How Buyers Can Win By Downsizing in 2020

 

How Buyers Can Win By Downsizing in 2020 | MyKCM

 

Home values have been increasing for 93 consecutive months, according to the National Association of Realtors. If you’re a homeowner, particularly one looking to downsize your living space, that’s great news, as you’ve likely built significant equity in your home.

Here’s some more good news: mortgage rates are expected to remain low throughout 2020 at an average of 3.8% for a 30-year fixed-rate loan.

The combination of leveraging your growing equity and capitalizing on low rates could make a big difference in your housing plans this year.

How to Use Your Home Equity

For move-up buyers, the typical pattern for building financial stability and wealth through homeownership works this way: you buy a house and gain equity over several years of mortgage payments and price appreciation. You then take that equity from the sale of your house to make a down payment on your next home and repeat the process.

For homeowners ready to downsize, home equity can work in a slightly different way. What you choose to do depends in part upon your goals.

According to HousingWire.com, for some, the desire to downsize may be related to retirement plans or children aging out of the home. Others may be choosing to live in a smaller home to save money or simplify their lifestyle in a space that’s easier to clean and declutter. The reasons can vary greatly and by generation.

Those who choose to put their equity toward a new home have the opportunity to make a substantial down payment or maybe even to buy their next home in cash. This is incredibly valuable if your goal is to have a minimal mortgage payment or none at all.

If you’re planning to downsize, keep in mind that home prices are anticipated to continue rising in 2020, which could influence your choices.

The Impact of Low Mortgage Rates

Low mortgage rates can offset price hikes, so locking in while rates are low will be key. For many downsizing homeowners, a loan with a shorter term is ideal, so the balance can be reduced more quickly.

Interest rates on 10, 15, and 20-year loans are lower than the rates on a 30-year fixed-rate loan. If you’re downsizing your housing costs, you may prefer a shorter-term loan to pay off your home faster. This way, you can save thousands in interest payments over time.

Bottom Line

If you’re planning a transition into a smaller home, the twin trends of low mortgage rates and rising home equity can kickstart or boost your plans, especially if you’re anticipating retirement soon or just want to live in a smaller home that’s easier to maintain. Let’s get together today to explore your options.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on January 22, 2020 at 5:11 pm
DAWIT WOLDE | Posted in Blog |

Housing Inventory Vanishing: What Is the Impact on You?

 

Housing Inventory Vanishing: What Is the Impact on You? | MyKCM

 

The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:

“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”

The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:Housing Inventory Vanishing: What Is the Impact on You? | MyKCMGeorge Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:

“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”

The question is: What does this mean to you?

If You’re a Buyer…

Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.

If You’re a Seller…

Realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on January 16, 2020 at 3:56 pm
DAWIT WOLDE | Posted in Blog |

Year Ended with Higher Home Prices, Dip in Annual Home Sales

 

 

LAS VEGAS – Local home prices continued to rise as the year came to an end, though fewer existing homes were sold in Southern Nevada during 2019 compared to the previous year. So says a report released by the Greater Las Vegas Association of REALTORS® (GLVAR).

GLVAR reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during December was $312,990. That was up 6.0% from $295,250 in December of 2018. Meanwhile, the median price of local condos and townhomes sold in December was $178,000. That was up 8.9% from $163,500 in December of 2018.

 

 

“As we begin a new year and new decade, I think you can sum up the state of the local housing market with two words: stable and sustainable,” said 2020 GLVAR President Tom Blanchard. “We ended the year with a fairly strong month of December, which is usually one of our slowest months. Although sales and prices both increased last month, we still sold fewer homes in 2019 than we did in past years. I think the tight local housing supply we’ve been dealing with had something to do with that.”

 

 

According to GLVAR, the total number of existing local homes, condos, townhomes and other residential properties sold in Southern Nevada during 2019 was 41,269. That’s down from 42,876 total sales in 2018 and from 45,388 in 2017. The total number of existing local homes, condos and townhomes sold during December was 3,214. Compared to one year ago, December sales were up 21.8% for homes and up 17.2% for condos and townhomes.

 

 

By all indications, Blanchard said “the local housing market in 2020 figures to look a lot like it did last year,” with gradually increasing or stable home prices, strong demand for housing and a persistently tight supply. As long as Southern Nevada continues to enjoy economic, job and population growth, he expects the housing market to continue on its current course.

 

The local housing inventory ended the year well below the six-month supply that is considered to be a more balanced market. At the current sales pace, Blanchard said Southern Nevada has just over a two-month supply of homes available for sale, with the supply shrinking from past months. By the end of December, GLVAR reported 5,538 single-family homes listed for sale without any sort of offer. That’s down 16.3% from one year ago. For condos and townhomes, the 1,555 properties listed without offers in December represented a 1.8% increase from one year ago.

 

About the GLVAR: GLVAR was founded in 1947 and provides its more than 14,000 local members with education, training and political representation. The local representative of the National Association of REALTORS®, GLVAR is the largest professional organization in Southern Nevada.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on January 9, 2020 at 4:37 am
DAWIT WOLDE | Posted in Blog |

The Biggest Issue Facing Housing Next Year

The Biggest Issue Facing Housing Next Year | MyKCM

This coming year the housing market will be defined by 3 things- inventoryinterest rates, and appreciation.  But the biggest issue the housing market will face in 2020 is an inventory shortage.  There aren’t enough homes on the market for buyers, especially on the lower end of the market. This is a topic that has come up frequently within the past several months.

Based on what is forecasted, we know that interest rates are projected to remain low and that appreciation is expected to continue as we move into 2020.  Additionally, the upcoming election will provoke many unique perspectives on the health of the US housing market. The challenge will be understanding what is actually happening and how you can best position yourself if you are thinking of buying or selling your home.

Here are several perspectives to consider on the inventory issue facing housing next year:

According to realtor.com:

“Despite increases in new construction, next year will once again fail to bring a solution to the inventory shortage that has plagued the housing market since 2015. Inventory could reach a historic low as a steady flow of demand, especially for entry level homes, and declining seller sentiment combine to keep a lid on sales transactions.”

Diana Olick at CNBC:

“Inventory has been falling annually for five straight months, after it recovered slightly toward the end of last year, due to a spike in mortgage rates. Rates began falling again by spring of this year. Homebuilders have been increasing production slowly, but it’s not enough to meet the increasingly strong demand.”

George Ratiu, Senior Economist with realtor.com

“As millennials — the largest cohort of buyers in U.S. history — embrace homeownership and take advantage of this year’s unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish. The housing shortage is felt acutely at the entry-level of the market, where most millennials are looking to break into the market for their first home.”

Bottom Line

The most important thing you can do is understand what is happening in your local market. You may not be able to avoid some of the issues brought on by low inventory, but you can be educated and prepared. Let’s connect and discuss the options that make the most sense for you and your family.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on December 18, 2019 at 11:26 pm
DAWIT WOLDE | Posted in Blog |

Southern Nevada Home Prices Stay the Same for Two Months, Still Up from Last Year

 

 

LAS VEGAS – A report released Friday by the Greater Las Vegas Association of REALTORS® (GLVAR) shows home prices in Southern Nevada stayed the same from October to November but are still up from one year ago.

GLVAR reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during November was $307,000. That’s the same median price as October, but up 4.1% from $295,000 in November of 2018.

Meanwhile, the median price of local condos and townhomes sold in November was $175,000. That was up 6.1% from $164,900 in November of 2018.

 

 

“The overall trends in our housing market have basically been the same all year,” said 2019 GLVAR President Janet Carpenter, a longtime local REALTOR®. “Home prices have been rising gradually compared to last year and the past several years. Sales have been running slightly behind last year’s pace. Homes are staying on the market a little longer. And our local housing supply is still very tight and only about half of what we’d like it to be.”

As for 2020, Carpenter expects to see more of the same, citing Southern Nevada’s strong job, population and economic growth that continue to drive demand for housing and reports from the National Association of REALTORS® (NAR) and others suggesting modest increases in home prices next year. She expressed skepticism about a report released this week by Realtor.com that predicted existing home prices in Southern Nevada could fall by about 1% in 2020.

 

 

Just as prices have been rising more gradually lately, Carpenter said fewer homes have been selling this year compared to the previous few years. For all of 2018, GLVAR reported a total of 42,876 local property sales. That was down from 45,388 in all of 2017. The total number of existing local homes, condos and townhomes sold during November was 2,946. Compared to one year ago, November sales were up 5.0% for homes, but down 4.6% for condos and townhomes.

By the end of November, GLVAR reported 6,531 single-family homes listed for sale without any sort of offer. That’s down 6.7% from one year ago. For condos and townhomes, the 1,711 properties listed without offers in November represented a 6.6% increase from one year ago.

While the local housing supply had been increasing for much of 2019, Carpenter said it’s still well below the six-month supply that is considered to be a more balanced market. At the current sales pace, she said Southern Nevada has less than a three-month supply of homes available for sale. Compared to one year ago, total sales values in November were up 12.4% for homes and up 2.5% for condos and townhomes.

About the GLVAR: GLVAR was founded in 1947 and provides its more than 14,000 local members with education, training and political representation. The local representative of the National Association of REALTORS®, GLVAR is the largest professional organization in Southern Nevada.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on December 13, 2019 at 4:57 am
DAWIT WOLDE | Posted in Blog |

A 365 Day Difference in Homeownership

 

A 365 Day Difference in Homeownership | MyKCM

Over the past year, mortgage rates have fallen more than a full percentage point. This is a great driver for homeownership, as today’s low rates provide consumers with some significant benefits. Here’s a look at three of them:

  1. Refinance: If you already own a home, you may want to decide if you’re going to refinance. It’s one way to lock in a lower monthly payment and save substantially over time, but it also means paying upfront closing costs too. You have to answer the question: Should I refinance my home?
  2. Move-up or Downsize: Another option is to consider moving into a new home, putting the equity you’ve likely gained in your current house toward a down payment on a new one that better meets your needs – something that’s truly a perfect fit for your family.
  3. Become a First-Time Homebuyer: There are many financial and non-financial benefits to owning a home, and the most important thing is to first decide when the time is right for you. You have to determine that on your own, but know that now is a great time to buy if you’re considering it. Just take a look at the cost of renting vs. buying

Why 2019 Was a Great Year for Homeownership

Last year at this time, mortgage rates were 4.63% (substantially higher than they are today). If you’re one who waited for a better time to make a move, market conditions have improved significantly. Today’s low mortgage rates combined with increasing wages are making homes much more affordable than they were just one year ago, so it’s a great time to get more for your money and consider a new home.

The chart below shows how much you would save based on today’s rates, compared to what you would have paid if you purchased a house exactly one year ago, depending on how much you finance.A 365 Day Difference in Homeownership | MyKCM

Bottom Line

If you’ve been waiting since last year to make your move into homeownership, or to find a house that better meets your needs, today’s low mortgage rates may be just what you need to get the process going. Let’s get together to discuss how you can benefit from the current rates.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on December 10, 2019 at 8:00 pm
DAWIT WOLDE | Posted in Blog |

Southern Nevada Home Prices Stall to Start Fall, Though Still Higher Than Last Year

 

 

LAS VEGAS – A report released Wednesday by the Greater Las Vegas Association of REALTORS® (GLVAR) shows home prices in Southern Nevada stalled to start fall, with fewer homes selling so far this year compared to last year.

GLVAR reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during October was $307,000. That’s down 1.0% from September but up 4.1% from $295,025 in October of 2018. Meanwhile, the median price of local condos and townhomes sold in October was $171,250. That was down 1.6% from $174,000 in October of 2018.

 

 

“Local home prices are as stable as they’ve been in years and appreciating at a much more gradual pace, more like what was considered a normal and healthy rate of appreciation for many years,” said 2019 GLVAR President Janet Carpenter, a longtime local REALTOR®. “We realize that many prospective buyers still face challenges finding homes that are both available and affordable for them. But at least buyers are benefiting from more stable prices, more homes on the market than we had at this time last year and historically low mortgage interest rates.”

Just as prices have been rising more gradually, Carpenter said fewer homes have been selling this year compared to the previous few years. According to GLVAR, a total of 36,665 existing local properties were sold in Southern Nevada from Jan. 1, 2019 through Oct. 31, 2019. That’s down from 38,248 total properties sold during the same 10-month period in 2018. For all of 2018, GLVAR reported a total of 42,876 local property sales. That was down from 45,388 in all of 2017.

 

 

The total number of existing local homes, condos and townhomes sold during October was 3,571. Compared to one year ago, October sales were up 7.9% for homes and up 3.5% for condos and townhomes.

As for inventory, by the end of October, GLVAR reported 7,210 single-family homes listed for sale without any sort of offer. That’s up 4.2% from one year ago. For condos and townhomes, the 1,808 properties listed without offers in October represented a 15.7% increase from one year ago.

While the local housing supply has increased over the past year, Carpenter said it’s still well below the six-month supply that is considered to be a more balanced market. At the current sales pace, she said Southern Nevada has less than a three-month supply of homes available for sale.

About the GLVAR: GLVAR was founded in 1947 and provides its more than 14,000 local members with education, training and political representation. The local representative of the National Association of REALTORS®, GLVAR is the largest professional organization in Southern Nevada.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on November 19, 2019 at 12:36 am
DAWIT WOLDE | Posted in Blog |

Thinking of Selling Your Home? The Waiting Is The Hardest Part.

Thinking of Selling Your Home? The Waiting Is The Hardest Part. | MyKCM

 

Tom Petty famously penned the words, “the waiting is the hardest part” in his early 80’s hit song The Waiting, and his thought process can surprisingly also be applied to individuals considering selling their homes today. Traditional thinking would suggest it may be best to wait until the spring to sell when there is a flood of buyers in the market, but right now may in fact be an even better time to list your home.

We can see the overall economy is good: wages are rising, there are near record-low unemployment rates, and mortgage interest rates are still very low too. Over the past 10+ years the housing market has stabilized, so what (if anything) is the biggest challenge in the housing market today?

The answer is simple: it’s inventory.

According to the Existing Home Sales Report by the National Association of Realtors,

“Total housing inventory at the end of September sat at 1.83 million, approximately equal to the amount of existing-homes available for sale in August, but a 2.7% decrease from 1.88 million one year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, up from 4.0 months in August and down from the 4.4-month figure recorded in September 2018.”

What does this mean?

While homes are coming to the market, they aren’t coming fast enough! Right now, across the country there is less than 6 months of overall inventory of homes for sale, putting us in a seller’s market. The challenge is that there are not enough homes for sale to increase the supply needed for the number of people who want to buy, especially in the starter and middle-level markets.

To be in a balanced market (meaning we have enough inventory for the number of buyers in the market), we need to have 6 months of inventory available. Today we are nowhere near that number, and as a matter of fact, the last time we reached that height was August 2012 (as shown in the graph below):Thinking of Selling Your Home? The Waiting Is The Hardest Part. | MyKCMWhen we look at the inventory challenge today, we can see that now is a great time to sell your house. Truthfully, waiting may end up being the hardest part in the long run. This landscape is a great place for sellers who own homes in the starter and middle-level markets to take the opportunity to sell in a sellers’ market, before inventory catches up with demand. Serious buyers are actively in the market and ready to make a move at this time of year. When inventory is limited at the lower end, like it is today, selling before more homes are listed could mean a significant seller’s advantage to those who are ready to move up. The upper level of the market has much more inventory available to move into, so it’s a win across the board.

Bottom  Line

If you’re considering selling your home, don’t wait – now is the time to make your move! Take advantage of the high housing demand and the low inventory of homes for sale at the lower end of the market and use your purchasing power while mortgage rates are low to go after the move-up home of your dreams. Let’s get together to decide if now is the right time for you.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on October 29, 2019 at 5:32 pm
DAWIT WOLDE | Posted in Blog |

Home-ownership is the Top Contributor to Your Net Worth

Homeownership is the Top Contributor to Your Net Worth | MyKCM

Many people plan to build their net worth by buying CDs or stocks, or just having a savings account. Recently, however, Economist Jonathan Eggleston and Survey Statistician Donald Hays, both of the U.S. Census Bureau, shared the biggest determinants of wealth,

“The biggest determinants of household wealth [are] owning a home and having a retirement account.” (Shown in the graph below):

Homeownership is the Top Contributor to Your Net Worth | MyKCMThis does not come as a surprise, as we often mention that homeownership can help you to increase your family’s wealth. This study reinforces that idea,

 “Net worth is an important indicator of economic well-being and provides insights into a household’s economic health.”

Having equity in your home can help your family move in that direction, building toward substantial financial growth. According to the report noted above, people are not only creating net worth in the homes they live in, but many are also earning equity in rental property investments too. (See below):Homeownership is the Top Contributor to Your Net Worth | MyKCMJohn Paulson said it well,

If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Bottom Line

There are financial and non-financial benefits to owning a home. If you would like to increase your net worth, let’s get together so you can learn all the benefits of becoming a homeowner.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on October 16, 2019 at 4:32 am
DAWIT WOLDE | Posted in Blog |

Southern Nevada Home Prices Inch Up as Supply Stays Tight in September 2019

 

 

LAS VEGAS – A report released Tuesday by the Greater Las Vegas Association of REALTORS® (GLVAR) shows home prices in Southern Nevada inching back towards their all-time high as the local housing supply remains tight.

GLVAR reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during September was $310,000. That’s up 3.3% from an even $300,000 in September of 2018. Meanwhile, the median price of local condos and townhomes sold in September was $171,000. That was up 0.6% from $170,000 in September of 2018.

 

 

“When you look at how gradually home prices have been going up lately, the rate of appreciation is more like what we considered to be normal for many years. In past decades, when prices went up by 3 to 5% per year, we thought that was pretty good appreciation,” said 2019 GLVAR President Janet Carpenter, a longtime local REALTOR®. “With demand staying strong and our local housing supply remaining tight, I wouldn’t be surprised to see this trend continue into the foreseeable future.”

According to GLVAR, the median price of existing single-family homes sold in Southern Nevada is now within $5,000 of the $315,000 peak set in June of 2006 before prices began falling during the recession.

As for inventory, by the end of September, GLVAR reported 7,334 single-family homes listed for sale without any sort of offer. That’s up 19.3% from one year ago. For condos and townhomes, the 1,830 properties listed without offers in September represented a 35.0% increase from one year ago.

 

 

While the local housing supply is up from one year ago, Carpenter said it’s still well below the six-month supply that is considered to be a more balanced market. At the current sales pace, she said Southern Nevada has less than a three-month supply of homes available for sale.

About the GLVAR: GLVAR was founded in 1947 and provides its more than 14,000 local members with education, training and political representation. The local representative of the National Association of REALTORS®, GLVAR is the largest professional organization in Southern Nevada.

DISCLAIMER: The information contained in this Blog is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of the Blog posts or any other information contained in this website.


Posted on October 14, 2019 at 6:38 pm
DAWIT WOLDE | Posted in Blog |

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