It’s Not Just About the Price of the Home

It’s Not Just About the Price of the Home

It’s Not Just About the Price of the Home

It’s Not Just About the Price of the Home | MyKCM

When most of us begin searching for a home, we naturally start by looking at the price. It’s important, however, to closely consider what else impacts the purchase. It’s not just the price of the house that matters, but the overall cost in the long run. Today, that’s largely impacted by low mortgage rates. Low rates are actually making homes more affordable now than at any time since 2016, and here’s why.

Today’s low rates are off-setting rising home prices because it’s less expensive to borrow money. In essence, purchasing a home while mortgage rates are this low may save you significantly over the life of your home loan.

Taking a look at the graph below with data sourced from the National Association of Realtors (NAR), the higher the bars rise, the more affordable homes are. The orange bars represent the period of time when homes were most affordable, but that’s also reflective of when the housing bubble burst. At that time, distressed properties, like foreclosures and short sales, dominated the market. That’s a drastically different environment than what we have in the housing market now.

The green bar represents today’s market. It shows that homes truly are more affordable than they have been in years, and much more so than they were in the normal market that led up to the housing crash. Low mortgage rates are a big differentiator driving this affordability.It’s Not Just About the Price of the Home | MyKCM

What are the experts saying about affordability?

Experts agree that this unique moment in time is making homes incredibly affordable for buyers.

Lawrence Yun, Chief Economist, NAR:

“Although housing prices have consistently moved higher, when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020’s second quarter compared to one year ago.”

Bill Banfield, EVP of Capital Markets, Quicken Loans:

“No matter what you’re looking for, this is a great time to buy since the current low interest rates can stretch your spending power.”

Mortgage News Daily:

“Those shopping for a home can afford 10 percent more home than they could have one year ago while keeping their monthly payment unchanged. This translates into nearly $32,000 more buying power.” 

Forbes:

“Homeowners are the clear winners. Low mortgage rates mean the cost of owning is at historically low levels and who gains all the benefits of strong house price appreciation? Homeowners.”

Bottom Line

When purchasing a home, it’s important to think about the overall cost, not just the price of the house. Homes on your wish list may be more affordable today than you think. Let’s connect to discuss how affordability plays a role in our local market, and your long-term homeownership goals.

Salt Lake Home Sales Climb to Record High in July 2020

Salt Lake Home Sales Climb to Record High in July

 

Salt Lake County home sales reached an all-time high in July at 2,093 homes sold, 15 percent higher than July 2019. It’s the first time monthly sales surpassed 2,000 closings since the MLS began keeping records. Home sales had tumbled in April and May as the COVID-19 pandemic forced business shutdowns and slowed consumer spending. However, sales began to increase in June as home buyers took advantage of record-low mortgage interest rates. Limited inventory remains the biggest challenge. Based on sales trends over the past six months, Salt Lake County’s housing inventory currently for sale would be sold in less than three months (2.87 months) if no new listings were added to the market.

Utah Real Estate Tip – there are no “easy” transactions.

Utah Real Estate Tip – there are no “easy” transactions.

 
 

Real Estate Legal Tip – there are no “easy” transactions.

Some people say that when the market is hot, “I can sell my home myself,” or “I don’t need an experienced agent because it costs money,” or “how hard can it be?”

Curtis Bullock From the Salt Lake Board of Realtors® Writes 

I can tell you that after being an attorney in this industry for almost two decades, there are no “easy” transactions in real estate right now – even in this hot seller’s market. Selling or purchasing a home requires a unique skill set and knowledge base to ensure the transaction goes smoothly. If you have recently purchased or sold a home and felt like it was easy, it’s probably because your Realtor® was solving problems left and right behind the scenes without you knowing about it.

I’ve shared this before, but here is a list of potential trouble spots your Realtor® will help you avoid when purchasing or selling a home. I’ve seen most of these happen when a seller or buyer tries DIY’ing the purchase or sale of their home:

* Seller misunderstanding what “as-is” condition means.
* How to deal with multiple offers.
* Husband or wife didn’t sign the REPC. Causes dispute over validity of the contract.
* CC&R’s not given to buyer causing problems.
* Seller disclosure form not delivered to buyer by the deadline. Causing lawsuit.
* Buyer not reviewing the Commitment for Title Insurance.
* Seller not providing Buyer Agent with Commitment for Title insurance by the deadline.
* Double contract. Loan fraud.
* Not using the correct contract or disclosure form in the appropriate situation.
* Buyer’s receive the key prior to recording, funding doesn’t occur, dispute arises.
* Buyer moving from out of state on friday to Settle at title company, doesn’t fund until Tuesday (Monday is a holiday) and becomes upset.
* Confusion on how the Time Clause Addendum works. Causing a disagreement.
* Lease agreements not provided to buyer before seller disclosure deadline.
* Low appraisal. Buyer sends notice of cancellation but forgets to include the appraisal.
* Multiple offers. Seller puts the property under contract with two buyers at the same time. Dispute arises.
* Counter offer is not withdrawn before accepting another offer. Problem arises.
* 10 different addenda included with the REPC. Confusion as to what has been agreed upon.
* Subject to Sale contingency not satisfied causing a domino effect resulting in two cancelled contracts.
* Missing initials on one page of the REPC causing a dispute.
* Seller repairs not completed. What to do next?
* Not delivering a document by the deadline. Dispute arises.
* Mold in the home detected. Who is responsible? Can I cancel the contract?
* Termites or radon detected in the home. What do I do now?
* No legal access to the lot. Implied easement issue.
* $10,000 earnest money not delivered by the buyer on time. Major dispute arises.
* Money wired and lost due to wire fraud.
* Mechanics lien filed on home that was “recently remodeled.”
* Sloppy language in an addendum causing a dispute.
* Air conditioner doesn’t work.
* Conflict between what is on the MLS and what is in the REPC.
* Multiple offers disclosed without seller approval, prospective buyers back out.
* Seller decides not to sell a week before settlement. Seller default. Lawsuit arises.
* Buyer backing out after deadlines expires. Buyer default. Lawsuit arises.
* Dispute over who pays for the HOA transfer fee.
* Dispute over who pays for the HOA special assessment.
* After Settlement but prior to Funding & Recording, house is vandalized.
* Missing dates on the REPC.
* Can’t get the HOA docs.
* Language on the REPC crossed out causing ambiguity.
* Sections of the REPC left blank causing ambiguity.
* The wrong address listed on the REPC.
* Two addendum number 4 – causing ambiguity and dispute.
* Seller failing to disclose major structural problem with the home.
* Fair Housing issue created after buyer submits letter with offer.
* “TBD” filled in on the REPC in too many places causing uncertainty.
* Poorly filled out forms and contracts causing problems.
* Representing multiple buyers at the same time on the same property causing a conflict.
* Angry tenant when showing a property.
* Seller didn’t accurately fill out the seller disclosure form.
* Checking “Acceptance” on page 6 of the REPC, then checking “Counter” on Addendum #1 that was also included in the offer.

Hiring an experienced Realtor® will be the best money you spend this year.

Image may contain: sky and cloud, text that says'R KEEP CALM AND HIRE A REALTOR'
Courtesy of

Curtis Bullock
Salt  Lake  Board of Realtors®
The Cost of Renting Vs. Buying a Home

The Cost of Renting Vs. Buying a Home

The Cost of Renting Vs. Buying a Home

The Cost of Renting Vs. Buying a Home [INFOGRAPHIC] | MyKCM

Some Highlights

  • The percentage of income needed to afford a median-priced home today is declining, while that for renting is on the rise.
  • This is making buying a home an increasingly attractive option for many people, especially with low mortgage rates driving purchasing power.
  • Let’s connect if you’d like expert guidance on exploring your homebuying options while affordability is high.
Top Reasons People Are Moving This Year In 2020

Top Reasons People Are Moving This Year In 2020

The Top Reasons People Are Moving This Year

The Top Reasons People Are Moving This Year | MyKCM

Today, Americans are moving for a variety of different reasons. The current health crisis has truly re-shaped our lifestyles and our needs. Spending extra time where we currently live is enabling many families to re-evaluate what homeownership means and what they find most important in a home.

According to Zillow:

“In 2020, homes went from the place people returned to after work, school, hitting the gym or vacationing, to the place where families do all of the above. For those who now spend the majority of their hours at home, there’s a growing wish list of what they’d change about their homes, if possible.” 

With a new perspective on homeownership, here are some of the top reasons people are reconsidering where they live and making moves this year.

1. Working from Home

Remote work is becoming the new norm in 2020, and it’s continuing on longer than most initially expected. Many in the workforce today are discovering they don’t need to live close to the office anymore, and they can get more for their money if they move a little further outside the city limits. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) notes:

“With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

If you’ve tried to convert your guest room or your dining room into a home office with minimal success, it may be time to find a larger home. The reality is, your current house may not be optimally designed for this kind of space, making remote work and continued productivity very challenging.

2. Virtual Schooling

With school about to restart this fall, many districts are beginning the new academic year online. Education Week is tracking the reopening plans of schools across the country, and as of August 21, 21 of the 25 largest school districts are choosing remote learning as their back-to-school instructional model, affecting over 4.5 million students.

With a need for a dedicated learning space, it may be time to find a larger home to provide your children with the same kind of quiet room to focus on their schoolwork, just like you likely need for your office work.

3. A Home Gym

Staying healthy and active is a top priority for many Americans. With various levels of concern around the safety of returning to health clubs across the country, dreams of space for a home gym are growing stronger. The Home Builders Association of Greater New Orleans explains:

“For many in quarantine, a significant decrease in activity is more than a vanity issue – it’s a mental health issue.”

Having room to maintain a healthy lifestyle at home – mentally and physically – may prompt you to consider a new place to live that includes space for at-home workouts.

4. Outdoor Space

Especially for those living in an apartment or a small townhouse, this is a new priority for many as well. Zillow also notes the benefits of being able to use yard space throughout the year:

“People want more space in their next home, and one way to get it is by turning part of the backyard into a functional room, ‘an outdoor space for play as well as entertaining or cooking.’”

You may, however, not have the extra square footage today to have these designated areas – indoor or out.

Moving May Be Your Best Option

If you’re clamoring for extra space to accommodate your family’s changing needs, making a move may be your best bet, especially while you can take advantage of today’s low mortgage rates. Low rates are making homes more affordable than they have been in years. According to Black Knight:

“Buying power for those shopping for a home is up 10% year over year, with home buyers able to afford nearly $32,000 more home than they could have 1 year ago while keeping their monthly payment the same.”

It’s a great time to get more home for your money, just when you need the extra space.

Bottom Line

People are moving for a variety of different reasons today, and many families’ needs have changed throughout the year. If you’ve been trying to decide if now is the time to buy a new home, let’s connect to discuss your needs.

Ask a Pro About Buying a Home

Ask a Pro About Buying a Home

Ask a Pro About Buying a Home 

Ask a Pro About Buying a Home [INFOGRAPHIC] | MykCM

Some Highlights

  • According to trending data, searches for key real estate topics are skyrocketing online.
  • Clearly, lots of people have questions about buying a home, and other topics related to the process.
  • Working with a trusted real estate professional will help you create the most personalized and helpful experience. Let’s connect so you have the guidance you need along the way.
Forbearance Numbers Are Lower than Expected

Forbearance Numbers Are Lower than Expected

Forbearance Numbers Are Lower than Expected

Forbearance Numbers Are Lower than Expected | MyKCM

Originally, some housing industry analysts were concerned that the mortgage forbearance program (which allows families to delay payments to a later date) could lead to an increase in foreclosures when forbearances end. Some even worried that we might relive the 2006-2008 housing crash all over again. Once you examine the data, however, that seems unlikely.

As reported by Odeta Kushi, Deputy Chief Economist for First American:

“Despite the federal foreclosure moratorium, there were fears that up to 30% of homeowners would require forbearance, ultimately leading to a foreclosure tsunami. Forbearance did not hit 30%, but rather peaked at 8.6% and has been steadily falling since.”

According to the most current data from Black Knight, the percentage of homes in forbearance has fallen to 7.4%. The report also gives the decrease in raw numbers:

“The overall trend of incremental improvement in the number of mortgages in active forbearance continues. According to the latest data from Black Knight’s McDash Flash Forbearance Tracker, the number of mortgages in active forbearance fell by another 71,000 over the past week, pushing the total under 4 million for the first time since early May.”

Here’s a graph showing the decline in forbearances over the last several months:Forbearance Numbers Are Lower than Expected | MyKCMThe report also explains that across the board, overall forbearance activity fell with 10% fewer new forbearance requests and nearly 40% fewer renewals.

What about potential foreclosures once forbearances end?

Kushi also addresses this question:

“There are two main reasons why this crisis is unlikely to produce a wave of foreclosures similar to the 2008 recession. First, the housing market is in a much stronger position compared with a decade ago. Accompanied by more rigorous lending standards, the household debt-to-income ratio is at a four-decade low and household equity near a three-decade high. Indeed, thus far, MBA data indicates that the majority of homeowners who took advantage of forbearance programs are either staying current on their mortgage or paying off the loan through a home sale or a refinance. Second, this service sector-driven recession is disproportionately impacting renters.”

There is one potential challenge

Today, the options available to homeowners will prevent a large spike in foreclosures. That’s good not just for those families impacted, but for the overall housing market. A recent study by Fannie Mae, however, reveals that many Americans are not aware of the options they have.

It’s imperative for potentially impacted families to better understand the mortgage relief programs available to them, for their personal housing situation and for the overall real estate market.

Bottom Line

If Americans fully understand their options and make good choices regarding those options, the current economic slowdown does not need to lead to mass foreclosures.

Are you Thinking About Selling? Sellers Are Returning to the Housing Market

Are you Thinking About Selling? Sellers Are Returning to the Housing Market

Sellers Are Returning to the Housing Market

Sellers Are Returning to the Housing Market | MyKCM

Get Your PEAR Report Today! (Professional Equity Assessment Report)

In today’s housing market, it can be a big challenge for buyers to find homes to purchase, as the number of houses for sale is far below the current demand. Now, however, we’re seeing sellers slowly starting to come back into the market, a bright spark for potential buyers. Javier Vivas, Director of Economic Research at realtor.com, explains:

“Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone…After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay.”

Even with the number of homes coming into the market, the available inventory is well below where it needs to be to satisfy buyer interest. The National Association of Realtors (NAR) reports:

“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May,but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.”

Houses today are selling faster than they’re coming to market. That’s why we only have inventory for 4 months at the current sales pace when in reality we need inventory for 6 months to keep up. But, as mentioned above, sellers are starting to return to the game. Realtor.com explains:

“The ‘housing supply’ component – which tracks growth of new listings – reached 101.7, up 4.9 points over the prior week, finally reaching the January growth baseline. The big milestone in new listings growth comes as seller sentiment continues to build momentum…After constant gradual improvements since mid-April, seller confidence appears to be reaching an important milestone. The temporary boost in new listings comes as the summer season replaces the typical spring homebuying season. More homes are entering the market than typical for this time of the year.”

Why is this good for sellers?

A good time to enter the housing market is when the competition in your area is low, meaning there are fewer sellers than interested buyers. You don’t want to wait for all of the other homeowners to list their houses before you do, providing more options for buyers to choose from. With sellers starting to get back into the market after five months of waiting, if you want to sell your house for the best possible price, now is a great time to do so.

Why is this good for buyers?

It can be challenging to find a home in today’s low-inventory environment. If more sellers are starting to put their houses up for sale, there will be more homes for you to choose from, providing a better opportunity to find the home of your dreams while taking advantage of the affordability that comes with historically low mortgage rates.

Bottom Line

While we still have a long way to go to catch up with the current demand, inventory is slowly starting to return to the market. If you’re thinking of moving this year, let’s connect today so you’re ready to make your move when the home of your dreams comes up for sale.

Get Your PEAR Report Today! (Professional Equity Assessment Report)

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