Hope Leitner, Realtor®, CRS

As a homeowner, it’s always tempting to dream about the next big project you’re going to tackle. The possibilities are endless. Should I renovate? Should I refinance? Should I stay? Should I move? The list goes on and on. In today’s housing market, it’s actually a great time to shift your thoughts toward selling your house and moving up into the home of your dreams. Here’s why: Inventory is on the rise, but there’s still an overall shortage of houses for sale (less than a 6-month supply found in a more normal market), so homes are going under contract quickly. In fact, the National Association of Realtors (NAR) Realtors® Confidence Index Survey reports that right now homes are only staying on the market for an average of 27 days. That’s less than one month, an even more accelerated pace from the 36-day trend we saw last spring. The same report also indicates there are more interested buyers than active sellers today, which is one of the big factors driving home prices higher.

The current housing landscape presents greater home values, low interest rates, and high buyer demand. All of these factors point to the strong market forecasted to continue throughout the rest of the year. There is, however, one thing that may cause the industry to tap the brakes: an overall lack of housing inventory. Buyer demand naturally increases during the summer months, but the current supply is not keeping up. Here is a look at what a few industry experts have to say: Lawrence Yun, Chief Economist at National Association of Realtors “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices.” Mark Fleming, Chief Economist of First American “Market conditions are ripe for increasing home sales with one glaring exception. The supply of homes for sale remains tight, keeping existing home sales below potential.” Danielle Hale, Chief Economist of Realtor.com “We’re not seeing as many new li

Leverage is an investment term that describes the use of borrowed funds to control an asset; sometimes referred to as using other people's money.  Borrowed funds can affect the investment in your home positively. For instance, if you had a $100,000 rental property, collected the rents and paid the expenses and had $10,000 left, you would earn a 10% return (divide the $10,000 by the $100,000.)  With no loan on the property, there is no leverage. If you decided to get an 80% mortgage at 8%, you would owe an additional $6,400 in expenses leaving you only $3,600 net.  However, your return would grow to 18% because your investment is now $20,000 in cash (divide the $3,600 by $20,000.) Leverage, the use of borrowed funds, causes the return to increase in this example.  While, most people associate leverage with rental properties, it also applies to a home.  The larger the mortgage, the more leverage you have.  A FHA mortgage with a 3.5% down payment has more leverage than an 80% lo

We’re halfway through the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the experts predict for the second half of 2019. Here’s what some have to say: Danielle Hale, Chief Economist at realtor.com “Lower mortgage rates, higher wages and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.” “Our outlook implies 4% growth for the remaining months of the year, predicated on…more supply than last year, the decline in mortgage rates, moderating home price appreciation and improving affordability.” Lawrence Yun, Chief Economist at NAR “Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in at these rates.” Doug Duncan, Chief Economist for Fannie Mae “Moderating home price appreciation and attractive mortgage rates continu

If you’re currently renting and have dreams of owning your own home, it may be a good time to think about your next move. With rent costs rising annually and many helpful down payment assistance programs available, homeownership may be closer than you realize. According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying within the next 5 years, and 38% are planning to buy within the next 2 years. When those same renters were asked why they disliked renting, 52% said rising rental costs were their top reason, and 42% of renters believe their rent will rise every year. The full results of the survey can be seen below: There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again, it’s never a bad idea to reconsider your family’s plan and ask yourself if renting is your best angle go

Two things can happen when the mortgage rates go up before you've found a home or locked-in your mortgage.   You'll either pay the current mortgage rate which means a higher payment, or you'll have to increase your down payment to keep the monthly payment at the same level. If the rate were to go up by ½%, the payment on a $275,000 mortgage would increase by $82.87 per month for the entire 30-year term.   That would increase the cost of the home by $29,835. Some people are purchasing the maximum home that they can qualify for.   In that case, they cannot qualify for a higher payment and the only way to buy the same price home is to put more money down which may not be a possibility.   The other alternative is to buy a lower price home which may not be in the same area or size which will involve some compromises. The rate is not the only dynamic that affects buyers waiting to purchase.   The home they want could sell to someone else.   Prices could increase as new home

Some Highlights: •Interest rates are projected to increase steadily heading into 2020. •The higher your interest rate, the more money you will end up paying for your home and the higher your monthly payment will be. Rates are still low right now – don’t wait until they hit 5% to start searching for your dream home!

Over 10% of all residential homes are purchased by investors, and that number continues to rise. Who are these investors? Many have speculated that the large institutional conglomerates such as Blackstone, American Homes 4 Rent, and Colony Starwood dominate investor purchases. However, a special report on investor home buying by CoreLogic, Don’t Call it a Comeback: Housing Investors Have Been Here for Years, shows this is not the case. Ralph McLaughlin, CoreLogic’s Deputy Chief Economist and author of the report, explained his findings at the recent National Association of Real Estate Editors conference in Austin: “Investor buying activity in the U.S. is at record highs. And our records go back confidently, about 20 years… What’s going on and why? Well, it turns out, it’s not the big institutional guys that are leading the increase in home buying. It’s actually the smaller guys. It’s those that have bought between one and ten properties over this 20-year period, they’re the ones

Over the last few years, many sellers have been hesitant to put their houses on the market because they feared not being able to find another home to buy. We’ve reported on inventory shortages in the past, and it’s been a constant concern for potential buyers throughout recent years. New research shows the inventory concern is starting to decrease among potential buyers. According to First American, the two leading obstacles to homeownership that buyers feel today are Affordability and Limited Inventory. This means the feeling that homes are less affordable has risen, while the fear of limited inventory has decreased, delivering a wealth of good news for sellers. At the same time, over the past 12 months, we’ve seen a steady month-over-month increase in the number of homes coming to market for purchase. In the past, the lack of listings and available inventory slowed down the real estate market. This recent increase in current inventory has many buyers and sellers now thinking i

Questions continue to come up about where home prices will head throughout the rest of this year, as well as where they may be going over the few years beyond. We’ve gathered current data from the industry’s most reliable sources to help answer these questions: The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter. Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments. Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives. Freddie Mac – An organization whose mission is to

Square footage is commonly used to determine if a home will fit a buyer's needs.   The price per square foot can be used to compare the costs of different homes and even, determine the value of a property. The challenge is what is the source of the square footage measurement and how was it done. County records use square footage to determine assessed value for property tax purposes.   They are assumed to be reliable but there can be inaccuracies in their tax rolls.   Another source of square footage could be from the house plans but the problem there is that the builder may have made modifications, or a subsequent owner could have made additions. Appraisers are required to measure the home to determine square footage and they generally, adhere to a standard method which leads to uniformity in the industry.   The ANSI, American National Standards Institute, guidelines are considered the standard but there are no laws governing the process. Because basements are below grade l

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

The Federal Reserve Bank (The Fed) recently released their 2019 Survey of Consumer Expectations Housing Survey. The survey reported that 65% of Americans believe homeownership is a good financial investment. Since 2014, the percentage has increased by over nine present. The Fed’s survey also showed that when the results are broken down by age, education, income, or region of the country, more than 55% of Americans in each category see homeownership as a good investment. This coincides with a recent Gallup survey of Americans which revealed that real estate was their number one choice for the best long-term investment when compared to stocks, savings accounts or gold. Bottom Line Americans’ belief in residential real estate as a good financial investment continues to grow as the housing market returns to normalcy.

Since June of last year, we have seen an increase in the inventory of homes for sale month per month. Every spring and summer, the inventory increases because people want to sell their home. For those with children, they may want to be in their new home for the beginning of the school year. If you are one of those sellers, you may find these 4 tips helpful in getting your home sold more quickly. 1. Make buyers feel at home Declutter your home! Pack away all personal items like pictures, awards, and sentimental belongings. Make them feel like they belong in this house! According to the Profile of Home Staging by the National Association of Realtors, “83% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.” Not only will your house spend less time on the market, but the same report mentioned that, “One-quarter of buyers’ agents said that staging a home increased the dollar value offered between 1 – 5%, compared to other s

Homes priced at the top 25% of the price range for a particular area of the country are considered “premium homes.” In today’s real estate market, there are deals to be had at the higher end! This is great news for homeowners wanting to upgrade from their current house. Much of the demand for housing over the past couple of years has come from first-time buyers looking for their starter home. Many of the more expensive homes listed for sale have not seen as much interest. According to ILHM’s Luxury Report, this mismatch in demand and inventory of luxury and premium homes has created a Buyer’s Market. For the purpose of the report, a luxury home was defined as one that costs $1 million or more. “A Buyer’s Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/or price point.” The authors of the rep

Some Highlights: •If you are thinking of buying a home, you may not know where to start. •Here is a simple list of 10 steps that you will go through to purchase a home. •Make sure to ask your agent for details about each step and what else may be required in your area!

Aside from standing water in your yard or water running out from under a sink, the first indication that you might have a water leak comes from a larger than normal water bill.   Before calling a leak specialist or a plumber, there is a simple diagnostic you can perform. Go through your home and make certain that all the faucets are turned off and that the toilets have indeed stopped filling the reserve.   Then, go to the water meter and make a mark on the lens where the dial is currently.   If there is water in the meter box, the meter itself could be leaking. If the meter is still turning, the leak is between the meter and the house. By inspecting the area between the meter and the house, you can look for soft, muddy areas or grass that is greener than the rest of the yard. One of the hardest places to isolate a leak is in a swimming pool.   If you have an automatic filler, like in a toilet, you'll need to turn it off.   Mark the water line on the wall and wait to see if th

Aside from standing water in your yard or water running out from under a sink, the first indication that you might have a water leak comes from a larger than normal water bill.   Before calling a leak specialist or a plumber, there is a simple diagnostic you can perform. Go through your home and make certain that all the faucets are turned off and that the toilets have indeed stopped filling the reserve.   Then, go to the water meter and make a mark on the lens where the dial is currently.   If there is water in the meter box, the meter itself could be leaking. If the meter is still turning, the leak is between the meter and the house. By inspecting the area between the meter and the house, you can look for soft, muddy areas or grass that is greener than the rest of the yard. One of the hardest places to isolate a leak is in a swimming pool.   If you have an automatic filler, like in a toilet, you'll need to turn it off.   Mark the water line on the wall and wait to see if th

Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers. The top 5 reasons are listed below: 1. Online Strategy for Prospective Purchasers Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use 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? •50% on the Internet •7% from a yard sign •28% from a Real Estate Agent •1% from newspapers The days of selling your house by putting up a sign and listing 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

Owning a home is the first step to building equity.   Tenants build equity but not for themselves; they build it for the owners. Equity is the difference in the value of the home and what is owed on the home.   There are two dynamics that cause this to grow: appreciation and principal reduction. As the home increases in value, it is said to appreciate.   Various authorities will annualize an appreciation rate based on average sales prices from one year to the next.   Since appreciation is based on supply and demand as well as economic conditions, it will not be the same year after year.   If you looked at a ten to twelve-year period, some would be higher than others and there may even be some individual years that it is flat or even declined.   For the most part, values tend to appreciate over time. Most mortgages are amortized which means that a portion of the payment each month is applied to the principal in order to pay off the loan by the end of the term.   A $300,000 mortg