The COST of a Home: Last Year, This Year & Next Year

KCM Crew: 26 Aug 2013

The cost of a home is determined mainly by two components: price and mortgage rate. Today, we want to show how the monthly cost of purchasing a median priced home has changed over the last twelve months and how it might change over the next twelve months. For the first two examples, we will be using the National Association of Realtors’ (NAR) Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples.

LAST YEAR

The median priced home in the country was selling for $187,800. The 30-year fixed mortgage rate was at 3.5%. Here is what it would cost to buy a home last year:

TODAY

The median priced home in the country is selling for $213,500. The 30-year fixed mortgage rate is at 4.5%. Here is what it would cost a purchaser to buy a home today:



The monthly cost increased by: $190.78!

NEXT YEAR

Projecting into the future in real estate can be rather tricky. To establish future pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae. Here is what these experts project will be the approximate cost of a home a year from now:



The monthly cost will increase by about: $97.32!

Bottom Line

From a financial perspective, why wait if you are thinking about buying?

Timing, that is, the RIGHT timing, has and it has always been an important thing when investing your money. Do you have questions about buying a home in today's market? As your local real estate market expert, we'd be happy to provide you or anyone you know with a free consultation and work diligently to find a great buy that will fulfill your real estate needs, or to answer any questions you may have about today's real estate market.

Noemi Cardoso
William Raveis Real Estate
Cell: 508-558-1945
Noemi.Cardoso@raveis.com

3 Reasons to Sell Your House Today! (Part II)

by The KCM Crew on April 9, 2013

This week, we are going to look at the three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition. – The KCM Crew

Part II – Housing Supply is Low

A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

• 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
• 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
• 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.
Based on the table above, we can see that the supply/demand ratio is showing a sellers’ market where prices appreciate. This has created positive movement in housing values in most parts of the country.
Sellers have a great opportunity right now. Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best price.


Tomorrow, we will look at the competition new construction will create.

Are you ready to discuss marketing exposure and get your home to shine in this season? If so, please contact me and let's get the process started.

Noemi Cardoso
William Raveis Real Estate
508-558-1945
www.DistinctiveHomes-NE.com

 

3 Reasons to Sell Your House Today! (Part I)

by The KCM Crew on April 8, 2013

This week, we are going to look at three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition. – The KCM Crew

Part I – Demand for Real Estate is Much Stronger This Year
 

When selling anything, owners can only hope there is a strong demand for that which they are selling. The great news for today’s home sellers is that the current housing market is experiencing a stronger demand than we have seen in some time.

The  spring housing market of 2013 is projected to be one of the best in years.

Home Sales

The National Association of Realtors (NAR) reports monthly on both pending sales (houses going into contract) and existing home sales (actual closed sales).

In the first quarter of 2013, pending sales have consistently outperformed the numbers reported in 2012. Contract activity has been above year-ago levels for the past 22 months. Before this year, the last time the index showed a higher reading was in April 2010, shortly before the deadline for the home buyer tax credit.

NAR also revealed that closed home sales have been above year-ago levels for 20 consecutive months and sales are at the highest level since the tax credit period of 2009-2010.

Impact on Sellers

This increase in demand has created bidding wars for properly priced homes across the country. This has resulted in two favorable changes for home sellers:

1. They are receiving offers closer to (if not greater than) the list price.
2. The average days it takes to sell a home has dropped by over 20% from last year.

If you are thinking about selling your home, don’t miss out on the strong demand that exists in the current spring market.

Tomorrow, we will look at the supply of housing inventory that is available.

If you are ready to discuss marketing exposure and get your home to shine in this season please contact me and let's get the process started.

Noemi Cardoso
\William Raveis Real Estate
508-558-1945
www.DistinctiveHomes-NE.com
 

Fannie: Housing to See 'Sustained Growth'

Daily Real Estate News - February  2013

  

The housing market is “on a sustained growth path,” according to the latest economic outlook by Fannie Mae’s Economic & Strategic Research Group.

"One of the key developments for the housing market last year was the general consensus that home prices, on a national basis, bottomed earlier in the year and continued to build momentum, exhibiting robust year-over-year gains unseen since the housing boom," according to the report.

Housing inventories are at the lowest since December 1994 and fewer distressed homes have helped to lift home prices, according to Fannie Mae economists.

Among some of Fannie Mae economists projections for this year:

• Home prices: Fannie Mae economists predict that the median price of existing homes will increase 2.3 percent on an annual basis this year, reaching $181,000. The median price of a new home will likely increase 1.6 percent to $248,000. For 2014, economists predict that home prices will increase an extra 2.8 percent.
• Home sales: Existing-home sales will likely rise 11.5 percent in 2013, and new-home sales will rise 12.5 percent, economists predict.
• Mortgage rates: Rates will likely edge up slightly this year with 30-year fixed-rate mortgages projected to average 3.8 percent this year and rise to 4.4 percent in 2014.

Source: “Fannie Mae: Housing Is 'on a Sustained Growth Path',” Inman News (Feb. 21, 2013)
Read More Fannie: Housing Shows Signs of 'Durable, Long-Term Recovery'

If you are thinking of buying a home in Westport or surrounding areas please visit www.DistinctiveHomes-NE.com for a free list of homes for sale in Westport and Bristol County MA and RI.

If you are thinking of selling your home contact me for a FREE Current Market Analysis and to learn about our Market Plan to get your home SOLD!

We work with one going in mind, YOURS!

Noemi Cardoso
Local Office. Local Agents. Local Knowledge.
William Raveis Real Estate
911 Main Rd - Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com

There Are Still Some Bears Out There!

by The KCM Crew on January 21, 2013 ·

 

Most real estate analysts are rather bullish on the housing market right now. Sales, pending contracts, prices and new construction starts are all up. The Home Price Expectation Survey released last month revealed a sense of optimism among the experts surveyed regarding home values over the next five years.

However, not everyone is buying into the belief that housing is in a full-out recovery. There are still a few bears who do not believe housing is out of the woods just yet. One such bear is Radar Logic. In their RPX Year in Review released last week, they shed new light on two data points which have recently shown improvement.

House Prices

“From November 2011 to November 2012, the RPX Composite price increased 9.2 percent year over year, but this increase reflects a significant shift in the composition of home sales and overstates the appreciation in individual properties.”

House Sales

“An increasing share of sales activity has been driven by institutional investors rather than households. While the 25-metro-area RPX transaction count increased 7.6 percent year over year, monthly investor purchases increased 75 percent year over year. The bulk of these purchases occurred in a handful of markets hit particularly hard by the housing bust: Miami, Phoenix, Los Angeles, Las Vegas and Atlanta.”

Radar Logic concludes:

“Some commentators suggest that investor-driven home price appreciation could spur demand among housing consumers, which will in turn bring about a broad-based and sustainable recovery in the nation’s housing markets… It is hard to see a direct connection between the current increase in institutional demand and future gains in household demand, especially at a time when traditional buyers are faced with high down payment requirements and tight standards for mortgages.”

It will be interesting to see whether the few bears are correct or if the bulls, who are definitely in the majority, are proven correct.

If you are thinking of buying a home in or around Bristol County MA or RI, please visit www.DistinctiveHomes-NE.com for a free list of homes for sale in Westport MA and surrounding towns.

Would you like to receive a current market update of your specific area? Contact me with your request.

If you are thinking of selling your home contact me for a FREE Current Market Analysis and to learn about our Market Plan to get your home SOLD!

We work with one going in mind, YOURS!

Noemi Cardoso

Local Office. Local Agents. Local Knowledge.

William Raveis Real Estate
911 Main Rd - Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com