What’s Going on with Home Prices?

KCM Crew, October 10th, 2018

What’s Going On With Home Prices? | MyKCMAccording to CoreLogic’s latest Home Price Insights Report, national home prices in August were up 5.5% from August 2017. This marks the first time since June 2016 that home prices did not appreciate by at least 6.0% year-over-year.

CoreLogic’s Chief Economist Frank Nothaft gave some insight into this change,

“The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home. The slackening in demand is reflected in the slowing of national appreciation, as illustrated in the CoreLogic Home Price Index.  

National appreciation in August was the slowest in nearly two years, and we expect appreciation to slow further in the coming year.”

One of the major factors that has driven prices to accelerate at a pace of between 6-7% over the past two years was the lack of inventory available for sale in many areas of the country. This made houses a prized commodity which forced many buyers into bidding wars and drove prices even higher.

According to the National Association of Realtors’ (NAR) latest Existing Home Sales Report, we are starting to see more inventory come to market over the last few months. This, paired with patient buyers who are willing to wait to find the right homes, is creating a natural environment for price growth to slow.

Historically, prices appreciated at a rate of 3.7% (from 1987-1999). CoreLogic predicts that prices will continue to rise over the next year at a rate of 4.7%.

Bottom Line

As the housing market moves closer to a ‘normal market’ with more inventory for buyers to choose from, home prices will start to appreciate at a more ‘normal’ level, and that’s ok! If you are curious about home prices in your area, let’s get together to chat about what’s going on!

 


 

 

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The True Cost of NOT Owning Your Home

KCM Crew, October 8th, 2018

The True Cost of NOT Owning Your Home | MyKCMOwning 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 the entirety of America’s existence.

Realtor.com 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. Less than a month ago, we explained that a family that purchased an average-priced home at the beginning of 2018 could build more than $49,000 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 your home has many social and financial benefits that cannot be achieved by renting.

 


 

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Another Property Sold by Len and Leslie Marma

This Single-Family in Marshfield, MA recently sold for $480,000. This Ranch style home was sold by Len and Leslie Marma – SUCCESS! Real Estate.

73 Indian Rd, Marshfield, MA 02050

Single-Family

$499,900
Price

$480,000
Sale Price
8
Rooms
4
Beds
2
Baths
A classic ranch situated high on the popular Holly Hill neighborhood overlooking the blue Atlantic. Relax in the comfortable family/4 season room with wall of windows, sliders to a patio and great views. Lots of room for family gatherings and those special dinners including an eat-in kitchen and dining room. Easy one floor living looking toward those later years. Large full basement for lots of storage and an attached 2 car garage. Private yard with a paved spot for RV or boat parking. Nothing like it around.
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Number of Homes Selling Above List Price Drops

Only 23% of homes sold for more than asking

cash house two

In the four weeks ending on September 23, homes that sold above asking price dipped below 2016 levels, according to the latest data from Redfin.

According to the company, 22.9% of homes sold for more than asking price, declining from 25.5% of homes the same time last year. Notably, the share of homes that sold above asking price has been steadily decreasing from June, when it was at 29%.

“With home price growth slowing to 4.7% in August, and a record-high share of sellers dropping their prices, the fact that fewer homes are selling above their asking price is another indication that competition is getting less intense than it has been in recent years,” Redfin Senior Economist Taylor Marr stated.

The report indicates that the decline is most apparent in highly competitive markets like Seattle, Denver, Portland and the Bay Area.

In Seattle, the share of homes sold above list fell to 30.3% from 50.6% the same time in 2017. Remarkably, this is the lowest the share of homes has been since 2014.

Competition is tighter in affordable inland metros, including Buffalo, New York, Indianapolis and Las Vegas, according to the report.

This is largely attributed to a steep decline in inventory, resulting in the share of homes selling above list price growing significantly.

“Inventory pressures are easing in the hottest markets, which is welcome news for homebuyers who are increasingly able to submit an offer without competition and get bids accepted without offering above list price,” Marr concluded.

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NAR: Pending home sales fall for eighth consecutive month

Pending Home Sales Index falls 1.8% in August

house

Pending home sales have now fallen on an annual basis for eight consecutive months in August, according to the latest report from the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 1.8% in August to 104.2, down from 106.1 in July. With August’s decline, the index is remains 2.3% down.

NAR Chief Economist Lawrence Yun said that low inventory continues to contribute to the housing market slowdown.

“Pending home sales continued a slow drip downward, with the fourth month over month decline in the past five months,” Yun stated. “Contract signings also fell backward again last month, as declines in the West negatively impacted overall activity.”

“The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points,” Yun added.

“With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains,” Yun continued. “However, with indications that buyers are beginning to pull out, price gains are going to decelerate, and potential sellers are considering that now is a good time to list and bring more properties to the market.”

Yun also pointed to year-over-year increases in active listings to illustrate a potential rise in inventory.

Cities experiencing an increase in listings in August 2017 and 2018 included Columbus, Ohio, Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Providence-Warwick, RI-Mass. and Nashville, according to Realtor.com.

According to Yun, while rising rates are always a deterrent to potential buyers, it should not lead to a significant decline.

“We have two opposing factors affecting the market: the negative impact of rising mortgage rates and the positive impact of continued job creation,” Yun said. This should lead to future homes sales staying fairly neutral.”

Yun states as long as there is job growth, rising mortgage rates will hinder some buyers. However, job creation means second, or third incomes being added to households which gives consumers the financial confidence to purchase a home.

Yun forecasts existing home sales will decrease 1.6% to 5.46 million in 2018, and the national median existing home price, he predicts, will increase 4.8% in 2018.

The PHSI in the Northeast decreased 1.3% to 92.7 in August and is 1.6% lower than 2017. The Midwest index fell by 0.5% to 101.6, but is still 1.1% lower than this time last year.

Lastly, pending home sales in the South declined 0.7% to 121.3 but is still 1.3% higher than 2017. The index in the West retreated 5.9% to 89.1 and plummeted 11.3% below 2017.

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5 things TO DO this week in Marshfield

5 things TO DO this week in Marshfield http://marshfield.wickedlocal.com/news/20180926/5-things-to-do-this-week-in-marshfield#Marshfield #LenandLeslieMarma

marshfield.wickedlocal.com, September 27th, 2018

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Where are the Mortgage Interest Rates Headed in 2019?

KCM Crew, September 25th, 2018

Where Are Mortgage Interest Rates Headed In 2019? | MyKCMThe 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 year.

Where Are Mortgage Interest Rates Headed In 2019? | 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 6.2% from this time last year and are predicted to be 5.1% higher next year.

If both the predictions of home price and interest rate increases become a reality, families would wind up paying considerably more for their next homes.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth, so don’t wait until next year! Let’s get together to evaluate your ability to purchase your dream home now.

 


 

 

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