Karen R. Brown
Karen R. Brown
RE/MAX Innovative Properties
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Sellers Have an Opportunity with Today’s Home Prices

Sellers Have an Opportunity with Today's Home Prices | MyKCM

As mortgage rates started to rise this year, many homeowners began to wonder if the value of their homes would fall. Here’s the good news. Historically, when mortgage rates rise by a percentage point or more, home values continue to appreciate. The latest data on home prices seems to confirm that trend.

According to data from CoreLogic, home price appreciation has been re-accelerating since November. The graph below shows this increase in home price appreciation in green:

Sellers Have an Opportunity as Home Prices Re-Accelerate | MyKCMThis is largely due to an ongoing imbalance in supply and demand. Specifically, housing supply is still low, and demand is high. As mortgage rates started to rise this year, many homebuyers rushed to make their purchases before those rates could climb higher. The increased competition drove home prices up even more. Selma Hepp, Deputy Chief Economist at CoreLogicexplains:

“Home price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.”

And experts say prices are forecast to continue appreciating, just at a more moderate pace moving forward. A recent article from Fortune says:

“. . . the swift move up in mortgage rates . . . doesn’t mean home prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts home prices will climb further this year.”

What This Means for You

If you’re thinking about selling your house, you should know you have a great opportunity to list your home and capitalize on today’s home price appreciation. As prices rise, so does the value of your home, which gives your equity a big boost.

When you sell, you can use that equity toward the purchase of your next home. And at today’s record-level of appreciation, that equity may be enough to cover some (if not all) of your down payment.

Bottom Line

History shows rising mortgage rates have not had a negative impact on home prices. Now is still a great time to sell your house thanks to ongoing price appreciation. When you’re ready to find out how much equity you have in your current home and what’s happening with home prices in your local area, let’s connect.

Will Home Prices Fall This Year? Here’s What Experts Say.

Will Home Prices Fall This Year? Here’s What Experts Say | MyKCM

Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyerseller, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your homeownership goals.

What’s Happening with Home Prices? 

Home prices have seen 121 consecutive months of year-over-year increases. CoreLogic says:

Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”

So why are prices climbing so much? It’s because there are more buyers than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory housing market.

Where Do Experts Say Prices Will Go from Here?

Experts say the housing market isn’t set up for a price decline due to that ongoing imbalance between supply and demand. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below):

Will Home Prices Fall This Year? Here’s What Experts Say | MyKCM

While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First American explains it like this:

While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”

What Does That Mean for You?

The biggest takeaway is that none of the experts are projecting depreciation. If you’re a homeowner thinking about selling, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will only cost you more in the long run because climbing mortgage rates and rising home prices will have an impact on your next home purchase. Freddie Mac says:

“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

Bottom Line

If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. Experts say prices will continue to appreciate this year. That means, if you’re ready, buying your next home before prices climb further may make the most financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.

 

How To Approach Rising Mortgage Rates as a Buyer

How To Approach Rising Mortgage Rates as a Buyer | MyKCM

In the last few weeks, the average 30-year fixed mortgage rate from Freddie Mac inched up to 5%. While that news may have you questioning the timing of your home search, the truth is, timing has never been more important. Even though you may be tempted to put your plans on hold in hopes that rates will fall, waiting will only cost you more. Mortgage rates are forecast to continue rising in the year ahead.

If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.

How Rising Mortgage Rates Impact You

Mortgage rates play a significant role in your home search. As rates go up, they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. Here’s an example of how even a quarter-point increase can have a big impact on your monthly payment (see chart below):

How To Approach Rising Mortgage Rates as a Buyer | MyKCM

With mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of delaying your plans, today’s rates should motivate you to purchase now before rates increase more. Use that motivation to energize your search and plan your next steps accordingly.

The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a trusted lender, help you adjust your search based on your budget, and make sure you’re ready to act quickly when it’s time to make an offer.

Bottom Line

Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.

Where Are Mortgage Rates Headed?

Where Are Mortgage Rates Headed? | MyKCM

There’s never been a truer statement regarding forecasting mortgage rates than the one offered last year by Mark Fleming, Chief Economist at First American:

“You know, the fallacy of economic forecasting is: Don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”

Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It’s only April, and rates have already blown past those numbers. Freddie Mac announced last week that the 30-year fixed-rate mortgage is already at 4.72%.

Danielle Hale, Chief Economist at realtor.comtweeted on March 31:

“Continuing on the recent trajectory, would have mortgage rates hitting 5% within a matter of weeks. . . .”

Just five days later, on April 5, the Mortgage News Daily quoted a rate of 5.02%.

No one knows how swiftly mortgage rates will rise moving forward. However, at least to this point, they haven’t significantly impacted purchaser demand. Ali Wolf, Chief Economist at Zondaexplains:

Mortgage rates jumped much quicker and much higher than even the most aggressive forecasts called for at the end of last year, and yet housing demand appears to be holding steady.”

Through February, home prices, the number of showings, and the number of homes receiving multiple offers all saw a substantial increase. However, much of the spike in mortgage rates occurred in March. We will not know the true impact of the increase in mortgage rates until the March housing numbers become available in early May.

Rick Sharga, EVP of Market Intelligence at ATTOM Datarecently put rising rates into context:

“Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach five percent on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford.”

While no one knows exactly where rates are headed, experts do think they’ll continue to rise in the months ahead. In the meantime, if you’re looking to buy a home, know that rising rates do have an impact. As rates rise, it’ll cost you more when you purchase a house. If you’re ready to buy, it may make sense to do so sooner rather than later.

Bottom Line

Mark Fleming got it right. Forecasting mortgage rates is an impossible task. However, it’s probably safe to assume the days of attaining a 3% mortgage rate are over. The question is whether that will soon be true for 4% rates as well.

What You Can Expect from the Spring Housing Market

 

What You Can Expect from the Spring Housing Market | MyKCM

As the spring housing market kicks off, you likely want to know what you can expect this season when it comes to buying or selling a house. While there are multiple factors causing some uncertainty, including the conflict overseas, rising inflation, and the first rate increase from the Federal Reserve in over three years — the housing market seems to be relatively immune.

Here’s a look at what experts say you can expect this spring.

1. Mortgage Rates Will Climb

Freddie Mac reports the 30-year fixed mortgage rate has increased by more than a full point in the past six months. And despite some mild fluctuation in recent weeks, experts believe rates will continue to edge up over the next 90 days. As Freddie Mac says:

“The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”

If you’re a first-time buyer or a seller thinking of moving to a home that better fits your needs, realize that waiting will likely mean you’ll pay a higher mortgage rate on your purchase. And that higher rate drives up your monthly payment and can really add up over the life of your loan.

2. Housing Inventory Will Increase

There may be some relief coming for buyers searching for a home to purchase. Realtor.com recently reported that the number of newly listed homes has grown for each of the last two months. Also, the National Association of Realtors (NAR) just announced the months’ supply of inventory increased for the first time in eight months. The inventory of existing homes usually grows every spring, and it seems, based on recent activity, the next 90 days could bring more listings to the market.

If you’re a buyer who has been frustrated with the limited supply of homes available for sale, it looks like you could find some relief this spring. However, be prepared to act quickly if you find the right home.

If you’re a seller, listing now instead of waiting for this additional competition to hit the market makes sense. Your leverage in any negotiation during the sale will be impacted as additional homes come to market.

3. Home Prices Will Rise

Prices are always determined by supply and demand. Though the number of homes entering the market is increasing, buyer demand remains very strong. As realtor.com explains in their most recent Housing Report:

“During the final two weeks of the month, more new sellers entered the market than during the same time last year. . . . However, with 5.8 million new homes missing from the market and millions of millennials at first-time buying ages, housing supply faces a long road to catching up with demand.”

What does that mean for you? With the demand for housing still outpacing supply, home prices will continue to appreciate. Many experts believe the level of appreciation will decelerate from the high double-digit levels we’ve seen over the last two years. That means prices will continue to climb, just at a more moderate pace. Most experts are predicting home prices will not depreciate.

Won’t Increasing Mortgage Rates Cause Home Prices To Fall?

While some people may believe a 1% increase in mortgage rates will impact demand so dramatically that home prices will have to fall, experts say otherwise. Doug Duncan, Senior Vice President and Chief Economist at Fannie Maesays:

“What I will caution against is making the inference that interest rates have a direct impact on house prices. That is not true.”

Freddie Mac studied the impact that mortgage rates increasing by at least 1% has had on home prices in the past. Here are the results of that study:

What You Can Expect from the Spring Housing Market | MyKCM

As the chart shows, mortgage rates jumped by at least 1% six times in the last thirty years. In each case, home values increased.

So again, if you’re a first-time buyer or a repeat buyer, waiting to buy likely means you’ll pay more for a home later in the year (as compared to its current value).

Bottom Line

There are three things that seem certain going into the spring housing market:

  1. Mortgage rates will continue to rise
  2. The selection of homes available for sale will modestly improve
  3. Home prices will continue to appreciate, just at a slightly slower pace

If you’re thinking of buying, act now before mortgage rates and home prices increase further. If you’re thinking of selling, your best bet may be to sell soon so you can beat the increase in competition that’s about to come to market.

Are You Wondering if This Is the Year To Buy a Home?

Are You Wondering if This Is the Year To Buy a Home? | MyKCM

Every year, many renters ask themselves the same question: Should I continue renting, or is it time to buy a home? If you’re a renter, chances are you’ve asked yourself that question at least once, and it’s likely because you’ve faced an increase in your monthly housing costs over time. After all, according to Census data, rents have risen consistently for decades.

To make an informed and powerful decision, the first step is understanding what’s happening in today’s housing market so you can determine which option is the better long-term financial decision for you.

Rents Are Going Up Again This Year

Rents are skyrocketing right now. Data from realtor.com shows just how much rental prices are surging throughout the country. The graph below highlights rental unit price increases over the past year:

Are You Wondering if This Is the Year To Buy a Home? | MyKCM

If you’re a renter and plan on signing a new lease, your monthly costs are likely to go up when you do. Those rising costs can have a big impact on your financial goals, including any plans you’re making to save for a home purchase.

Homeownership Offers Stable Monthly Costs

Of course, one of the key benefits of owning your home is that you’re able to lock in and stabilize your payments for the duration of your loan. That’s not the case when you rent.

While rents are already on the rise, there’s a good chance many people will see their rental costs increase even more this year. As Danielle Hale, Chief Economist at realtor.comsays:

With rents already at a high and expected to keep going up, rental affordability will increasingly challenge many Americans in 2022. For those thinking about making the transition from renting to buying their first home, rising rents will remain a motivating factor. . . .”

So, if you’re ready to become a homeowner, waiting any longer may not make financial sense. Instead, escape the cycle of rising rents and enjoy the many benefits that come with homeownership today.

Bottom Line

Starting your journey towards homeownership can pay off significantly this year. If you’re financially ready today, let’s connect so we can discuss your options.

The Perks of Owning More Than One Home

The Perks of Owning More Than One Home | MyKCM

Many things have changed over the past couple of years, and real estate is no exception. One impact is an increased desire to own more than one home. According to the recent Luxury Market Report from Luxury Home Marketing:

“As trends such as remote working and flexi-hours took hold in 2021, so too did the flexibility of relocating as well as the growth of second homeownership.”

This may be because the pandemic has altered how we think about our homes. Where we live has become, more than ever, our safe space and our getaway. And with the rise in remote work, more people are reconsidering where they want to live and buying second homes to give them greater flexibility. If you fall in that category, here are just a few of the perks you’ll enjoy, and how owning a second home may be a great decision for your lifestyle and your future.

Enjoy a Change in Scenery (or Weather)

When you have two homes, you can alternate between them as the weather changes or as you crave different scenery. Do you want to live in an area with a particular season? Would alternating between a resort and a suburban setting be ideal? With two homes, you have those options. Being able to move between homes based on which location best suits you at the time gives you added flexibility and variety that can help increase your happiness.

Build Your Wealth Faster

You may have heard that home equity is skyrocketing, thanks to ongoing home price appreciation. CoreLogic reports that the average homeowner gained $56,700 in equity over the last year. With home prices projected to continue rising, if you purchase a second home, you could benefit from rising equity on both properties to build your wealth (and your net worth) even faster.

Be Closer to Loved Ones

The pandemic has also reignited the importance of being near our loved ones. One option worth exploring is whether you want your second home to be near the people who matter most in your life. This makes it easier to see your loved ones but still gives you your own dedicated, private space so you can be nearby for major life events or longer visits.

Lock in Your Expenses

Buying a second home today and locking in your mortgage rate may be a good option if you’re looking to stabilize your housing costs for the long haul. If you’re approaching retirement or are looking to use your second home as your permanent residence in the future, buying that house now with today’s rate and price may be a good financial decision. That way, no matter what happens with rates and prices in years ahead, your monthly payment is locked in for the next 15-30 years.

Bottom Line

Having multiple homes has considerable benefits. If owning a second home is something you’re interested in, let’s connect to explore your options, discuss the benefits, and take the next step to start your home search.

Want Top Dollar for Your House? Now’s the Time To List It.

Want Top Dollar for Your House? Now’s the Time To List It. | MyKCM

When you’re selling any item, you usually want to sell it for the greatest profit possible. That happens when there’s a strong demand and a limited supply for that item. In the real estate market, that time is right now. If you’re thinking of selling your house this year, here are two reasons why now’s the time to list.

1. Demand Is Very Strong This Winter

recent article in Inman News explains:

“Spring, the hottest time of year for homebuyers and sellers, has started early, according to economists. . . . ‘Home shopping season appears to already be in full swing!’”

And they aren’t the only ones saying buyers are already out in full force. That claim is backed up with data released last week by ShowingTime. The ShowingTime Showing Index tracks the average number of monthly buyer showings on active residential properties, which is a highly reliable leading indicator of current and future trends for buyer demand. The latest index reveals this December was the most active December in five years (see graph below):

Want Top Dollar for Your House? Now’s the Time To List It. | MyKCM

As the data indicates, buyers are very active this winter. Last December saw even more showings than December of 2020, which was already a stronger-than-usual winter. And remember – you want to sell something when there’s a strong demand for that item. That time is now.

2. Housing Supply Is Extremely Low

Each month, realtor.com releases data on the number of active residential real estate listings (listings currently for sale). Their most recent report reveals the latest monthly number is the lowest we’ve seen in any January since 2017 (see graph below):

Want Top Dollar for Your House? Now’s the Time To List It. | MyKCM

And don’t forget, the best time to sell an item is when there’s a limited supply of it available. This graph clearly shows how extremely low housing supply is today.

Even Though Supply Is at a Historic Low, Home Sales Are at a 15-Year High

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), existing-home sales totaled 6.12 million in 2021 – the highest annual level since 2006. This means the market is hot and homeowners are in a great place to sell now while sales are so strong.

NAR also reports available listings by calculating the current months’ supply of inventory. They explain:

“Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.”

The current 1.8-months’ supply is the lowest ever reported. Here are the December numbers over the last five years (see graph below):

Want Top Dollar for Your House? Now’s the Time To List It. | MyKCM

The ratio of buyers to sellers favors homeowners right now to a greater degree than at any other time in history. Buyer demand is high, and supply is low. That gives sellers like you an incredible opportunity.

Bottom Line

If you agree the best time to sell anything is when demand is high and supply is low, let’s connect to begin discussing the process of listing your house today.

Are You a Homeowner Thinking About Climate Change?

Are You a Homeowner Thinking About Climate Change? | MyKCM

Americans are more aware than ever of the effects climate change and natural disasters can have on their homes. According to a report from realtor.com:

More than 3 in 4 recent buyers, 78%, took [natural disasters] into account when choosing the locations of their homes, . . .”

The study also found that many existing homeowners (34%) have already considered selling their houses and moving to a new location because of the changing climate. If you’re like those homeowners and are weighing your options about what to do next, here’s some information to keep in mind as you begin the process of selling your existing house and searching for your new home.

Do Your Research and Work with a Real Estate Advisor To Find a Home That Meets Your Needs

As a homeowner, it’s impossible to control what types of weather events your home is exposed to. As Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy for CoreLogicsays:

“You can’t necessarily remove the location from around you, but there are things you can do to mitigate damage that can happen.”

The first step is understanding how to navigate your home sale and purchase with these specific issues in mind. While that can seem like a difficult undertaking at first, with the appropriate resources and experts on your side, you can simplify the process.

The Mortgage Reports provides some tips for purchasing your next house, including, but not limited to:

  • Vetting the location before you buy
  • Researching Climate Action Plans and learning if the city or state has one
  • Working with professionals for additional assessments on the home’s ability to withstand natural disasters

Ultimately, your best resource throughout the process is a trusted real estate professional. An agent will help you navigate the sale and required disclosures for your existing home, be your expert advisor on local guidelines and information, and keep your goals and concerns top of mind. Even if your advisor doesn’t have the answers to all your questions about how your next home will stand up to natural disasters, they can help connect you with experts and resources who will.

Bottom Line

If you’re becoming more mindful about the effects of climate change and you’re ready to make a move, you’re not alone. Let’s connect so you have a trusted advisor on your side to help you navigate the sale of your current house and find the perfect spot for your next home.

 

Real Estate Professionals Are Experts at Keeping You Safe When You Sell

Real Estate Professionals Are Experts at Keeping You Safe When You Sell | MyKCM

If you’re on the fence about whether or not you want to sell your house this year, there’s good news. For nearly two years, real estate professionals have worked tirelessly to ensure the safety of buyers and sellers during the pandemic.

Today, they’re seasoned experts, not just in the art of buying and selling homes, but also in how to keep you safe throughout the process. Real estate professionals have learned new technologies plus safety and sanitation measures. As new variants emerge, those lessons continue to be key ways agents add value.

Real Estate Advisors Stay Current on Guidance for In-Person Showings

Agents don’t leave your health up to chance. They follow guidance from the Centers for Disease Control (CDC) and the National Association of Realtors (NAR) to ensure in-person showings are safe. NAR maintains industry-specific resources to ensure agents are informed on the latest recommendations and best practices.

Guidance from the CDC also equips real estate professionals with the know-how to employ sanitization and disinfectant measures during the health crisis, so they’re safe for you and your potential buyers.

Digital Tools Can Enhance Your Home Sale

In addition, agents are also well versed in using technology and digital tools to sell your home efficiently. In their guidance for realtors, NAR says:

“The COVID-19 pandemic is impacting members in unprecedented ways, and raises numerous unique and novel issues for the real estate industry.”

Real estate advisors have responded by reimagining the tech and tools they use. For instance, serving clients at a distance and limiting exposure to others is more important now than ever. That’s because restricting the number of people you need to interact with during the sales process is one of the best ways to keep everyone safe.

To accomplish this, agents now use a variety of methods to serve their clients, including:

  • Virtual Open Houses, Tours, and Listing Appointments
  • High-Quality Photos for Websites and Social Media
  • eSignature
  • Video Conferencing

Bottom Line

The health challenges we face today have fundamentally changed the way real estate professionals conduct business for the better. Let’s connect today so you have the latest tools on your side to feel safe and confident when you sell your house this year.