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Last week saw one of the largest mortgage interest rate drops in a single. Acting on early indications that inflation cooled slightly in October & on the CPI report from the Bureau of Labor - interest rates dipped to their lowest level in the last 30 days.
For generations, the process of buying and selling a home never really changed. A homeowner would try to estimate the market value of their house, then tack on a little extra to give themselves some negotiating room. That figure would become the listing price. Buyers would then try to determine how much less than the full price they could offer and still get the home. As a result, the listing price was generally the ceiling of the negotiation. The actual sales price would almost always be somewhat lower than what was listed. It was unthinkable to pay more than what the seller was asking.
The record-low supply of homes for sale coupled with very strong buyer demand is leading to a rise in bidding wars on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for a lot more.
According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR):
“For every listing there are 5.1 offers. Half of the homes are being sold above list price.”
In this market, you likely can’t shop for a home with the former approach of negotiating to a lower price.
Due to the low supply of houses for sale, many homes are now being offered in an auction-like atmosphere in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to take the highest bid, and many sellers set a reserve price on the item they’re selling. A reserve price is the minimum amount a seller will accept as the winning bid.
When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. It’s the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you’re navigating the homebuying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves as you buy a home.
Someone who’s more familiar with the housing market of the past than that of today may think it’s foolish to offer more for a home than the listing price. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions right now. Let’s connect today so you have a trusted real estate professional on your side to provide the best advice on how to make a competitive offer on a home.
The financial benefits of buying a home as compared to renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.
Most experts are calling for home prices to continue appreciating over the next several years. The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home appreciation to increase as follows:
Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:
A homeowner could increase their net worth by over $80,000 in five years. That’s an average of $16,000 annually. That number should be in any equation determining the financial benefits of owning a home compared to renting.
Homeowners are going to make a substantial amount of money in home equity over the next five years. If you’re ready to buy a home, let’s connect so you can enjoy this great benefit as well.
Below are five compelling reasons to list your house this winter.
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase, and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.
Take advantage of the buyer activity currently in the market.
Inventory is still under the 6-month supply needed for a normal housing market. This means in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market.
Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.
Many homeowners were reluctant to list their homes over the last couple of years, for fear they would not find a home to move into. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.
Traditionally, homeowners think about spring as a great time to list their homes, when more buyer traffic may be out there actively searching. In the winter, however, the buyers who are seeking a home – whether for relocation or otherwise – are serious ones. They’re ready to make offers and they’re eager to move, often quickly. Your house may be exactly what they’re looking for, so listing when other potential sellers are holding off may be your best opportunity to shine.
If your next move will be into the premium or luxury market, now is the time to move up. There is currently ample inventory for sale at higher price ranges. This means if you're planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that now. Demand for your entry-level home is high, and inventory in the luxury or premium market is too.
According to CoreLogic, prices are projected to appreciate by 5.6% over the next year. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and in your mortgage) if you wait.
Look at the reason you decided to sell in the first place and determine whether it’s worth waiting. Is money more important than being with family? Are you ready to go on with your life the way you think you should?
Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market this winter. Perhaps the time has come for you and your family to move on and start living the life you desire.
Here are four great reasons to consider buying a home today, instead of waiting.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Insights Report shows that home prices have appreciated by 3.6% over the last 12 months. The same report predicts prices will continue to increase at a rate of 5.8% over the next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase Next Year
The Primary Mortgage Market Survey from Freddie Mac indicates that interest rates for a 30-year mortgage have recently hovered just above 3.5%. This is great news for buyers in the market right now, because low interest rates increase your purchasing power – but don’t wait! Most experts predict rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
An increase in rates will impact your monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is needed to buy your next home.
3. Either Way, You Are Paying a Mortgage
There are some renters who haven’t purchased a home yet because they’re uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you’re living rent-free with your parents, you are paying a mortgage – either yours or that of your landlord.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing costs to work for you?
4. It’s Time to Move on With Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you’re buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over custom renovations, maybe now is the time to buy.
Buying a home sooner rather than later could lead to substantial savings. Let’s get together to determine if homeownership is the right choice for you and your family this fall.
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Come out this Friday and see The Christie Cannon Team at The Shops at Willowbend. Petty Theft a Tom Petty tribute band will be there providing tunes and fun! There are also some great places to eat and shop!
By Victoria V. Valdez of The Dallas
Frisco is laying claim to a new No. 1 title.
It's the nation's top city in terms of the gap between residents' median household income and the rest of the state, according to an analysis by personal finance website GoBankingRates.
Frisco’s median household income of $120,701 is more than twice as much as Texas’ $57,051. That $63,650 difference makes it the highest among 188 U.S. cities studied.
The website called its analysis: “Most surprising cities to live in if you want to make a lot of money.” It examined cities with more than 50,000 households.
“Frisco is the best city to live in if you have your sights set on big bucks but want to avoid living in an urban center,” GoBankingRates said.
So who are Frisco’s top competitors? Just look south and east.
Neighboring cities McKinney and Plano rank second and third, respectively. McKinney’s $87,608 median household income is $30,000 more than the state’s. Plano’s difference of $31,527 is actually higher than McKinney’s, but it was dinged for being a more expensive place to live.
“McKinney ... manages to nab the No. 2 spot because it offers cheaper homes for sale and is slightly less expensive to live in compared to Plano,” according to the analysis.
Frisco's median home value is $396,500, according to real estate site Zillow.
Besides median household income, GoBankingRates examined each city’s cost of living, median home prices, labor force participation rates and state income taxes. Cost of living and median home prices were given extra weight in the ranking.
Other North Texas cities earning spots in the top 25 are Grand Prairie (7th) and Fort Worth (13th). Austin was the only other Texas city to make the list, coming in 11th.
Frisco can stack its new trophy next to one it received last year, when Money named it the best place to live in the U.S.
Morning News
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