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May
11

Are There More Homes Coming to the Market?

Are There More Homes Coming to the Market? | MyKCM

According to a recent survey from the National Association of Realtors (NAR), one of the top challenges buyers face in today's housing market is finding a home that meets their needs. That's largely because the inventory of homes for sale is so low today.

If you're looking to buy a home, you may have noticed this yourself. But there is good news. Recent data shows more sellers are listing their houses this season, which may give you more options for your home search.

Early Signs Inventory May Be Growing

The latest data from realtor.com shows the number of listings coming onto the market, known in the industry as "new listings," has increased since the start of the year (see graph below):

Are There More Homes Coming to the Market? | MyKCM

This indicates more sellers are listing their homes for sale each month this year. And according to realtor.com, this growth is expected to continue. Their research finds the majority of potential sellers plan to list their homes over the next six months. Realtor.com says:

". . . markets may see a noticeable bump in the number of homes for sale as we move through spring and into summer. A majority of homeowners planning to sell this year indicated that they aim to list in the next six months, with almost 10% having already placed their properties on the market."

Homes Are Still Selling Quickly

But while new listings are increasing, it's important to know they're also selling quickly. The latest Realtors Confidence Index from NAR shows the median days on market for recently sold homes since the beginning of the year (see chart below). The time on market has decreased month-over-month. That means homes are selling even faster than they did the previous month.

Are There More Homes Coming to the Market? | MyKCM

What That Means for You

While a low-inventory market is difficult to navigate as a buyer, there is hope. The growing number of new listings and the expectation more sellers will list their homes in the coming months is great news if you've had a hard time finding a home that fits your needs. Just remember, those new listings are going fast. That means you'll want to keep your foot on the gas and be ready to act if you find a home you love this season.

Your agent can help you stay on top of the latest listings in your area so you can find the home that's right for you and submit your strongest offer as quickly as possible.

Bottom Line

If you've been having a hard time finding your dream home, stick with your search. More options are coming to market and your ideal home could be one of them. Let's connect so you can stay up to date on the latest listings in our market, so you can be ready to move fast when you find the one that's right for you.

May
10

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.

May
6

2022 Housing Market Forecast [INFOGRAPHIC]

2022 Housing Market Forecast [INFOGRAPHIC] | MyKCM

Some Highlights

May
3

Beaufort, SC Quarterly Market Update

Click below to read about the current market conditions in Beaufort, SC.

April
21

Why This Housing Market Is Not a Bubble Ready To Pop

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

Homeownership has become a major element in achieving the American Dream. A recent report from the National Association of Realtors (NAR) finds that over 86% of buyers agree homeownership is still the American Dream.

Prior to the 1950s, less than half of the country owned their own home. However, after World War II, many returning veterans used the benefits afforded by the GI Bill to purchase a home. Since then, the percentage of homeowners throughout the country has increased to the current rate of 65.5%. That strong desire for homeownership has kept home values appreciating ever since. The graph below tracks home price appreciation since the end of World War II:

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

The graph shows the only time home values dropped significantly was during the housing boom and bust of 2006-2008. If you look at how prices spiked prior to 2006, it looks a bit like the current spike in prices over the past two years. That may lead some people to be concerned we're about to see a similar fall in home values as we did when the bubble burst. To help alleviate those worries, let's look at what happened last time and what's happening today.

What Caused the Housing Crash 15 Years Ago?

Back in 2006, foreclosures flooded the market. That drove down home values dramatically. The two main reasons for the flood of foreclosures were:

1. Many purchasers were not truly qualified for the mortgage they obtained, which led to more homes turning into foreclosures.
2. A number of homeowners cashed in the equity on their homes. When prices dropped, they found themselves in an underwater situation (where the home was worth less than the mortgage on the house). Many of these homeowners walked away from their homes, leading to more foreclosures. This lowered neighboring home values even more.

This cycle continued for years.

Why Today's Real Estate Market Is Different

Here are two reasons today's market is nothing like the one we experienced 15 years ago.

1. Today, Demand for Homeownership Is Real (Not Artificially Generated)

Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home. Today, purchasers and those refinancing a home face much higher standards from mortgage companies.

Data from the Urban Institute shows the amount of risk banks were willing to take on then as compared to now.

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

There's always risk when a bank loans money. However, leading up to the housing crash 15 years ago, lending institutions took on much greater risks in both the person and the mortgage product offered. That led to mass defaults, foreclosures, and falling prices.

Today, the demand for homeownership is real. It's generated by a re-evaluation of the importance of home due to a worldwide pandemic. Additionally, lending standards are much stricter in the current lending environment. Purchasers can afford the mortgage they're taking on, so there's little concern about possible defaults.

And if you're worried about the number of people still in forbearance, you should know there's no risk of that causing an upheaval in the housing market today. There won't be a flood of foreclosures.

2. People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

As mentioned above, when prices were rapidly escalating in the early 2000s, many thought it would never end. They started to borrow against the equity in their homes to finance new cars, boats, and vacations. When prices started to fall, many of these homeowners were underwater, leading some to abandon their homes. This increased the number of foreclosures.

Homeowners didn't forget the lessons of the crash as prices skyrocketed over the last few years. Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has more than doubled compared to 2006 ($4.6 trillion to $9.9 trillion).

The latest Homeowner Equity Insights report from CoreLogic reveals that the average homeowner gained $55,300 in home equity over the past year alone. Odeta Kushi, Deputy Chief Economist at First American, reports:

"Homeowners in Q4 2021 had an average of $307,000 in equity - a historic high."

ATTOM Data Services also reveals that 41.9% of all mortgaged homes have at least 50% equity. These homeowners will not face an underwater situation even if prices dip slightly. Today, homeowners are much more cautious.

Bottom Line

The major reason for the housing crash 15 years ago was a tsunami of foreclosures. With much stricter mortgage standards and a historic level of homeowner equity, the fear of massive foreclosures impacting today's market is not realistic.

April
13

Where Are Mortgage Rates Headed?

Mortgage Rates

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.com, tweeted 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.

April
6

Remote Work Trends Mean Flexibility for First-Time Homebuyers

Working Remotely

Today's low inventory can be challenging for homebuyers, especially if you're looking to purchase your first home. But if you're one of many people who work remotely, you may have a great opportunity to use the flexibility you have at work to achieve your homebuying goals this year.

In a recent report, Arch Capital Services explains how the ongoing trend of remote work can open up more options for homebuyers:

". . . This will enable those who are able to work from home on a part-time or hybrid basis to move slightly farther away from job centers. . . . For workers who secure full-time remote jobs, their place of residence will be determined by affordability and personal preferences."

Basically, working from home is great news if you're a first-time buyer trying to find a home that meets your needs and budget. Here's a deeper look at how it could benefit you.

Extra Flexibility in Your Career Means Extra Flexibility in Your Home Search

If your job is 100% remote, you don't have to be tied to a specific location or office. So, if you've been having a hard time finding what you want in your local area, it may be time to expand your search.

One option you could consider is moving to a place where you've always wanted to live, like the mountains, beach, or closer to loved ones. When you broaden your search radius to include those locations, it'll give you additional homes to consider.

It could also allow you to search for a more affordable location where you have more options in your price range. This can help you achieve two goals – saving money and finding additional features that meet your needs. To truly highlight this benefit, a recent First American article discusses the great ways remote work can really help you with your homebuying goals. Ksenia Potapov, Economist at First American, says:

"For potential first-time home buyers, leveraging their house-buying power in more affordable markets can also help them buy more attractive homes – more square footage and rooms, more options for different home styles and neighborhood amenities – increasing the opportunity to find a home that suits their preferences."

That means you can use your work flexibility to search for homes with the amenities you need at a lower price point.

Bottom Line

Remote work doesn't just give you expanded flexibility for your career. If you're no longer tied to a location because of your office, you have a great opportunity to expand your housing search. Let's connect to explore how this can open up your options.

April
1

It's Still a Sellers' Market [INFOGRAPHIC]

It's Still a Sellers' Market [INFOGRAPHIC]

Some Highlights

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
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.

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