Uncategorized • July 27, 2015

Don’t Lose Faith, Would-Be Home Buyers: It Will Get Better

by Kara Brem

The housing recovery is good news for the U.S. economy and homeowners, but would-be buyers may feel priced out. But fear not: Relief is on the way, according to an article posted on July 23, 2015 by Realtor.com.

It’s been a seller’s market in residential real estate for more than a year now. That’s fantastic for homeowners, and for the U.S. economy overall, but let’s get real: It creates a challenging environment for people who are trying to buy their first home. Fear not, first-time home buyers! Things are going to get better—soon.

The main reason we’ve seen above-average price appreciation is limited inventory. And that leads to bidding wars. Thankfully, higher prices ultimately help solve this problem by encouraging more owners to put their homes up for sale.

So the market is clearly shifting toward more of a balance in the second half of the year. Combined with a temporary reprieve from rising mortgage rates and slightly easier access to credit, buyers should find it easier to purchase a home in the months ahead.

Listings have grown an average of 4.5% over the past three months. New construction is also finally stepping up to relieve pressure as well, with single-family permits up 9% year to date over last year.

And prospective buyers are noticing the difference. From our daily surveys of visitors to realtor.com® who are looking to buy a home, the No. 1 reported obstacle to making a purchase in June remained “I have not yet found a home that meets my needs.” However, the percentage of respondents reporting this problem declined from 42% in January to 37% in June.

For first-time buyers, the fact that they’re “just starting to explore” became their No. 1 obstacle in June, bumping the issue of finding a suitable home for the first time this year.

Don’t get me wrong—supply is still tight. But we are moving in the right direction. We should see the median age of inventory—the number of days a house sits on the market—plateau and even increase in the months ahead as a result of supply expanding. This will be a clear sign that the market is moving toward more of a balance.

Access to credit has been holding back many potential sellers and buyers from participating in this market. That, too, is slowly changing for the better. Mortgage credit availability was 5% higher in June than in June 2014, according to data from the Mortgage Bankers Association.

Meanwhile, even though mortgage rates are now well off their lows, with the average 30-year fixed-rate firmly above 4%, rates have retreated more than 10 basis points from their recent highs. “Lock” and “float-down” are two moves to put in your dance arsenal this summer and autumn if the direction of rates is unnerving you.

Finally, the upcoming change of season should favor you first-time buyers, assuming you are flexible about timing and can find a home that fits your needs. Families with school-age children are far less likely to compete for homes on the market after the beginning of the school year, which for many is in August. While inventory levels will also be lower due to the season in most areas of the country, the fall could turn into a great time to buy.

Uncategorized • July 1, 2015

Pending Home Sales Reach Highest Mark In 9 Years!

by Kara Brem

Pending Home Sales Reach Highest Mark In 9 Years!

The National Association of Realtors (NAR) recently released their Pending Home Sales Index Report and revealed that it is at its highest level since April 2006. The Pending Home Sales Index is “a forward-looking indicator based on contract signings”. The higher the Pending Home Sales Index number, the more contracts have been signed by buyers that will soon translate to sales. Every region of the country has experienced year-over-year gains in pending sales.

NAR’s Chief Economist, Lawrence Yun cites job creation as a major reason that the housing market has boomed this spring, going on to say, "It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive." Yun went on to caution that,
"Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages. Without meaningful gains in new and existing supply, there's no question the goalpost will move further away for many renters wanting to become homeowners."

So What Does This Mean To Buyers?

There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.

What Does This Mean to Sellers?

If you are on the fence about listing your home for sale right now and debating whether now is the time to move on with your plans of relocating… now is the time! There are more buyers that are ready, willing and able to buy their first, second, third, vacation, or investment property now than there has been in years! The supply of homes for sale is not keeping up with the demand of these buyers. Listing your home for sale now will give you the most exposure to buyers and the best sales price.

Bottom Line

Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.

Posted: 30 Jun 2015 04:00 AM PDT by National Association of Realtors®

Uncategorized • June 16, 2015

Save Green with an Energy-Efficient Home

by Kara Brem

Save Green with an Energy-Efficient Home

Energy costs can deplete a significant portion of a homeowner’s budget. In fact, they account for almost half of a typical U.S. home’s utility costs, according to the U.S. Department of Energy. With energy bills rising steadily, it is even more important to manage energy costs. These tips can help you get started.

1. Schedule a professional home energy audit. A professional will assess the home from top-to-bottom, using the Home Energy Rating System (HERS) Index, the industry standard by which a home's energy efficiency is measured. Often they’ll perform a “blower door test,” which shows thermographic imaging to pinpoint exactly where energy is escaping from. As part of the assessment, they’ll also offer suggestions on which upgrades to consider for maximum benefit.

2. Check the insulation. A properly insulated home can save up to 20 percent on heating and cooling costs. Not sure where to start? A significant amount of heat loss – up to 40 percent – is due to poorly insulated attics. It’s simple to determine whether the insulation is adequate. If you can see the wood joists of the attic floor, the homeowner may want to consider adding more insulation – a simple DIY project.

3. Install a programmable thermostat. Wi-Fi-enabled thermostats are automatically adjusted, and can be controlled with a broad choice of phone apps. Homeowners are able to leave the heat or air conditioning at a lower setting during the day to keep their energy bills in check, and still come home to a comfortable house by changing the thermostat before they leave work.

4. Conduct routine maintenance. Everyday tasks, like replacing a furnace filter, can make appliances run more efficiently and last longer. One often-overlooked chore is the draining of sediment from the water heater. Over time, sediment and mineral deposits can accumulate, reducing the water heater’s efficiency.

5. Know your numbers. The U. S. Department of Energy has issued new mandatory energy efficiency standards that affect residential central air conditioners, heat pumps and water heaters. For instance, water heaters larger than 55 gallons may require additional equipment, thereby increasing the size of some units.

6. Check the dates. The new standards for air conditioners and heat pumps went into effect Jan. 1, and the new water heater standards began April 16. However, an 18-month grace period is in place for installing non-compliant central air conditioners that were manufactured before the new standards went into effect. This grace period will expire June 30, 2016, pending existing inventory availability.

7. Utilize a home warranty contract. Some home warranty companies may help clients meet their energy efficiency goals by helping with situations that include refrigerant recapture, reclaim, and disposal; removal of defective equipment; mismatched systems; undetectable preexisting conditions; improper installations, repairs or modifications; and permits and code violations within stated limits. For more information on home warranties, services or coverage questions, contact American Home Shield at 800-735-4663 or visit ahs.com/realestate.

Saving money through increased energy efficiency is a win-win for a homeowner’s wallet and the environment.

This message originally posted by THE CALIFORNIA ASSOCIATION OF REALTORS®. ("C.A.R."). C.A.R. did not sell, rent, or otherwise provide your email address to any vendor or service mentioned herein, and C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

Uncategorized • May 14, 2015

Lower interest rates and steady home prices ease California housing affordability for second straight quarter

by Kara Brem

Curious as to what you could afford in our area or across CA?

This is a great article from California Association of Realtors® summarizing all real estate markets in CA including a chart showing:

– median home price for all regions

-what the monthly payment would be for that home price

– minimum household income requirements to qualify for loan.

For release May 12, 2015

Seventeen regions see improvement from previous quarter, with Napa, Merced, Marin, San Luis Obispo, Los Angeles, and Alameda counties leading the way

LOS ANGELES (May 12) – Lower interest rates and stabilizing home prices over the past year combined to make it easier for more Californians to purchase a home in the first quarter of 2015, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in first-quarter 2015 rose to 34 percent from the 31 percent recorded in the fourth quarter of 2014 and up from 33 percent in the first quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). This is the second consecutive quarter of improvements for the state and the highest level since second-quarter 2013. California’s housing affordability index hit a peak of 56 percent in the first quarter of 2012.

C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

Home buyers needed to earn a minimum annual income of $87,700 to qualify for the purchase of a $442,430 statewide median-priced, existing single-family home in the first quarter of 2015. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,190, assuming a 20 percent down payment and an effective composite interest rate of 3.97 percent.

The median home price was $418,570 in first-quarter 2014, and an annual income of $86,800 was needed to purchase a home at that price. The effective composite interest rate in first-quarter 2014 was 4.46 percent.

Key points from the first-quarter 2015 Housing Affordability report include:

read more here: http://www.car.org/newsstand/newsreleases/2015releases/1qtrhousingaff#

Uncategorized • March 31, 2015

Should you buy now or wait?

by Kara Brem

Why Waiting To Buy Might Not Make Sense
Posted: 31 Mar 2015 04:00 AM PDT
by Keeping Current Matters

Whether you are a first time or a move-up buyer, there are two factors that will impact the amount of house you can afford in your price range: home prices & mortgage rates. Let’s look at what the experts are predicting over the next twelve months for these two areas:

PRICES

Over 100 economists, real estate experts and investment & market strategists were recently polled as a part of the Home Price Expectation Survey. They were asked to project where home prices are headed. The average value appreciation projected over the next twelve-month period is approximately 4.4%.

MORTGAGE INTEREST RATES

In the latest Economic & Housing Market Outlook from Freddie Mac, they predict that the 30-year fixed mortgage rate will be 4.7% by this time next year. As of last week, the Freddie Mac rate was 3.69%.

With both home prices & interest rates projected to increase, now is the time.

Uncategorized • February 17, 2015

Home Prices – A Five Year Outlook

by Kara Brem

With inventory presently below historically normal levels, current & future home prices have been the topic of many real estate conversations. The most recent Home Price Expectation Survey was just released; giving insight into where experts believe prices will be leading up to 2019.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Here are some highlights from their latest survey:

Home values will appreciate by 4.4% in 2015.
The cumulative appreciation will be 19.3% by 2019.
That means the average annual appreciation will be 3.6% over the next 5 years.
Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 11.7% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Uncategorized • December 12, 2014

Top 10 Markets to Watch in 2015

by Kara Brem

Markets to Watch in 2015

As the rebound effect fades, our 10 markets to watch have strong fundamentals for housing activity. These include solid job growth, which fuels housing demand, and a low vacancy rate, which spurs construction. We gave a few extra points to markets with a higher share of millennials. These young adults are getting back to work and that will drive household formation and rental demand. We didn’t include markets where prices looked at least 5% overvalued in our latest Bubble Watch report. Here are our markets to watch, in alphabetical order:

Trulia

Uncategorized • December 2, 2014

2015 California Housing Market Forecast

by Kara Brem

2015 CALIFORNIA HOUSING MARKET FORECAST

With more available homes on the market for sale, California’s housing market will see fewer investors and a return to traditional home buyers as home sales rise modestly and prices flatten out in 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2015 California Housing Market Forecast.”

The C.A.R. forecast sees an increase in existing home sales of 5.8 percent next year to reach 402,500 units, up from the projected 2014 sales figure of 380,500 homes sold. Sales in 2014 will be down 8.2 percent from the 414,300 existing, single-family homes sold in 2013.

“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown. “However, next year, home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”

“Moreover, prospective buyers should know that it's a misperception that a 20 percent down payment is always required to buy a home. There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” continued Brown.

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 3 percent in 2015, after a projected gain of 2.2 percent in 2014. With nonfarm job growth of 2.2 percent in California, the state’s unemployment rate should decrease to 5.8 percent in 2015 from 6.2 percent in 2014 and 7.4 percent in 2013.

The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.

The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years.

“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years.”

“Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply.”

Uncategorized • November 18, 2014

Where Are Prices Headed Over The Next 5 Years

by Kara Brem

Today, many real estate conversations center on housing prices and where they may be headed. That is why I like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

Home values will appreciate by 4.8% in 2014.
The cumulative appreciation will be 23.5% by 2019.
That means the average annual appreciation will be 3.6% over the next 5 years.
Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 15.1% by 2019.

Individual opinions make headlines. This survey is a fairer depiction of future values.

Uncategorized • October 23, 2014

‘Tis time, ‘Tis time. If you don’t live in the home you own, you should.

by Kara Brem

This is a fantastic article on why Real Estate is still a prudent investment, according to billionaire John Paulson.

http://www.simplifyingthemarket.com/2014/10/22/billionaire-says-real-estate-is-best-investment-possible-2/?a=197992-ea7de2efc1fee274bb7e5fcd68f43e57

Top that off with lower than low mortgage rates and I truly is time for all of us to own our own homes again.