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  • Here Comes the Housing Inventory!! | Simplifying The Market

    Here Comes the Housing Inventory!!

    Almost every real estate conversation revolves around the continuous rise in house values over the last four years. Some have even mentioned a concern about another possible bubble forming. However, the recent increase in prices can be attributed to a very simple principle: supply and demand.

    DEMAND

    Demand for single-family housing has continued to increase as the economy slowly moves forward. Recent surveys have shown that over 80% of each generation still believes that homeownership is a part of the American Dream. And a recent Gallup survey showed that Americans believe that real estate is the best long-term investment.

    SUPPLY

    Over the last several years, many homeowners were unable to put their homes on the market for an assortment of reasons (family finances, no or limited equity in the home). There has been a pent-up supply of sellers who have wanted to move but couldn’t. Below is a graph depicting the number of years families have historically stayed in a home. We can see there is pent-up seller demand.

    Here Comes the Housing Inventory!! | Simplifying The Market

    As the economy improves and more families reach the point of significant equity (20%), we will see these homes come to market. As supply then matches demand, the acceleration of home price increases will begin to slow.

    Bottom Line

    If you are one of the families that have been chained to your current home over the last 5-7 years, now may be the time to break free and find the home of your dreams.

  • Serious About Home Buying? Get Pre-Approved | Simplifying The Market

    Serious About Home Buying? Get Pre-Approved

    In many markets across the country, the amount of buyers searching for their dream home greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

    But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know if 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 markets.”

    One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

    Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

    1. Capacity:Your current and future ability to make your payments
    2. Capital or cash reserves:The money, savings and investments you have that can be sold quickly for cash
    3. Collateral:The home, or type of home, that you would like to purchase
    4. Credit:Your history of paying bills and other debts on time

    Getting pre-approved is one of many steps that will show home sellers that you are serious about buying and it often helps speed up the process once your offer has been accepted.

    Bottom Line

    Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

  • Is Your First Home Within Your Grasp Now? | Simplifying The Market

    Is Your First Home Within Your Grasp Now?

    There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family. Others may think they are too young. And still others might think their current income would never enable them to qualify for a mortgage.

    We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first time buyer:

    Is Your First Home Within Your Grasp Now? | Simplifying The Market

    Bottom Line

    You may not be much different than many people who have already purchased their first home. Let’s get together to see if your dream of homeownership can become a reality!

  • The Presidential Election and Its Impact on Housing | Simplifying The Market

    The Presidential Election and Its Impact on Housing

    Every four years people question what effect the Presidential election might have on the national housing market. Let’s take a look at what is currently taking place. The New York Times ran an articleearlier this week where they explained:

    “A growing body of research shows that during presidential election years — particularly ones like this when there is such uncertainty about the nation’s future — industry becomes almost paralyzed. A look at the last several dozen election cycles shows that during the final year of a presidential term, big corporate investments are routinely postponed, and big deals are put on the back burner.

    The research is even more persuasive on the final year of an eight-year presidential term, when a new candidate inevitably will become president.”

    We are seeing this take form in the latest economic numbers. However, will this lead to a slowdown in the housing market? Not according to Fannie MaeFreddie Mac or the National Association of Realtors.

    The Impact on Housing Throughout 2016

    Let’s look at what has happened and what is projected to happen by these three major entities.

    National Association of Realtors

    “In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007.”

    Freddie Mac

    “Recent data darkened the growth outlook for the first quarter of 2016. However, despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016.”

    Fannie Mae

    “Consumers and businesses showed caution at the end of the first quarter…(but) Home sales are expected to pick up heading into the spring season amid the backdrop of declining mortgage rates, rising pending home sales and purchase mortgage applications, and continued easing of lending standards on residential mortgage loans.”

    Bottom Line

    Even during this election year, the desire to achieve the American Dream is greater than the fear of uncertainty of the next presidency.

  • A ‘Buyer’ in Hand Is Worth Two in the Bush | Simplifying The Market

    A ‘Buyer’ in the Hand is Worth Two in the Bush

    In today’s highly competitive seller’s market where there are more buyers than there are listings for them to purchase, some sellers may feel like the ball is in their court.

    And they would be right when it comes to choosing which offer to accept, the closing date, or even which improvements the seller is willing to make to the home prior to selling.

    One thing to remember though is that there is always a line that shouldn’t be crossed.

    Interest rates could change, financing might not go through, the appraisal might not come back at the price that you have agreed to. These are all opportunities to work with your buyer to make sure that the sale still happens.

    You may think that because buyer demand is high right now, that you could choose to make your buyer jump through hoops. But what happens if they reach their limit and need to walk away? You’re starting over… weeks, maybe months later… and other buyers may wonder what’s wrong with the house that the deal fell through.

    The Golden Rule

    We were all taught from a young age to “treat others as you would like to be treated”. This shouldn’t change once you have a buyer who seems as though they would do anything to buy your home.

     

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