Real Estate Information Archive

Good Morning!

It seems that much of the nation is beginning to feel the pressure from housing markets that are quickly becoming over-priced. California, which has had extreme housing inflation for years is feeling the pain of an over-priced market and home sales are beginning to slow down quickly in many areas. California many times leads national housing trends. Here is an article from MSNBC that talks about the housing market changes.

A slight increase in the supply of homes for sale brought buyers back to the table in June.

Pending home sales, a measure of signed contracts to buy existing homes, rose 0.9 percent in June compared to May, according to the National Association of Realtors. Sales, however, were 2.5 percent lower than they were in June 2017. Pending home sales have been down annually for six straight months.

Sales increased in all regions of the country, rising 1.4 percent month-to-month in the Northeast, 0.5 percent in the Midwest, 1.1 percent in the South and 0.7 percent in the West. Compared to a year ago, however, sales were lower in all regions – weakest in the West.

"After two straight months of pending sales declines, home shoppers in a majority of markets had a little more success finding a home to buy last month," said Lawrence Yun, chief economist for the Realtors. "The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates."

The severe shortage of homes for sale has been plaguing the housing market for more than a year. As demand rises, prices continue to heat up, with multiple offers more the norm than the exception. Total housing inventory at the end of June rose 0.5 percent compared to June of 2017, the first annual increase in three years.

"Even with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year's pace," added Yun.

Affordability has hit the West especially hard. Home sales in southern California plummeted in June, according to CoreLogic, as buyers came up against red-hot prices. Some sellers are starting to lower prices, and real estate agents there are reporting fewer bidding wars. This could mark a turn in the market.

The rise in pending home sales, albeit very small for the month, does show that as more inventory comes on the market, there are buyers waiting to meet it. One headwind going forward is mortgage rates. They barely moved at all in June but started to edge higher again in July. Should rates move even more decisively higher, especially amid still-high home prices, sales could weaken further.

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Good Morning!

Rents have crept up in most communities just as home prices have.  In fact in many areas rents have increased at a higher rate than home prices.  I find today that many of the renters are paying more money to rent than they would be spending on a home payment.  By renting they are also losing out on some great opportunities such as depreciation and interest tax deductions.  Renters are also just making the landlords payments and not building equity.  Long term the buidling of equity in a home is one of the greatest wealth building opportunities for most people.  The followng is an article from "Realtor.com" on a recent study of the current trend towards renting.

A growing percentage of apartment renters aren’t interested in buying a home as affordability challenges take a bigger toll on American aspirations of homeownership.

In all, 20% of renters said they have no interest in owning a home, up from 17% in August and 13% in 2016, according to results of a semiannual survey of renters by mortgage company Freddie Mac in January.

Two-thirds of renters who plan to continue renting said they are doing so for financial reasons, up from 59% two years ago, according to the survey. 

“Housing is becoming less and less affordable. Renting is perceived to be the more affordable housing option,” said David Brickman, an executive vice president at Freddie Mac and head of its multifamily division.

The growing preference for renting comes even as the economy has strengthened and credit has loosened, in theory making homeownership possible for more people. Renters generally report being better off financially, with some 39% saying they have money to take them beyond the next payday, up from 34% in August, according to Freddie.

But home prices have risen strongly in recent years while rent increases have slowed, especially for luxury buildings in urban centers. The S&P CoreLogic Case-Shiller National Home Price Index rose 6.2% in January from the same month a year earlier, while the average apartment rent increased a more manageable 3.9% in the first quarter from a year earlier, according to real-estate research firm Reis Inc.

The preference for renting is being driven in part by baby boomers, who are more likely to have experienced some of the pitfalls of homeownership. Some 35% of baby boomers said they have no interest in owning a home, up from 31% in August and 23% two years ago, according to the Freddie Mac survey.

At the same time, concerns about affordability are most prevalent among younger renters. Nearly three-quarters of millennials said they are renting for financial reasons, up from 59% two years ago.

The survey was taken in late January, so it likely doesn’t reflect the full impact of the tax bill that passed in late December and shifted the equation in favor of renting for many households.

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Good Morning!

Yes, our national economy is taking off.  Wages are up, employment is up and many economists say that this is just the beginning of a long improvement.  The value of homes across the nation have steadily increased since the recession and have added to a large increase in national wealth.

Americans are feeling richer. Household net worth neared $100 trillion in the final quarter of last year, falling into record territory, according to new data released by the Federal Reserve on Thursday. Rising stock markets and property prices were attributed to the jolt in the fourth quarter. (Household net worth is the value of all of a consumer’s assets, like stocks and real estate, minus any liabilities like mortgage and credit card debt.)

Household net worth increased more than $2 trillion last quarter to a record $98.7 trillion in the final three months of last year, according to the report. Households in the U.S. saw their net worth increase to nearly seven times their disposable personal income in 2017.

The impact real estate has had on that increase can’t be understated, economists say. The value of households’ real estate rose $511.2 billion, which reflects recent run-ups in home prices.

But the rate at which consumers are saving is concerning, JPMorgan Chase Economist Michael Feroli told The Wall Street Journal. The saving rate was 3.74 percent in 2017, down from 7.19 percent in 2015.

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Good Morning!

There are many questions about the new tax plan currenty beeing looked at by the Senate.  How will it affect all of us?  There is much debate ahead and mostly likely many changes ahead before a bill is passed. The following is an article from "Realtor.com"  that goes over what is currently being discussed.

After months of internal debate among Republicans, the House Ways and Means Committee released the details of its plan to overhaul the U.S. tax code for businesses and individuals. The highlights include lower rates for many individual households but not the highest earners; fewer individual tax brackets; a larger standard deduction for households who don’t itemize their tax bills; trimmed-back deductions for state and local taxes; eventual repeal of the estate tax; and much lower rates for corporate profits and profits for individuals on unincorporated business income. Here is a look at all of the details.

New tax brackets and rates

Tax treatment for the wealthy is among the hottest issues. The House Republican tax plan will preserve a top individual tax rate of 39.6%. Republicans last year had been discussing a top rate of 33%, and then moved to 35% earlier this year.

The retention of the 39.6% individual tax rate marks a shift in the way Republicans think about tax policy. For years, they had focused on driving down that top tax rate. President Trump says he is instead focused on middle-income cuts and large changes to the business tax code, which he argues will boost growth and hiring.

Effect on deductions and credits

The plan aims to increase the standard deduction, while adjusting several other deduction and credits.

House Republicans had planned to release the bill Wednesday but delayed it until Thursday to finish technical work on the legislation and address thorny issues such as how to treat deductions for state and local taxes. Party leaders want to repeal the deduction, but that has sparked a rebellion from lawmakers in high-tax states like New York and New Jersey and set off a scramble for compromise, centered on keeping the deduction for property taxes.

Standard Deduction

• Current law for 2017: $12,700 (married); $9,350 (head of household); $6,350 (single)

• Proposed for 2018: $24,400 (married); $18,300 (head of household); $12,200 (single)

Personal Exemption

• Current law for 2017: $4,050

• Proposed: Repealed Child Tax Credit

• Current law: $1,000

• Proposed: $1,600 plus $300 each for the taxpayer, a spouse and any non-child dependents

State and Local Taxes

• Current law: Itemized deduction

• Proposed: Deduction capped at $10,000 for property tax only

Charitable Donations

• Current law: Itemized deduction

• Proposed: Unchanged

Mortgage Interest Deduction

• Current law: Itemized deduction on loans up to $1 million

• Proposed: Itemized deduction for loans up to $500,000 on new home purchases

Alternative Minimum Tax

• Current law: Parallel tax that disallows personal exemptions and state deductions• Proposed: Repealed

Retirement Accounts

• Current law: 401(k) plans allow pretax deferral of up to $18,000

• Proposed: Minor changes

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Good Morning!

If you are interested in what is taking place with our national housing market, the following article will give you a good idea as to what is taking place.  This article from "Realtor.com", talks about the shortage of homes for sale and the effect it is having on home prices.

It's anyone's guess just how much higher home prices will go—and if they'll ever slow down. Besides, if you could see the future, wouldn't you rather focus your energies on predicting the winning lottery numbers?

Nationally, the median existing-home price for single-family abodes zoomed up to $255,600 in the second quarter of the year, according to the new quarterly report from the National Association of Realtors®. (Existing homes are previously lived-in residences as opposed to newly built abodes.) That was up 10.1% from the first quarter of the year and represented a 6.2% rise from the second quarter of last year.

Prices are continuing their steady climb because there simply aren't enough homes on the market to go around. As the economy has improved, more people who held off on becoming homeowners or trading up to bigger, better abodes are getting into the market. "Household incomes may be rising and giving consumers assurance that now is a good time to buy," NAR Chief Economist Lawrence Yun said in a statement. "But these severe inventory shortages will likely continue to be a drag on sales potential the second half of the year."

The cost of buying a single-family home increased in about 87% of the metros that NAR looked at. Prices dropped in just 23 markets.

That might explain why sales of all existing homes, which include both single-family residences and condos, fell 0.9% in the second quarter. They hit 5.57 million, according to the seasonally adjusted numbers in the report.

"With new supply not even coming close to keeping pace, price appreciation remained swift in most markets," Yun said. "An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth-building benefits of homeownership."

Even the median prices of lower-priced condos and co-ops shot up to $239,500. That's up nearly 9.5% from the first quarter of 2017 and represented a 5.4% rise from the second quarter of last year. Sorry, buyers.

The most expensive metros were, unsurprisingly, primarily in California. Silicon Valley's San Jose topped the list with a median price of$1,183,400 for a single-family, existing home, according to the report.

Silicon Valley buyers are "commonly very well-to-do people in their mid-20s to mid-40s. Most typically are working in high tech," says Realtor® Avi Urban of Keller Williams Palto Alto. "Many of them are making enormous amounts of money."

But prices fluctuate during the year depending on the season as well as the local job market, he says.

"As long as the Silicon Valley economy is doing well, I do not expect prices to go down," Urban says. "I expect prices to continue with more gradual, moderate appreciation."

San Jose was followed by its neighbor to the north, San Francisco, at $950,000; Anaheim, CA, at $788,000; Honolulu, at $760,600; and San Diego, at $605,000.

Meanwhile, the cheapest metros were Youngstown, OH, at $87,000; Cumberland, MD, at $98,200; Decatur, IL, at $107,400; Binghamton, NY, at $109,000; and Elmira, NY, at $111,600.

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Good Monday Morning!

The national housing market could be very close to seeing a huge surge in the number of homebuyers actively looking for and purchasing new homes.  This is a surge that is sure to hit the housing markets acrosss the nation and have a huge impact at some time soon.  The following is an interesting article about "Boomerang" buyers from "Realty Times".

Remember all those people who defaulted on their homes during the last housing crisis? Well, those bankruptcies are about to be discharged, or they already have been, and that means we could soon see an avalanche of homebuyers hitting the market.

Just what constitutes an avalanche? "More than 12.8 million homes entered the foreclosure process - roughly 29 percent of all homes with a mortgage," between 2007 and 2014," said The BIG Picture. "At the peak of foreclosures in 2009, more than 650,000 homes, 1.5 percent of those with a mortgage, entered foreclosure in a single quarter."

According to CoreLogic, this is a key year for boomerang buyers because seven years have passed since the peak of foreclosures in 2010. A whopping "1.9 million homeowners who faced owner-occupied foreclosures between the start of the housing crisis in 2007 through 2010 will have met the seven-year period after which the Fair Credit Reporting Act requires derogatory information to be removed," they said. "By the end of 2020, another 1.2 million homeowners who lost their homes to foreclosure between 2011 and 2013 will become eligible."

A new TransUnion Study Found that, "1.5 million homeowners negatively impacted by the mortgage crisis could re-enter the housing market in the next three years."

But do they want back in?

Many think so.

"The chief attraction is strong motivation, Kent Temple, broker/owner of Keller Williams Realty - The Temple Team in Mooresville, N.C., said on Bankrate. "If you've been through a foreclosure, you've already been a homeowner. "You know what it's about. You know the process. You've been through hell sometime in the last seven years, and if you really want to buy a house, you are so willing to do whatever it takes."

But some aren't so sure.

"As those foreclosures began to clear, many observers speculated that a slew of ‘boomerang buyers' was poised to return to the housing market," said The BIG Picture. "Those buyers have been slow to materialize. So what's hindering their return?"

Oh, little things like:

• Rising home prices
• Rising mortgage rates
• Low inventory
• More stringent lending requirements
• Credit scores that haven't jumped back up to where they need to be because of other delinquency issues

There may also be the fear factor. Do buyers who lost a home to foreclosure once before want to take the risk again? If they do, they are largely looking to be more careful this time around, said Jami Harich, a real estate agent with Avery-Hess Realtors in Fredericksburg, VA, in the Washington Post. "Most buyers I work with now, especially if they lost a home in the past, don't want to get in over their heads. They start with a monthly payment that they want to stick to, and then I show them what they can find on the market that fits in that budget."

Whatever their reasoning, "History says not all those buyers are likely to come back," said The BIG Picture.

"According to a 2016 study by CoreLogic, fewer than half of those who lost a home in 2000 or later have purchased new homes, even among those 16 years past a foreclosure." The boomerang rate has been especially low so far for people who lost their homes during the crisis. A little over 30 percent of borrowers who lost their homes in 2000 had purchased another home seven years after the event. But only about 15 percent to 20 percent of borrowers who lost a home between 2006 and 2008 had returned to the housing market after seven years."

Quick or slow

Perhaps it's the rate at which boomerang buyers have been returning (or not) to the market that has surprised industry experts the most. Instead of the rapid return like many had predicted, the boomerang effect has been more tempered, according to CoreLogic.

"While millions of former homeowners reentering the buying market would have a significant impact on home sales, historical data shows a more gradual return rate for these so-called boomerang buyers, with less than half returning to homeownership even 16 years after the foreclosures were completed. Historical return rates show recent incremental volumes of 150,000 boomerang buyers returning per year, or 12,500 per month. Of the 4.4 million owner-occupied foreclosures completed since 2000, 1 million foreclosed homeowners have returned."

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56324 MCKENZIE HWY Price: $425,000 Beds: 3 Baths: 2 Sq Ft: 2070 Riverfront Retreat on 2.48 Acres! Enjoy river views spanning south end of property. Unwind in hot tub, walk short trail for easy river access & relax on large deck. Beautiful park-like yard w/ horseshoe pit, sand volleyball ct, garden & mature trees... View this property >>

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