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Date Archives: March 2022

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March
31

Pros and Cons of Buying a House With Cash

Buying a House with Cash

Most people who purchase a house take out a mortgage, but some can pay the entire cost upfront and buy a property outright. If you have the funds available to pay cash for a new home, that can give you some distinct advantages, but it's also important to consider the risks.

Benefits of Paying Cash for a House
If you can afford to pay cash, you can avoid all of the hassles and costs associated with getting a mortgage. You won't have to shop around for the best rates, submit applications or wait for approval. You won't have to pay fees associated with a mortgage at the time of closing, and you can save tens or even hundreds of thousands of dollars in interest. 

Being able to pay in cash can make your offer more appealing to a seller. Sometimes two parties agree on a purchase price, but the deal falls through because the buyer can't get financing. If a seller gets multiple offers, you can pay in cash and others can't, the seller will be more likely to accept your bid. Even if another buyer offers more money, the seller may accept a lower price from you if you can pay in cash and the other buyer can't. 

Owning a house outright can give you peace of mind. You won't have to worry about the monthly cost of a mortgage and will have room in your budget to focus on other priorities.

Downsides of Buying a House With Cash
You may have additional financial goals, such as investing for retirement and your kids' college education. If you pay hundreds of thousands of dollars in cash for a house, you won't be able to put those funds toward your other long-term priorities. 

If you itemize your tax deductions and you have a mortgage, you will be able to deduct interest. That may significantly reduce your tax liability. That won't be an option if you pay cash for a house and don't take out a mortgage.  

Buying a house with cash can leave you with little money in savings. If you lose your job, the house needs major repairs or you face some other type of financial emergency, you may struggle to make ends meet. 

If you buy a house with cash, a large sum of money will be tied up in a single investment. If you fall on hard times and need to sell your home, you may not be able to find a buyer quickly or you may have to accept less than you paid for the property. 

Weigh the Pros and Cons
Everyone's situation is different. Think about how much money you have to work with, how much you have already saved for retirement and other long-term goals, and how comfortable you would be having a large sum of money tied up in a house. If you need additional advice, consult a financial professional.

March
30

What's Happening with Mortgage Rates, and Where Will They Go from Here?

Mortgage Rates

Based on the Primary Mortgage Market Survey from Freddie Mac, the average 30-year fixed-rate mortgage has increased by 1.2% (3.22% to 4.42%) since January of this year. The rate jumped by more than a quarter of a point from just a week ago. Here's a visual to show how mortgage rate movement throughout 2021 was steady compared to the rapid increase in mortgage rates this year:

Freddie Mac 30 Year Fixed Mortgage Rate Average

Just a few months ago, Freddie Mac projected mortgage rates would average 3.6% in 2022. Earlier this month, Fannie Mae forecast mortgage rates would average 3.8% in 2022. As the chart above shows, rates have already surpassed those projections.

Sam Khater, Chief Economist at Freddie Mac, explained in a press release last week:

"This week, the 30-year fixed-rate mortgage increased by more than a quarter of a percent as mortgage rates across all loan types continued to move up. Rising inflation, escalating geopolitical uncertainty and the Federal Reserve's actions are driving rates higher and weakening consumers' purchasing power."

Where Are Mortgage Rates Going from Here?

In a recent article by Bankrate, several industry experts weighed in on where rates might be headed going forward. Here are some of their forecasts:

Greg McBride, Chief Financial Analyst, Bankrate:

"With inflation figures continuing to surprise to the upside, mortgage rates will remain above 4.0% on the 30-year fixed."

Nadia Evangelou, Senior Economist and Director of Forecasting, National Association of Realtors (NAR):

"While higher short-term interest rates will push up mortgage rates, I expect some of this impact to be mitigated eventually through lower inflation. Thus, I expect the 30-year fixed mortgage rate to continue to rise, although we aren't likely to see the big jumps that occurred over the past few weeks."

Len Kiefer, Deputy Chief Economist, Freddie Mac:

"Mortgage rates are likely to continue to move higher throughout the balance of 2022, although the pace of rate increases is likely to moderate."

In a recent realtor.com article, another expert adds to the conversation:

Danielle Hale, Chief Economist, realtor.com:

". . . As markets digest the Fed's updated economic projections, I anticipate a continued increase in mortgage rates over the next several months. . . ."

What Does This Mean for You if You're Looking To Buy a Home?

With both mortgage rates and home values expected to increase throughout the year, it would be better to buy sooner rather than later if you're able. That's because it'll cost you more the longer you wait. But, there is a possible silver lining to buying a home right now. While you'll be paying a higher price and a higher mortgage rate than you would have last year, rising prices do have a long-term benefit once you buy.

If you purchase a home today valued at $400,000 and put 10% down, you would be taking out a $360,000 mortgage. According to mortgagecalculator.net, at a 4.42% fixed mortgage rate, your mortgage payment would be $1,807 a month (this does not include insurance, taxes, and other fees because those vary by location).

Now, let's put that mortgage payment into a new perspective based on the substantial growth in equity that comes with the escalation in home prices. Every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts about their expectations for future home prices in the United States. Last week, Pulsenomics released their latest Home Price Expectation Survey. The survey reveals that the average of the experts' forecasts calls for a 9% increase in home values in 2022.

Based on those projections, a $400,000 house you buy today could be valued at $436,000 by this time next year. If you break that down, that means the equity in your home would increase by $3,000 a month over that period. That's greater than the estimated monthly payment above. Granted, the increase in your net worth is tied to the home, but it is one way to put the home price appreciation to use in a way that benefits you.

Bottom Line

Paying a higher price for a home and a higher mortgage rate can be a difficult pill to swallow. However, waiting will just cost you more. If you're ready, willing, and able to buy a home, now will be a better time than a year, or even six months from now. Let's connect to begin the process today.

March
29

The Best Week To List Your House Is Just Around the Corner

The Best Week To List Your House

Are you thinking about selling your house? If so, you may want to make it a priority to start the process soon. According to realtor.com, the sweet spot for sellers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years (excluding 2020, since it was an atypical year). When applied to the current market, experts determined the ideal week to list a house this year. The research says:

"Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2022 is approaching quickly. The week of April 10-16 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year."

If you've been putting your move on the back burner waiting for the ideal time to sell, you should know your golden window of opportunity is coming up. If you're able to get your house ready quickly, here's what you can expect from that week.

You Should See More Buyer Activity

The article expects higher buyer demand based on what's happened in previous years. This could result in increased competition among buyers and ultimately a bidding war over your house. And since mortgage rates recently ticked up over 4%, chances are good that analysis is right. When rates rise, experts say buyers often hurry to make their purchase before rates climb higher. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

". . . Buyers are rushing to lock in lower rates as the outlook is for even higher mortgage rates in the following months."

Your House Is Expected To Sell Quickly

Additionally, the realtor.com analysis shows houses sell even faster during this week of the year, likely due to the heightened buyer demand. If you work with a trusted real estate professional to price your house right, it should sell quickly. And when homes are already selling in just 18 days according to NAR, that could set you up for a big win.

Your House Will Be in the Spotlight

Since the beginning of the year, the number of homes available for sale has been at or near record lows. According to the realtor.com study, the typical trend for this week of the year is that there will be even fewer sellers on the market. If you list when inventory is low, your house will be the center of attention for eager buyers craving options.

If you're ready to move fast, you may want to shoot for April 10th-16th as your target goal. Just remember, even if you're not ready to list within the next couple of weeks, rest assured this is still a hot sellers' market. If you list later in April, you'll still be in the driver's seat.

Bottom Line

Ready to get the ball rolling? Let's connect and schedule a time to go over your next steps. In the meantime, make a checklist of things you need to tackle to get your house ready. When we talk, we can prioritize your to-do list and get you on the road to selling your house.

March
28

A Key To Building Wealth Is Homeownership

A Key To Building Wealth Is Homeownership | MyKCM

The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of the National Association of Realtors (NAR), says:

"Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability."

Here are just a few reasons why, if you're looking to increase your financial stability, homeownership is a worthwhile goal.

Owning a Home Is a Building Block for Financial Success

A recent NAR report details several homeownership trends and statistics, including the difference in net worth between homeowners and renters. It finds:

". . . the net worth of a homeowner was about $300,000 while that of a renter's was $8,000 in 2021."

To put that into perspective, the average homeowner's net worth is roughly 40 times that of a renter (see visual below):

A Key To Building Wealth Is Homeownership | MyKCM

The results from this report show that owning a home is a key piece to the puzzle when building your overall net worth.

Equity Gains Can Substantially Boost a Homeowner's Net Worth

The net worth gap between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as your home appreciates in value and you make your mortgage payments each month.

In other words, when you own your home, you have the benefit of your mortgage payment acting as a contribution to a forced savings account. And when you sell, any equity you've built up comes back to you. As a renter, you'll never see a return on the money you pay out in rent every month.

To sum it up, NAR says it simply:

"Homeownership has always been an important way to build wealth."

Bottom Line

The gap between a homeowner's net worth and a renter's shows how truly foundational homeownership is to wealth-building. If you're ready to start on your journey to homeownership, let's connect today.

March
26

Sellers: Prioritize These Kitchen Improvements

A bigger and brighter kitchen is always on the list of top home features buyers are willing to move for. For those who love to cook and entertain guests, a nice kitchen is a must-have. As a seller, this means investing a little time and effort into sprucing up your kitchen can be well worth the time and energy.

Because the kitchen is such an important selling feature, we often recommend our clients invest in some upgrades and repairs before listing. While a full remodel may not make sense financially, here are some upgrades you might want to consider this year:

  • Enhance Your Lighting
    Everybody wants a bright kitchen, so if you're lighting fixtures aren't getting the job done, it might be time for an upgrade. Consider adding new fixtures over your kitchen table, island, or sink. We also love the look of dimmable under cabinet lighting. You can also line your backsplash with string lights to create a nice look.

  • Update Your Countertops
    If your countertops are in poor condition or have an unflattering color, upgrading them can be well worth the investment. While traditional granite countertops have been popular for decades, buyers prefer quartz these days. Not only are quartz countertops nice and sturdy, but they come in a wide range of colors and designs.

  • Upgrade Your Appliances
    New appliances can be a big investment, but you can see a nice ROI. Buyers are immediately drawn to brand new stainless steel appliances. If your refrigerator or dishwasher are dated or in bad shape, an upgrade can do you good and wow your buyers at the same time.

  • Add Or Replace Your Backsplash
    It doesn't take long for kitchen backsplashes to become dirty and dated, and don't underestimate the power of a makeover. The great thing about backsplashes is you can install a wide range of colors or patterns. Of course, classic white subway tile always works well too.

  • Refresh Your Cabinets
    Brand new cabinets can come with a hefty price tag, so if you're not feeling this upgrade, there are easier and less expensive ways to refresh your cabinets. Adding a new coat of paint is the easiest and fastest way to give them a fresh look. You can also replace any doorknobs or drawer pulls.

  • Stage The Room
    Once you've completed your kitchen upgrades, take some time to stage the room. You can really make your kitchen appear larger by putting away countertop appliances and getting rid of clutter. Open up your blinds or window treatments to maximize natural light and remove any personal items (including photos and magnets from the refrigerator). Sometimes keeping things simple is the best way to stage a room.

The kitchen is often considered one of the most important rooms of the house when it comes to selling a home. It serves as a gathering place where food is prepared and guests are entertained. Looking at your kitchen through the eyes of a potential buyer will definitely help your home sale.

March
25

How an Energy Efficient Home Can Be a Bright Idea [INFOGRAPHIC]

How an Energy Efficient Home Can Be a Bright Idea [INFOGRAPHIC] | MyKCM

Some Highlights

  • With inflation driving up the cost of everyday items, seeking out an energy-efficient home can be a great way to decrease the expenses you can control.
  • Energy efficiency can help lower your utility bills and possibly even save you money on your taxesOptions to look for include efficient appliances, windows, and solar panels.
  • If you're planning to buy a home this year, consider energy efficiency in your search. Let's connect so you can better understand features that can save you money for years to come.
March
24

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 Mae, says:

"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. Let's connect!

March
23

What You Need To Know if You're Thinking About Building a Home

What You Need To Know if You're Thinking About Building a Home | MyKCM

If you're ready to move up, you may be trying to decide whether you want to buy a home that's already on the market or build a new one. And since the supply of homes available for sale today is low, you're willing to consider either avenue. While home builders are doing everything they can to construct more houses and help narrow the supply shortage, they're also facing delays due to factors outside of their control.

Here's the latest on some of the key challenges homebuilders are experiencing today and how they could impact your plans to move up. When you know what's happening in the industry, you can make an informed decision on whether to look for a newly built or an existing home in your home search.

Supply Chain Issues

The first hurdle builders are dealing with is the lack of supply of various building materials. According to a recent article from HousingWire:

". . . Nearly everything needed in the homebuilding process is facing some sort of delay and subsequent price increase."

The supply issue isn't just with lumber, even though that's what's covered most in the news. The article explains many other supplies are impacted too, including roofing materials, windows, garage doors, siding, and gypsum (which is used in drywall).

The difficulty in getting these items is dragging out timelines for new homes as builders wait on what they need to finish construction. And since materials are in short supply, even when they do get the product, the principle of supply and demand is driving prices up for those goods. HousingWire explains it like this:

"When supplies are low, charges inevitably go up, . . . Meanwhile, a lack of availability is causing huge delays, meaning builders are struggling to stay on schedule."

The National Association of Home Builders (NAHB) agrees:

"Builders are grappling with supply-chain issues that are extending construction times and increasing costs."

Skilled Labor Shortage

But that's not the only challenge with new home construction today. Builders are also having a hard time finding skilled labor, which means they're short-handed, further dragging out their timelines. Odeta Kushi, Deputy Chief Economist at First American, says this is an ongoing challenge for the industry:

"The skilled labor shortage in the construction industry is not new – it's been an issue for more than a decade now."

But there is good news. The February jobs report shows employment gains in the construction industry. Kushi puts this encouraging news into perspective in the article mentioned above:

"Overall this was a good report, . . . The supply of workers continues to fall short of demand, but the underlying momentum of the labor market recovery is strong, and falling COVID case counts provide further forward momentum."

That means, while finding workers continues to be a challenge for builders, there are signs of positive momentum moving forward.

How This Impacts You

HousingWire explains how these things can impact move-up buyers today:

"The residential construction industry is facing a crisis as builders manage the critical shortage of building materials and labor. Explosive supply and labor costs are forcing long delays. . . ." 

So, when you weigh your options and try to decide between building a home or buying an existing one, factor the potential delay in new home construction into your decision. While it doesn't mean you should cross newly built homes off your list, it does mean you should consider your timeline and if you're willing to wait while your home is being constructed.

Bottom Line

When planning your next move, understanding the latest market conditions is key to making the best decision possible. To make sure you have all the information you need, let's connect. Together we can make sure you know what's happening in our local market so you can confidently decide what's right for you, your priorities, and your timeline.

March
22

The Many Benefits of Homeownership

The Many Benefits of Homeownership | MyKCM

The past two years have taught us the true value of homeownership, especially the stability and the feeling of accomplishment it can provide. But homeownership has so much more to offer. Here's a look at a few of the non-financial and financial benefits of owning a home. If you're looking to buy a home today, think about all the ways homeownership can impact your life.

Homeownership Has Impactful Personal and Emotional Benefits

Owning your home gives you a significant sense of pride because it's a space that is truly yours. And as a homeowner, you can customize your home to your heart's desire. Having a space you've put your stamp on enhances the pride and sense of ownership you may feel.

And that sense of ownership can extend beyond your shelter to help create social, community, and civic benefits as well. That's because the average homeowner stays in their home for longer than just a few years. That means you'll naturally feel a stronger connection to the community around you the longer you live there. This can help you experience a greater sense of belonging and a greater stake in your community as a whole. As the National Association of Realtors (NAR) says:

"Living in one place for a longer amount of time creates an obvious sense of community pride, which may lead to more investment in said community."

Owning a Home Is a Significant Step Toward Financial Stability

In a financial sense, homeowners benefit from home price appreciation, equity gains, and having a shield against some of the effects of inflation. These benefits can have a big impact on your life. As you gain equity through home price appreciation and paying down your mortgage, you build your net worth. And in times of inflation, your 30-year fixed-rate mortgage can help you stabilize one of your largest monthly expenses for the duration of your loan.

Lawrence Yun, Chief Economist for NAR, explains how you can start to see these lasting effects of homeownership as soon as you make your purchase:

"Owning a home continues to be a proven method for building long-term wealth. . . . Home values generally grow over time, so homeowners begin the wealth-building process as soon as they make a down payment and move to pay down their mortgage."

Knowing you've made a good investment soon after your purchase is powerful. And that may give you confidence in your decision to buy a home.

Bottom Line

The benefits of owning a home are foundational. As a homeowner, you can feel proud of the space you call home and know you've made a sound financial investment. To learn how homeownership can help you, let's connect to start the conversation today.

March
21

The Average Homeowner Gained More Than $55K in Equity over the Past Year

The Average Homeowner Gained More Than $55K in Equity over the Past Year | MyKCM

If you're a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you're building that equity far faster than you may expect – and this gain is great news for you.

Here's how it happened. Home values are on the rise thanks to low housing supply and high buyer demand. Basically, there aren't enough homes available to meet this high buyer interest,  so bidding wars are driving home prices up. When you own a home, the rising prices mean your home is worth more in today's market. And as home values climb, your equity does too. As Dr. Frank Nothaft, Chief Economist at CoreLogic, explains:

"Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth."

The latest Homeowner Equity Insights from CoreLogic shed light on just how much rising home values have boosted homeowner equity. According to that report, the average homeowner's equity has grown by $55,300 over the last 12 months.

Want to know what's happening in your area? Here's a breakdown of the average year-over-year equity growth for each state based on that data.

The Average Homeowner Gained More Than $55K in Equity over the Past Year | MyKCM

How Rising Equity Impacts You

In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. It works like this: when you sell your house, the equity you built up comes back to you in the sale.

In a market where you're gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. So, if you've been holding off on selling and worried about being priced out of your next home because of today's home price appreciation, rest assured your equity can help fuel your move.

Bottom Line

Equity can be a real game-changer if you're planning to make a move. To find out just how much equity you have in your home and how you can use it to fuel your next purchase, let's connect so you can get a professional equity assessment report on your house.

March
19

Spring Cleaning Checklist for Sellers [INFOGRAPHIC]

Spring Cleaning Checklist for Sellers [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you're thinking about selling your house this spring, here are some things you'll want to tackle before you list.
  • Spend your time on tasks that make it feel inviting, show it's cared for, and boost your curb appeal.
  • To determine the full list of things you'll want to tackle for your home, you need the opinion of a trusted expert. Let's connect to help make sure your house shows well this season.
March
18

Did Your Dream Home Just Come on the Market?

Did Your Dream Home Just Come on the Market? | MyKCM

For the first time in a long time, the number of newly listed homes is beginning to rise. In their latest monthly releaserealtor.com reveals the number of existing homes entering the market has increased for two months in a row (this comes after six months of declines). Here's a graph showing the monthly new listings going back to January of last year. The green bars indicate the first gains since June.

Did Your Dream Home Just Come on the Market? | MyKCM

However, buying demand is still outpacing housing supply.

Though the increase in homes coming to the market is great news for prospective homebuyers, the number of buyers is still outpacing the number of homes available for sale. As realtor.com explains in their latest 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."

In fact, according to the latest ShowingTime Showing Indexwhich tracks the average number of appointments received on active listings during the month, buyer demand was greater this January than any other January in the last five years (see graph below):

Did Your Dream Home Just Come on the Market? | MyKCM

This prompted ShowingTime to say:

"The latest data from ShowingTime . . . shows a surge in home buyer demand in January. . . . This enormous activity occurred in a month when buyer activity typically slows and followed a historic 2021, where buyer demand across the country was extraordinarily strong."

What does that mean for you?

Basically, as homes come to the market, they are quickly being purchased by eagerly awaiting buyers. So even though the number of newly listed homes is increasing, the number of active listings is still shrinking every month because buyers are purchasing homes almost as soon as they come up for sale. That means listings are coming on and off the market so fast that they don't carry over to be counted in the active listing numbers the following month. Here's a graph showing the number of active listings each month since last January using data released by realtor.com:

Did Your Dream Home Just Come on the Market? | MyKCM

This graph shows that the number of active listings has decreased for each of the last five months even though the number of newly listed homes has increased over the last two months.

Bottom Line

Whether you're looking to upgrade to a home that will better suit your lifestyle or looking to purchase your first house, let's connect so you can stay updated on what's happening in your area. And be prepared to move immediately if a home fitting your needs hits the market. Your dream home may be one of those new listings that just became available, but if you don't act quickly, it could be gone tomorrow.

March
16

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.com, says:

"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.

March
15

Don't Get Caught Off Guard by Closing Costs

Don't Get Caught Off Guard by Closing Costs | MyKCM

As a homebuyer, it's important to plan and budget for the expenses you'll encounter when you purchase a home. While most people understand the need to save for a down payment, a recent survey found 41% of homebuyers were surprised by their closing costs. Here's some information to help you get started so you're not caught off guard when it's time to close on your home.

What Are Closing Costs?

One possible reason some people are surprised by closing costs may be because they don't know what they are or what they cover. According to U.S. News and World Report:

"Closing costs encompass a variety of expenses above your property's purchase price. They include things like lender fees, title insurance, government processing fees, upfront tax payments and homeowners insurance."

In other words, your closing costs are a collection of fees and payments made to a variety of individuals and organizations who are involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting Fees

How Much Will You Need To Budget for Closing Costs?

Understanding what closing costs include is important, but knowing what you'll need to budget to cover them is critical to achieving your homebuying goals. According to the Freddie Mac article mentioned above, the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here's how you can get an idea of what you'll need to cover your closing costs.

Let's say you find a home you want to purchase for the median price of $350,300. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,000 and $17,500.

Keep in mind, if you're in the market for a home above or below this price range, your closing costs will be higher or lower.

What's the Best Way To Make Sure You're Prepared At Closing Time?

Freddie Mac provides great advice for homebuyers, saying:

"As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs."

The best way to understand what you'll need at the closing table is to work with a team of trusted real estate professionals. An agent can help connect you with a lender, and together they can provide you with answers to the questions you might have.

Bottom Line

In today's real estate market, it's more important than ever to make sure your budget includes any fees and payments due at closing. Let's connect so you have the knowledge you need to be confident going into the homebuying process.

March
14

This Spring Presents Sellers with a Golden Opportunity

This Spring Presents Sellers with a Golden Opportunity | MyKCM

If you're thinking of selling your house this year, timing is crucial. After all, you'll want to balance getting the most out of the sale of your current home and making the best investment when you buy your next one.

If that's the case, you should know – you may be able to get the best of both worlds today. Here are four reasons why this spring may be your golden window of opportunity.

1. The Number of Homes on the Market Is Still Low

Today's limited supply of houses for sale is putting sellers in the driver's seat. There are far more buyers in the market today than there are homes available. That means purchasers are eagerly waiting for your house.

Listing your house now makes it the center of attention. And if you work with a real estate professional to price your house correctly, you can expect it to sell quickly and likely get multiple strong offers this season.

2. Your Equity Is Growing in Record Amounts

According to the most recent Homeowner Equity Insight report from CoreLogic, homeowners are sitting on record amounts of equity thanks to recent home price appreciation. The report finds that the average homeowner has gained $55,300 in equity over the past year.

That much equity can open doors for you to make a move. If you've been holding off on selling because you're worried about how rising prices will impact your next home search, rest assured your equity can help fuel your move. It may be just what you need to cover a large portion – if not all – of the down payment on your next home.

3. Mortgage Rates Are Increasing

While it's true mortgage rates have already been climbing this year, current mortgage rates are still below what they've been in recent decades. In the 2000s, the average mortgage rate was 6.27%. In the 1990s, the average rate was 8.12%.

For context, the current average 30-year fixed mortgage rate, according to Freddie Mac, is 3.85%. And while recent global uncertainty caused rates to dip slightly in the near-term, experts project rates will rise in the months ahead. Doug Duncan, Senior Vice President and Chief Economist at Fannie Maesays:

"For homebuyers, we believe that borrowing costs will likely rise with the increase in mortgage rates...."

When that happens, it'll cost you more to purchase your next home. That's why it's important to act now if you're ready to sell. Work with a trusted advisor to kickstart the process so you can take key steps to making your next purchase before rates climb further.

4. Home Prices Are Climbing Too

Home prices have been skyrocketing in recent years because of the imbalance of supply and demand. And as long as that imbalance continues, so will the rise in home values.

What does that mean for you? If you're selling so you can move into the home of your dreams or downsize into something that better suits your current needs, you have an opportunity to get ahead of the curve by leveraging your growing equity and purchasing your next home before prices climb higher.

And, once you make your purchase, you can find peace of mind in knowing ongoing home price appreciation is growing the value of your new investment.

Bottom Line

If you want to win when you sell and when you buy, this spring could be your golden opportunity. Let's connect so you have the insights you need to take advantage of today's incredible sellers' market.

March
13

Which Season Is The Best For Selling?

It's a well-known fact that the real estate market cools off in the fall and winter and picks up in the spring, but what is really the best season to sell your property? The answer ultimately depends on your situation and location. The reality is each season comes with its own unique advantages and challenges. To help you determine the best season for selling, we'll break down the top advantage and challenge of each season below:

Selling In The Spring

Many people believe spring is the best time to sell your home, but that really depends on where you live. While spring is often the most popular time to shop, some southern states experience intense weather in late spring. Competition is also at its peak. Here are some of the benefits

  • Advantages: Warmer weather in most areas and tax refund checks mean more buyers are hitting the market.
  • Disadvantages: More buyers also means more sellers, so the competition begins to really pick up. Kids are also still in school, so moving is more difficult.

Selling In The Summer

Statistics show that late June has the highest number of closings, indicating summer is an ideal time to sell. It's also the most popular time to move, especially because school is out. However, extreme heat in some areas of the country coupled with vacation times can drag out the closing process.

  • Advantages: Longer days and warm weather means more buyers are hunting. Many buyers are also motivated to find a home before school starts.
  • Disadvantages: Weather, vacations, and busy schedules may delay closings. Plus, competition is likely still very high.

Selling In The Fall

Once school starts, there is a noticeable decline in real estate activity, but that doesn't mean fall is a bad time to sell. There are still many buyers on the market that couldn't secure a home in the spring or summer. Selling in late September / or early October has both pros and cons:

  • Advantages: Fewer listings mean less competition, and many buyers are extra motivated to close before winter. It's also easier to find home repair professionals.
  • Disadvantages: Cooler weather might keep buyers away. Those who are shopping may be more demanding due to less competition. Curb appeal also generally declines in the fall as landscaping begins to deteriorate. 

Selling In The Winter

December is often considered to be the slowest month for real estate closings. Cold weather means fewer shoppers in most of the country, but competition is probably at its lowest point of the year. If you live in Florida, Arizona, or Southern California, winter is likely a great time to sell.

  • Advantages: There is less competition, and buyers are likely highly motivated. 
  • Disadvantage: There are fewer shoppers, especially around the holidays. Depending on location, it can be a difficult time to make renovations. Many buyers are looking for a deal.

It's certainly possible to sell your home any time of the year, and so often the right season depends on your property, location, and situation. Your real estate agent is a great resource to help you assess the market and determine the best time to list your home. When you are ready to list your home, let's connect!

March
11

Key Terms for Homebuyers [INFOGRAPHIC]

Key Terms for Homebuyers [INFOGRAPHIC] | MyKCM

Some Highlights

  • Knowing key housing terms and how they relate to today's market is important. For example, when mortgage rates and home prices rise, it impacts how much home you can afford.
  • Terms like appraisal (what lenders rely on to validate a home's value) and the inspection contingency (which gives buyers essential information on a home's condition) directly impact the transaction.
  • Buying a home can be intimidating if you're not familiar with the terms used throughout the process. Let's connect so you have an expert guide and advice for any questions that may come up.
March
10

How To Navigate a Market Where Multiple Offers Is the New Normal

How To Navigate a Market Where Multiple Offers Is the New Normal | MyKCM

If you're thinking of buying a home today, you already know that the number of homes available for sale is low. But what does that really mean for you? As a buyer, low housing supply coupled with high buyer demand means you should be prepared to navigate a highly competitive market where homes sell fast and get multiple offers. Realtor.com has this to say:

"Homes also flew off the market at record pace as buyers put offers in the moment properties came up for sale…."

In a bidding war situation like this, doing everything you can to get ahead of the competition is a wise move. That's because when you find a house and submit an offer, it'll likely be up against strong offers from other buyers. According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), homes today are receiving an average of 3.9 offers. That's the most offers we've seen in January for the last 5 years (see graph below):

How To Navigate a Market Where Multiple Offers Is the New Normal | MyKCM

To help you navigate bidding wars with multiple offers, an expert real estate advisor is key. They know what's worked for other buyers, what sellers are looking for, and how to help you prepare when it comes time to make an offer. Here are three tips to keep in mind that will help you make the best offer possible.

1. Know Your Numbers​

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. Pre-approval shows sellers you're serious, which can give you a competitive edge. You should also know making an offer at the home's asking price may not be enough. Homes today often sell for more than their listing price. An agent can help you understand the market value of the home and what other homes are selling for in your area.

2. Be Ready To Move Fast​

Speed and the pace of sales are contributing factors to today's competitive housing market. When homes are selling fast, it's important to stay on top of the market and be ready to move quickly. Your agent will help you stay up to date on the latest listings and help you put together your best offer as soon as you find the home you want to buy.​

3. Make a Strong but Fair Offer​

​When you're up against other offers, putting your best offer forward from the start is key. Lean on your agent to write a strong offer and use their expertise on which levers you can pull to make your offer as enticing as possible. One option is to wave some of your contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Just remember there are certain contingencies you don't want to give up, like the home inspection.

Bottom Line

No matter what, your agent is your best resource for making an offer that stands out in a competitive market. Let's connect to talk through what you can expect as a buyer and how to kick off a successful home search.

March
9

Key Factors That Impact Affordability Today

Key Factors That Impact Affordability Today | MyKCM

You can't read an article about residential real estate without the author mentioning the affordability challenges that today's buyers face. There's no doubt homes are less affordable today than they were over the last two years, but that doesn't mean homes are now unaffordable.

There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let's look closely at each of these components.

1. Home Prices

The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.

2. Mortgage Rates

While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.

3. Wages

The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

"Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income."

The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here's a graph of their findings:

Key Factors That Impact Affordability Today | MyKCM

As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it's important to note that, in most of the country, homes are still affordable.

So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That's why it's less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they're a big reason that, while less affordable, homes are not unaffordable today.

Bottom Line

To find out more about affordability in our local area, lets discuss where home prices are locally, what's happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.

March
8

How Global Uncertainty Is Impacting Mortgage Rates

How Global Uncertainty Is Impacting Mortgage Rates | MyKCM

If you're thinking about buying or selling a home, you'll want to keep a pulse on what's happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year. And just a few weeks ago, the 30-year fixed mortgage rate from Freddie Mac approached 4% for the first time since May of 2019. But that climb has dropped slightly over the past few weeks (see graph below):

How Global Uncertainty Is Impacting Mortgage Rates | MyKCM

The recent decline in mortgage rates is primarily due to growing uncertainty around geopolitical tensions surrounding Russia and Ukraine. But experts say it's to be expected.

Here's a look at how industry leaders are explaining the impact global uncertainty has on mortgage rates:

Odeta Kushi, Deputy Chief Economist at First American, says:

"While mortgage rates trended upward in 2022, one unintended side effect of global uncertainty is that it often results in downward pressure on mortgage rates."

In another interview, Kushi adds:

"Geopolitical events play an important role in impacting the long end of the yield curve and mortgage rates. For example, in the weeks following the 'Brexit' vote in 2016, the U.S. Treasury bond yield declined and led to a corresponding decline in mortgage rates."

Kushi's insights are a reminder that, historically, economic uncertainty can impact the 10-year treasury yield – which has a long-standing relationship with mortgage rates and is often considered a leading indicator of where rates are headed. Basically, events overseas can have an impact on mortgage rates here, and that's what we're seeing today.

Will Mortgage Rates Stay Down?

While no one has a crystal ball to predict exactly what will happen with rates in the future, experts agree this slight decline is temporary. Sam Khater, Chief Economist at Freddie Mac, echoes Kushi's sentiment, but adds that the decline in rates won't last:

"Geopolitical tensions caused U.S. Treasury yields to recede this week . . . leading to a drop in mortgage rates. While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months." 

Rates will likely fluctuate in the short-term based on what's happening globally. But before long, experts project rates will renew their climb. If you're in the market to buy a home, doing so before rates start to rise again may be your most affordable option.

Bottom Line

Mortgage rates are an important piece of the puzzle because they help determine how much you'll owe on your monthly mortgage payment in your next home. Let's connect so you have up-to-date information on rates and trusted advice on how to time your next move.

March
7

Why It's Critical To Price Your House Right

Why It's Critical To Price Your House Right | MyKCM

When you make a move, you want to sell your house for the highest price possible. That might be why many homeowners are eager to list in today's sellers' market. After all, with record-low inventory and high buyer demand, many homes are selling for more than asking price. Data from the National Association of Realtors (NAR) shows 46% of homes are selling above list price today.

But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale. Here's why.

Pricing Your House Right Is Crucial Even in a Sellers' Market

The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home's condition or lead buyers to assume something is wrong with the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your house.

On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you'll have more buyers who are interested in purchasing it. That makes it more likely you'll see a bidding war, too. And when a bidding war happens, you'll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.

To get a look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:

Why It's Critical To Price Your House Right | MyKCM

Lean on a Professional's Expertise To Price Your House Right

There are several factors that go into pricing your house and balancing them is the key. That's why it's important to lean on an expert real estate advisor when you're ready to move. A local real estate advisor is knowledgeable about:

  • The value of homes in your neighborhood
  • The current demand for houses in today's market
  • The condition of your house and how it affects the value

A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.

Bottom Line

Even in a sellers' market, pricing your house right is critical. Don't rely on guesswork. Let's connect to make sure your house is perfectly priced.

March
3

Are Home Prices Continuing To Rise?

Are Home Prices Continuing To Rise? | MyKCM

Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn't happened. The major price indices are all revealing ongoing double-digit price appreciation. Here's a look at their reports on year-over-year price appreciation for December:

To show that they're not seeing signs of softening, here's a graph that gives the progression of all three indices for each month of 2021.

Are Home Prices Continuing To Rise? | MyKCM

As the graph above reveals, last year, home price appreciation accelerated dramatically from January to July according to all three indices. Then, it began to decelerate in August when prices appreciated at a slower pace, but it didn't decline. Many thought that would be the beginning of a rapid slowdown in the level of home price appreciation, but as the data shows, that wasn't the case. Instead, prices began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December.

To clarify, deceleration is not the same as depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month. Deceleration means home values continue to rise but at a slower pace of year-over-year appreciation. Depreciation means prices drop below current values. No one is forecasting that to happen.

In fact, the FHFA revealed that price appreciation accelerated in December in six of the nine regions it tracks. Case Shiller showed that appreciation accelerated in 15 of the 20 metros they report on. As Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

"After some signs of slowing home price growth . . . monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel."

What Does This Mean for You?

Whether you're a first-time purchaser or someone looking to sell your current house and buy a home that better fits your needs, waiting to decide what to do will cost you in two ways:

  1. Mortgage rates are forecast to rise this year.
  2. Home prices should continue to appreciate at double-digit levels for some time.

If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your monthly mortgage payment.

Bottom Line

Maybe the best thing to do is listen to the advice of Len Kiefer, Deputy Chief Economist at Freddie Mac:

"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."

March
2

Down Payment Assistance Programs Can Help You Achieve Homeownership

Down Payment Assistance Programs Can Help You Achieve Homeownership | MyKCM

For many homebuyers, the thought of saving for a down payment can feel daunting, especially in today's market. That's why, when asked what they find most difficult in the homebuying process, some buyers say it's one of the hardest steps on the path to homeownership. Data from the National Association of Realtors (NAR) shows:

"For first-time home buyers, 29 percent said saving for a downpayment [sic] was the most difficult step in the process."

If you're finding that your down payment is your biggest hurdle, the good news is there are many down payment assistance programs available that can help you achieve your goals. The key is understanding where to look and learning what options are available. Here's some information that can help.

First-Time and Repeat Buyers Are Often Eligible

According to downpaymentresource.com, there are thousands of financial assistance programs available for homebuyers, like affordable mortgage options for first-time buyers. But, of the many programs that are available, down payment assistance options make up the large majority. They say 73% of the assistance available to homebuyers is there to help you with your down payment.

And it's not just first-time homebuyers that are eligible for these programs. Downpaymentresource.com notes:

"You don't have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years."

That means no matter where you are in your homeownership journey, there could be an option available for you.

There Are Local Programs and Specialized Programs for Public Servants

There are also multiple down payment assistance resources designed to help those who serve our communities. Teacher Next Door is one of those programs:

"The Teacher Next Door Program was designed to increase home ownership among teachers and other public servants, support community development and increase access to affordable housing free from discrimination."

Teacher Next Door is just one program that seeks to help teachers, first responders, health providers, government employees, active-duty military personnel, and veterans reach their down payment goals.

And, most importantly, even if you don't qualify for these types of specialized programs, there are many federal, state, and local programs available for you to explore. And the best way to do that is to connect with a local real estate professional to learn more about what's available in your area.

Bottom Line

If saving for a down payment seems daunting, there are programs available that can help. And if you work to serve our community, there may be even more opportunities available to you. To learn more about your options, let's connect so you can start your homebuying journey today.

March
1

The Difference Between Renting and Owning [INFOGRAPHIC]

The Difference Between Renting and Owning [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you're deciding whether to rent or buy, consider the many financial benefits that come with owning a home.
  • As a renter, you build your landlord's wealth and face rising costs. As a homeowner, you build your own net worth and can lock in your monthly payments for the length of your loan.
  • If you're weighing your options, remember that owning a home is a decision that has considerable financial perks. If you want to learn more, let's connect to talk about the perks of homeownership.

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