Chicago Illinois Real Estate Blog and News

2 Myths Holding Back Home Buyers

2 Myths Holding Back Home Buyers | MyKCM
Freddie Mac recently released a report entitled, “Perceptions of Down Payment Consumer Research.” Their research revealed that,

“For many prospective homebuyers, saving for a down payment is the largest barrier to achieving the goal of homeownership. Part of the challenge for those planning to purchase a home is their perception of how much they will need to save for the down payment…

…Based on our recent survey of individuals planning to purchase a home in the next three years, nearly a third think they need to put more than 20% down.”

Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate the funds needed to qualify for a home loan. According to the same report:

22% of renters and 31% of homeowners believe lenders require 20% or more of a home’s sale price as a down payment for a typical mortgage today. And,

“If a 20% down payment was required, 70% of those who were planning to buy a home in the next three years said it would delay them from purchasing and nearly 30% indicated...

What is the Cost of Waiting Until Next Year to Buy? [INFOGRAPHIC]

What is the Cost of Waiting Until Next Year to Buy? [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The “cost of waiting to buy” is defined as the additional funds necessary to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac forecasts interest rates to rise to 4.5% by the Q4 2020.
  • CoreLogic predicts home prices to appreciate by 4.8% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to!
...

What is Important to Boomers when Selling their House?

What is Important to Boomers when Selling their House? | MyKCM

If you are a “baby boomer” (born between 1946 and 1964), you may be thinking about selling your current home. Your children may have finally moved out. Your large, four-bedroom house with three bathrooms no longer fits the bill. Taxes are too high. Utilities are too expensive. Cleaning and repair are too difficult. You may be ready to move into a home that better fits your current lifestyle. Many fellow boomers have already made the move you may be considering.

The National Association of Realtors recently released their 2019 Home Buyer and Seller Generational Report. The report revealed many interesting tidbits about both categories of baby boomers: younger boomers (ages 54 to 63) and older boomers (64 to72). Here are a few of the more interesting topics.

Percentage of Buyers who Looked Online First

  • All Buyers: 44%
  • Younger Boomers: 46%
  • Older Boomers: 44%

Where Boomers Found the Home They Purchased

The...

The Feeling You Get from Owning Your Home

The Feeling You Get from Owning Your Home | MyKCM
We often talk about the financial reasons why buying a home makes sense. But, more often than not, the emotional reasons are the more powerful and compelling ones.

No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, that feeling of safety and security you gain from owning your own home is simultaneously one of the greatest and most difficult to describe.

Frederick Peters, a contributor for Forbesrecently wrote about that feeling, and the pride that comes from owning your own home.

“As homeowners discover, living in an owned home feels different from living in a rented home. It’s not just that an owner can personalize the space; it touches a chord even more fundamental than that.

Homeownership enhances the longing for self-determination at the heart of the American Dream. First-time homeowners, young or old, radiate not only pride but also a sense of arrival, a sense of being where they belong. It cannot be duplicated by owning a 99-year lease.”

...

How Homeownership Delivers Unsurpassed Family Wealth

How Homeownership Delivers Unsurpassed Family Wealth | MyKCM
There are many financial benefits to homeownership, but probably none more important than its ability to create family wealth.

How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is an online resource for research and information on how homeownership contributes to individual and community success.

Their article, The First Rung on the Ladder to Economic Opportunity Is Housing, explains the importance of homeownership to a family’s financial health. In that article, they simply stated:

“The ladder to economic success can stretch only so high without the asset-building power of homeownership.”

To this point, National Association of Realtors’ (NAR) Economists’ Outlook Blog revealed in a recent post:

“Housing wealth contributes positively to the homeowner’s and children’s...

4 Reasons to Buy A Home This Summer

4 Reasons to Buy A Home This Summer | MyKCM
Here are four reasons to consider buying today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 3.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.8% over the next year.

Home values will continue to appreciate. Waiting may no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage have started to level off around 4.3%. Most experts predict that rates will rise over the next 12 months. TheMortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next...

The Top Reasons to Own Your Home [INFOGRAPHIC]

The Top Reasons to Own Your Home [INFOGRAPHIC] | MyKCM

Some Highlights:

  • June is National Homeownership Month!
  • Now is a great time to reflect on the many benefits of homeownership that go way beyond the financial.
  • What reasons do you have to own your own home?
...

The Ultimate Truth about Housing Affordability

The Ultimate Truth about Housing Affordability | MyKCM
There have been many headlines decrying an “affordability crisis” in the residential real estate market. While it is true that buying a home is less affordable than it had been over the last ten years, we need to understand why and what that means.

On a monthly basis, the National Association of Realtors (NAR), produces a Housing Affordability Index. According to NAR, the index…

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase...

Is Now a Good Time to Begin Investing In Real Estate?


Is now a good time to begin investing in real estate?

Want to Buy a Home?
Search All Homes
Want to Sell a Home? Get a Home Value Report

With our current climate, is it a good time to start investing in real estate?

Let me explain something: You can invest in real estate at any time, even in a market that’s running like gangbusters. Many of today’s investors say that as long as your rent will cover the mortgage, it’s a great investment unto itself—let alone if you actually get cash flow.

Great real estate investment properties do one of two things: Either they appreciate in value over time, allowing you to sell them down the road, or they produce cash flow.

You’ll usually find the best opportunities
to purchase properties that provide cash flow
in the lower price market.


...

Multigenerational Homes Are on the Rise

Multigenerational Homes Are on the Rise | MyKCM
As loved ones start to get older, we start to wonder: how long will they be able to live alone? Will they need someone there to help them with daily life? There’s a reason to ask those questions now more than ever, as the average life expectancy in the U.S. is 78 years old! As a result, 41% of Americans in the market are searching for a home that can accommodate a multigenerational family.

The graph below shows the number of people by generation that purchased a multigenerational home because they will either be taking care of an aging parent or they just want to spend time together.Multigenerational Homes Are on the Rise | MyKCMOf those buyers, 26% indicated...

2 Things You Need to Know to Properly Price Your Home


In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly.

In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal.

Every month, the Home Price Perception Index (HPPI) measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

Over the last five months, the gap between the homeowner’s opinion and the bank’s appraisal has widened to -0.78%. This is important for homeowners to note, as even a 0.78% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home).

The chart below...

The Impact Staging Your Home Has On Your Sale Price [INFOGRAPHIC]

The Impact Staging Your Home Has On Your Sale Price [INFOGRAPHIC] | MyKCMSome Highlights:

  • The National Association of Realtors surveyed their members & released the findings of their Profile of Home Staging.
  • 62% of seller’s agents say that staging a home decreases the amount of time a home spends on the market.
  • 50% of staged homes saw a 1-10% increase in dollar-value offers from buyers.
  • 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
  • The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.
...

4 Most Popular Bottom Line Investments in America

4 Most Popular Bottom Line Investments in America | MyKCM
Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks, gold, and savings accounts.

For the sixth year in a row, real estate has come out on top as the best long-term investment! That has not always been the case. Gallup explains:

“Between 2008 and 2010, covering most of the Great Recession period that saw plummeting home and stock values, Americans were as likely to name savings accounts or CDs as the best long-term investment as they were to name stocks or real estate.”

This year’s results showed that 35% of Americans chose real estate, followed by stocks at 27%. The full results are shown in the chart below.

4 Most Popular Bottom Line Investments in America | MyKCM...

Boomerang Buyers: Don’t Be Afraid to Buy a Home Again!

Boomerang Buyers: Don’t Be Afraid to Buy a Home Again! | MyKCM
According to CoreLogic, from 2006 to 2014 “there were 7.3 million housing foreclosures and 1.9 million short sales.” The hesitation some Americans feel after experiencing a foreclosure brings to mind the old saying: “Fool me once- shame on you. Fool me twice- shame on me.

According to the 2019 Home Buyer Report from NerdWallet,

Thirteen percent of Americans have lost a home due to a financial event such as foreclosure in the past 10 years. More than 6 in 10 of them (61%) have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again.”

This makes sense. They don’t want to go through the same pain again. As a cornerstone of the American...

Are Older Generations Really Not Selling Their Homes?

Are Older Generations Really Not Selling their Homes? | MyKCM
Many studies suggest one of the main reasons for the inventory shortage in today’s market of homes for sale is that older generations have chosen to “age in place” over moving.

The 2019 Home Buyers & Sellers Generational Trend Report by NAR clarifies this point!

NAR’s findings show that Baby Boomers (43%) and the Silent Generation (12%) made up 56% of sellers in 2018! This means the majority of sellers last year were over the age of 54. This also shows these generations ARE moving!

The report also shared the reasons why they chose to move. According to the research, the top reason was a desire to be closer to friends and family. Below is a full breakdown:

Are Older Generations Really Not Selling their Homes? | MyKCM...

Starting the Search for Your Dream Home? Here Are 5 Tips!

Starting the Search for Your Dream Home? Here Are 5 Tips! | MyKCM
In today’s real estate market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre-approvedfor a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

This step will also help you narrow your search based on your budget and...

Top Days to List Your Home for Sale [INFOGRAPHIC]

Top Days to List Your Home for Sale [INFOGRAPHIC] | MyKCMSome Highlights:

  • ATTOM Data Solutions conducted an analysis of more than 29 million single family home and condo sales over the past eight years to determine the top days to list your home for sale.
  • The top five days to list your home brought in a 10% premium over market value and are all in either May or June!
  • “Families start their home search when they know their kids will be out of school and when the weather is ideal for home viewing and moving, giving home sellers an upper hand in price negotiations.”
  • There is still time to list your home before these dates pass you by!
...

What is Really Happening with Home Prices?

What is Really Happening with Home Prices? | MyKCMHome values have softened over the last twelve months. We are no longer seeing 6-7% annual appreciation levels for the national housing market. The current numbers are closer to 4%. Some have suggested that year-over-year appreciation levels could fall to 3% or less this year.

However, a stronger-than-expected economy and a good spring housing market have changed some opinions. Some analysts are now predicting that home value appreciation may begin to increase as we move forward.

Here are three examples:

Mark Fleming, Chief Economist of First American

“Data on the movement of unadjusted house prices during the early spring home-buying season won’t be available for a few more months, but it’s quite likely that price appreciation will accelerate again.”

CoreLogic’s April “Home Price Insights

...

4 Tips for Making a Competitive Offer

4 Tips for Making a Competitive Offer | MyKCM
So, you’ve been searching for that perfect house to call 'home,' and you've finally found it! The price is right, and in such a competitive market, you want to make sure you make a good offer so that you can guarantee that your dream of making this house yours comes true!

Below are 4 steps provided by Freddie Mac to help buyers make offers, along with some additional information for your consideration:

1. Determine Your Price

“You’ve found the perfect home and you’re ready to buy. Now what? Your real estate agent will be by your side, helping you determine an offer price that is fair.”

Based on your agent’s experience and key considerations (like similar homes recently sold in the same neighborhood or the condition of the house and what you can afford), your agent will help you to determine the offer that you are going to present.

Getting pre-approved will not only show home-sellers that you are serious about buying, but it will also allow you to make your offer with confidence because you’ll know...