottom Line

    If you plan on purchasing your first home this year, let’s get together to determine how much house you can afford. You may be pleasantly surprised.




    May 29, 2018
    5 Reasons Why to Sell This Summer!

    5 Reasons Why to Sell This Summer! | MyKCM

    Here are five reasons listing your home for sale this summer makes sense.

    1. Demand Is Strong

    The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! More often than not, multiple buyers are competing with each other to buy the same home.

    Take advantage of the buyer activity currently in the market.

    2. There Is Less Competition Now

    Housing inventory has declined year-over-year for the last 35 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

    Historically, the average number of years a homeowner stayed in his or her home was six, but that number has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

    The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

    3. The Process Will Be Quicker

    Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 41 days.

    4. There Will Never Be a Better Time to Move Up

    If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

    Prices are projected to appreciate by 5.2% over the next year, according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

    5. It’s Time to Move on With Your Life

    Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

    Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

    That is what is truly important.




    May 28, 2018
    All Gave Some. Some Gave All.

    All Gave Some. Some Gave All. | MyKCM



    May 25, 2018
    Drop in Inventory Fuels Sales Slowdown [INFOGRAPHIC]

    Drop in Inventory Fuels Sales Slowdown [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Existing Home Sales are now at an annual pace of 5.46 million.
    • Inventory of existing homes for sale dropped to a 4-month supply, marking the 35th month in a row of declines.
    • The median price of homes sold in April was $257,900. This is the 74th consecutive month of year-over-year price gain




    May 24, 2018
    Selling Your House on Your Own Could Cost You

    Selling Your House on Your Own Could Cost You | MyKCM

    In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.

    However, a study by Collateral Analytics 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. 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 had 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 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.

    Conclusions from the study:

    1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
    2. The data suggests the average price was near 6% lower for FSBO sales of similar properties.

    Bottom Line

    As Dave Ramsey, America’s trusted voice on money, explains:

    “Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”




    May 23, 2018
    Why Have Interest Rates Jumped to a 7-Year High?

    Why Have Interest Rates Jumped to a 7-Year High? | MyKCM

    Interest rates for a 30-year fixed rate mortgage have climbed from 3.95% in the first week of January up to 4.61% last week, which marks a 7-year high according to Freddie Mac. The current pace of acceleration has been fueled by many factors.

    Sam Khater, Freddie Mac’s Chief Economist, had this to say:

    “Healthy consumer spending and higher commodity prices spooked bond markets and led to higher mortgage rates over the past week.

    Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”

    But what do gas prices have to do with interest rates?

    Investopedia explains the relationship like this:

    “The price of oil and inflation are often seen as being connected in a cause-and-effect relationship. As oil prices move up or down, inflation follows in the same direction.”

    You may have noticed that filling your gas tank has become substantially more expensive in recent months. The average national gas price has climbed nearly $0.50 from the beginning of the year, leading to the highest price for Memorial Day weekend since 2014.

    As rates go up, your purchasing power goes down, but don’t worry; rates are still well below the averages we’ve seen over the last four decades.

    “Freddie Mac said this year’s higher rates have not yet caused much of a ripple in the strong demand levels for buying a home seen in most markets, but inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

    Buying sooner rather than later will help lock in a lower rate than waiting, as the experts believe rates will continue to climb. Even a small increase in interest rates can have a big impact on your monthly housing cost.

    Bottom Line

    If you are planning on buying a home this year, keep an eye on gas prices the next time you’re at the pump. If you start to feel a big jump in price, know that rates are probably on their way up, too.




    May 22, 2018
    How Current Interest Rates Can Have a High Impact on Your Purchasing Power

    How Current Interest Rates Can Have a High Impact on Your Purchasing Power | MyKCM

    According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.61%, which is still near record lows in comparison to recent history!

    The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

    Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

    The chart below shows the impact that rising interest rates would have if you planned to purchase a home within the national median price range while keeping your principal and interest payments between $1,850-$1,900 a month.

    How Current Interest Rates Can Have a High Impact on Your Purchasing Power | MyKCM

    With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

    Act now to get the most house for your hard-earned money.




    May 21, 2018
    Don’t Wait to Sell Your House! Buyers Are Out Now

    Don’t Wait to Sell Your House! Buyers Are Out Now | MyKCM

    Recently released data from the National Association of Realtors (NAR) suggests that now is a great time to sell your home. The concept of ‘supply & demand’ reveals that the best price for an item is realized when the supply of that item is low and the demand for that item is high.

    Let’s see how this applies to the current residential real estate market.

    SUPPLY

    It is no secret that the supply of homes for sale has been far below the number needed to sustain a normal market for over a year at this point. A normal market requires six months of housing inventory to meet the demand. The latest report from NAR revealed that there is currently only a 3.6-month supply of houses on the market.

    Supply is currently very low!

    DEMAND

    A report that was just released tells us that demand is very strong. The most recent Foot Traffic Report (which sheds light on the number of buyers who are actually out looking at homes) disclosed that “foot traffic grew 10.5 points to 52.4 in March as the new season approaches.”

    Demand is currently very high!

    Bottom Line

    Waiting to sell will only increase the competition between you and all of the other sellers putting their houses on the market later this summer. If you are debating whether or not to list your home, let’s get together to discuss the conditions in our market.




    May 18, 2018
    Is Your First Home Within Your Grasp Now? [INFOGRAPHIC]

    Is Your First Home Within Your Grasp Now? [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds.
    • According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.
    • More and more ‘old millennials’ (25-36) are realizing that homeownership is within their grasp now!




    May 17, 2018
    Moving Up to Your Dream Home? Don’t Wait!

    Moving Up to Your Dream Home? Don’t Wait! | MyKCM

    Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.

    Where are home values today compared to the beginning of the year?

    While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:

    • January: Prices were up 0.5% over the month before.
    • February: Prices were up 1% over the month before.
    • March: Prices were up 1.4% over the month before.

    Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.

    How can prices rise while mortgage rates increase?

    Freddie Mac explained in a recent Insight Report:

    “In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

    Bottom Line

    If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.




    May 16, 2018
    Renters Under 50 Want to Buy a Home!

    Renters Under 50 Want to Buy a Home! | MyKCM

    Every year, the New York Federal Reserve publishes the results of their Survey of Consumer Expectations (SCE). Each survey covers a wide range of topics including inflation, labor market, household finance, credit access and housing.

    One of the many questions asked in the housing section of the survey was:

    Assuming you had the financial resources to do so, would you like to OWN instead of RENT your primary residence?

    Over three-quarters of respondents under the age of 50 said that they would prefer to own their home, rather than rent. While only 52.6% of those over 50 would prefer to own. The full breakdown can be found in the chart below.

    Renters Under 50 Want to Buy a Home! | MyKCM

    When renters were asked what the average probability of owning a primary residence at some point in their future was, 66.4% of those under 50 believed that they would eventually own their home, while only 23% of those over 50 did.

    Renters Under 50 Want to Buy a Home! | MyKCM

    Bottom Line

    Many had wondered if young Americans had lost their desire to own a home, but for those renting now, that dream is still alive.




    May 15, 2018
    Access: An Important Factor in Getting Your House SOLD!

    Access: An Important Factor in Getting Your House SOLD! | MyKCM

    So, you’ve decided to sell your house. You’ve hired a real estate professional to help you through the entire process, and they have asked you what level of access you want to provide to your potential buyers.

    There are four elements to a quality listing. At the top of the list is Access, followed by Condition, Financing, and Price. There are many levels of access that you can provide to your agent so that he or she can show your home.

    Here are five levels of access that you can give to buyers, along with a brief description:

    1. Lockbox on the Door – this allows buyers the ability to see the home as soon as they are aware of the listing, or at their convenience.
    2. Providing a Key to the Home – although the buyer’s agent may need to stop by an office to pick up the key, there is little delay in being able to show the home.
    3. Open Access with a Phone Call – the seller allows showings with just a phone call’s notice.
    4. By Appointment Only (example: 48-Hour Notice) – Many buyers who are relocating for a new career or promotion start working in that area prior to purchasing their home. They often like to take advantage of free time during business hours (such as their lunch break) to view potential homes. Because of this, they may not be able to plan their availability far in advance or may be unable to wait 48 hours to see the house.
    5. Limited Access (example: the home is only available on Mondays or Tuesdays at 2pm or for only a couple of hours a day) – This is the most difficult way to be able to show your house to potential buyers.

    With May proving to be the best month to sell your home, access can make or break your ability to get the price you are looking for, or even sell your house at all.




    May 14, 2018
    Homeownership: “A Man Is Not a Complete Man, Unless He Owns a House”

    Homeownership: "A Man Is Not a Complete Man, Unless He Owns a House" | MyKCM

    The famous quote by Walt Whitman, “A man is not a whole and complete man, unless he owns a house and the ground it stands on,” can be used to describe homeownership in America today. The Census revealed that the percentage of homeowners in America has been steadily climbing back up since hitting a 50-year low in 2016. The homeownership rate in the first quarter of 2018 was 64.2%, higher than last year’s 63.6%.

    Homeownership: "A Man Is Not a Complete Man, Unless He Owns a House" | MyKCM

    Chief Economist, Dr. Ralph McLaughlin, in his VUE Blog gave these new homeownership numbers some context:

    “The trend is clear: the homeownership rate has been ticking up for five consecutive quarters, and the number of new renter households has fallen for four consecutive quarters. Owner-occupied households grew by 1.345 million from a year ago, while the number of renters actually fell by 286,000 households.

    The fact that we now have four consecutive quarters where owner households increased while renter households fell is a strong sign households are making a switch from renting to buying. This is a trend that multifamily builders, investors, and landlords should take note of.”

    In a separate article comparing the rental population in America to the homeowner population, Realtor.com also concluded that the gap is now shrinking:

    “The U.S. added 1.3 million owner households over the last year and lost 286,000 renter households, the fourth consecutive quarter in which the number of renter households declined from the same quarter a year earlier. That could pose challenges for apartment landlords, who are bracing this year for one of the largest infusions of new rental supply in three decades.”

    America’s belief in homeownership was also evidenced in a survey conducted by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”

    The results:

    • 43% said homeownership was essential to the American Dream
    • 48% said homeownership was important to the American Dream
    • Only 9% said it was not important

    Bottom Line

    Homeownership has been, is, and always will be a crucial part of the American Dream.




    May 11, 2018
    3 Tips for Making Your Dream of Owning a Home a Reality [INFOGRAPHIC]

    3 Tips for Making Your Dream of Owning a Home a Reality [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking much about it.
    • Living within a budget right now will help you save money for down payments while also paying down other debts that might be holding you back.
    • What are you willing to cut back on to make your dreams of homeownership a reality?




    May 10, 2018
    5 Ways Tax Reform Has Impacted the 2018 Housing Market

    5 Ways Tax Reform Has Impacted the 2018 Housing Market | MyKCM

    Starting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double-digit price depreciation and suggested that buyer demand could drop like a rock. There was even sentiment that homeownership could lose its coveted status as a major component of the American Dream.

    Now that the first quarter numbers are in, we can begin to decipher the actual that impact tax reform has had on the real estate market.

    1. Has tax reform killed off home buyer demand? The answer is “NO.”

    According to the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,” buyer demand has increased each month over the last three months and is HIGHER than it was for the same months last year. Buyer demand is not down. It is up.

    2. Have the tax changes affected America’s belief in real estate as a long-term investment? The answer is “NO.”

    Two weeks ago, Gallup released its annual survey which asks Americans which asset they believed to be the best long-term investment. The survey revealed:

    “More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.” 

    The survey also showed that the percentage of Americans who believe real estate is the best long-term investment was unchanged from a year ago.

    3. Has the homeownership rate been negatively impacted by the tax changes? The answer is “NO.”

    Not only did the homeownership rate not crash, it increased when compared to the first quarter of last year according to data released by the Census Bureau.

    In her latest Z Report,” Ivy Zelman explains that tax reform didn’t hurt the homeownership rate, but instead, enhanced it:

    “We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

    4. Has the upper-end market been crushed by new State and Local Taxes (SALT) limitations? The answer is “NO.”

    In the National Association of Realtors latest Existing Home Sales Report it was revealed that:

    • Sales between $500,000 and $750,000 were up 4.5% year-over-year
    • Sales between $750,000 and $1M were up 15.1% year-over-year
    • Sales over $1M were up 17.3% year-over-year

    5. Will the reforms in the tax code cause home prices to tumble over the next twelve months? The answer is “NO.”

    According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

    Bottom Line

    The doomsday scenarios that some predicted based on tax reform fears seem to have already blown over based on the early housing industry numbers being reported.




    May 9, 2018
    Real Estate Tops Best Investment Poll for 5th Year Running

    Real Estate Tops Best Investment Poll for 5th Year 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 fifth 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.

    Real Estate Tops Best Investment Poll for 5th Year Running | MyKCM

    The study makes it a point to draw attention to the contrast in the sentiment over the last five 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.




    May 8, 2018
    Home Inspections: What to Expect

    Home Inspections: What to Expect | MyKCM

    So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. Oftentimes, agents make your offer contingent on a clean home inspection.

    This contingency allows you to renegotiate the price you paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed.

    How to Choose an Inspector

    Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. HGTV recommends that you consider the following 5 areas when choosing the right home inspector for you:

    1. Qualifications – find out what’s included in your inspection and if the age or location of your home may warrant specific certifications or specialties.
    2. Sample Reports – ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. The more detailed the report, the better in most cases.
    3. References – do your homework – ask for phone numbers and names of past clients who you can call to ask about their experiences.
    4. Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Membership in one of these organizations often means that continued training and education are provided.
    5. Errors & Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human after all, and it is possible that they might miss something they should have seen.

    Ask your inspector if it’s okay for you to tag along during the inspection, that way they can point out anything that should be addressed or fixed.

    Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace and chimney, the foundation, and so much more!

    Bottom Line

    They say ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional who you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.




    May 7, 2018
    What If I Wait Until Next Year to Buy a Home?

    What If I Wait Until Next Year to Buy a Home? | MyKCM

    We recently shared that national home prices have increased by 6.7% year-over-year. Over that same time period, interest rates have remained historically low which has allowed many buyers to enter the market.

    As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

    The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Reporthome prices will appreciate by 5.2% over the next 12 months.

    What Does This Mean as a Buyer?

    If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

    What If I Wait Until Next Year to Buy a Home? | MyKCM

    Bottom Line

    If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.




    May 4, 2018
    50% of Homes Sold in 30 Days in March [INFOGRAPHIC]

    50% of Homes Sold in 30 days in March [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The National Association of REALTORS® recently surveyed their members for their Confidence Index.
    • The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
    • Homes sold in less than 60 days in 35 out of 50 states and Washington D.C.
    • Homes typically went under contract in 30 days in March!




    May 3, 2018
    4 Reasons Why Today’s Housing Market is NOT 2006 All Over Again

    4 Reasons Why Today’s Housing Market is NOT 2006 All Over Again | MyKCM

    With home prices rising again this year, some are concerned that we may be repeating the 2006 housing bubble that caused families so much pain when it collapsed. Today’s market is quite different than the bubble market of twelve years ago. There are four key metrics that explain why:

    1. Home Prices
    2. Mortgage Standards
    3. Mortgage Debt
    4. Housing Affordability

    1. HOME PRICES

    There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone.

    Frank Nothaft is the Chief Economist for CoreLogic (which compiles some of the best data on past, current, and future home prices). Nothaft recently explained:

    “Even though CoreLogic’s national home price index got to the same level it was at the prior peak in April of 2006, once you account for inflation over the ensuing 11.5 years, values are still about 18% below where they were.” (emphasis added)

    2. MORTGAGE STANDARDS

    Some are concerned that banks are once again easing lending standards to a level similar to the one that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.

    The Urban Institute’s Housing Finance Policy Center issues a Housing Credit Availability Index (HCAI). According to the Urban Institute:

    “The HCAI measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

    The graph below reveals that standards today are much tighter on a borrower’s credit situation and have all but eliminated the riskiest loan products.

    4 Reasons Why Today’s Housing Market is NOT 2006 All Over Again | MyKCM

    3. MORTGAGE DEBT

    Back in 2006, many homeowners mistakenly used their homes as ATMs by withdrawing their equity and spending it with no concern for the ramifications. They overloaded themselves with mortgage debt that they couldn’t (or wouldn’t) repay when prices crashed. That is not occurring today.

    The best indicator of mortgage debt is the Federal Reserve Board’s household Debt Service Ratio for mortgages, which calculates mortgage debt as a percentage of disposable personal income.

    At the height of the bubble market a decade ago, the ratio stood at 7.21%. That meant over 7% of disposable personal income was being spent on mortgage payments. Today, the ratio stands at 4.48% – the lowest level in 38 years!

    4. HOUSING AFFORDABILITY

    With both house prices and mortgage rates on the rise, there is concern that many buyers may no longer be able to afford a home. However, when we look at the Housing Affordability Index released by the National Association of Realtors, homes are more affordable now than at any other time since 1985 (except for when prices crashed after the bubble popped in 2008).

    4 Reasons Why Today’s Housing Market is NOT 2006 All Over Again | MyKCM

    Bottom Line

    After using four key housing metrics to compare today to 2006, we can see that the current market is not anything like the bubble market.




    May 2, 2018
    This Just In: Data Says May is the Best Month to Sell Your Home

    This Just In: Data Says May is the Best Month to Sell Your Home | MyKCM

    According to a newly released study by ATTOM Data Solutions, selling your home in the month of May will net you an average of 5.9% above estimated market value for your home.

    For the study, ATTOM performed an “analysis of 14.7 million home sales from 2011 to 2017” and found the average seller premium achieved for each month of the year. Below is a breakdown by month:

    This Just In: Data Says May is the Best Month to Sell Your Home | MyKCM

    ATTOM even went a step further and broke their results down by day.

    Top 5 Days to Sell:

    • June 28th – 9.1% above market
    • February 15th – 9.0% above market
    • May 31st – 8.3% above market
    • May 29th – 8.2% above market
    • June 21st – 8.1% above market

    It should come as no surprise that May and June dominate as the top months to sell and that 4 of the top 5 days to sell fall in those two months. The second quarter of the year (April, May, June) is referred to as the Spring Buyers Season, when competition is fierce to find a dream home, which often leads to bidding wars.

    One caveat to mention though, is that when broken down by metroATTOM noticed that while warmer climates share in the overall trend, it turns out that they have different top months for sales. The best month to get the highest price in Miami, FL, for instance, was January, and Phoenix, AZ came in with November leading the charge.

    If you’re thinking of selling your home this year, the time to list is NOW! According to the National Association of Realtors, homes sold in an average of just 30 days last month! If you list now, you’ll have a really good chance to sell in May or June, setting yourself up for getting the best price!

    Bottom Line

    Let’s get together to discuss the market conditions in our area and get you the most exposure to the buyers who are ready and willing to buy!




    May 1, 2018
    How Much Has Your Home Increased in Value Over the Last Year?

    How Much Has Your Home Increased in Value Over the Last Year? | MyKCM

    Home values have risen dramatically over the last twelve months. In CoreLogic’s most recent Home Price Index Report, they revealed that national home prices have increased by 6.7% year-over-year.

    CoreLogic broke down appreciation even further into four price ranges, giving us a more detailed view than if we had simply looked at the year-over-year increases in national median home price.

    The chart below shows the four price ranges from the report, as well as each one’s year-over-year growth from February 2017 to February 2018 (the latest data available).

    How Much Has Your Home Increased in Value Over the Last Year? | MyKCM

    It is important to pay attention to how prices are changing in your local market. The location of your home is not the only factor that determines how much your home has appreciated over the course of the last year.

    Lower-priced homes have appreciated at greater rates than homes at the upper ends of the spectrum due to demand from first-time home buyers and baby boomers looking to downsize.

    Bottom Line

    If you are planning to list your home for sale in today’s market, let’s get together to go over exactly what’s going on in your area and your price range.




    April 30, 2018
    Why Home Prices Are Increasing

    Why Home Prices Are Increasing | MyKCM

    There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

    However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.

    It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart below).

    Why Home Prices Are Increasing | MyKCM

    According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).

    Why Home Prices Are Increasing | MyKCM

    Bottom Line

    If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.




    April 27, 2018
    Existing Home Sales Grow Despite Low Inventory [INFOGRAPHIC]

    Existing Home Sales Grow Despite Low Inventory [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • According to the latest Existing Home Sales Report from the National Association of Realtors, sales grew 1.1% in March to an annual pace of 5.60 million.
    • This is the strongest pace since November of 2017.
    • Inventory levels dropped year-over-year for the 34th consecutive month and are now 7.2% lower than March 2017 levels, representing a 3.6-month supply.




    April 26, 2018
    “Short of a war or stock market crash…”

    “Short of a war or stock market crash…” | MyKCM

    This month, Arch Mortgage Insurance released their spring Housing and Mortgage Market Review. The report explained that an increase in mortgage rates and/or home prices would impact monthly payments this way:

    • A 5% increase in home prices increases payments by roughly 5%
    • A 1% rise in interest rates increases payments by roughly 13% or 14%

    That begs the question…

    What if both rates and prices increase as predicted?

    The report revealed:

    “If interest rates and home prices rise by year-end in the ballpark of what most analysts are forecasting, monthly mortgage payments on a new home purchase could increase another 10–15%. That would make 2018 one of the worst full-year deteriorations in affordability for the past 25 years.”

    The percent increase in mortgage payments would negatively impact affordability. But, how would affordability then compare to historic norms?

    Per the report:

    “For the U.S. overall, even if affordability were to deteriorate as forecasted, affordability would still be reasonable by historic norms. That is because the percentage of pre-tax income needed to buy a typical home in 2019 would still be similar to the historical average during 1987–2004. Thus, nationally at least, even with higher rates and home prices, affordability will just revert to historical norms.”

    What about home prices?

    A decrease in affordability will cause some concern about home values. Won’t an increase in mortgage payments negatively impact the housing market? The report addressed this question:

    “Even recent interest rate increases and higher taxes on some upper-income earners didn’t slow the market, as many had feared…Short of a war or stock market crash, housing markets could continue to surprise on the upside over the next few years.”

    To this point, Arch Mortgage Insurance also revealed their Risk Index which estimates the probability of home prices being lower in two years. The index is based on factors such as regional unemployment rates, affordability, net migration, housing starts and the percentage of delinquent mortgages.

    Below is a map depicting their projections (the darker the blue, the lower the probability of a price decrease):

    “Short of a war or stock market crash…” | MyKCM

    Bottom Line

    If interest rates and prices continue to rise as projected, the monthly mortgage payment on a home purchased a year from now will be dramatically more expensive than it would be today.




    April 25, 2018
    New Study Shows ‘Best States for Millennials’

    New Study Shows ‘Best States for Millennials’ | MyKCM

    A new study by WalletHub used “30 key metrics, ranging from share of millennials to millennial unemployment rate to millennial voter-turnout rate” to find out which states are the ‘Best States for Millennials.’

    The Top 5 Best States for Millennials are:

    1. Washington, D.C. (also ranks highest in percentage of millennials already living there!)
    2. North Dakota (lowest unemployment rate)
    3. Minnesota (highest millennial homeownership rate)
    4. Massachusetts (highest percentage of millennials with health insurance coverage)
    5. Iowa (ranked #1 in lowest housing cost for millennials)

    Below is a map with the rankings for each of the 50 states:

    New Study Shows ‘Best States for Millennials’ | MyKCM

    We recently reported on a study that set out to find out “How Much You Need to Make to Buy a Home in Your State,” which may have left you wondering what the average salaries are in each of the five states listed above.

    According to WalletHub’s research, the top 5 states with the Highest Average Millennial Salaries are:

    1. Washington, D.C.
    2. New York
    3. Massachusetts
    4. Washington
    5. California

    Every day, more and more millennials are aging into the ‘Responsibility Zone,’ the time in their lives when their responsibilities start to dictate their behaviors. For many, this includes buying a home. The top 5 states with the Highest Millennial Homeownership Rate are:

    1. Minnesota
    2. West Virginia
    3. Indiana
    4. Utah
    5. Delaware

    Bottom Line

    If owning a home is next on your list, let’s get together to answer any questions you may have and set you on the path to homeownership!




    April 24, 2018
    Thinking of Selling Your Home? Why You Need A Pro in Your Corner

    Thinking of Selling Your Home? Why You Need A Pro in Your Corner | MyKCM

    With home prices on the rise and buyer demand strong, some sellers may be tempted to try and sell their homes on their own (FSBO) without using the services of a real estate professional.

    Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

    Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:

    • The buyer who wants the best deal possible
    • The buyer’s agent who solely represents the best interest of the buyer
    • The buyer’s attorney (in some parts of the country)
    • The home inspection companies, which work for the buyer and will almost always find some problems with the house
    • The termite company if there are challenges
    • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
    • The appraiser if there is a question of value
    • The title company if there are challenges with certificates of occupancy (CO) or other permits
    • The town or municipality if you need to get the CO permits mentioned above
    • The buyer’s buyer in case there are challenges with the house your buyer is selling
    • Your bank in the case of a short sale

    Bottom Line

    The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Let’s get together and discuss all we can do to make the process easier for you.




    April 23, 2018
    Buying a Home Is Cheaper Than Renting in the Majority of the US

    Buying a Home Is Cheaper Than Renting in the Majority of the US | MyKCM

    The results of the 2018 Rental Affordability Report from ATTOM show that buying a median-priced home is more affordable than renting a three-bedroom property in 54% of U.S. counties analyzed for the report.

    The updated numbers show that renting a three-bedroom property in the United States requires an average of 38.8% of income.

    The least affordable market for renting was Marin County, CA, just over the Golden Gate Bridge from San Francisco, where renters spend a staggering 79.5% of average wages on rent, while the most affordable market was Madison County, AL where 22.3% of average wages went to rent.

    Other interesting findings in the report include:

    • Average rent rose faster than income in 60% of counties
    • Average rent rose faster than median home prices in 41% of counties
    • While median home prices rose faster than average rents in 58% of counties

    Bottom Line

    Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home.




    April 20, 2018
    Home Buying Myths Slayed [INFOGRAPHIC]

    Home Buying Myths Slayed [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The average down payment for first-time homebuyers is only 6%!
    • Despite mortgage interest rates being over 4%, rates are still below historic numbers.
    • 88% of property managers raised their rents in the last 12 months!
    • The credit score requirements for mortgage approval continue to fall.




    April 19, 2018
    Is Family Mortgage Debt Out of Control?

    Is Family Mortgage Debt Out of Control? | MyKCM

    Some homeowners have recently done a “cash out” refinance and have taken a portion of their increased equity from their house. Others have sold their homes and purchased more expensive homes with larger mortgages. At the same time, first-time buyers have become homeowners and now have mortgage payments for the first time.

    These developments have caused concern that families might be reaching unsustainable levels of mortgage debt. Some are worried that we may be repeating a behavior that helped precipitate the housing crash ten years ago.

    Today, we want to assure everyone that this is not the case. Here is a graph created from data released by the Federal Reserve Board which shows the Household Debt Service Ratio for mortgages as a percentage of disposable personal income. The ratio is the total quarterly required mortgage payments divided by total quarterly disposable personal income. In other words, the percentage of spendable income people are using to pay their mortgage.

    Is Family Mortgage Debt Out of Control? | MyKCM

    Today’s ratio of 4.44% is nowhere near the ratio of 7.21% during the peak of the housing bubble and is instead at the lowest rate since 1980 (4.38%).

    Bill McBride of Calculated Risk recently commented on the ratio:

    “The Debt Service Ratio for mortgages is near the low for the last 38 years. This ratio increased rapidly during the housing bubble and continued to increase until 2007. With falling interest rates, and less mortgage debt, the mortgage ratio has declined significantly.”

    Bottom Line

    Many families paid a heavy price because of questionable practices that led to last decade’s housing crash. It seems the American people have learned a lesson and are not repeating that same behavior regarding their mortgage debt.




    April 18, 2018
    How Much Do You Need to Make to Buy a Home in Your State?

    How Much Do You Need to Make to Buy a Home in Your State? | MyKCM

    It’s no mystery that cost of living varies drastically depending on where you live, so a new study by GOBankingRates set out to find out what minimum salary you would need to make in order to buy a median-priced home in each of the 50 states, and Washington, D.C.

    States in the Midwest came out on top as most affordable, requiring the smallest salaries in order to buy a median-priced home. States with large metropolitan areas saw a bump in the average salary needed to buy with California, Washington, D.C., and Hawaii edging out all others with the highest salaries required.

    Below is a map with the full results of the study:

    How Much Do You Need to Make to Buy a Home in Your State? | MyKCM

    GoBankingRates gave this advice to anyone considering a home purchase,

    “Before you buy a home, it’s important to find out if you can afford the monthly mortgage payment. To do this, some financial experts recommend your housing costs — primarily your mortgage payments — shouldn’t consume more than 30 percent of your monthly income.”

    As we recently reported, research from Zillow shows that historically, Americans had spent 21% of their income on owning a median-priced home. The latest data from the fourth quarter of 2017 shows that the percentage of income needed today is only 15.7%!

    Bottom Line

    If you are considering buying a home, whether it’s your first time or your fifth time, let’s get together to evaluate your ability to do so in today’s market!




    April 17, 2018
    Rising Prices Help You Build Your Family’s Wealth

    Over the next five years, home prices are expected to appreciate, on average, by 3.6% per year and to grow by 18.2% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

    So, what does this mean for homeowners and their equity position?

    As an example, let’s assume a young couple purchased and closed on a $250,000 home this January. If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

    Rising Prices Help You Build Your Family’s Wealth | MyKCM

    Since the experts predict that home prices will increase by 5.0% in 2018, the young homeowners will have gained $12,500 in equity in just one year.

    Over a five-year period, their equity will increase by over $48,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

    Bottom Line

    Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!




    April 16, 2018
    Getting Pre-Approved Should Always Be Your First Step

    Getting Pre-Approved Should Always Be Your First Step | MyKCM

    In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

    Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if your dream home is within your reach.

    Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

    “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

    One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

    Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

    1. Capacity: Your current and future ability to make your payments
    2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
    3. Collateral: The home, or type of home, that you would like to purchase
    4. Credit: Your history of paying bills and other debts on time

    Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

    Bottom Line

    Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so.




    April 13, 2018
    A Tale of Two Markets [INFOGRAPHIC]

    A Tale of Two Markets [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • A trend that has been emerging for some time now is the contrast between inventory & demand in the Premium & Luxury Markets vs. the Starter & Trade-Up Home Markets and what that’s, in turn, doing to prices!
    • Inventory continues to rise in the luxury & premium home markets which is causing prices to cool.
    • Demand continues to rise with low inventory in the starter & trade-up home markets, causing prices to rise!




    April 12, 2018
    The COST of Your Next Home Will Be LESS Than Your Parents’ Home Was

    The COST of Your Next Home Will Be LESS Than Your Parents' Home Was | MyKCM

    There is no doubt that the price of a home in most regions of the country is greater now than at any time in history. However, when we look at the cost of a home, it is cheaper to own today than it has been historically.

    The Difference Between PRICE and COST

    The price of a home is the dollar amount you and the seller agree to at the time of purchase. The cost of a home is the monthly expense you pay for your mortgage payment.

    To accurately compare costs in different time periods, we must look at home prices, mortgage rates, and wages during each period. Home prices were less expensive years ago, but paychecks were also smaller and mortgage rates were much higher (the average mortgage interest rate in 1988 was 10.34%).

    The best way to measure the COST of a home is to determine what percentage of income is necessary to buy a home at the time. That would take into account the price of the home, the mortgage interest rate and wages at the time.

    Zillow just released research that examined home costs using this formula. The research compares the historic percentage of income necessary to afford a mortgage to the percentage needed today. It also revealed the cost if mortgage rates continue to rise as experts are predicting. Here is a graph of their findings*:

    The COST of Your Next Home Will Be LESS Than Your Parents' Home Was | MyKCM

    Rates would need to jump to 7% in order for the percentage of necessary income to be greater than historic norms.

    Bottom Line

    Whether you are a homeowner considering selling your current house and moving up to the home of your dreams, or a first-time buyer trying to purchase your first home, it’s a great time to move forward.

    *Assumptions in the Zillow report: Buyer puts 20% down, takes out a conforming, 30-year fixed-rate mortgage at rates prevailing at the time, earns the median household income, and is buying a median-valued home.




    April 11, 2018
    Mortgage Interest Rates Have Begun to Level Off

    Mortgage Interest Rates Have Begun to Level Off | MyKCM

    Whether you are a buyer searching for your first home, or a homeowner looking to move up to your next home, you should pay attention to where mortgage interest rates are heading.

    Over the course of 2018, according to Freddie Mac’s Primary Mortgage Market Survey, rates have increased from 3.95% in the first week of January to 4.40% in the first week of April.

    At first glance, the difference between these numbers in such a short amount of time could be concerning, but if we look at the graph below, we’ll see that rates have already started to level off and return to the mark set in February.

    Mortgage Interest Rates Have Begun to Level Off | MyKCM

    This is great news for anyone looking to buy a home this spring! The spring is always one of the busiest seasons for home buying, and with rates increasing even more, buyers have come off the fence to lock in great rates! This is still great advice as the experts believe that rates will continue to rise throughout the year.

    Every month, Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors release their projections for where they believe mortgage rates will be in the coming months. If we take the average of what each of the four organizations is predicting for the second quarter, rates are expected to rise to about 4.48% by June.

    That average climbs to 4.73% by the end of this year.

    So, what does this mean?

    Waiting until the end of the year to buy, with rates still projected to increase, will end up costing you more money on your monthly mortgage payment. For every $250,000 you need to borrow to purchase your dream home, you will spend $49.21 more per month, $590.52 per year, and over $17,700 by the end of your 30-year mortgage.

    And that’s just the impact of your interest rate going up!

    Bottom Line

    If you are ready and willing to purchase a home, find out if you’re able to. Let’s get together to evaluate your needs and help you with next steps!




    April 10, 2018
    What Is Private Mortgage Insurance (PMI)?

    What Is Private Mortgage Insurance (PMI)? | MyKCM

    When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

    What is PMI?

    Freddie Mac defines PMI as:

    “An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

    Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

    As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

    “The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

    According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 5%, while repeat buyers put down 14% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

    Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

    What Is Private Mortgage Insurance (PMI)? | MyKCM

    The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

    “It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

    Bottom Line

    If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family.




    April 9, 2018
    US Housing Market Still In ‘Buy Territory’!

    US Housing Market Still In ‘Buy Territory’! | MyKCM

    According to the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, the U.S. housing market has continued to move deeper into buy territory, supporting the belief that housing markets across the country remain a sound investment.

    The BH&J Index is a quarterly report that attempts to answer the question:

    In today’s housing market, is it better to rent or buy a home?

    The index examines the entire US housing market and then isolates 23 major cities for comparison. The researchers “measure the relationship between purchasing property and building wealth through a buildup in equity versus renting a comparable property and investing in a portfolio of stocks and bonds.” 

    While 13 of the 23 metropolitan markets examined moved further into buy territory, markets like Dallas, Denver, and Houston are currently deep into rent territory. Due to a lack of inventory, the home prices in these areas have increased by 6.7%6.3%, and 5.3%  respectively from a year ago.

    According to Eli Beracha, Ph.D., Co-Creator of the index, home prices will begin to return to more normal levels.

    Our data indicates that prices are above their 40-year trend but not significantly so as they were in 2007. Rather than a crash, I anticipate slower growth in prices accompanied by longer marketing times for sellers and increasing inventories, which should bring prices back in conjunction with their 40-year trend.”

    Bottom Line

    The majority of the country is strongly in buy territory. Buying a home makes sense socially and financially, as rents are predicted to increase substantially in the next year. Protect yourself from rising rents by locking in your housing cost with a mortgage payment now. 

    To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.




    April 6, 2018
    VA Loans by the Numbers [INFOGRAPHIC]

    VA Loans by the Numbers [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Since the creation of the VA Home Loans Program, 22 million veterans have been able to achieve the American Dream of homeownership.
    • In 2017, $188 billion was loaned to veterans and their families through the program.
    • VA Purchase Loans are on the rise in 46 out of 50 states and Washington, DC.




    April 5, 2018
    House Prices: Simply a Matter of Supply & Demand

    House Prices: Simply a Matter of Supply & Demand | MyKCM

    Why are home prices still rising? It is a simple answer. There are more purchasers in the market right now than there are available homes for them to buy. This is an example of the theory of “supply and demand” which is defined as:

    “the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.”

    When demand exceeds supply, prices go up. This is currently happening in the residential real estate market.

    Here are the numbers for supply and demand as compared to last year for the last three months (March numbers are not yet available):

    House Prices: Simply a Matter of Supply & Demand | MyKCM

    In each of the last three months, demand (buyer traffic) has increased as compared to last year while supply (number of available listings) has decreased. If this situation persists, home values will continue to increase.

    Bottom Line

    The reason home prices are still rising is because there are many purchasers looking to buy, but very few homeowners ready to sell. This imbalance is the reason prices will remain on the uptick.




    April 4, 2018
    Boomerang Buyers: Most Qualify for Financing in 2-3 Years

    Boomerang Buyers: Most Qualify for Financing in 2-3 Years | MyKCM

    According to a new study from Lending Tree, Americans who have filed for bankruptcy may be able to rebuild enough credit to qualify for a home loan in as little as 2-3 years.

    This is in stark contrast to the belief that many have that they need to wait 7-10 years for their bankruptcies to clear from their credit reports before attempting to apply for either a mortgage or a personal or auto loan.

    The study analyzed over one million loan applications for mortgages, personal, and auto loans and compared borrowers who had a bankruptcy on their credit report vs. those who did not to find out the “Cost of Bankruptcy.”

    The study found that 43.2% of Americans who filed bankruptcy were able to repair their credit back to a 640 FICO® Score in less than a year. The percentage of those who achieved a 640 FICO® Score increased to nearly 75% after 5 years. The full breakdown of the findings was used to create the chart below.

    Boomerang Buyers: Most Qualify for Financing in 2-3 Years | MyKCM

    Americans who were able to repair their credit scores to a range of 720-739 within three years of filing were able to obtain the same financing options as those who had never filed bankruptcy.

    According to Ellie Mae’s latest Origination Insights Report, 53.5% of those who were approved for a home loan had FICO® Scores between 600-749 last month. This is great news for Americans who are looking to re-enter the housing market.

    Boomerang Buyers: Most Qualify for Financing in 2-3 Years | MyKCM

    Raj Patel, Lending Tree’s Director of Credit Restoration & Debt-Related Services had this to say:

    “People may think that filing a bankruptcy would put you out of the loan market for seven to ten years, but this study shows that it is possible to rebuild your credit to a good credit quality.”

    “LendingTree’s research found that very few bankruptcy filers have a harder time [obtaining a mortgage] than those who have not filed for bankruptcy.”

    Bottom Line

    If you are one of the millions of Americans who has filed for bankruptcy and think that you have to wait 7-10 years to make your dream of returning to homeownership a reality, let’s get together to find out if you qualify now.




    April 3, 2018
    What Should You Look for In Your Real Estate Team?

    What Should You Look for In Your Real Estate Team? | MyKCM

    How do you select the members of your team who are going to help make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender?

    The most important characteristic that you should be looking for in your agent is someone who is going to take the time to really educate you on the choices available to you and your ability to buy in today’s market.

    As the financial guru Dave Ramsey advises:

    “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.”

    Do your research. Ask your friends and family for recommendations of professionals they’ve worked with in the past and have had good experiences with.

    Look for members of your team who will be honest and trustworthy; after all, you will be trusting them to help you make one of the biggest financial decisions of your life.

    Whether this is your first or fifth time buying a home, you want to make sure that you have an agent who is going to have the tough conversations with you, not just the easy ones. If your offer isn’t accepted by the seller, or they think that there may be something wrong with the home that you’ve fallen in love with, you would rather know what they think than make a costly mistake.

    According to the Home Buyer and Seller Generational Trends Report:

    Buyers from all generations primarily wanted their agent’s help to find the right home to purchase. Buyers were also looking for help to negotiate the terms of sale and to help with price negotiations.” Additionally, “Help understanding the purchase process was most beneficial to buyers 37 years and younger at 75 percent.”

    Look for someone to invest in your family’s future with you. You want an agent who isn’t focused on the transaction but is instead focused on helping you understand the process while helping you find your dream home.

    Bottom Line

    In this world of Google searches, where it seems like all the answers are just a mouse-click away, you need an agent who is going to educate you and share the information that you need to know before you even know you need it.




    April 2, 2018
    NOT Owning Your Home Can Cost You a Lot of Money!

    NOT Owning Your Home Can Cost You a Lot of Money! | MyKCM

    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.

    Realtor.com recently reported that:

    Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option… as people get more savings in their pockets, buying becomes the better option.”

    What proof exists that owning is financially better than renting?

    1. In a previous blog we 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 2018 could build more than $44,000 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 renting.




    March 30, 2018
    The Cost of Renting vs. Buying Today [INFOGRAPHIC]

    The Cost of Renting vs. Buying Today [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Historically, the choice between renting or buying a home has been a tough decision.
    • Looking at the percentage of income needed to rent a median-priced home today (28.9%) vs. the percentage needed to buy a median-priced home (15.7%), the choice becomes obvious.
    • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!




    March 29, 2018
    99% of Experts Agree: Home Prices Will Increase

    99% of Experts Agree: Home Prices Will Increase | MyKCM

    Some believe that the combined effects of the new tax code and rising mortgage rates will have an adverse impact on residential real estate prices in 2018. However, the clear majority of recently surveyed housing experts believe that home values will continue to rise this year.

    What is the Home Price Expectation Survey?

    Each quarter, Pulsenomics surveys a nationwide panel of economists, real estate experts and investment & market strategists. Those surveyed include experts such as:

    • Daniel Bachman, Senior Manager, U.S. Economics at Deloitte Services, LP
    • Kathy Bostjancic, Head of U.S. Macro Investors Service at Oxford Economics
    • David Downs, Real Estate Finance Professor at VCU
    • Edward Pinto, Resident Fellow at American Enterprise Institute
    • Albert Saiz, Director at MIT Center for Real Estate

    Where do these experts see home values headed in 2018?

    Here is a breakdown of where they see home values twelve months from now:

    • 21.6% believe prices will appreciate by 6% or more
    • 71.6% believe prices will appreciate between 3 and 5.99%
    • 5.7% believe prices will appreciate between 0 and 2.99%
    • Only 1.1% believe prices will depreciate

    Bottom Line

    Almost ninety-nine percent of the top experts studying residential real estate believe that prices will appreciate this year, and over 93% believe home values will appreciate by at least 3%.




    March 28, 2018
    Be Thankful You Don’t Have to Pay Your Parents’ Interest Rate!

    Be Thankful You Don’t Have to Pay Your Parents’ Interest Rate! | MyKCM

    Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability. In the first quarter of 2018, rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.

    The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home. Don’t let the prediction that rates will increase stop you from purchasing your dream home this year.

    Let’s take a look at a historical view of interest rates over the last 45 years.

     

    Be Thankful You Don’t Have to Pay Your Parents’ Interest Rate! | MyKCM

    Bottom Line

    Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.




    March 27, 2018
    Buyer Demand Still Outpacing the Supply of Homes for Sale

    Buyer Demand Still Outpacing the Supply of Homes for Sale | MyKCM

    The price of any item is determined by the supply of that item, as well as market demand. The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.

    Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).

    Buyer Demand

    The map below was created after asking the question: “How would you rate buyer traffic in your area?”

    Buyer Demand Still Outpacing the Supply of Homes for Sale | MyKCM

    The darker the blue, the stronger the demand for homes in that area. Only four states had a ‘stable’ demand level.

    Seller Supply

    The index also asked: “How would you rate seller traffic in your area?”

    As you can see from the map below, 25 states reported ‘weak’ seller traffic, 21 states reported ‘stable’ seller traffic, 3 states and Washington D.C. reported ‘strong’ seller traffic, and only 1 state reported ‘very strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes.

    Buyer Demand Still Outpacing the Supply of Homes for Sale | MyKCM

    Bottom Line

    Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet buyer demand, prices will continue to increase. If you are debating listing your home for sale, let’s get together to help you capitalize on the demand in the market now!



    March 26, 2018
    5 Reasons Why to Sell This Spring!

    5 Reasons Why to Sell This Spring! | MyKCM

    Here are five reasons listing your home for sale this spring makes sense.

    1. Demand Is Strong

    The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.

    Take advantage of the buyer activity currently in the market.

    2. There Is Less Competition Now

    Housing inventory has declined year over year for the last 32 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

    Historically, the average number of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

    The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

    3. The Process Will Be Quicker

    Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 45 days.

    4. There Will Never Be a Better Time to Move Up

    If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

    Prices are projected to appreciate by 4.8% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

    5. It’s Time to Move on With Your Life

    Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

    Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

    That is what is truly important.




    March 23, 2018
    20 Tips for Preparing Your House for Sale This Spring [INFOGRAPHIC]

    Tips for Preparing Your House for Sale This Spring [INFOGRAPHIC] | MyKCM

    Highlights:

    • When listing your house for sale your top goal will be to get the home sold for the best price possible!
    • There are many small projects that you can do to ensure this happens!
    • Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!




    March 22, 2018
    Freddie Mac: Rising Mortgage Rates DO NOT Lead to Falling Home Prices

    Freddie Mac: Rising Mortgage Rates DO NOT Lead to Falling Home Prices | MyKCM

    Recently, Freddie Mac published an Insight Report titled Nowhere to go but up? How increasing mortgage rates could affect housing. The report focused on the impact the projected rise in mortgage rates might have on the housing market this year.

    Many believe that an increase in mortgage rates will cause a slowdown in purchases which would, in turn, lead to a fall in house values. Ultimately, however, prices are determined by supply and demand and while rising mortgage rates may slow demand, they also affect supply. From the report:

     “For current homeowners, the decision to buy a new home is typically linked to their decision to sell their current home… Because of this link, the financing costs of the existing mortgage are part of the homeowner’s decision of whether and when to move.

    Once financing costs for a new mortgage rise above the rate borrowers are paying for their current mortgage, borrowers would have to give up below-market financing to sell their home.

    Instead, they may choose to delay both the sale of their existing home and the purchase of a new home to maintain the advantageous financing.”

    The Freddie Mac report, in acknowledging this situation, concluded that prices are not adversely impacted by higher mortgage rates. They explained:

    “While there is a drop in the demand for homes, there is an associated drop in the supply of homes from the link between the selling and buying decisions. As both supply and demand move together in this way they have offsetting effects on price—lower demand decreases price and lower supply increases price.

    They went on to reveal that the Freddie Mac National House Price Index is…

    “…unresponsive to movements in interest rates. In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

    The following graph, based on data from the report, reveals what happened to home prices the last six times mortgage rates rose by at least 1%.

    Freddie Mac: Rising Mortgage Rates DO NOT Lead to Falling Home Prices | MyKCM

    Bottom Line

    Whether you are a move-up buyer or first-time buyer, waiting to purchase your next home based on the belief that prices will fall because of rising mortgage rates makes no sense.




    March 21, 2018
    Is a Major Home Renovation Worth It in the Long Run?

    Is a Major Home Renovation Worth It in the Long Run? | MyKCM

    Last week, we shared 7 Factors To Consider When Choosing A Home To Retire In.” For some homeowners, these seven factors can be taken into account with a home renovation, but is it worth it to remodel or change floor plans?

    Let’s look at this example.

    Let’s say you have a 4-bedroom colonial style home in a great school district. The neighborhood is amazing, and you are very comfortable there, but your kids are all grown up and the original benefits of the home no longer apply.

    You’ve always wanted a huge master suite and are considering merging 3 of the smaller bedrooms on the second floor to achieve this dream.

    In the short term, you are over the moon excited about your newly renovated oasis.

    In the long term, when you go to sell your home down the road, you’ve now taken a 4-bedroom home in a great school district and turned it into a 2-bedroom home. Your pool of potential buyers has shrunk significantly and so has the value of your home (unless you are able to find someone who has the exact needs you have today!).

    Why not consider listing your 4-bedroom home now and moving into a gorgeous 2-bedroom with a master suite? Your house can become a home for the next family looking for that perfect neighborhood with a great school district to raise their kids in!

    You may even be able to achieve your dream in the same area you love, without having to give up your favorite restaurants and grocery stores.

    Bottom Line

    If you are debating a major renovation that would change the layout of your home, before you pick up that sledgehammer, let’s get together and discuss the available listings in our area that might meet your needs today!




    March 20, 2018
    Are You Aware of How Much Equity You Have in Your Home? You May Be Surprised!

    Are You Aware of How Much Equity You Have in Your Home? You May Be Surprised! | MyKCM

    CoreLogic’s latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.

    U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year.”

    Price Appreciation = Good News for Homeowners

    Frank Nothaft, CoreLogic’s Chief Economist, explains:

    Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years.”

    He also believes this is a great sign for the market in 2018, saying:

    “Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”  

    This is great news for homeowners! But, do they realize that their equity position has changed?

    A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).

    The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%) when in actuality, 83% do!

    Are You Aware of How Much Equity You Have in Your Home? You May Be Surprised! | MyKCM

    This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.

    Fannie Mae spoke out on this issue in their report:

    “Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

    Bottom Line

    If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018! Let’s get together to evaluate your situation!




    March 19, 2018
    Dreaming of a Luxury Home? Now’s the Time!

    Dreaming of a Luxury Home? Now's the Time! | MyKCM

    If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! Recently, the Institute for Luxury Home Marketing released its Luxury Market Report which showed that in today’s premium home market, buyers are in control.

    The inventory of homes for sale in the luxury market far exceeds the number of people searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer or can be found at a discount.

    Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call their house their new home.

    The sale of your starter or trade-up house will help you come up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

    But not all who are buying luxury properties have a home to sell first.

    A recent Bloomberg article gave some insight into what many millennials are choosing to do:

    “A new generation of affluent homebuyers powered by a surge in inherited wealth is driving the luxury-home market, demanding larger spaces and fancier finishes, according to a report heralding ‘the rise of the new aristocracy.’”

    Bottom Line

    The best time to sell anything is when demand is high, and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.




    March 16, 2018
    The Cost of Waiting: Interest Rates Edition [INFOGRAPHIC]

    The Cost of Waiting: Interest Rates Edition [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Interest rates are projected to increase steadily heading into 2019.
    • The higher your interest rate, the more money you end up paying for your home and the higher your monthly payment will be.
    • Rates are still low right now. Don’t wait until rates hit 5% to start searching for your dream home!




    March 15, 2018
    Moving up Is MORE Affordable Now Than Almost Any Other Time in 40 Years

    Moving up Is MORE Affordable Now Than Almost Any Other Time in 40 Years | MyKCM

    If you are considering selling your current home, to either move up to a larger home or into a home in an area that better suits your current family needs, great news was just revealed.

    Last week, Trulia posted a blog, Not Your Father’s Housing Market, which examined home affordability over the last 40+ years (1975-2016). Their research revealed that:

    “Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.

    Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.

    Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.”

    Here is a graph showing the Affordability Index compared to the 40-year average:

    Moving up Is MORE Affordable Now Than Almost Any Other Time in 40 Years | MyKCM

    The graph shows that housing affordability is better now than at any other time in the last forty years, except during the housing crash last decade.

    (Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)

    There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. That is why if you are thinking of moving up, you probably shouldn’t wait.




    March 14, 2018
    7 Factors to Consider When Choosing A Home to Retire In

    7 Factors to Consider When Choosing A Home to Retire In | MyKCM

    As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.

    According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.

    1. Affordability

    “It may be easy enough to purchase your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.

    Would moving to a complex with homeowner association fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

    2. Equity

    “If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”

    The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $14,000 in equity last year.

    3. Maintenance

    “As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”

    As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind of not having to do the maintenance work yourself?

    4. Security

    “Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”

    As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.

    5. Pets

    “Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”

    Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or in a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

    6. Mobility

    “No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”

    Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Installing handrails and making sure your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

    7. Convenience

    “Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”

    How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

    Bottom Line

    When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, let’s get together to evaluate your ability to sell your house in today’s market and get you into your dream retirement home!




    March 13, 2018
    You Can Save for a Down Payment Faster Than You Think!

    Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long it would take to save for a down payment in each state.

    Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

    By determining the percentage of income spent renting in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

    According to the data, residents in Ohio can save for a down payment the quickest in just under 3 years (2.44). Below is a map that was created using the data for each state:

    You Can Save for a Down Payment Faster Than You Think! | MyKCM

    What if you only needed to save 3%?

    What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3%-down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes possible in a year or two in many states as shown on the map below.

    You Can Save for a Down Payment Faster Than You Think! | MyKCM

    Bottom Line

    Whether you have just started to save for a down payment, or have been saving for years, you may be closer to your dream home than you think! Let’s meet up so I can help you evaluate your ability to buy today.




    March 12, 2018
    4 Reasons Spring is a Great Time to Buy a Home!

    4 Reasons Spring is a Great Time to Buy a Home! | MyKCM

    Here are four great reasons to consider buying a home today instead of waiting.

    Prices Will Continue to Rise

    CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.3% over the next year.

    The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

    Mortgage Interest Rates Are Projected to Increase

    Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage hovered close to 4.0% in 2017. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

    An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

    Either Way, You Are Paying a Mortgage

    There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    Are you ready to put your housing cost to work for you?

    It’s Time to Move on with Your Life

    The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

    But what if they weren’t? Would you wait?

    Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

    If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.




    March 9, 2018
    The Difference an Hour Will Make This Spring [INFOGRAPHIC]

    The Difference an Hour Will Make This Spring [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Don’t forget to set your clocks forward this Sunday, March 11th at 2:00 AM EST in observance of Daylight Saving Time.
    • Unless of course, you are a resident of Arizona or Hawaii!
    • Every hour in the United States: 614 homes are sold, 81 homes regain equity (meaning they are no longer underwater on their mortgage), and the median home price rises $1.51!




    March 8, 2018
    A New Housing Bubble Forming…Not Before 2024!

    A New Housing Bubble Forming…Not Before 2024! | MyKCM

    A recent report by CoreLogic revealed that U.S. home values appreciated by more than 37% over the last five years. Some are concerned that this is evidence we may be on the verge of another housing “boom & bust” like the one we experienced from 2006-2008.

    Recently, several housing experts weighed in on the subject to alleviate these fears.

    Sean Becketti, Freddie Mac Chief Economist

     “The evidence indicates there currently is no house price bubble in the U.S., despite the rapid increase of house prices over the last five years.”

    Edward Golding, a Senior Fellow at the Urban Institute’s Housing Finance Policy Center

     “There is not likely to be a national bubble in the way that we saw the first decade of the century.”

    Christopher Thornberg, Partner at Beacon Economics

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

    Bill McBride, Calculated Risk

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

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

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

    A recent article by Teo Nicolais, a real estate entrepreneur who teaches courses on real estate principles, markets, and finance at Harvard Extension School concluded that the next housing bubble may not occur until 2024.

    The articleHow to Use Real Estate Trends to Predict the Next Housing Bubble, looks at previous peaks in real estate values going all the way back to 1818. Nicolais uses the research of several economists. The article details the four phases of a real estate cycle and what defines each phase.

    Nicolais concluded his article by saying:

    “Those who study the financial crisis of 2008 will (we hope) always be weary of the next major crash. If George, Harrison, and Foldvary are right, however, that won’t happen until after the next peak around 2024. 

    Between now and then, aside from the occasional slow down and inevitable market hiccups, the real estate industry is likely to enjoy a long period of expansion.”

    Bottom Line

    The reason for the price appreciation we are seeing is an imbalance between supply and demand for housing. This has created a natural increase in values, not a bubble in prices.




    March 7, 2018
    Home Prices: The Difference 5 Years Makes

    Home Prices: The Difference 5 Years Makes | MyKCM

    The economists at CoreLogic recently released a special report entitled, Evaluating the Housing Market Since the Great Recession. The goal of the report was to look at economic recovery since the Great Recession of December 2007 through June 2009.

    One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from December 2012 to December 2017 to show how prices over the last five years have fared.

    Frank Nothaft, Chief Economist at CoreLogic, commented on the importance of breaking out the data by state,

    “Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011. After finally reaching bottom in 2011, home prices began a slow rise back to where we are now.

    Greater demand and lower supply – as well as booming job markets – have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”

    The map below was created to show the 5-year appreciation from December 2012 – December 2017 by state.

    Home Prices: The Difference 5 Years Makes | MyKCM

    Nationally, the cumulative appreciation over the five-year period was 37.4%, with a high of 66% in Nevada, and a modest increase of 5% in Connecticut.

    Where were prices expected to go?

    Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

    According to the December 2012 survey results, national homes prices were projected to increase cumulatively by 23.1% by December 2017. The bulls of the group predicted home prices to rise by 33.6%, while the more cautious bears predicted an appreciation of 11.2%.

    Where are prices headed in the next 5 years?

    Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%.

    Bottom Line

    Every day, thousands of homeowners regain positive equity in their homes. Some homeowners are now experiencing values even higher than before the Great Recession. If you’re wondering if you have enough equity to sell your house and move on to your dream home, let’s get together to discuss conditions in our neighborhood!




    March 6, 2018
    Competition is Coming, Are You Thinking of Selling Your Home?

    Competition is Coming, Are You Thinking of Selling Your Home? | MyKCM

    The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.4% over last year.

    How will this impact buyers?

    More inventory means more options. Lawrence Yun, NAR’s Chief Economistexplained this is good news for the housing market – especially for those looking to buy:

    “This rise in single-family housing construction will help tame home price growth, and the increase in multifamily units should continue to help slow rent growth.”

    How will this impact sellers?

    More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:

    1. A great price on their home as buyers outbid each other for it
    2. A quick sale as buyers have so little to choose from
    3. Fewer hassles as buyers don’t want to “rock the boat” on the deal

    With an increase in competition, the seller may not enjoy these same benefits. As Chief Economist Nela Richardson, added:

    “Because existing home inventory has been so low for so long, new construction is taking a larger share of the market…Builders meet the buyers and see the demand firsthand.”

    Bottom Line

    If you are considering selling your house, you’ll want to beat this new competition to market to ensure you get the most attention for your listing and the best price.




    March 5, 2018
    Housing Market Expected To “Spring Forward” This Year

    Housing Market Expected To "Spring Forward" This Year | MyKCM

    Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward!” Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market.

    Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right.

    Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

    That hasn’t happened this year.

    Demand for housing has remained strong as mortgage rates have remained near historic lows. Even with the recent increase in rates, buyers are still able to lock in an affordable monthly payment. Many more buyers are jumping off the fence and into the market to secure a lower rate.

    The National Association of Realtors (NAR) recently reported that the top 10 dates sellers listed their homes in 2017 all fell in April, May, or June.

    Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competitioncoming to market in the next few months.

    Bottom Line

    If you are planning on selling your home in 2018, let’s get together to evaluate the opportunities in our market.




    March 2, 2018
    4 Reasons to Sell This Spring [INFOGRAPHIC]

    4 Reasons to Sell This Spring [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Buyer demand continues to outpace the supply of homes for sale which means that buyers are often competing with one another for the few listings that are available!
    • Housing inventory is still under the 6-month supply needed to sustain a normal housing market.
    • Perhaps the time has come for you and your family to move on and start living the life you desire.




    March 1, 2018
    Are Home Values Really Overinflated?

    Are Home Values Really Overinflated? | MyKCM

    Last week, the National Association of Realtors (NAR) released their most recent Existing Home Sales Report. According to the report:

    “The median existing-home price for all housing types in January was $240,500, up 5.8 percent from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.”

    Seventy-one consecutive months of price increases may have some concerned that current home values may be overinflated.

    However, at the same time, Zillow issued a press release which revealed:

    “If the housing bubble and bust had not happened, and home values had instead appreciated at a steady pace, the median home value would be higher than its current value.”

    Here are two graphs that help show why home prices are exactly where they should be.

    The first graph shows actual median home sales prices from 2000 through 2017.

    Are Home Values Really Overinflated? | MyKCM

    By itself, this graph could heighten concerns as it shows home values rose in the early 2000s, came tumbling down and are now headed up again. It gives the feel of a rollercoaster ride that is about to take another turn downward.

    However, if we also include where prices would naturally be, had there not been a boom & bust, we see a different story.

    Are Home Values Really Overinflated? | MyKCM

    The blue bars on this graph represent were prices would be if they had increased by the normal annual appreciation rate (3.6%). By adding 3.6% to the actual 2000 price and repeating that for each subsequent year, we can see that prices were overvalued during the boom, undervalued during the bust, and a little bit LOWER than where they should be right now.

    Bottom Line

    Based on historic appreciation levels, we should be very comfortable that current home values are not overinflated.




    February 28, 2018
    It’s Tax Season… Use Your Refund to Jump Start Your Down Payment Savings!

    It's Tax Season… Use Your Refund to Jump Start Your Down Payment Savings! | MyKCM

    According to data released by the Internal Revenue Service (IRS), Americans can expect an estimated average refund of $2,840 this year when filing their taxes. This is down slightly from the average refund of $2,895, last year.

    Tax refunds are often thought of as ‘extra money’ that can be used toward larger goals; for anyone looking to buy a home in 2018, this can be a great jump start toward a down payment!

    The map below shows the average tax refund Americans received last year by state. (The refunds received for the 2017 tax year should continue to reflect these numbers as the new tax code will go into effect for 2018 tax filings.)

    It's Tax Season… Use Your Refund to Jump Start Your Down Payment Savings! | MyKCM

    Many first-time buyers believe that a 20% down payment is required to qualify for a mortgage. Programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae all allow for down payments as low as 3%, with Veterans Affairs Loans allowing many veterans to purchase a home with 0% down.

    If you started your down payment savings with your tax refund check this year, how close would you be to a 3% down payment?

    The map below shows what percentage of a 3% down payment is covered by the average tax refund by taking into account the median price of homes sold by state.

    It's Tax Season… Use Your Refund to Jump Start Your Down Payment Savings! | MyKCM

     

    The darker the blue, the closer your tax refund gets you to homeownership! For those in Alabama looking to purchase their first homes, their tax refund could potentially get them 69% closer to that dream!

    Bottom Line

    Saving for a down payment can seem like a daunting task. But the more you know about what’s required, the more prepared you can be to make the best decision for you and your family! This tax season, your refund could be your key to homeownership!




    February 27, 2018
    Is Now a Good Time to Rent?

    Is Now a Good Time to Rent? | MyKCM

    People often ask if now is a good time to buy a home, but nobody ever asks when it’s a good time to rent. Regardless, we want to make certain that everyone understands that today is NOT a good time to rent.

    The Census Bureau recently released their 2017 fourth quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

    Is Now a Good Time to Rent? | MyKCM

    As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.

    Bottom Line

    One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, let’s meet to determine if you are able to today!




    February 26, 2018
    Latest NAR Data Shows Now Is a Great Time to Sell!

    Latest NAR Data Shows Now Is a Great Time to Sell! | MyKCM

    We all realize that the best time to sell anything is when demand for that item is high, and the supply of that item is limited. Two major reports released by the National Association of Realtors (NAR) revealed information that suggests that now is a great time to sell your house.

    Let’s look at the data covered in the latest REALTORS® Confidence Index and Existing Home Sales Report.

    REALTORS® CONFIDENCE INDEX

    Every month, NAR surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions.” This month, the index showed (again) that homebuying demand continued to outpace the supply of homes available in January.

    The map below illustrates buyer demand broken down by state (the darker your state, the stronger demand there is).

    Latest NAR Data Shows Now Is a Great Time to Sell! | MyKCM

    In addition to revealing high demand, the index also shows that compared to conditions in the same month last year, seller traffic conditions were ‘weak’ in 22 states, ‘stable’ in 25 states, and ‘strong’ in only 4 states (Alaska, Nevada, North Dakota & Utah).

    Takeaway: Demand for housing continues to be strong but supply is struggling to keep up, and this trend is likely to continue throughout 2018.

    THE EXISTING HOME SALES REPORT

    The most important data revealed in the report was not sales but was instead the inventory of homes for sale (supply). The report explained:

    • Total housing inventory rose 4.1% from December to 1.52 million homes available for sale.
    • Unsold inventory is 9.5% lower than a year ago, marking the 32nd consecutive month with year-over-year declines.
    • This represents a 3.4-month supply at the current sales pace.

    According to Lawrence Yun, Chief Economist at NAR:

    “Another month of solid price gains underlines this ongoing trend of strong demand and weak supply. The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability.”

    In real estate, there is a guideline that often applies; when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values.

    As we mentioned before, there is currently a 3.4-month supply, and houses are going under contract fast. The Existing Home Sales Report shows that 43% of properties were on the market for less than a month when sold.

    In January, properties sold nationally were typically on the market for 42 days. As Yun notes, this will continue unless more listings come to the market.

    “While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”

    Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market and supply will ‘fail to catch up with demand’ if a ‘sizable’ supply does not enter the market.

    Bottom Line

    If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers that are still out searching for your house.




    February 23, 2018
    The Mortgage Process: What You Need to Know [INFOGRAPHIC]

    The Mortgage Process: What You Need to Know [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Many buyers are purchasing a home with a down payment as little as 3%.
    • You may already qualify for a loan, even if you don’t have perfect credit.
    • Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.




    February 22, 2018
    Mortgage Rates on FIRE! Home Prices Up in Smoke?

    Mortgage Rates on FIRE! Home Prices Up in Smoke? | MyKCM

    Mortgage interest rates have already risen by over a quarter of a percentage point in 2018. Many are projecting that rates could increase to 5% by the end of the year.

    What impact will rising rates have on house values?

    Many quickly jump to the conclusion that an increase in mortgage rates will have a detrimental impact on real estate prices as fewer buyers will be able to qualify for a loan. This seems logical; if there is less demand for housing then prices will drop.

    However, in a good economy, rising mortgage rates increase demand as many prospective purchasers immediately jump off the fence to guarantee they get the lower rate.

    Let’s look at home prices the last four times mortgage rates increased dramatically.

    Mortgage Rates on FIRE! Home Prices Up in Smoke? | MyKCM

    In each case, home prices APPRECIATED and did not depreciate. No one is projecting as dramatic an increase in rates as the examples above. Most are projecting an increase of approximately 1% by the end of the year.

    The last time mortgage rates increased by 1% over a twelve-month period was January 2013 (3.41%) to January 2014 (4.43%). What happened to house prices during that span? They appreciated by 9.8%.

    Just two weeks ago, Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting explained:

    “Mortgage rates have risen 1% or more ten times in the last 43 years, with little impact on home sales and prices when the economy was also strong…Historically, rising confidence, solid job growth, and higher wages have more than offset reduced demand for housing resulting from higher mortgage rates.”

    Bottom Line

    When mortgage rates increase, history has shown that prices appreciate (and do not depreciate) during that same time span.




    February 21, 2018
    80% of Renters Believe Homeownership is a Part of Their American Dream

    According to the latest Aspiring Home Buyers Profile by the National Association of Realtors (NAR), 82% of surveyed renters desire to own a home in the future, with 80% believing homeownership is a big part of achieving their American Dream.

    The profile went on to state that 50% of millennials believe that their rent will increase, with 20% believing that an increase in rent will be the catalyst that pushes them to consider buying a home vs. renewing their lease.

    So, what is holding renters back?

    80% of Renters Believe Homeownership is a Part of Their American Dream | MyKCM

    What would make renters take the plunge?

    80% of Renters Believe Homeownership is a Part of Their American Dream | MyKCM

    NAR’s Chief Economist, Lawrence Yun believes that,

    “Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher.”

    Yun goes on to warn that,

    “However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”

    Bottom Line

    If you are one of the many homeowners whose houses no longer fit their needs and are looking to move up to your dream home, now is a great time to list your starter home! First-time buyers are out in force looking to achieve their American Dream.




    February 20, 2018
    2 Ways to Get the Most Money from The Sale of Your Home

    2 Ways to Get the Most Money from The Sale of Your Home | MyKCM

    Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?

    Here are two keys to ensure that you get the highest price possible.

    1. Price it a LITTLE LOW 

    This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

    2 Ways to Get the Most Money from The Sale of Your Home | MyKCM

    Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

    Realtor.com gives this advice:

    “Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

    2. Use a Real Estate Professional

    This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

    study by Collateral Analytics, reveals that FSBOs don’t actually save any money, 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.”

    The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

    Bottom Line

    Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.




    February 19, 2018
    Top 5 Reasons to Hire a Real Estate Professional When Buying or Selling!

    Top 5 Reasons to Hire a Real Estate Professional When Buying or Selling! | MyKCM

    Whether you are buying or selling a home it can be quite the adventure, which is why you need an experienced real estate professional to guide you on the path to achieving your ultimate goal. But in this world of instant gratification and internet searches, many sellers think that they can ‘For Sale by Owner’ or ‘FSBO.’

    The 5 reasons you NEED a real estate professional in your corner haven’t changed but have rather been strengthened by the projections of higher mortgage interest rates & home prices as the market continues to pick up steam.

    1. What do you do with all this paperwork?

    Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true real estate professional is an expert in his or her market and can guide you through the stacks of paperworknecessary to make your dream a reality.

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

    There are over 180 possible steps that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you achieve your dream?

    3. Are you a good negotiator?

    So maybe you’re not convinced that you need an agent to sell your home. After looking at the list of parties that you will need to be prepared to negotiate with, you’ll soon realize the value in selecting a real estate professional. From the buyers (who want the best deals possible), to the home inspection companies, all the way to the appraisers, there are at least 11 different people who you will need to be knowledgeable of, and answer to, during the process.

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

    It is important for your home to be priced correctly from the start to attract the right buyers and shorten the amount of time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to a study by Collateral Analytics, FSBOs achieve prices significantly lower than those from similar properties sold by real estate agents:

    “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.”

    Get the most out of your transaction by hiring a professional.

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

    There is so much information out there on the news and on the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?

    Dave Ramsey, the financial guru, advises:

    “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.”

    Hiring an agent who has his or her finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

    Bottom Line

    You wouldn’t replace the engine in your car without a trusted mechanic, so why would you make one of the most important financial decisions of your life without hiring a real estate professional?




    February 16, 2018
    Should I Wait Until Next Year to Buy? Or Buy Now? [INFOGRAPHIC]

    Should I Wait until next Year to Buy? Or Buy Now? [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
    • Freddie Mac predicts interest rates to rise to 5.1% by 2019.
    • CoreLogic predicts home prices to appreciate by 4.3% over the next 12 months.
    • If you are ready and willing to buy your dream home, find out if you are able to!




    February 15, 2018
    Calm Down! The Real Estate Market is NOT Falling Apart

    Calm Down! The Real Estate Market is NOT Falling Apart | MyKCM

    There has been tremendous volatility in certain markets over the last few weeks (for example, the stock and currency markets). When this happens, some tend to lump all of their investments together and create an almost ‘Armageddon’ scenario where everything loses value quickly and dramatically. Real estate is an investment that can get caught up in this hysteria. Does the concern about the current housing market have merit?

    Financial advisors have been warning us for months that the stock market was ripe for a “correction.”

    Experts have been questioning the value of alternative currencies for over a year.

    In contrast, here are the opinions of three major players in the residential housing market:

    Ralph DeFranco, Chief Economist, Arch Capital Services Inc.

    “It’s premature to worry about a housing bubble. The typical warning signs – excessive debt levels, poor quality loans, exponentially increasing home prices, rising vacancy rates and/or poor affordability compared to the past, and a high number of internet searches on house flipping – are not present.”

    Liu-Down, Genworth Chief Economist

    “My thoughts on many recent discussions of ‘housing bubble’ – the bar for a housing bubble is higher than just prices being above some fundamental value. There must be widespread behavior change as well such as higher levels of fraud and speculation.”

    Fitch Report

    “US home prices are on track for a 5% nominal gain for the 4th consecutive year, returning national prices to their highest level since 2007. The growth has been driven by historically low mortgage rates and unemployment plus solid population and personal income growth rates…a meaningful correction should only be triggered by an unexpected economic shock.”

    Bottom Line

    Speculation has driven certain markets over the last year. However, it has not been speculation, but instead people’s desire for homeownership, that has driven the real estate market.




    February 14, 2018
    Which Comes First… Marriage or Mortgage?

    Which Comes First… Marriage or Mortgage? | MyKCM

    According to the National Association of REALTORS most recent Profile of Home Buyers & Sellers, married couples once again dominated the first-time homebuyer statistics in 2017 at 57% of all buyers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.

    But, many couples are also deciding to buy a home before spending what would be a down payment on a wedding, as unmarried couples made up 16% of all first-time buyers last year.

    If you’re single, don’t fret! Single women made up 18% of first-time buyers in 2017, while single men accounted for 7% of buyers. A recent report pointed to a sense of responsibility and commitment that drives many single women to want to own their own homes rather than rent someone else’s.

    Here is the breakdown of all first-time homebuyers in 2017 by percentage of all buyers, income, and age:

    Which Comes First… Marriage or Mortgage? | MyKCM

    Bottom Line

    You may not be that much different than those who have already purchased their first homes. Let’s get together to determine if your dream home is already within your grasp!




    February 13, 2018
    Low Inventory Pushes Home Prices Higher

    Low Inventory Pushes Home Prices Higher | MyKCM

    According to CoreLogic’s latest Home Price Index, prices appreciated by 6.9% year-over-year from December 2016 to December 2017 on a national level. This marks the fifth month in a row with at least a 6.9% increase.

    Dr. Frank Nothaft, Chief Economist for CoreLogic, gave insight into the reason behind the large appreciation,

    “The number of homes for sale has remained very low. Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

    This is great news for homeowners who have gained nearly $15,000 in equity (on average) in their homes over the last year! Those homeowners who had been on the fence as to whether or not to sell will be pleasantly surprised to find out that they now have an even larger profit to help cover a down payment on their dream homes.

    As we near the traditionally busy spring buyers season, there is still hope for buyers as mortgage rates remain low compared to recent decades. The report also predicted that home price appreciation will slow slightly, rising by 4.3% by this time next year.

    Bottom Line

    If you are looking to enter the housing market, as either a buyer or a seller, let’s get together to go over exactly what’s going on in our neighborhood and discuss your options!




    February 12, 2018
    The #1 Reason to Sell Now Before Spring

    The #1 Reason to Sell Now Before Spring | MyKCM

    The price of any item (including residential real estate) is determined by ‘supply and demand.’ If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

    According to the National Association of Realtors (NAR), the supply of homes for sale dramatically increases every spring. As an example, here is what happened to housing inventory at the beginning of 2017:

    The #1 Reason to Sell Now Before Spring | MyKCM

    Putting your home on the market now instead of waiting for increased competition in the spring might make a lot of sense.

    Bottom Line

    Buyers in the market during the winter months are truly motivated purchasers. They want to buy now. With limited inventory currently available in most markets, sellers are in a great position to negotiate.




    February 9, 2018
    5 Reasons to Love Using A Real Estate Pro [INFOGRAPHIC]

    5 Reasons to Love Using A RE Pro [INFOGRAPHIC] | MyKCM

    Highlights:

    • Hiring a real estate professional to guide you through the process of buying a home or selling your house can be one of the best decisions you make!
    • They are there for you to help with paperwork, understanding the process, negotiations, and helping you with pricing (both when making an offer or setting the right price for your home).
    • One of the top reasons to hire a real estate professional is their understanding of your local market and how the conditions in your neighborhood will impact your experience.




    February 8, 2018
    Homeownership: “The Reports of My Death Have Been Greatly Exaggerated”

    Homeownership: "The Reports of My Death Have Been Greatly Exaggerated" | MyKCM

    The famous quote by Mark Twain in the title of this article can be used to describe homeownership in America today. Last week, the Census revealed that the percentage of homeowners in the country increased for the first time in thirteen years.

    Homeownership: "The Reports of My Death Have Been Greatly Exaggerated" | MyKCM

    story in the Wall Street Journal gave these new homeownership numbers some context:

    “The annual increase marks a crucial turning point because it comes after the federal government reined in bubble-era policies that encouraged banks to ease lending standards to boost homeownership. This time, what’s driving the market is a shift in favor of owning rather than renting.

    ‘This is market, market and market…There’s no government incentive program in sight that is having this effect,’ said Susan Wachter, a professor of real estate and finance at the Wharton School at the University of Pennsylvania, ‘This is back to basics.’”

    In a separate report comparing the rental population in America to the homeowner population, RentCafé also concluded that the gap is now shrinking.

    “Undoubtedly, the recession had a great impact on homeownership…However, it looks like it takes more to discourage Americans from buying a house than that.

    As the years go by, it seems more and more certain that the fact that renting has seen a sudden gain in popularity is more a reaction to the economic crisis than a paradigm shift in the Americans’ attitude toward housing.”

    America’s belief in homeownership was also evidenced in a recent survey by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”

    The results:

    • 43% said homeownership was essential to the American Dream
    • 48% said homeownership was important to the American Dream
    • Only 9% said it was not important

    Bottom Line

    Homeownership has been, is and will always be a crucial element of the American Dream.




    February 7, 2018
    Where Are Mortgage Interest Rates Headed in 2018?

    Where Are Mortgage Interest Rates Headed in 2018? | MyKCM

    The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

    Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily over the course of the next 12 months.

    Where Are Interest Rates Headed? | MyKCM

    How Will This Impact Your Mortgage Payment?

    Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

    According to CoreLogic’s latest Home Price Index, national home prices have appreciated 7.0% from this time last year and are predicted to be 4.2% higher next year.

    If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.

    Bottom Line 

    Even a small increase in interest rate can impact your family’s wealth. Let’s get together to evaluate your ability to purchase your dream home.




    February 6, 2018
    Millionaire to Millennials: Don’t Rent a Home… Buy!

    Millionaire to Millennials: Don’t Rent a Home… Buy! | MyKCM

    In a CNBC article, self-made millionaire David Bach explained that: The biggest mistake millennials are making is not buying their first home.” He goes on to say that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.

    Bach went on to explain:

    “Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.” 

    Then he explains the secret in order to buy that home!

    Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

    What will it cost to pay your mortgage in fifteen years? He explains further:

    “For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

    Bottom Line

    Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

    Who is David Bach?

    Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

    He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.




    February 5, 2018
    Whether You Rent or Buy, Either Way You’re Paying a Mortgage!

    Whether You Rent or Buy, Either Way You're Paying a Mortgage! | MyKCM

    There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

    As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:

    “While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

    Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:

    “With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

    As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.

    Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.22% last week.

    Bottom Line

    Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.




    February 2, 2018
    5 Reasons Homeowners Can Throw Better Super Bowl Parties! [INFOGRAPHIC]

    5 Reasons Homeowners Can Throw Better Super Bowl Parties! [INFOGRAPHIC] | MyKCM

    Highlights:

    • Watching the big game at home with your friends & family offers many advantages.
    • There’s more room to entertain a large crowd and you don’t have to worry about complaints to your landlord if you cheer too loudly!
    • The kitchen is big enough to make as many appetizers as you want, and if some of your guests are only there to watch the commercials, they can do so on a different TV in another room!




    February 1, 2018
    Bidding Wars Abound… How Long Will They Continue?

    Bidding Wars Abound… How Long Will They Continue? | MyKCM

    Just like with any product or service, the law of supply and demand impacts home prices. Any time that there is less supply than the market demands, prices increase.

    In many areas of the country, the supply of homes for sale in the starter and trade-up home markets is so low that bidding wars have ensued, and the busy spring-buying season is just around the corner.

    CoreLogic recently conducted an analysis on national home prices at the time of sale for their January 2018 MarketPulse Report and found that a third of homes sold for at least list price.

    “The share selling above list price was almost three times the trough in January 2008 and represented more than one-fifth of total sales.”

    Many markets in the western part of the country and around major cities are experiencing higher shares of homes selling above list price.

    “San Francisco had the largest share of homes—76 percent—that sold for at least the list price, and Seattle and Los Angeles followed with 63 and 51 percent, respectively. Miami had the lowest share—16 percent—of homes selling at or above the list price.”

    Increased demand during the spring and summer months, the traditionally busier seasons for real estate, will no doubt influence how many homes continue to sell over list price.

    This should not be seen by sellers as permission to overprice their homes, though. Buyers are becoming more and more educated, especially those who have been searching for their dream homes for a while now while waiting for new inventory to come to market.

    Realtor.com gives this advice:

    “Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

    Bottom Line

    Without a large wave of new listings coming to market, buyers will continue competing with each other for the homes that are available. If you are thinking of selling your home, now may be the time to do so before more competition comes this spring. Let’s get together to determine the demand for your house in our area.




    January 31, 2018
    Study Shows “Millennials Deserve More Credit”

    Study Shows "Millennials Deserve More Credit" | MyKCM

    When it comes to talking about millennials, there are many stereotypes out there that have influenced the way the public feels about the generation. Whether it’s the assumption that millennials are irresponsible with money and would rather buy avocado toast than save for a down payment, or that millennials jump from job to job, the majority of these stereotypes paint the generation in a negative light.

    A new study by Bank of America entitled Better Money Habits Millennial Report recently came to the defense of the generation when it reported that:

    “Millennials deserve more credit – both from themselves and from others – for their mindfulness when it comes to money and their lives.”

    Here are some key takeaways from the study proving that millennials deserve more credit for what they are already doing:

    • 63% are saving – (47% have $15,000 or more in savings)
    • 54% are budgeting – (73% who have a budget stick to it every month)
    • 57% have a savings goal – (67% who have a goal stick to it every month)
    • 46% have asked for a raise in the past 2 years – (80% who asked for a raise got one)
    • 59% feel financially secure – (16% have $100,000 or more in savings)

    Many have wondered if millennials even want to own their own homes or if they would choose to rent instead. Well, not only do they want to own their own homes, but many already do and are looking to trade up! A recent study by realtor.com shows that 49% of Americans who plan to sell their home in the next 12 months are millennials!

    Danielle Hale, realtor.com’s Chief Economist, gave some insight into why millennials are looking to sell,

    “The housing shortage forced many first-time homebuyers to consider smaller homes and condos as a way to literally get their foot in the door. Our survey data reveals that we may see more of these homes hitting the market in the next year.”

    Bottom Line

    Not every millennial fits into the stereotypes that are so prominent in our society. Those who have risen above the stereotype are ready and willing to buy a home of their own, and many others already have!




    January 30, 2018
    2 Major Myths Holding Back Home Buyers

    2 Major Myths Holding Back Home Buyers | MyKCM

    Urban Institute recently released a report entitled, “Barriers to Accessing Homeownership,” which revealed that eighty percent of consumers either are unaware of how much lenders require for a down payment or believe all lenders require a down payment above 5 percent.”

    Myth #1: “I Need a 20% Down Payment”

    Buyers often overestimate the down payment funds needed to qualify for a home loan. According to the same report:

    Consumers are often unaware of the option to take out low-down-payment mortgages. Only 19% of consumers believe lenders would make loans with a down payment of 5% or less… While 15% believe lenders require a 20% down payment, and 30% believe lenders expect a 20% down payment.”

    These numbers do not differ much between non-owners and homeowners; 39% of non-owners believe they need more than 20% for a down payment and 30% of homeowners believe they need more than 20% for a down payment.

    While many believe that they need at least 20% down to buy their dream home, they do not realize that programs are available that allow them to put down as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined with programs that have emerged allowing less cash out of pocket.

    Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

    Similar to the down payment, many either don’t know or are misinformed about what FICO® score is necessary to qualify.

    Many Americans believe a ‘good’ credit score is 780 or higher.

    To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

    2 Major Myths Holding Back Home Buyers | MyKCM

    As you can see in the chart above, 53.5% of approved mortgages had a credit score of 600-749.

    Bottom Line

    Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.




    January 29, 2018
    U.S. Housing Inventory Crunch Continues… List Your House Today!

    U.S. Housing Inventory Crunch Continues… List Your House Today! | MyKCM

    Every winter, families across the country decide if this will be the year that they sell their current houses and move into their dream homes.

    Mortgage rates hovered around 4% for all of 2017 which forced many buyers off the fence and into the market, resulting in incredibly strong demand RIGHT NOW!

    At the same time, however, inventory levels of homes for sale have dropped dramatically as compared to this time last year.

    Trulia reported that “in Q4 2017, U.S. home inventory decreased by 10.5%. That is the biggest drop we’ve seen since Q2 2013.”

    Here is a chart showing the decrease in inventory levels by category:

    U.S. Housing Inventory Crunch Continues… List Your House Today! | MyKCM

    The largest drop in inventory was in the starter home category which saw a 19% dip in listings.

    Bottom Line

    Demand for your home is very strong right now while your competition (other homes for sale) is at a historically low level. If you are thinking of selling in 2018, now may be the perfect time.




    January 26, 2018
    5 Reasons Millennials Choose to Buy [INFOGRAPHIC]

    5 Reasons Millennials Choose to Buy [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
    • The top reason millennials choose to buy is to have control over their living space, at 93%.
    • Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they’d like, or renovate an outdated part of their living space.




    January 25, 2018
    If You’re Considering Selling, ACT NOW!!

    If You’re Considering Selling, ACT NOW!! | MyKCM

    Definitely an aggressive headline. However, as the final data on the 2017 housing market rolls in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME!

    How did we finish 2017?

    1. New-home sales were at their highest level in a decade.
    2. Sales of previously owned homes were at their highest level in more than a decade.
    3. Starts of single-family homes were their strongest in a decade and applications to build such properties advanced to the fastest pace since August 2007.

    And Bloomberg Business just reported:

    “America’s housing market is gearing up for a robust year ahead. Builders are more optimistic, demand is strong and lean inventory is keeping prices elevated.”

    And the National Association of Realtors revealed that buyer traffic is stronger this winter than it was during the spring buying season last year.

    The only challenge to the market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is less than a four-month supply of inventory. This represents a decrease in supply of 9.7% from the same time last year.

    Bottom Line

    With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Let’s get together to see whether that is the case in your neighborhood.




    January 24, 2018
    Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years

    Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years | MyKCM

    In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 4% or more over the next twelve months. One major challenge in such a market is the bank appraisal.

    When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

    Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

    In the latest release, the disparity was the narrowest it has been in over two years, as the gap between appraisers and homeowners was only -0.5%. This is important for homeowners to note as even a .5% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home)

    The chart below illustrates the changes in home price estimates over the last two years.

    Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years | MyKCM

    Bill Banfield, Executive VP of Capital Markets at Quicken Loans urges homeowners to find out how their local markets have been impacted by supply and demand:

    “Appraisers and real estate professionals evaluate their local housing markets daily. Homeowners, on the other hand, may only think about their housing market when they see ‘for sale’ signs hit front yards in the spring or when they think about accessing their equity.”

    “With several years of growth, owners may have more equity than they realize. Many consumers use the tax season at the beginning of the year to reevaluate their entire financial life. It also provides a good opportunity for them to consider how best to take advantage of their equity while mortgage interest rates and borrowing costs are still near record lows.”

    Bottom Line 

    Every house on the market must be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacles that may arise.




    January 23, 2018
    Why You Need a Professional on Your Team When Buying a Home

    Why You Need a Professional on Your Team When Buying a Home | MyKCM

    Many people wonder whether they should hire a real estate professional to assist them in buying their dream homes or if they should first try to go through the buying process on their own. In today’s market: you need an experienced professional!

    You Need an Expert Guide If You Are Traveling a Dangerous Path

    The field of real estate is loaded with landmines; you need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and is ready for you to move into can be tricky. An agent listens to your wants and needs, and can sift through the homes that do not fit within the parameters of your “dream home.”

    A great agent will also have relationships with mortgage professionals and other experts that you will need in order to secure your dream home. 

    You Need a Skilled Negotiator

    In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands, of dollars. Each step of the way – from the original offer to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

    Realize that when an agent is negotiating his or her commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family?

    If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal. 

    Bottom Line

    Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.




    January 22, 2018
    Buying A Home Is More Affordable Than Renting In 54% Of US Counties

    Buying A Home Is More Affordable Than Renting In 54% Of US Counties | MyKCM

    According to ATTOM Data Solutions’ 2018 Rental Affordability Report, “buying a median-priced home is more affordable than renting a three-bedroom property in 240 of 447 [or 54% of] U.S. counties analyzed for the report.”

    For the report, ATTOM Data Solutions compared recently released fair market rent data from the Department of Housing and Urban Development with reported income amounts from the Department of Labor and Statistics to determine the percentage of income that a family would have to spend on their monthly housing cost (rent or mortgage payments).

    Daren Blomquist, Senior Vice President of ATTOM Data Solutions had this to say:

    “Although buying is still more affordable than renting in the majority of U.S. housing markets, the majority is shrinking as home price appreciation continues to outpace rental growth in most areas.”

    However, the report also shows that the average fair market rent rose faster than average weekly wages in 60% of the counties analyzed in the report (266 of 447 counties). With rents rising, many renters should consider buying a home soon.

    Bottom Line

    Rents will continue to rise, and mortgage interest rates are still at historic lows. Before you sign or renew your next lease, let’s get together to help you determine if you are able to buy a home of your own and lock in your monthly housing expense.




    January 19, 2018
    Where Did Americans Move in 2017? [INFOGRAPHIC]

    Where Did Americans Move in 2017? [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Atlas Van Lines recently released the results of their annual Migration Patterns Survey in which they tracked their customer’s movement from state-to-state over the course of 2017.
    • Idaho held on to the top spot of ‘high inbound’ states for the 2nd year in a row followed by Washington.
    • The ‘outbound’ states seem to draw a line straight across the country from Connecticut to Wyoming.




    January 18, 2018
    What Impact Will the New Tax Code Have on Home Values?

    Every month, CoreLogic releases its Home Price Insights Report. In that report, they forecast where they believe residential real estate prices will be in twelve months.

    Below is a map, broken down by state, reflecting how home values are forecasted to change by the end of 2018 using data from the most recent report.

    What Impact Will the New Tax Code Have on Home Values? | MyKCM

    As we can see, CoreLogic projects an increase in home values in 49 of 50 states, and Washington, DC (there was insufficient data for HI). Nationwide, they see home prices increasing by 4.2%.

    How might the new tax code impact these numbers?

    Recently, the National Association of Realtors (NAR) conducted their own analysis to determine the impact the new tax code may have on home values. NAR’s analysis:

    “…estimated how home prices will change in the upcoming year for each state, considering the impact of the new tax law and the momentum of jobs and housing inventory.”

    Here is a map based on NAR’s analysis:

    What Impact Will the New Tax Code Have on Home Values? | MyKCM

    Bottom Line

    According to NAR, the new tax code will have an impact on home values across the country. However, the effect will be much less significant than what some originally thought.




    January 17, 2018
    61% of First-Time Buyers Put Down Less than 6%

    61% of First-Time Buyers Put Down Less than 6% | MyKCM

    According to the National Association of Realtors’ latest Realtors Confidence Index, 61% of first-time homebuyers purchased their homes with down payments below 6% from October 2016 through November 2017.

    Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying. The median down payment for all buyers in 2017 was just 10% and that percentage drops to 6% for first-time buyers.

    Zillow Senior Economist Aaron Terrazas’ recent comments shed light on why buyer demand has remained strong,

    “Looking into 2018, rent is expected to continue gaining. More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead.”

    It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.

    Bottom Line

    If you are one of the many first-time buyers who is not sure if you would qualify for a low-down payment mortgage, let’s get together and set you on your path to homeownership!




    January 16, 2018
    Wondering If You Can Buy Your First Home?

    There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family, others might think they are too young, and still, others might think their current income would never enable them to qualify for a mortgage.

    We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first-time buyer:

    Wondering If You Can Buy Your First Home? | MyKCM

    Bottom Line

    You may not be much different than many people who have already purchased their first homes. Let’s meet to determine if your dream home is within your grasp.




    January 15, 2018
    Thinking of Selling? Now is the Perfect Time

    It is common knowledge that a great number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their homes on the market until then. The question is whether or not that will be a good strategy this year.

    The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed the months in which most people listed their homes for sale in 2017. Here is a graphic showing the results:

    Thinking of Selling? Now is the Perfect Time | MyKCM

    The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,680,000.

    That number spiked to 1,970,000 by May!

    What does this mean to you?

    With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for homes right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition amongst buyers.

    Bottom Line

    It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.




    January 12, 2018
    The Impact Staging Your Home Has on Sales Price [INFOGRAPHIC]

    The Impact Staging Your Home Has on Sales Price [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The National Association of Realtors surveyed their members & released the findings of their Annual Profile of Home Staging.
    • 50% of staged homes saw a 1-10% increase in dollar value offers from buyers.
    • 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
    • The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.




    January 11, 2018
    93% Believe Homeownership Is Important in Attaining the American Dream

    93% Believe Homeownership Is Important in Attaining the American Dream | MyKCM

    Americans continue to believe that homeownership is important in achieving the American Dream. A recent survey by NeighborWorks America reported that:

    “Owning a home remains a core element of the American Dream.”

    When asked “How important a part of the American dream is owning a home?”

    • 18% of those surveyed said it was the most important part
    • 53% of those surveyed said it was very important
    • 22% of those surveyed said it was somewhat important

    Homeownership and Financial Stability

    The survey also revealed that 81% of Americans believe that owning a home leads to a family being more financially stable. This feeling was reiterated by Zillow Senior Economist Aaron Terrazas who, in a recent press release, explained:

    “After about a two-year slowdown, rent growth is starting to pick back up across the nation…Looking into 2018, rent is expected to continue gaining.

    More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stabilityof a monthly mortgage payment instead.” (emphasis added)

    Bottom Line

    Owning a home always has been, and always will be, a crucial part of attaining the American Dream.




    January 10, 2018
    FICO® Scores on Approved Home Loans Drop Again

    FICO® Scores on Approved Home Loans Drop Again | MyKCM

    According to Ellie Mae’s latest Origination Report, the average FICO® Score on all closed loans dropped to 722 which is its lowest mark since April. The average includes all approved refinance and purchase loans.

    FHA and VA loans showed the most opportunity for millennials looking to enter the market with low down payments and even lower FICO® Score requirements.

    Ellie Mae’s Millennial Tracker revealed that those who purchased homes in December with an FHA Loan were able to do so with an average down payment of 4% and a FICO® Score of only 684.

    Joe Tyrell, EVP of Corporate Strategy at Ellie Mae commented on the opportunity this brings to buyers,

    “With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market.”

    Bottom Line

    More and more potential buyers are able to qualify for a mortgage loan now! If you are debating a home purchase, let’s get together and evaluate your ability to buy today!




    January 9, 2018
    The Impact of Tight Inventory on the Housing Market

    The Impact of Tight Inventory on the Housing Market | MyKCM

    The housing crisis is finally in the rearview mirror as the real estate market moves down the road to a complete recovery. Home values are up, home sales are up, and distressed sales (foreclosures and short sales) have fallen to their lowest points in years. It seems that the market will continue to strengthen in 2018.

    However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout the winter, supply is not keeping up.

    Here are the thoughts of a few industry experts on the subject:

     

    National Association of Realtors

    “Total housing inventory at the end of November dropped 7.2 percent to 1.67 million existing homes available for sale, and is now 9.7 percent lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.”

    Joseph Kirchner, Senior Economist for Realtor.com

    “The increases in single-family permits and starts show that builders are planning and starting new construction projects, that’s a good thing because it will help to relieve the shortage of homes on the market.”

    Sam Khater, Deputy Chief Economist at CoreLogic

    Inventory is tighter than it appears. It’s much lower for entry-level buyers.”

    Bottom Line 

    If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.




    January 8, 2018
    712,000 Homes in the US Regained Equity in the Past 12 Months!

    712,000 Homes in the US Regained Equity in the Past 12 Months! | MyKCM

    CoreLogic’s latest Equity Report revealed that “over the past 12 months, 712,000 borrowers moved into positive equity.” This is great news, as the share of homeowners with negative equity (those who owe more than their home is worth), has dropped more than 20% since the peak in Q4 of 2009 (26%) to 4.9% today.

    The report also revealed:

    • The average homeowner gained approximately $14,900 in equity during the past year.
    • Compared to Q3 2016, negative equity decreased 22% from 3.2 million homes, or 6.3% of all mortgaged properties.
    • U.S. homeowners with mortgages (roughly 63% of all homeownershave seen their equity increase by a total of $870.6 billion since Q3 2016, an increase of 11.8%, year-over-year.

    The map below shows the percentage of homes by state with a mortgage and positive equity. (The states in gray have insufficient data to report.)

    712,000 Homes in the US Regained Equity in the Past 12 Months! | MyKCM

    Significant Equity Is on The Rise

    Frank Nothaft, Chief Economist at CoreLogic, believes this is great news for the “housing market.” He went on to say:

    “Homeowner equity increased by almost $871 billion over the last 12 months, the largest increase in more than three years. This increase is primarily a reflection of rising home prices, which drives up home values, leading to an increase in home equity positions and supporting consumer spending.”

    Of the 95.1% of homeowners with positive equity in the U.S., 82.9% have significant equity (defined as more than 20%). This means that more than three out of four homeowners with a mortgage could use the equity in their current home to purchase a new home now.

    The map below shows the percentage of homes by state with a mortgage and significant equity.

    712,000 Homes in the US Regained Equity in the Past 12 Months! | MyKCM

    Bottom Line

    If you are one of the many homeowners who are unsure of how much equity you have in your home and are curious about your ability to move, let’s meet up to evaluate your situation.




    January 5, 2018
    Time on the Market Drops to New Low in 2017

    Time on the Market Drops to New Low in 2017 | MyKCM

    According to recently released data from the National Association of Realtors (NAR), the median amount of time a home spent on the market hit an all-time low of only three weeks in 2017.

    Strong buyer demand, a good economy, and a low inventory of new and existing homes for sale created the perfect storm to accelerate the time between listing and signing a contract. The time needed to sell a home has dropped substantially since its highest mark of 11 weeks in 2012.

    The chart below shows the median weeks on the market from 1987 to today.

    Time on the Market Drops to New Low in 2017 | MyKCM

    Bottom Line

    If you are a homeowner who is debating whether or not to list your home for sale, know that national market conditions are primed for a quick turnaround! Let’s get together to discuss exactly what’s going on in our area, today!




    January 4, 2018
    4 Reasons to Sell This Winter [INFOGRAPHIC]

    4 Reasons to Sell This Winter [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Buyer demand continues to outpace the supply of homes for sale which means that buyers are often competing with one another for the few listings that are available!
    • Housing inventory is still under the 6-month supply needed to sustain a normal housing market.
    • Perhaps the time has come for you and your family to move on and start living the life you desire.




    January 3, 2018
    The Benefits of Homeownership Go Beyond the Financial

    The Benefits of Homeownership Go Beyond the Financial | MyKCM

    Homeownership is a major part of the American Dream. As evidence of that, 91% of Americans believe that owning a home is either essential (43%) or important (48%) to achieving that “dream.” In a market where some people may be unsure about the benefits and possibilities of buying a home, it is important that we remember this.

    Homeownership is NOT just about the money. In fact, some of the major benefits are non-financial. Here are a few of those benefits as per the National Association of Realtors:

    • Consistent findings show that homeownership does make a significant positive impact on educational achievement.
    • Several researchers have found that homeowners tend to be more involved in their communities than renters.
    • Early studies of homeownership and health outcomes found that homeowners and children of homeowners are generally happier and healthier than non-owners, even after controlling for factors such as income and education levels that are also associated with positive health outcomes and positively correlated with homeownership.

    Bottom Line

    Homeownership means something more to people and their families than just the financial considerations.




    January 2, 2018
    How Rising Prices Will Help You Build Family Wealth in 2018

    How Rising Prices Will Help You Build Family Wealth in 2018 | MyKCM

    Over the next five years, home prices are expected to appreciate on average by 3.35% per year and to grow by 24.34% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

    So, what does this mean for homeowners and their equity position?

    As an example, let’s assume a young couple purchases and closes on a $250,000 home this month (January). If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

    How Rising Prices Will Help You Build Family Wealth in 2018 | MyKCM

    Since the experts predict that home prices will increase by 4.2% in 2018, the young homeowners will have gained $10,500 in equity in just one year.

    Over a five-year period, their equity will increase by nearly $45,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

    Bottom Line

    Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!




    January 1, 2018
    Here’s to a Wonderful 2018!

    Here?s to a Wonderful 2018! | MyKCM

    We hope 2018 is a great year for you, both personally and professionally!




    December 29, 2017
    Buying or Selling in 2018? 5 Reasons to Resolve to Hire a Pro [INFOGRAPHIC]

    Buying or Selling in 2018? 5 Reasons to Resolve to Hire a Pro [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • As we usher in the new year, one thing is for certain… if you plan to buy or sell a house this year, you need a real estate professional on your team!
    • There are many benefits to using a local professional!
    • Pick a professional who knows your local market and can help you achieve your dreams!




    December 28, 2017
    There’s More to a Bubble Than Rising Home Prices

    There's More to a Bubble Than Rising Home Prices | MyKCM

    What truly causes a housing bubble and the inevitable crash? For the best explanation, let’s go to a person who correctly called the last housing bubble – a year before it happened.

    “A bubble requires both overvaluation based on fundamentals and speculation. It is natural to focus on an asset’s fundamental value, but the real key for detecting a bubble is speculation…Speculation tends to chase appreciating assets, and then speculation begets more speculation, until finally, for some reason that will become obvious to all in hindsight, the ‘bubble’ bursts.

    I have taken to calling the housing market a ‘bubble’.”

    – Bill McBride of Calculated Risk calling the bubble back in April 2005

    Where do we stand today regarding speculation?

    There are two measurements that are used to determine the speculation in a housing market:

    1. The number of homes purchased by an investor and
    2. The number of homes being flipped (resold within a twelve-month period)

    As compared to 2005, investor purchases are down dramatically (from 23% to 13%) and so is flipping (from 8.2% to 5.7%). McBride explains:

    “There is currently some flipping activity, but this is more the normal type of flipping (buy, improve and then sell). Back in 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation.”

    What are the experts saying about speculation in today’s market?

    DSNews recently ran an article which asked two economists to compare the speculation in today’s market to that in 2005-2007. Here is what they said:

    Dr. Eddie SeilerChief Housing Economist at Summit Consulting:

    “The speculative ‘flipping mania’ of 2006 is absent from most metro areas.”

    Tian LiuChief Economist of Genworth Mortgage Insurance:

    “The nature of housing demand is different as well, with more potential homeowners and far fewer speculators in the housing market compared to the 2005-2007 period.”

    And what does McBride, who called the last housing bubble, think about today’s real estate market?

    Sixty days ago, he explained:

    “In 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation. And even more dangerous during the bubble was the excessive use of leverage (all those poor-quality loans). Currently lending standards are decent, and loan quality is excellent…

    I wouldn’t call house prices a bubble – and I don’t expect house prices to decline nationally like during the bust.”

    Bottom Line

    Speculation is a major element of the housing bubble formula. Right now, there are not elevated percentages of investors and house flippers. Therefore, there is not an elevated rate of speculation.




    December 27, 2017
    Top 4 REAL Reasons We Buy a Home

    Top 4 REAL Reasons We Buy a Home | MyKCM

    We often talk about the financial reasons why buying a home makes sense. But, more often than not, the emotional reasons are the more powerful or compelling reasons.

    No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own homes are typically more important to us than the financial ones.

    1. Owning your home offers stability to start and raise a family

    From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home that they purchase.

    2. There’s no place like home

    Owning your own home offers you not only safety and security, but also a comfortable place that allows you to relax after a long day!

    3. You have more space for you and your family

    Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take this all into consideration when buying your dream home!

    4. You have control over renovations, updates, and style

    Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

    Bottom Line

    Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.




    December 26, 2017
    Top 5 Reasons You Shouldn’t FSBO

    Top 5 Reasons You Shouldn?t FSBO | MyKCM

    In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

    Here are the top five reasons:

    1. Exposure to Prospective Buyers

    Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

    2. Results Come from the Internet

    Where did buyers find the home they actually purchased?

    • 49% on the internet
    • 31% from a Real Estate Agent
    • 7% from a yard sign
    • 1% from newspapers

    The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

    3. There Are Too Many People to Negotiate With

    Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

    • The buyer who wants the best deal possible
    • The buyer’s agent who solely represents the best interest of the buyer
    • The buyer’s attorney (in some parts of the country)
    • The home inspection companies, which work for the buyer and will almost always find some problems with the house
    • The appraiser if there is a question of value

    4. FSBOing Has Become More And More Difficult

    The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

    The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

    5. You Net More Money When Using an Agent

    Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

    study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more, by not listing with an agent. One of the main reasons for the price difference at the time of sale is: 

    “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. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6% this year.

    Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?

    Bottom Line

    Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.




    December  25, 2017
    Thank You for All Your Support

    Thank You for All Your Support | MyKCM




    December 22, 2017
    Existing Home Sales Reach Highest Annual Pace in 11 Years [INFOGRAPHIC]

    Existing Home Sales Reach Highest Annual Pace in 11 Years [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Existing home sales are currently at an annual pace of 5.81 million, the highest pace since December 2006.
    • The inventory of existing homes for sale has dropped year-over-year for the last 30 consecutive months and is now at a 3.4-month supply.
    • NAR’s Chief Economist Lawrence Yun had this to say: “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end.”




    December 21, 2017
    Housing Prices are NOT Heading for Another Crash

    As home values continue to increase at levels greater than historic norms, some are concerned that we are heading for another crash like the one we experienced ten years ago. We recently explained that the lenient lending standards of the previous decade (which created false demand) no longer exist. But what about prices?

    Are prices appreciating at the same rate that they were prior to the crash of 2006-2008? Let’s look at the numbers as reported by Freddie Mac:

    Housing Prices are NOT Heading for Another Crash | MyKCM

    The levels of appreciation we have experienced over the last four years aren’t anywhere near the levels that were reached in the four years prior to last decade’s crash.

    We must also realize that, to a degree, the current run-up in prices is the market trying to catch up after a crash that dramatically dropped prices for five years.

    Bottom Line

    Prices are appreciating at levels greater than historic norms. However, we are not at the levels that led to the housing bubble and bust.




    December 20, 2017
    Top 5 Benefits of Hiring a Real Estate Agent

    Top 5 Benefits of Hiring a Real Estate Agent | MyKCM

    The National Association of Realtors (NAR) recently released their 2017 Profile of Home Buyers and Sellers in which they surveyed recent home buyers and sellers about their experiences. An entire section of the profile is dedicated to buyers’ experiences with their real estate agents.

    If you are looking to buy in 2018, here are the top 5 benefits of using a real estate agent when buying your dream home as cited by recent buyers:

    1. Helped the buyer understand the process – 60%

    If you are new to the home buying process, an experienced real estate professional can explain exactly what to expect during the entire transaction so you aren’t caught off guard.

    2. Pointed out unnoticed features/faults with the property – 56%

    Whether it’s pointing out possible uses for an extra bedroom/office, or using their trained eye to see potentially disastrous hazards that may be hiding out of site, your agent is there to protect your interests and make sure your home buying experience is a good one.

    3. Negotiated better sales contract terms – 47%

    When it comes to negotiating the complex terms of your contract and coming to an agreement with the seller, it never hurts to have someone who has been there before on your side. If earlier in your search you found a couple of less than desirable features on the home you are going to purchase, your agent can make sure that contingencies are in place for you to pay the best price. Their analysis of comparable properties in the area will also help to make sure that your dream home is priced properly for the market.

    4. Provided a better list of service providers – 46%

    Real estate agents are titans of networking. Many have a list of preferred providers who they have worked with in the past and who they trust to work as a part of your team to make your dream come true. This can include mortgage professionals (listed as the #8 reason to use an agent at 22%), home inspectors, plumbers, contractors, painters, landscapers, home stagers, and so many more!

    5. Improved the buyer’s knowledge of search areas – 44%

    Local real estate professionals are often members of community organizations and are usually well versed in their area’s history. Their ties to the community make them a great resource whether you plan to relocate to a new area or across town.

    Bottom Line

    If your plans for 2018 include purchasing your dream home, let’s get together to discuss your options and to help you make the most powerful and confident decisions for you and your family.




    December 19, 2017
    Rents Are on the Rise: Don’t Get Caught in the Rental Trap!

    Rents Are on the Rise: Don't Get Caught in the Rental Trap! | MyKCM

    There are many benefits to homeownership. One of the top benefits is protecting yourself from rising rents, by locking in your housing cost for the life of your mortgage.

    Don’t Become Trapped 

    A recent article by Apartment List addressed rising rents by stating:

    “Rents are up 2.7% year-over-year at the national level. Year-over-year growth continues to fall between the 2.1% rate from this time last year and the 3.4% growth rate from October 2015.”

    The article continues explaining that:

    “Despite the seasonal slowdown, rents are still up year-over-year in 89 of the 100 Largest cities.

    Additionally, the Urban Institute revealed that,

    Over a quarter of renters, or 11.1 million households, are severely cost burdened, spending at least half their income on rental housing.

    These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.

    It’s Cheaper to Buy Than Rent 

    As we have previously mentioned, the results of the latest Rent vs. Buy Report from Trulia shows that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

    The updated numbers show that the range is an average of 6.5% less expensive in San Jose (CA), all the way up to 57% less expensive in Detroit (MI) and 37.4% nationwide!

    Know Your Options

    Perhaps you have already saved enough to buy your first home. A nationwide survey of about 24,000 renters found that 80% of millennial renters plan to eventually buy a house, but 72% cite affordability as their primary obstacle. Aside from affordability, one in three millennial renters have concerns about their credit scores, and another 53% said that a down payment is an obstacle.

    Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream homes. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

    Bottom Line

    Don’t get caught in the trap that so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you can qualify for a mortgage now!




    December 18, 2017
    4 Reasons to Buy a Home This Winter!

    4 Reasons to Buy a Home This Winter! | MyKCM

    Here are four great reasons to consider buying a home today instead of waiting.

    1. Prices Will Continue to Rise

    CoreLogic’s latest Home Price Index reports that home prices have appreciated by 7.0% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.7% over the next year.

    The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

    2. Mortgage Interest Rates Are Projected to Increase 

    Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

    An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

    3. Either Way, you are Paying a Mortgage

    There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    Are you ready to put your housing cost to work for you?

    4. It’s Time to Move on with Your Life

    The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

    But what if they weren’t? Would you wait?

    Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

    If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.




    December 15, 2017
    Home Prices Up 6.54% Across the Country! [INFOGRAPHIC]

    Home Prices Up 6.54% Across the Country! [INFOGRAPHIC] | MyKCM

    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 more!




    December 14, 2017
    Should Boomers Buy or Rent after Selling?

    Should Boomers Buy or Rent after Selling? | MyKCM

    In a recent CNBC article, it was reported that many baby boomers are selling their current homes and moving into rentals, rather than purchasing another home.

    “Between 2009 and 2015, the number of renters aged 55 or above rose 28 percent, while those aged 34 or younger only increased 3 percent...

    Meanwhile, more than 5 million baby boomers across the nation are expected to rent their next home by 2020, according to a 2016 analysis from Freddie Mac.”

    This makes sense in the short term for many reasons. If you are moving to a different part of town or a new region of the country, you may decide to rent until you pick the perfect home in an area you love. However, is renting a good long-term strategy?

    A mortgage payment remains fixed. Rents, however…

    The Census Bureau recently released their 2017 third quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

    Should Boomers Buy or Rent after Selling? | MyKCM

    As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether you should rent or buy your next home, you should take this into consideration.

    Bottom Line

    One way to protect yourself from rising rents is to lock in your housing expense by buying a home instead of renting. Let’s get together so we can help you decide what the best step is for you and your family!




    December 13, 2017
    What is the Cost of Waiting Until Next Year to Buy?

    What is the Cost of Waiting Until Next Year to Buy? | MyKCM

    We recently shared that over the course of the last 12 months, home prices have appreciated by 7.0%. Over the same amount of time, interest rates have remained historically low which has allowed many buyers to enter the market.

    As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

    The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 4.7% over the next 12 months.

    What Does This Mean as a Buyer?

    If home prices appreciate by 4.7% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

    What is the Cost of Waiting Until Next Year to Buy? | MyKCM

    Bottom Line

    If buying a home is in your plan for 2018, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.




    December 12, 2017
    Before You Make an Offer, Here Are 4 Tips for Success!

    Before You Make an Offer, Here Are 4 Tips for Success! | MyKCM

    So, you’ve been searching for that perfect house to call a ‘home,’ and you finally found it! The price is right, and in such a competitive market, you want to make sure that you make a good offer so that you can guarantee that your dream of making this house yours comes true!

    Freddie Mac covered “4 Tips for Making an Offer” in their Executive Perspective. Here are the 4 tips they covered along with some additional information for your consideration:

    1. Understand How Much You Can Afford

    “While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

    This ‘tip’ or ‘step’ should really take place before you start your home search process.

    Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).

    2. Act Fast

    “Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.” 

    The inventory of homes listed for sale has remained well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.

    Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.

    3. Make a Solid Offer

    Freddie Mac offers this advice to help make your offer the strongest it can be:

    “Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”

    Talk with your agent to find out if there are any ways that you can make your offer stand out in this competitive market!

    4. Be Prepared to Negotiate

    “It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.

    Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”

    If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller, or cancel the contract.

    Bottom Line 

    Whether buying your first home or your fifth, having a local real estate professional who is an expert in their market on your side is your best bet to make sure the process goes smoothly. Let’s talk about how we can make your dreams of homeownership a reality!




    December 11, 2017
    Why Getting Pre-Approved Should Be Your First Step

    Why Getting Pre-Approved Should Be Your First Step | MyKCM

    In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

    Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

    Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

    “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

    One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” 

    Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

    1. Capacity: Your current and future ability to make your payments
    2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
    3. Collateral: The home, or type of home, that you would like to purchase
    4. Credit: Your history of paying bills and other debts on time

    Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

    Bottom Line

    Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.




    December 8, 2017
    3 Tips for Making Your Dream Home a Reality [INFOGRAPHIC]

    3 Tips for Making Your Dream Home a Reality [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Realtor.com shared their “5 Habits to Start Now If You Hope to Buy a Home.”
    • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking a lot about it.
    • Living within a budget will not only help you save money for down payments but will help you pay down other debts that might be holding you back.




    December 7, 2017
    The #1 Reason to List Your House Today!

    The #1 Reason to List Your House Today! | MyKCM

    Many people believe that selling their house during “the spring buyers’ market” is the best thing to do. Their reasoning is that there will be more buyers than there are during the winter months and, therefore, their house will sell quicker and for a higher price.

    Historically, this made sense. However, today’s real estate market is not following the rules of the past.

    The National Association of Realtors (NAR) measures buyer “foot traffic” each month. It receives data on the number of properties shown to a prospective purchaser by a Realtor® (based on the number of lockboxes used). The data reveals the number of buyers out actively looking for a home, not just window shopping on the internet. NAR explains:

    “Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.”

    According to the latest Foot Traffic Report, buyer traffic is greater now than it was during this year’s spring market and there are more buyers out now than at any other time in the last five years (March of 2012).

    The chart below shows that buyer activity over the last three months (blue bars) was greater than it was during this past spring market (green bars).

    The #1 Reason to List Your House Today! | MyKCM

    Bottom Line

    If you are waiting for next spring to list your home because you think that’s when the buyers will be out in force, perhaps you should reconsider. Buyers are out right now!




    December 6, 2017
    Home Prices Up 7% from Last Year

    Home Prices Up 7% from Last Year | MyKCM

    According to CoreLogic’s latest Home Price Indexnational home prices have appreciated by 7.0% from October 2016 to October 2017. This marks the second month in a row with a 7.0% year-over-year increase.

    A lack of supply of homes for sale has led to upward pressure on home prices across the country, especially in areas where both existing and new home inventory have not kept up with buyer demand.

    CoreLogic’s Chief Economist Frank Nothaft elaborated on the significance of such a large year-over-year gain, 

    “Single-family residential sales and prices continued to heat up in October. On a year-over-year basis, home prices grew in excess of 6 percent for four consecutive months ending in October, the longest such streak since June 2014.

    This escalation in home prices reflects both the acute lack of supply and the strengthening economy.”

    This is great news for homeowners who have gained over $13,000 in equity in their home over the last year! Those homeowners who had been on the fence as to whether or not to sell will be pleasantly surprised to find out that they now have an even larger profit to help cover a down payment on their dream home.

    CoreLogic’s President & CEO Frank Martell had this to say,

    “The acceleration in home prices is good news for both homeowners and the economy because it leads to higher home equity balances that support consumer spending and is a cushion against mortgage risk. However, for entry-level renters and first-time homebuyers, it leads to tougher affordability challenges.”

    Any time the price of a home goes up there will likely be concern about the affordability of that home, but there is good news. Mortgage interest rates remain at historic lows, allowing buyers to enter the housing market and lock in a low monthly housing cost.

    Rents Are Also Rising

    The report went on to mention that over the same 12-month period, median rental prices for a single-family home have also risen by 4.2%.

    With rents and home prices rising at the same time, first-time buyers may find the task of saving for a down payment a little daunting. Low down payment programs are available and have been a very popular option for first-time buyers. The median down payment for first-time buyers in 2017 was only 5%! 

    Bottom Line

    If you are looking to enter the housing market, as either a buyer or a seller, let’s get together to go over exactly what’s going on in our neighborhood and discuss your options!




    December 5, 2017
    Why Is There So Much Paperwork Required to Get a Mortgage?

    Why Is There So Much Paperwork Required to Get a Mortgage? | MyKCM

    Why is there so much paperwork mandated by the lenders for a mortgage loan application when buying a home today? It seems that they need to know everything about you and requires three separate sources to validate each and every entry on the application form.

    Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.

    There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any time in history.

    1. The government has set new guidelines that now demand that the bank proves beyond any doubt that you are indeed capable of paying the mortgage.

    During the run-up to the housing crisis, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.

    2. The banks don’t want to be in the real estate business.

    Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe even triple) check everything on the application.

    However, there is some good news in the situation.

    The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate around 4%.

    The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process, but also paid a higher interest rate (the average 30-year fixed rate mortgage was 8.12% in the 1990s and 6.29% in the 2000s).

    If you went to the bank and offered to pay 7% instead of around 4%, they would probably bend over backward to make the process much easier.

    Bottom Line

    Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.




    December 4, 2017
    5 Reasons to Sell This Winter!

    5 Reasons to Sell This Winter! | MyKCM

    Here are five reasons listing your home for sale this winter makes sense.

    1. Demand Is Strong

    The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.

    Take advantage of the buyer activity currently in the market.

    2. There Is Less Competition Now

    Housing inventory is still under the 6-month supply that is needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

    Historically, the average number of years a homeowner stayed in their home was six, but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

    The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

    3. The Process Will Be Quicker

    Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 44 days, after seeing a 12-month high of 48 days in January.

    4. There Will Never Be a Better Time to Move Up

    If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

    Prices are projected to appreciate by 4.7% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

    5. It’s Time to Move on With Your Life

    Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

    Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

    That is what is truly important.




    December 1, 2017
    Median Days on the Market Drops to 34! [INFOGRAPHIC]

    Median Days on the Market Drops to 34! [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The National Association of REALTORS® surveyed their members for their Confidence Index.
    • The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
    • Homes sold in less than 60 days in 44 out of 50 states, and Washington D.C.
    • Homes typically went under contract in 34 days in October!




    November 30, 2017
    The Real Reason Home Prices are Increasing

    The Real Reason Home Prices are Increasing | MyKCM

    There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

    However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.

    It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart 1).

    The Real Reason Home Prices are Increasing | MyKCM

    According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes has been below six months for the last four years (see chart 2).

    The Real Reason Home Prices are Increasing | MyKCM

    Bottom Line

    If buyer demand outpaces the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.



    November 29, 2017
    2 Charts That Show the Truth about Home Affordability

    2 Charts That Show the Truth about Home Affordability | MyKCM