Posted by Dan Bennett on Thursday, January 31, 2019 at 7:00 AMBy Dan Bennett / January 31, 2019Comment
Last year we saw headlines about a possible housing market bubble, and many wondered if Americans still felt confident about the value of their homes. Recently, the 2018 Houzz & Home Study revealed:
“Homeowners with mortgages have seen their home equity more than double since 2011, increasing to a record-setting $8.3 trillion in 2017.”
The average homeowner gained $16,200 in home equity between Q2 2017 and Q2 2018 according to the latest release of CoreLogic’s Home Equity Report.
Since 2011 home values have increased significantly throughout the country, with prices rising by 5.1% in 2018 alone. When surveyed, homeowners revealed the top four reasons why they felt their homes had increased in value.
Posted by Dan Bennett on Wednesday, January 30, 2019 at 7:00 AMBy Dan Bennett / January 30, 2019Comment
Recently, David Greene, co-host of the BiggerPockets podcast and a nationally renowned author and speaker, wrote an article in Forbes explaining how investing in real estate could help build wealth. Many of the points he made also apply to a family owning their own home. Here are a few:
1. Appreciation
“The rising of home prices over time, is how the majority of wealth is built in real estate. This is the ‘home run’ you hear of when people make a large windfall of money. While prices fluctuate, over the long run real estate values have always gone up, always, and there is no reason to think that is going to change.
One thing to consider when it comes to real estate appreciation affecting your ROI is the fact that appreciation combined with leverage offers huge returns. If you buy a property for $200,000 and it appreciates to $220,000, your property had made you a 10% return. However, you likely didn’t pay cash for the property and instead used the bank's money. If you consider that you...
Posted by Dan Bennett on Tuesday, January 29, 2019 at 7:00 AMBy Dan Bennett / January 29, 2019Comment
Over the course of the last thirty years, a shift has happened. An entire generation has been raised to believe that a college education is their key to unlocking opportunities that were not available to their parent’s or grandparent’s generations.
Due to this, student loan debt has soared to $1.5 trillion and represents the largest category of debt, surpassing credit card and auto loan debt in 2010 and never looking back. As more and more Americans continue their education amongst rising tuition costs, this number will no doubt increase.
Many housing experts have blamed student loans for a drop in the homeownership rate for young families, and to an extent, they’ve been right. Increased debt at the time of graduation has no doubt limited young people from being able to afford a home at the same rate as their parents or grandparents did at the same age.
In a recent Forbes article, the author explained that “in just the class of 2017, the average student has about $40,000 in debt — almost enough for a 20% down payment on a median-priced home.”
The news recently has been all over the place. Some are talking about a market shift, and others are suggesting the markets are moving, so let me explain to you what’s actually going on in the Chicagoland area.
Ultimately, it depends on the price range of the property: Homes in the lower price range typically still operate within a seller’s market. The higher the price range, the more likely they are to operate in a buyer’s market.
In fact, in the last week, I have been inside properties in an area where they have 1.5 years' worth of inventory—that is a lot. I’ve also been in areas where they have only two months' worth of inventory.
Posted by Dan Bennett on Friday, January 25, 2019 at 7:00 AMBy Dan Bennett / January 25, 2019Comment
Some Highlights:
For Sale By Owner (FSBO) is the process of selling real estate without the representation of a real estate broker or real estate agent.
According to the National Association of Realtors’ Profile of Home Buyers & Sellers, 36% of homeowners who decided to FSBO last year did so to avoid paying a commission or fee. But, homes sold with an agent net 6% more than those sold as a FSBO according to ...
Posted by Dan Bennett on Thursday, January 24, 2019 at 7:00 AMBy Dan Bennett / January 24, 2019Comment
Whether you are thinking of selling your house or buying a home, today’s real estate headlines can be confusing – perhaps even concerning. What is actually happening with mortgage rates? Are home values dropping or are they just rising at a slower pace? What impact will the economy have on the housing market?
If you are either a buyer or seller (or both), you need to know what it will mean to your family if you go ahead with the move. You need to understand three things:
1. What is happening in the housing market right now?
Consumers must get past those fear-mongering headlines and gain a deep understanding of what is truly happening. How strong is buyer demand right now? How much competition do listings have today compared to what they will have in the spring? People want to make an educated decision on what is probably their family’s greatest financial asset.
2. Why is it happening?
Understanding the individual pieces that impact the sale or purchase of real estate is important. Understanding how those pieces impact each other is critical. How does the amount of a down payment impact the mortgage rate a buyer will be offered? Can you still price your house a ‘little ahead’ of the market and still be sure it will sell?
Posted by Dan Bennett on Wednesday, January 23, 2019 at 7:00 AMBy Dan Bennett / January 23, 2019Comment
For centuries, people in this country have seen homeownership as part of the American Dream. Whether they were born here or immigrated from another country, they wanted to own a piece of America. With so many prominent societal changes over the last few decades, it is fair to ask if people in America still feel the same way about owning a home. The answer was made abundantly clear in two separate reports released earlier this month.
“After two years of no change, the share of Americans who say that homeownership is part of their personal “American Dream” ticked up from 72 percent to 73 percent of Americans.”
At the same time, the National Association of Realtors released their ...
Posted by Dan Bennett on Tuesday, January 22, 2019 at 7:00 AMBy Dan Bennett / January 22, 2019Comment
When homebuyers begin their research, they want to see all their available options! In many cases, they will include both new construction and existing homes in their search; but is a new construction home really the house of their dreams?
According to a recent survey by Zillow, of the 38% of total buyers that added new construction to their list, only 11% ultimately purchased a newly constructed home!
They added that 71% of these buyers are repeat buyers who are financially secure, with 45% using the money from the sale of their previous homes to make a purchase.
Below are some reasons why buyers are interested in purchasing a new build:
Posted by Dan Bennett on Monday, January 21, 2019 at 7:00 AMBy Dan Bennett / January 21, 2019Comment
In today’s fast-paced world, where answers are a Google search away, there are some who may wonder what the benefits of hiring a real estate professional to help them in their home search are. The truth is, with the addition of more information, comes more confusion.
Shows like Property Brothers, Fixer Upper and the dozens more on HGTV have given many a false sense of what it’s like to buy and sell a home.
Now more than ever, you need an expert on your side who is going to guide you toward your dreams and not let anything get in the way of achieving them. Buying and/or selling a home is definitely not something you want to DIY (Do It Yourself)!
Here are just some of the reasons you need a real estate professional in your corner:
There’s more to real estate than finding a house you like online!
There are over 230 possible steps that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows...
Posted by Dan Bennett on Thursday, January 17, 2019 at 7:00 AMBy Dan Bennett / January 17, 2019Comment
A loaf of bread used to be a nickel. A movie ticket was a dime. Not anymore. Houses were also much less expensive than they are now. Inflation raised the price of all three of those items, along with the price of almost every other item we purchase.
The reason we can still afford to consume is that our wages have also risen over time. The better measure of whether an item is more expensive than it was before is what percentage of our income it takes to purchase that item today compared to earlier. Let’s look at purchasing a home.
The COST of a home is determined by three major components: price, mortgage interest rate, and wages. The big question? Are we paying a greater percentage of our income toward our monthly mortgage payment today than previous generations? Surprisingly, the answer is no.
Historically, Americans have paid just over 21% of their income toward their monthly mortgage payment.
Though home prices are higher than before, wages have risen as well. And, the most important component in the cost equation - the mortgage rate - is dramatically lower than it was in the 1970s, 1980s, 1990s, and 2000s.
Posted by Dan Bennett on Wednesday, January 16, 2019 at 7:00 AMBy Dan Bennett / January 16, 2019Comment
If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price.
In today’s shifting real estate market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as they were able to just last year.
They will have to employ the same strategy: be the closest without going over!
As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!
Over the last six months, more inventory has come to market while the months’ supply of inventory available has dropped. This means that the demand for homes to buy is still very strong throughout the country!
Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This...
Posted by Dan Bennett on Tuesday, January 15, 2019 at 7:00 AMBy Dan Bennett / January 15, 2019Comment
Homeowners who purchase their homes before the age of 35 are better prepared for retirement at age 60, according to a new Urban Institute study. The organization surveyed adults who turned 60 or 61 between 2003 and 2015 for their data set.
“Today’s older adults became homeowners at a younger age than today’s young adults. Half the older adults in our sample bought their first house when they were between 25 and 34 years old, and 27 percent bought their first home before age 25.”
The full breakdown is in the chart below:
The study goes on to show the impact of purchasing a home at an early age. Those who purchased their first homes...
Posted by Dan Bennett on Monday, January 14, 2019 at 7:00 AMBy Dan Bennett / January 14, 2019Comment
In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.
Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.
Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive...
Posted by Dan Bennett on Thursday, January 10, 2019 at 7:00 AMBy Dan Bennett / January 10, 2019Comment
You may have heard that the housing market is softening. There is no doubt that buyer traffic has decreased. There are fewer purchasers in the market than there were last month and at this time last year. What you may not have heard, however, is that there is still a severe shortage of listing inventory in many regions of the country.
In a recent interview discussing the housing market, First American’s Chief Economist Mark Fleming put it simply:
“The biggest challenge is really the availability of supply.”
When we look at available inventory numbers released by the National Association of Realtors (NAR), we see that the actual number of homes for sale has decreased in each of the last five months.
Posted by Dan Bennett on Wednesday, January 9, 2019 at 7:00 AMBy Dan Bennett / January 9, 2019Comment
Interest rates for a 30-year fixed rate mortgage climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey.
After the first week of 2019, rates have continued their downward trend. As Freddie Mac’s Chief Economist Sam Khater notes, this is great news for homebuyers. He states,
“Mortgage rates declined to start the new year with the 30-year fixed-rate mortgage dipping to 4.51 percent. Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”
In some areas of the country, the combination of rising interest rates and rising home prices had made some first-time buyers push pause on their home searches. But with more inventory coming to market, continued price growth, and interest rates slowing, this is a great time to get back in the market!
Posted by Dan Bennett on Tuesday, January 8, 2019 at 7:00 AMBy Dan Bennett / January 8, 2019Comment
Every year around this time, many homeowners begin the process of preparing their homes in case of extreme winter weather. Some others skip winter all together by escaping to their vacation homes in a warmer climate.
For those homeowners staying at their first residence, AccuWeather warns:
“The late-week cold shot should fade next week, but this is a warning shot for winter's return late in the month and early February."
Given this, it’s time to go and stock up on winter weather supplies! However, if you’re tired of shoveling snow and dealing with the cold weather, maybe it’s time to consider obtaining a vacation home!
Posted by Dan Bennett on Monday, January 7, 2019 at 7:00 AMBy Dan Bennett / January 7, 2019Comment
Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?
Here are two keys to ensure that you get the highest price possible.
1. Price it a LITTLE LOW
This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will...
Posted by Dan Bennett on Friday, January 4, 2019 at 7:00 AMBy Dan Bennett / January 4, 2019Comment
Some Highlights:
If you are planning on listing your house for sale this year, here are the top four home improvement projects that will net you the most Return on Investment (ROI).
Minor bathroom renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
Upgrading your landscaping or curb appeal helps get buyers in the door. These upgrades rank as the 2nd and 4th best renovations for returns on investment.
Posted by Dan Bennett on Thursday, January 3, 2019 at 7:00 AMBy Dan Bennett / January 3, 2019Comment
Following last year's real estate market was like riding a rollercoaster. The market started off strong in 2018 and then softened before finishing with a mild flurry. However, one thing that did not waiver was America’s belief that owning a home makes sense from a financial standpoint.
An end-of-the-year survey by the Federal Reserve Bank’s Center for Microeconomic Data revealed that:
“The majority of households continue to view housing as a good financial investment.”
And that percentage has increased over the last three years.
Bottom Line
Though there is some uncertainty as to how the real estate market will perform over the next twelve months, one thing remains very certain: America’s...
![Think You Should For Sale By Owner? Think Again! [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2019/01/24092338/20190125-FSBO-MEM-ENG-1046x1354.jpg)
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![The Cost Across Time [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2019/01/10104016/20190111-MEM-ENG-1046x808.jpg)
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![Top Renovations to Complete Before You Sell Your House [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2019/01/03093809/201901104-STM-ENG-1046x1354.jpg)
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