Hope Leitner, Realtor®, CRS

We are beginning to see reports that more housing inventory is coming to the market and that buyer demand may not be increasing at the same pace it did earlier this year. The result will be many headlines written to address the impact that these two situations will have on home values. Many of these headline writers will confuse “softening home prices” with “falling home prices,” but there is a major difference between the two. The data will begin to show that home values are not appreciating at the same levels as they had over the last several years (softening prices). This does NOT mean that prices are depreciating (falling prices). Here is an example: Over the last several years, national home values increased by more than 6% annually. If you had a home worth $300,000 at the beginning of the year, it would be worth $318,000 by year’s end. If the appreciation rate “falls” to 4%, that $300,000 house would be worth $312,000 at the end of next year – a $6,000 difference. The price...

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 6.2% 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 July 2017 to July 2018 (the latest data available). 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 which 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 lis...

The gutters and downspouts on your home are intended to channel rainwater away from your home and its foundation.   When they're blocked and not functioning properly they can lead to the gutters coming loose, wood rot and mildew, staining of painted surfaces, and even worse, foundation issues or water penetration into the interior of the home. Most experts recommend cleaning the gutters at least once a year.   More often might be necessary depending on the proximity of leaves and other debris that could collect. If this is a task that you feel comfortable about tackling yourself, there are few things to consider.   If the debris is dry, it will be easier to clean the gutters.   Safety is important, and precautions should be taken such as using a sturdy ladder and possibly, having someone hold it while you're on the ladder. Other useful tools will be a five-gallon plastic bucket to hook on the ladder to hold the debris; work gloves to protect your hands from sh...

The housing market has been anything but normal for the last eleven years. In a normal real estate market, home prices appreciate 3.7% annually. Below, however, are the price swings since 2007 according to the latest Home Price Expectation Survey: After the bubble burst in June 2007, values depreciated 6.1% annually until February 2012. From March 2012 to today, the market has been recovering with values appreciating 6.2% annually. These wild swings in values were caused by abnormal ratios between the available supply of inventory and buyer demand in the market. In a normal market, there would be a 6-month supply of housing inventory. When the market hit its peak in 2007, homeowners and builders were trying to take advantage of a market that was fueled by an “irrational exuberance.” Inventory levels grew to 7+ months. With that many homes available for sale, there weren’t enough buyers to satisfy the number of homeowners/builders trying to sell, so prices began to fall. Then, fo...

Congress enacted the Dodd-Frank Act in 2010 in response to the mortgage crisis that led to America's Great Recession.   The two parts that apply closely to homebuyers are the Ability-to-Repay (ATR) and Qualified Mortgages (QM). A Qualified Mortgage is a category of loans that have certain, more stable features that help make it more likely that borrowers will be able to afford their loan.   These loans do not allow certain risky features like an interest-only period when no money is applied to reduce the principal; negative amortization that would allow the mortgage balance to increase; and, "balloon payments" at the end of the loan that are larger than the normal periodic payments. A debt-to-income ratio of less than or equal to 43% has been established to provide a limit on how much of a borrower's income can go toward total debt including the mortgage and all other monthly debt payments.   However, the Consumer Finance Protection Bureau believes these loans sho...

Between 1987 and 1999, which is often referred to as the ‘Pre-Bubble Period,’ home prices grew at an average of 3.6% according to the Home Price Expectation Survey . Every month, the economists at CoreLogic release the results of their Home Price Insights Report , which includes the actual year-over-year change in prices across the country and their predictions for the following year. The chart below shows the forecasted year-over-year prices for 2018 (predictions made in 2017). According to their predictions, the average appreciation over the course of 2018 should be 4.8%, which is still greater than the ‘normal’ appreciation of 3.6%. If we layer in the actual price appreciation that has occurred this year, we can see that over the course of 2018, home prices have appreciated by an average of 6.9% and have outpaced projections all year! What does this mean? The tale of today’s real estate market is one of low inventory, high demand, and rising prices. The forces at work c...

We all realize that the best time to sell anything is when the demand for that item is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that right now continues to be a great time to sell your house. Let’s look at the data covered in the latest Pending Home Sales Report and Existing Home Sales Report. THE PENDING HOME SALES REPORT The report announced that pending home sales (homes going into contract) are down 2.3% from last year and have continued to fall on an annual basis for seven straight months. Lawrence Yun, NAR’s Chief Economist, had this to say: “The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it.” Takeaway : Demand for housing is strong and will continue to grow i...

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 report reveals that home prices have appreciated by 6.2% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.1% 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 already increased by half of a percentage point, to around 4.5% in 2018. 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 half a percentage point to around 5.1% by this time next year. An increase in rates will impact your monthly mortgage payment....

No one wants to waste water or money.   For that reason, take a few minutes every other month to do the following inspections: Check to see if cutoff valves on sinks and toilets are working properly.   Many times, builders will put individual cutoffs on supply lines to sinks and toilets.   It is reasonable to expect them to work but after some time, they can corrode which prevents opening and closing.   It is a good idea to test them occasionally before you need them in an emergency.   Fill each sink with a few inches of water to see if they drain in what you feel is a normal time. A slow-draining sink can be an indication of a clog that builds up around the insides of the pipe.   Common causes are food, grease, hair and soap scum.   Plunging can take care of some slow-running sinks.   After partially filling the sink with water, seal the plunger over the drain and pump it up and down a few times. ...

There are many things that factor into the decision to buy a home. New research from the Urban Institute suggests that one of those things may be inherited from your parents. Children are More Likely to Own a Home if Their Parents Did According to an analysis of millennial homeowners, the homeownership rate of those whose parents rent their homes is 14.4%, while the rate amongst millennials whose parents are homeowners is 31.7%! “A young adult’s odds of homeownership are highly correlated with their parent’s homeownership. Without controlling for such factors as age, income, education, marital status, and race or ethnicity, there is a 17 percentage-point gap between the homeownership rate for young adults whose parents are renters and young adults whose parents are homeowners.” The study also revealed that as a parent’s net worth increases, so does the likelihood that their child will own a home. These two findings are not surprising as we know from the Survey of Consumer Fin...

Whether it is hesitation or procrastination due to uncertainty, it can cost buyers by having to pay more for both the house and the financing.   This is one of those markets where most of the experts expect interest rates and prices will continue to rise through 2019. The National Association of REALTORS® reports there is currently a 4.2-month supply of homes for sale which is close to the same as last year's inventory.   Normal inventory is considered to be a 6-month supply. If during the period you're waiting to buy, the price of the home goes up by 5% and the mortgage rate increases by 1%, the payment on a $275,000 home with a 95% mortgage could be $233.80 more each and every month.   Over a seven-year period, the delay to purchase would total close to $20,000. To act decisively, you need good information; a confused mind will not generally make a decision.   In today's market, you need to know exactly what price home you can qualify for and you need to...