The Two Things You Don’t Need to Hear from Your Listing Agent

 

by The KCM Crew on September 16, 2014

You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust.  Make sure this is the case.

 

Be careful if the agent you are interviewing begins the interview by:

• Bragging about their success
• Bragging about their company’s success

An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.

Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick someone who truly cares.

Thinking of selling a home, contact someone who cares.

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

4 Reasons to Buy Before Winter

 

by The KCM Crew on September 8, 2014    
                

It's that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don't have to look much farther to find four great reasons to consider buying a home now, instead of waiting.
 

1. Prices Will Continue to Rise

 

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic).
 

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
 

2. Mortgage Interest Rates Are Projected to Increase

 

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year.
 

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
 

3. Either Way You are Paying a Mortgage

 

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
 

4. It’s Time to Move On with Your Life

 

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.
 

Bottom Line

 

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Home Mortgage Rates: Where are They Headed?

by The KCM Crew on July 15, 2014 in Interest Rates

Many of our readers ask us where interest rates are headed over the next several months. While no one has a crystal ball, we did want to share what some experts are saying on the subject.

HSH.com

 

“For now, and likely through the summer, we may see data-driven bumps and dips in rates. Although we managed a slight dip presently, a bump is in order before long.”

Freddie Mac

 

“In the next few months, mortgage rates are likely to remain at their current, low level, but will not remain there for long. As the Federal Reserve is expected to ‘taper’ its purchases of long-term Treasuries and mortgage-backed securities, and as economic growth picks up, long-term yields will gradually rise. Fixed-rate mortgages are expected to be higher in six months, and may even approach 5 percent a year from now.”

National Association of Realtors

 

“Mortgage rates could move suddenly higher in anticipation of rate increases, much as they did last summer when refinance and transaction activity was high. Steady purchase transaction volume and lower refinance volume could mean that mortgages rates may adjust in a more gradual fashion. In either case, as the economy improves—and today’s data clearly suggests it is improving—the overall trend for mortgage rates is up, not down.” 

Fannie Mae

 

Projects the 30 year fixed mortgage rate to be 4.3% by the end of the year.

Mortgage Bankers Association

 

Projects the 30 year fixed mortgage rate to be 4.7% by the end of the year.

If you are ready to buy or sell and take advantage of the still lower rates, call us and let's get the process in motion.

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

Money Magazine: Buy Now Not Later

by The KCM Crew on March 24, 2014 in For Buyers

We have often suggested that potential home buyers consider rising interest rates when thinking about the true cost of a home. Remember, cost is not determined by price alone but by price and mortgage rate. The longer a buyer waits, the higher the mortgage payment will be if rates continue to increase (as is projected by Fannie Mae, Freddie Mac, the National Association of Realtors and the Mortgage Bankers Association).

Money Magazine, in its latest issue, agreed with our analysis as they also warned their readership of the same ramification if they waited to buy a home.

Here is what they said:

"BE MINDFUL OF RATES. The average interest rate on a 30-year fixed loan is predicted to climb from the current 4.4% to 5.3% by the 2015 spring buying season, according to Freddie Mac. For a $250,000 loan, that means that a borrower who waits would pay $136 more per month and an additional $49,090 in interest over the life of the loan. Will you need a big loan? Better to act soon before rates tick up."

And the monthly increase Money mentioned did not take into consideration that prices are also projected to increase over the next year. Here is what the additional cost would be if prices rise by the 4.5% projected by the latest Home Price Expectation Survey and interest rates go to 5.3%.

Predictions for 2014: Sales Will Surge

by The KCM Crew on January 6, 2014
 
Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014. Here are the three categories of buyers we believe will create this strong demand.

The First Time Buyer

 

The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. With the economy improving, we believe they will finally be moving out of their parents’ homes and, when they compare renting versus buying, many will choose homeownership.

The Move-Up Buyer 

 

Over the last several years many homeowners were trapped in their home by negative equity. This prevented them from moving up to the home of their dreams. Zillow has just revealed that home equity increased by $1.9 trillion dollars in 2013 an increase of 7.9% in the last twelve months. With home values rising, this pent-up demand will finally be released and move-up properties will be in high demand.

The Immigrant Buyer

 

No one knows what will happen with immigration reform. However, we do know what such reform would have on housing demand. A recent study released by the Immigration Task Force of the Bipartisan Policy Center (BPC) found that immigration reform, if passed, would dramatically increase demand for housing units; increasing residential construction spending by an average of $68 billion per year over the next 20 years.

We realize that our projections are based on three situations that are still uncertain. However, we believe that these issues will come to fruition and thereby dramatically increase demand for homeownership.


It is up to the builders and real estate agents in each community to make sure this doesn’t happen.

Where Prices are Headed over the Next 5 Years

KCM Team - November 12th, 2013.

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

The latest survey was released last week. Here are the results:

• Home values will appreciate by 4.3% in 2014.
  
• The average annual appreciation will be 4.2% over the next 5 years 
  

The cumulative appreciation will be 28% by 2018.

Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Chicken Little is Wrong: Homeownership Still the American Dream

 

by The KCM Crew on November 4, 2013 in For Buyers

After the harrowing challenges experienced by so many homeowners over the last few years, many housing experts had predicted that the belief in homeownership as a major element of the American Dream would soon die. There is now conclusive evidence that these experts were wrong. As we reported back in September, The Joint Center of Housing Studies at Harvard University completed a study which concluded:

"The long term cultural preference for owning seems to have weathered the recent housing crisis."

Now, a second source recently announced similar results. Fannie Mae just released their National Housing Survey of Delinquent Mortgage Borrowers. The survey asked questions about the value of homeownership to the most sensitive of all groups – those delinquent on their mortgages. Here is what they found:

Of those delinquent borrowers:

• 74% still see homeownership as better than renting when building up wealth
• 71% still see homeownership as better than renting when saving for retirement
• 73% still see homeownership as better than renting for overall financial stability
• 80% still see homeownership as better than renting as an investment plan
• 70% still see homeownership as better than renting for creating an overall tax strategy

Bottom Line

Homeownership has always been and will always be a crucial piece of the American Dream.

Noemi Cardoso
William Raveis Real Estate
Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com

Experts Comment on the Housing Market

by The KCM Crew on September 2013 - in For Buyers, For Sellers

Rick Judson, chairman of NAHB

 

Responding to the report that over 80% of housing markets are improving:
“While there is still plenty of room for growth, this is an excellent indication of how the housing recovery has begun to take hold across more geographical areas.”

Tim Sloan, Wells Fargo Chief Financial Officer

 

“When you look at any sort of statistics in the demographics in terms of household creation as well as household affordability, they are still very attractive and should drive a continued recovery in the housing business.”

Dr. Alex Villacorta, VP of research and analytics at Clear Capital

 

“With the continued strengthening of home price trends in August, the need for perspective on market activity is even more important…Considering the low tier price segment of the housing market led the recovery, the cooling in this segment will likely transfer through to the broader housing market. That’s not to say the recovery is slated to stall, rather growth patterns are likely to return to more historical rates of growth, between 4.0 percent to 5.0 percent, rather than align with bubble-like growth… At the end of the day, this is still great news for housing.”

Bradley F. Hunter, the chief economist at MetroStudy

 

“We have gone from a situation where five years ago everyone was saying, ‘There are too many lots,’ to today, builders are literally crying on our shoulder saying, ‘There are not enough lots. We can’t find any.”

Jay Brinkmann, Mortgage Bankers Association chief economist

 

“The recovery we’ve seen has been related to the fact that the economy is creating jobs at a steady rate and those jobs do translate into paychecks, some of those paychecks go to pay rentals and others go toward mortgages.”

Noemi Cardoso
William Raveis Real Estate
Local Office. Local Agents. Local Knowledge.
www.DistinctiveHomes-NE.com
Serving MA & RI Coast

Should I Wait for a interest Rates to Come Back Down?

---

Should I Wait for Interest Rates to Come Back Down? Posted: 03 Sep 2013    Above is a graph of the movement of the 30 year fixed mortgage rate since the beginning of 2012. Some buyers are waiting to see if interest rates will come back down before making a decision about buying a home. Though no one can guarantee where rates will be in a few months, we don’t believe waiting is a good strategy. Most experts believe rates may actually move higher. The Mortgage Bankers Association,Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb. With home prices increasing and interest rates projected to also increase, the cost of buying a house could quickly increase rather dramatically.

The Only Threat to the Housing Recovery

by The KCM Crew on July 25, 2013

 

Interest rates are skewing upward.

Home prices are rising.

Because of this, experts are saying ‘buy now’.

Could anything slow the momentum in real estate right now?

YES! – a lack of quality inventory to satisfy the buying demand which will continue to increase throughout the year.

Building a bank of marketable listings right now is good for your business. It is also necessary to maintain the current momentum in the housing market; a momentum that is ‘the juice’ helping to foster a recovery in the overall economy.

Thinking of buying? Let's meet and see what is available in the current real estate market and get you into the home of your dreams.

Noemi Cardoso
William Raveis Real Estate
Cell: 508-558-1945
Noemi@DistinctiveHomes-NE.com
Serving MA & RI

 

Housing Bubble: Is There a New One Forming?

 

by The KCM Crew on May 29, 2013

in For Buyers, For Sellers

 

The housing market is recovering so nicely that it has caused some to wonder whether a new housing bubble is forming. Today, we want to explain that the fear of a new pricing bubble in real estate is unwarranted.

Trulia revealed some great data on this point in a recent blog post. They explained that, even with the recent price increases, national home prices are still 7 percent undervalued. Trulia explained:

“Home prices nationally remain undervalued relative to fundamentals and much lower than in the last bubble. That’s why today’s price gains are actually still a rebound, not a bubble.”

Prices are below their fundamental value in the vast majority of the country (91 of the 100 largest metros). Even in the parts of the country that are now overvalued they come nowhere near the percentages we saw in 2006-2007. For example, let’s look at the two markets that are most overvalued today. In Orange County, California prices are currently overvalued by 9%. In 2006, prices in the region were overvalued by 71%! The second most overvalued market today is Austin, Texas at 5%. Texas real estate prices did not skyrocket as they did in many other parts of the country during the last boom. Austin prices were shown as being 12% overvalued at the time.

Again, prices are still undervalued in 91% of markets and, even in the markets that are overvalued, they are nowhere near the numbers of the 2006-2007 bubble.
Jed Kolko, Trulia’s Chief Economist, explained:

“So are we in bubble territory? No. Bubble-phobes can rest easy. Even with recent sharp home price increases, prices are still low relative to fundamentals and are far below bubble levels.”

Dr. David Stiff, chief economist for CoreLogic Case-Shiller agreed in a recently released report on prices:

“Even if double-digit price appreciation were to continue in former bubble metro areas, there is no reason to believe that new home price bubbles are forming. That’s because single-family homes in these markets are still very affordable, even after last year’s large price gains.”

Three reasons there will NOT be another bubble

Prices are determined by the ratio between supply and demand. Here are three reasons a bubble will be avoided.

1. Supply is beginning to increase. A lack of inventory is creating a market of multiple bids which has caused prices to rise. The National Association of Realtors (NAR), in their latest Existing Home Sales Report, revealed that the months’ supply of inventory has increased from 4.3 to 5.2 months since January.
2. Demand will decrease in certain demographics. For an example, investors have been a large part of the housing market over the last several years. As prices continue to rise, a certain percentage of these buyers will back off.
3. As mortgage rates increase, buyers will be able to afford less. The Mortgage Bankers Association, Fannie Mae and NAR have all projected an increase in mortgage rates over the next year. Buying power will decrease as borrowers can no longer afford the same price point as monthly payments will increase.

For these reasons, we believe the fear of a new housing bubble are currently unfounded.

Ready to enter the exciting market again? If so give me a call and let's get the best custom made strategy for your case.

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

Two Additional Experts Upgrade their Pricing Forecast

by The KCM Crew on April 1, 2013

 

Last Monday, we reported that several analysts had upgraded their projections for home price appreciation in 2013. A few days later, the Wall Street Journal revealed that two additional analysts had also upgraded their forecasts.

Zelman & Associates

“Ivy Zelman, chief executive of research firm Zelman & Associates, said Wednesday she was now expecting prices to rise by 7% this year, up from earlier estimates of 6%, 5%, and 3%…She’s also calling for a 5% gain next year because she says the supply shortages and growing demand that fueled last year’s turnaround show no signs of easing.“

Her reasons:

“The shortage of housing capacity continues to resonate. Just as deflation was a national headwind that stretched deeper into the economy than anyone would have imagined, we believe that appreciation can carry broad, positive implications for the consumer and economy beyond many expectations.”

John Burns Real Estate Consultants

“John Burns, who runs a real-estate consulting firm in Irvine, Calif., is calling for a 9% gain in home prices this year, up from a 5% forecast late last year.”

 His reasons:

“Strong investor demand and low interest rates that have boosted the purchasing power of buyers.”

These two experts join a long list of housing analysts who have now called for a major rebound in housing prices in 2013.

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 

Should Your Buyers Increase Their Offer?

Limited inventory and a very strong demand for housing has created an environment where bidding wars are commonplace in today’s real estate market. Homes priced properly are getting multiple offers within a short time of coming to market. This brings about a dilemma for the agent: How should they advise their client who is about to make an offer when other offers will also be presented?

Over the last several years, there wasn’t any pressure on the buyer to adjust their offer for three reasons:

1. There were plenty of homes for sale
2. Prices were falling
3. Mortgage interest rates were falling

They buyer could find another home easily for probably less money and a lower mortgage rate. There was no downside to not ‘upping the ante’. However, in today’s market, things have dramatically changed.

HOUSING INVENTORY

A normal real estate market has between 5-6 months worth of inventory. Over the last several years, the inventory of homes for sale had skyrocketed to 10 months. Most buyers in almost any price range had a multitude of houses to choose from. Today, the national month’s supply of inventory has fallen below five months. In many markets, there is not enough housing inventory to satisfy the current demand.

Conclusion: If the buyer loses the house they are bidding on, there is no guarantee they will find a similar home anytime soon.

HOME PRICES

Because of the limited inventory, home prices are again appreciating. The Case Shiller Pricing Index revealed that house prices rose by 6.8% in 2012. Experts are projecting home prices to increase by 5% to 8% in 2013.

Conclusion: If the buyer doesn’t get this house, there is a good likelihood that a similar home will cost more in the future.

MORTGAGE RATES

The ‘cost’ of a home to a buyer is determined by the price of the house and the expense associated with the financing. Mortgage rates are projected to inch up in 2013. In a recent forecast, the Mortgage Bankers Association predicted that rates could climb as high as 4.3% by the end of the year.

Conclusion: If interest rates do inch up, the ‘cost’ of the next home could be impacted significantly.

Bottom Line 

If a buyer truly loves the house they are bidding on, it probably makes sense to raise their bid now instead of waiting for another dream house to appear. by The KCM Crew on March 28, 2013

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  

3 Financial Reasons to Buy a Home NOW! (Part I)

by The KCM Crew on March 25, 2013

 

This week, we are going to look at the three financial reasons to buy a home now instead of waiting: prices are rising at an accelerated rate, interest rates are increasing and rents are skyrocketing. – The KCM Crew

Part I – Prices Are Rising at an Accelerated Rate

The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optimistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:

The Home Price Expectation Survey

The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.

Bank of America

In a report titled, Someone Say House Party?, Bank of America analysts revised their projections upward:

“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast of 4.7% for home prices this year. We now expect national home prices, as defined by the S&P Case Shiller home price index, to increase 8% this year.”

Capital Economics

According to a report in DSNews, Capital Economics also upgraded their prediction:

“Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely. 

These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5% price gain this year up to 8%.”

Morgan Stanley

In an article from HousingWire, Morgan Stanley joined the party:

“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013, according to its latest global securitized credit report…
“The momentum in most metrics of housing activity is running well ahead of the pace we had expected,” said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.” 

Not only are prices projected to appreciate. Experts are actually revising their projections upward as demand maintains its momentum.

Tomorrow, we will look at increasing interest rates.

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
 

What’s Up with the Housing Inventory?

Posted: 20 Mar 2013

We are honored to have Chip Wagner, an icon in the appraisal industry and our good friend, as a guest blogger today. Chip recently addressed the housing inventory challenges in the Chicago region. We believe that his observations can be applied to the majority of markets in the U.S. – The KCM Crew

It’s All About Supply and Demand

Definitions of Supply and Demand:

 Dictionary.com

In classical economic theory, the relation between these two factors determines the price of a commodity. This relationship is thought to be the driving force in a free market. As demand for an item increases, prices rise. When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down.

Investopedia.com

A theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply and demand defines the effect that the availability of a particular product and the desire (or demand) for that product has on price. Generally, if there is a low supply and a high demand, the price will be high. In contrast, the greater the supply and the lower the demand, the lower the price will be. The law of supply and demand is not an actual law but it is well confirmed and understood realization that if you have a lot of one item, the price for that item should go down.

In real estate appraisal context, the principle of Supply and Demand states that:

The price of real property varies directly, but not necessarily proportionately, with demand and inversely, but not necessarily proportionately, with supply.

My most simple explanation of Supply and Demand is: It is the relationship between sellers present in a market, which is the supply; and buyers looking, which is the demand. This relationship is reported in months’ supply of inventory.

 

So, what is the latest challenge?

 

Some (or most) might say that there are not enough “good” homes for sale. This could represent a shortage of supply, something we have not talked about for several years. It is allowing sellers to raise their asking prices and buyers who have been ‘shopping around’ are now willing to pay higher prices based on other homes they are comparing and/or contemplating to the home that they want.

 

Why do we have a shortage?

• We are coming out of the worst decline (or correction) in real estate values for many generations – some pointing back to the early 1980′s, others are pointing back to the Great Depression.
• In all of Chicagoland, our MLS showed a 37.6% decline in 5 years. The values hit their all-time high in the 3^rd quarter of 2007 at $391,272, and by the 3^rd quarter of 2012, they hit a low of $244,203.
• The mean sales price at the end of the year in 2001 was $239,858, and year-end 2002 was $255,001. Therefore pricing as of the end of 2012 is at the same level that we were 10 years ago – sometime in 2002.

Why aren’t there many “good” homes for sale?

There are several contributing factors:

1. New construction – We are seeing new construction picking up again at all price points, which is certainly a positive. But with fewer builders, and more conservative approaches after getting burned, builders are not keeping up with the demand that is present. This is leaving buyers searching for resales. And because of the slowdown in new construction, (few new homes were built between 2007 and 2012) the nearly-new resales rarely exist.

Lack of new construction is a contributing factor as many builders folded or downsized significantly over the past 5-6 years.

2. Foreclosures – Foreclosures are a trend that is affecting supply of inventory. Banks are slower at foreclosing, in some cases taking over 3 years through the process. In some cases, the buyers aren’t even interested in these properties, and the investors are picking up these properties and flipping them at a profit.

Foreclosure properties, once viewed as a deal perhaps 25% to 40% under market values, are now being sold at only a 7% discount according to RealtyTimes.com.

3. Investors – Investors have entered the market at greater levels, some to purchase properties to rent, others to rehab and flip them. With the high inventory, investors were able to seek out the best deals, now there are fewer homes available for them.

4. Few people really want to sell at the bottom – Personally, I think the biggest reason that our inventory is low is simply because everyone wants to buy at the bottom; but what seller really wants to sell their home at the bottom of the market? That being said, there are many sellers who cannot sell.
Recently, I heard Steve Harney speak at the Leading Real Estate Companies of the World Conference; he stated there are over 10 million people that are still under water and cannot sell their homes. That is a significant number – these are ‘move-up buyers’ that will create a domino effect. A portion may also represent the potential downsizing buyers who have that upper priced home to sell. This is a very complicated situation. There are many opportunities in the market as demand continues to surge.

Move-up sellers have pent up demand and are ready to buy – if they can sell!

Remember, our market dropped 37.6% as a region since 2007 (some areas fell less than 20%, and other areas fell greater than 50%). The buyers with 20% down lost equity in their homes. Buyers with 5% or 10% lost substantial equity in their homes. If they sell today, they don’t have the down payment necessary for that next home.

Various predictions by “experts” suggest our recovery may be anywhere between 2% and 8% annually. At a conservative 4% annual rate of recovery, it is 5 more years before we can reach 20%.  Those who last purchased their home between 2006 and 2008 are being hurt the hardest in today’s market.
One positive is that renters are ready to purchase. Generation X and Y buyers now believe in homeownership; they want to get out of renting apartments because rents continue to go higher than taking out a mortgage. Interest rates remain at historic lows, with no indication of a significant increase of rates on the horizon.

From the 3rd quarter to the 4th quarter, Chicagoland saw its first quarter to quarter increase in sales price since prices began falling five (5) years ago. All indications are that this trend is continuing. But the increase, although welcome news, is very small. (+0.13%). Many communities throughout Chicagoland are seeing more substantial increases, some are not yet seeing increasing values. (44%, or 84 out of 191 communities) saw increases over the past quarter.

Back to Supply and Demand …

A balanced supply of inventory is considered to be 4 to 6 months. A balanced supply is going to be neutral in pricing, while an undersupply is going to lead to upward pressure on prices – a Seller’s Market. An oversupply will lead to downward pressure on prices – a Buyer’s Market.

Our supply of inventory is at its lowest level since the end of 2006 and most areas have been reduced to a balanced supply of inventory, with undersupply observed in many sub-markets in the region.
Chicago Detached housing is 3.88 months, and Attached housing (condos, townhomes, Co-ops and duplexes) is 2.87 months supply!

The anticipation is that the pricing will continue to be pressured upward as the desirable properties (in terms of location and condition/modernization) will be gobbled up. Remember the multiple-contracts driving up values last decade? Many agents are now experiencing these trends again.

Get ready for a wild and crazy ride as our real estate market in Chicagoland is pulled and pushed in all directions in 2013

This could lead to things that do not make sense in the crazed market. Real Estate professionals (Agents and Appraisers alike) must take care to understand all of the nuances in the market signaling the positives taking place.

Just what we need: more complications to try to understand.

Here are a few things to watch…

• Watch the days on market (DOM). Take time to understand if an area’s high DOM may be due to stale listings of homes that are overpriced, distressed and/or in inferior condition.
• Trend the increasing Sales Price-to-List Price ratios - in many sub-markets that I appraise in, I have seen these trend from 93% to 96% or higher just in the past year.
• Track the number of pendings in relationship to the number of listings? One appraiser friend of mine tracks this and calls this “market velocity.” Right now, I see some areas where there have more pendings than listings in a given sub-market.
• Are the pendings priced higher than the previous sales prices? Another indication of an increasing market that I am seeing in many areas.

Welcome to, we all hope, the Housing Market 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

Real Estate: When She Speaks, We Should Listen

by The KCM Crew on March 2013

Ivy Zelman is an industry expert consistently recognized by Institutional Investor, Greenwich Associates, StarMine and The Wall Street Journal as an industry-leading analyst. What separates her from many other analysts is the fact that she has accurately called the real estate market continuously over the last decade.

Her Position in 2006

She was one of the first to call the burst of the housing bubble. She was nicknamed ‘Poison Ivy’ for the harsh positions she took in combating the overly optimistic views of many in the industry at the time.

What happened next?

Existing home sales plummeted, new construction starts feel to historic lows and prices dropped by 50% in some areas of the country.

Her Position in 2012

Ivy Zelman, in a Wall Street Journal article in March Stunned Home Buyers Find the Bidding Wars Are Back, projected that the real estate market was about to rebound and that home prices would begin to appreciate. She emphatically claimed:

“We very much believe we’ve hit bottom.”
 

What happened next?

Pending sales (homes going into contract) surged in May and have remained above what is recognized as a healthy market level ever since. Starting in June, home prices began to appreciate on a year-over-year basis. This continued through the rest of the year with yearend appreciation coming in at 6.8%.

Her Position Today

What is Ms. Zelman saying today? In an interview on CNBC, she said:

“I think we are in Nirvana for housing…I’m probably the most bullish I’ve ever been fundamentally…I think home prices could go up for four to six years…Today, the urgency and sentiment toward buying residential real estate is back.”
 

What will the future bring?

If Ms. Zelman’s past predictions are evidence of her understanding of the housing industry, it seems that real estate is about to make a dramatic comeback.

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

Homeownership: The Reports of Its Death…

by The KCM Crew on March 13, 2013

Mark Twain and homeownership are both iconic pieces of the American experience. And like what happened to Twain in 1897, recent reports of homeownership’s death have been greatly exaggerated. Ever since the housing bubble burst, many so-called experts have predicted the end of homeownership as part of the American Dream. Today, we want to expose some of these myths.

MYTH #1:

After the housing crash, Americans would no longer believe in homeownership.

FACT:

While homeownership has fallen from a high of 69.2% in 2004 to 65.4% at the end of 2012, the desire to own a home is still strong.

• 73% of Americans say it is a good time to buy a home. (Fannie Mae)
• 70% of Americans see homeownership as part of the American Dream. (Trulia)
• In every age group from 25 to 65 years old, over 80% plan to buy a home in the future. Even 76% of those over 65 years old plan to buy a home in the future. (Joint Center for Housing Studies at Harvard University)

MYTH #2:

Those families that were forced from their homes during the housing crash would never look at homeownership in a positive light again.

FACT:

• Many of the sellers who lost their home to a short sale or foreclosure over the last six years are re-entering the housing market as purchasers. It is projected that over 700,000 people in this category could be in the market for a home in 2013 and that the number will more than double to over 1.5 million in 2014. (Moody’s Analytics)
• Nearly 80% of those homeowners who decided to strategically default (walking away from the house and mortgage) over the last few years have expressed a desire to buy a home again within the next 12 months. (YouWalkAway.com)

MYTH #3:

Young adults, after seeing their parents suffer major loses of equity, will not embrace homeownership especially as a financial investment.

FACT:

Not one study has substantiated this myth. Recent studies have actually proven the exact opposite:

• 72% of young adults between 18-35 years old see homeownership as part of their personal American Dream. (Trulia)
• 75% of young adults between 18-35 years old see homeownership as an indicator of success. (Realogy)
• 94% of young adults under 25 and 96% between the ages of 25-34 plan to buy a home. (Joint Center for Housing Studies at Harvard University)
• 79% of young adults under 25 years old and 86% of young adults 25-34 believe that owning is a better financial decision than renting. (Joint Center for Housing Studies at Harvard University)

Obviously, the reports of the death of homeownership in America were GREATLY exaggerated.

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: 508-558-1945www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com

Real Estate: If You Waited to Sell, You May Be Brilliant

by The KCM Crew on March 12, 2013

Many homeowners look back on 2006 house values and wonder why they didn’t sell at the height of the market. They lament the money they may have lost by not selling. However, there is another side to that story. If they did sell back in 2006, they would have still needed to live somewhere.

Looking back at the euphoria that permeated the real estate market at the time, many may have sold and moved into an even nicer, more expensive home. With the benefit of 20/20 hindsight, we can now calculate the financial consequences of such a move.

Let’s look at a house that would have cost $400,000 in 2006. For the sake of this example, we are going to assume that values in this region dropped 25% since. To compute total cost (principal and interest payment) we needed to research mortgage interest rates at the time also.

Here is the comparison:

 

You saved over $1,100/month on your mortgage payment. Maybe it wasn’t horrible that you didn’t sell in 2006. Perhaps, it was a great decision!

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

Less Americans in ‘Underwater’ Situation

With home values falling dramatically from 2006 boom prices, many homeowners have found themselves in what is called a ‘negative equity’ or ‘underwater’ situation. This means the value of their home is currently less than the mortgage amount on that home.

Many of these homeowners have been ‘locked’ into their houses because they were unable to sell it without bringing cash to the closing table. The good news is this situation is improving as prices begin to rise.

We are not saying that this challenge is over. We just have to look at what the experts are saying to realize we still have a long way to go.

Zillow Chief Economist Dr. Stan Humphries recently stated:

“Negative equity is still very high, and millions of homeowners have a very long way to go to get back above water, even with current robust levels of home value appreciation in most areas. As a result, negative equity will remain a major factor in the market for the foreseeable future.”

Anand Nallathambi, CEO of CoreLogic, in their latest Negative Equity Report:

“With nearly one quarter of borrowers still underwater we have a long way to go.”

However, the situation is improving. The recent Zillow Negative Equity Report revealed:

• Negative equity continued to fall in the fourth quarter of 2012, dropping to 27.5 percent of all homeowners with a mortgage, compared with 31.1 percent one year ago.
• Almost 2 million American homeowners were freed from negative equity over the course of the year.
• Approximately 13.8 million homeowners with a mortgage were in negative equity, or “underwater,” at the end of the fourth quarter, owing more on their mortgages than their homes are worth. That was down from 15.7 million in the fourth quarter of 2011.

What does the future hold?

Anand Nallathambi, president and CEO of CoreLogic, sees the situation improving:

“As we look ahead into 2013, we expect to continue to see more borrowers’ escape the negative equity trap and that will be a strong positive for the housing market specifically and the broader economy generally.”

Zillow Chief Economist Dr. Stan Humphries agrees:

“As home values continue to rise and more homeowners are pulled out of negative equity in 2013, the positive effects on the housing market will be numerous. Freed from negative equity, homeowners will have more flexibility, and some will likely choose to list their home for sale, helping to ease inventory constraints and moderating sometimes dramatic, demand-driven price increases in some markets.”

Negative equity is still a challenge to a full housing recovery in this country. However, things will continue to improve as prices appreciate.

If you are thinking of buying a home in Westport or surroundign 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