When Is the Right Time To Sell [INFOGRAPHIC]

When Is the Right Time To Sell [INFOGRAPHIC] | Simplifying The Market

When Is the Right Time To Sell [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • If you’re trying to decide when to list your house, the time is now. There are plenty of buyers eagerly waiting for your home to hit the market.
  • The latest data indicates home showings are rising. There are more buyers than homes for sale right now. That means you’ll likely receive multiple offers, and your home won’t be on the market long.
  • Today’s market favors sellers. If you’re ready to move, let’s meet to discuss the benefits you can expect when you sell this season.
Content previously posted on Keeping Current Matters

What’s Going To Happen with Home Prices This Year?

What’s Going To Happen with Home Prices This Year? | Simplifying The Market

After almost two years of double-digit increases, many experts thought home price appreciation would decelerate or happen at a slower pace in the last quarter of 2021. However, the latest Home Price Insights Report from CoreLogic indicates while prices may have plateaued, appreciation has definitely not slowed. The following graph shows year-over-year appreciation throughout 2021. December data has not yet been released.

What’s Going To Happen with Home Prices This Year? | Simplifying The Market
As the graph shows, appreciation has remained steady at around 18% over the last five months.

In addition, the latest S&P Case-Shiller Price Index and the FHFA Price Index show a slight deceleration from the same time last year – it’s just not at the level that was expected. However, they also both indicate there’s continued strong price growth throughout the country. FHFA reports all nine regions of the country still experienced double-digit appreciation. The Case-Shiller 20-City Index reveals all 20 metros had double-digit appreciation.

Why Haven’t We Seen the Deeper Deceleration Many Expected?

Experts had projected the supply of housing inventory would increase in the last half of 2021 and buyer demand would decrease, as it historically does later in the year. Since all pricing is subject to supply and demand, it seemed that appreciation would wane under those conditions.

Buyer demand, however, did not slow as much as expected, and the number of listings available for sale dropped instead of improved. The graph below uses data from realtor.com to show the number of available listings for sale each month, including the decline in listings at the end of the year.

What’s Going To Happen with Home Prices This Year? | Simplifying The Market
Here are three reasons why the number of active listings didn’t increase as expected:

1. There hasn’t been a surge of foreclosures as the forbearance program comes to an end.

2. New construction slowed considerably because of supply chain challenges.

3. Many believed more sellers would put their houses on the market once the concerns about the pandemic began to ease. However, those concerns have not yet disappeared. A recent article published by com explains:

“Before the omicron variant of COVID-19 appeared on the scene, the 2021 housing market was rebounding healthily from previous waves of the pandemic and turned downright bullish as the end of the year approached. . . . And then the new omicron strain hit in November, followed by a December dip in new listings. Was this sudden drop due to omicron, or just the typical holiday season lull?”

No one knows for sure, but it does seem possible.

Bottom Line

Home price appreciation might slow (or decelerate) in 2022. However, based on supply and demand, you shouldn’t expect the deceleration to be swift or deep.

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Two Ways Homebuyers Can Win in Today’s Market

Two Ways Homebuyers Can Win in Today’s Market | Simplifying The Market

If your goal is to purchase a home this year, you might be looking for any advantage you can get in today’s sellers’ market. While competition is still fierce for homebuyers, there are ways you can win and secure the home of your dreams, even in a hot market.

Act Early and Save

The earlier you act this year, the more affordable your purchase will be. That’s because experts project mortgage rates will rise as we move deeper into 2022. According to Freddie Mac, the average 30-year fixed-rate mortgage is expected to be 3.5% by year’s end. Experts forecast home prices will rise as well.

That means the longer you wait, the more it will cost you to buy a home. Instead, act early and purchase your home before rates and prices rise further. Not to mention, the sooner you buy, the sooner you can experience the benefits of continued home price appreciation yourself. Once you have your home, you’ll be able to watch its value rise, giving you confidence that your investment is a sound one.

Buy Now, Move Later

Keep in mind, with high buyer demand like we’re seeing today, you’ll be competing against other potential homebuyers, which means you need to find a way to stand out. One way to accomplish this is to negotiate with sellers and present terms that meet their ideal needs. Danielle Hale, Chief Economist for realtor.com, explains one lever flexible buyers can pull to entice sellers:

“For buyers with more flexible timelines – such as those making a move from a big city – offering a couple extra months on the closing date could sweeten the deal for sellers who also need to buy their next home.”

In other words, if you’re eager to purchase a home now before it becomes more costly and you don’t have to move right away, you could extend the date of your closing and provide the seller with the time they need to find their next home. That’s a deal that could benefit both parties and help you stand out from the crowd.

Of course, it’s important to work with a real estate professional for expert advice on how to make your best offer. Your trusted advisor knows what’s working in your market and what may appeal to sellers.

Bottom Line

Experts project home prices and rates will increase in 2022. That means buyers who are ready should act soon and find ways to strengthen their offer to meet sellers’ needs. Let’s connect today to learn how you can win in today’s market.

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Why Inflation Shouldn’t Stop You from Buying a Home in 2022

Why Inflation Shouldn’t Stop You from Buying a Home in 2022 | Simplifying The Market

If you’re following along with the news today, you’re probably hearing a lot about record-breaking home prices, rising consumer costs, supply chain constraints, and more. And if you’re thinking about purchasing a home this year, all of these inflationary concerns are likely making you wonder if you should wait to buy. Investopedia explains that during a period of high inflation, prices rise across the board. And while home prices aren’t immune from this increase, here’s why inflation shouldn’t stop you from buying a home in 2022.

Homeownership Offers Stability and Security

Home prices have been increasing for quite some time, and experts say they’re going to continue to climb throughout 2022. So, as a buyer, how can you protect yourself from rising costs for things like food, shelter, entertainment, and other goods and services? The answer lies in housing.

Buying a home allows you to lock in your monthly mortgage payment for the foreseeable future. That means as other prices rise, your monthly payment will be consistent thanks to your fixed-rate mortgage. This gives you the peace of mind that the bulk of your housing costs is shielded from inflation.

James Royal, Senior Wealth Management Reporter at Bankrate, says:

A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

If you rent, you don’t have that same benefit and you won’t be protected from rising housing costs. As an added incentive to buy, consider that today’s mortgage interest rates are lower than they have been in decades. While inflation decreases what your dollars can buy, low mortgage rates help counteract it by boosting your purchasing power so you can get more home for your money. They also help keep your monthly payments down. This is especially important during an inflationary period because you’ll want to protect yourself from the impact of inflation as much as possible.

Ali Wolf, Chief Economist at Zonda, explains:

“If you have cash and are expecting inflation, you want to think through where you can put your money so it does not lose value. Housing is commonly looked at as a good inflation hedge, especially with interest rates so low.”

Bottom Line

The best hedge against inflation is a fixed housing cost. That’s why you shouldn’t let it stop you from buying a home this year. Not sure where to start? Let’s connect so you have expert advice and help throughout every step of the homebuying process.

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Real Estate Professionals Are Experts at Keeping You Safe When You Sell

Real Estate Professionals Are Experts at Keeping You Safe When You Sell | Simplifying The Market

If you’re on the fence about whether or not you want to sell your house this year, there’s good news. For nearly two years, real estate professionals have worked tirelessly to ensure the safety of buyers and sellers during the pandemic.

Today, they’re seasoned experts, not just in the art of buying and selling homes, but also in how to keep you safe throughout the process. Real estate professionals have learned new technologies plus safety and sanitation measures. As new variants emerge, those lessons continue to be key ways agents add value.

Real Estate Advisors Stay Current on Guidance for In-Person Showings

Agents don’t leave your health up to chance. They follow guidance from the Centers for Disease Control (CDC) and the National Association of Realtors (NAR) to ensure in-person showings are safe. NAR maintains industry-specific resources to ensure agents are informed on the latest recommendations and best practices.

Guidance from the CDC also equips real estate professionals with the know-how to employ sanitization and disinfectant measures during the health crisis, so they’re safe for you and your potential buyers.

Digital Tools Can Enhance Your Home Sale

In addition, agents are also well versed in using technology and digital tools to sell your home efficiently. In their guidance for realtors, NAR says:

“The COVID-19 pandemic is impacting members in unprecedented ways, and raises numerous unique and novel issues for the real estate industry.”

Real estate advisors have responded by reimagining the tech and tools they use. For instance, serving clients at a distance and limiting exposure to others is more important now than ever. That’s because restricting the number of people you need to interact with during the sales process is one of the best ways to keep everyone safe.

To accomplish this, agents now use a variety of methods to serve their clients, including:

  • Virtual Open Houses, Tours, and Listing Appointments
  • High-Quality Photos for Websites and Social Media
  • eSignature
  • Video Conferencing

Bottom Line

The health challenges we face today have fundamentally changed the way real estate professionals conduct business for the better. Let’s connect today so you have the latest tools on your side to feel safe and confident when you sell your house this year.

Content previously posted on Keeping Current Matters

How To Hit Your Homebuying Goals This Year [INFOGRAPHIC]

How To Hit Your Homebuying Goals This Year [INFOGRAPHIC] | Simplifying The Market

How To Hit Your Homebuying Goals This Year [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • If you’re looking to buy a home, you may want to put these items on your to-do list to ensure you hit your goals.
  • It’s important to start working on your credit and saving for a down payment early. When you’re ready to begin your search, work with a real estate professional and get pre-approved so you know how much you can borrow.
  • Connect with a real estate advisor so you have the guidance you need to achieve your homebuying goals this year.
Content previously posted on Keeping Current Matters

There Won’t Be a Wave of Foreclosures in the Housing Market

There Won’t Be a Wave of Foreclosures in the Housing Market | Simplifying The Market

When mortgage forbearance plans were first announced and the pandemic surged through the country in early 2020, many homeowners were allowed to pause their mortgage payments. Some analysts were concerned that once the forbearance program ended, the housing market would experience a wave of foreclosures like what happened after the housing bubble 15 years ago.

Here’s a look at why that isn’t the case.

1. There Are Fewer Homeowners in Trouble This Time

After the last housing crash, over nine million households lost their homes to a foreclosure, short sale, or because they gave it back to the bank. Many believed millions of homeowners would face the same fate again this time.

However, today’s data shows that most homeowners exited their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The latest data from the Mortgage Bankers Association (MBA) studies how people exited the forbearance program from June 2020 to November 2021.

Here are those findings:

38.6% left the program paid in full
  • 19.9% made their monthly payments during the forbearance period
  • 11.8% made up all past-due payments
  • 6.9% paid off the loan in full
44% negotiated work-out repayment plans
  • 29.1% received a loan deferral
  • 14.1% received a loan modification
  • 0.8% arranged a different repayment plan
0.6% sold as a short sale or did a deed-in-lieu
16.8% left the program still in trouble and without a loss mitigation plan in place

2. Those Left in the Program Can Still Negotiate a Repayment Plan

As of last Friday, the total number of mortgages still in forbearance stood at 890,000. Those who remain in forbearance still have the chance to work out a suitable plan with the servicing company that represents their lender. And the servicing companies are under pressure to do just that by both federal and state agencies.

Rick Sharga, Executive Vice President at RealtyTrac, says in a recent tweet:

“The [Consumer Financial Protection Bureau] and state [Attorneys General] look like they’re adopting a ‘zero tolerance’ approach to mortgage servicing enforcement. Likely that this will limit #foreclosure activity for a good part of 2022, while servicers explore all possible loss [mitigation] options.”

For more information, read the warning issued by the Attorney General of New York State.

3. Most Homeowners Have More Than Enough Equity To Sell Their Homes

For those who can’t negotiate a solution and the 16.8% who left the forbearance program without a work-out, many will have enough equity to sell their homes and leave the closing with cash instead of facing foreclosures.

Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. As Frank Martell, President & CEO of CoreLogic, explains:

“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”

4. There Have Been Far Fewer Foreclosures Over the Last Two Years

One of the seldom-reported benefits of the forbearance program was that it allowed households experiencing financial difficulties prior to the pandemic to enter the program. It gave those homeowners an extra two years to get their finances in order and work out a plan with their lender. That prevented over 400,000 foreclosures that normally would have come to the market had the new forbearance program not been available. Otherwise, the real estate market would have had to absorb those foreclosures. Here’s a graph depicting this data:

There Won’t Be a Wave of Foreclosures in the Housing Market | Simplifying The Market

5. The Current Market Can Easily Absorb Over a Million New Listings

When foreclosures hit the market in 2008, they added to the oversupply of houses that were already for sale. That resulted in over a nine-month supply of listings, and anything over a six-month supply can cause prices to depreciate.

It’s exactly the opposite today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) reveals:

“Total housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.”

A balanced market would have approximately a six-month supply of inventory. At 2.1 months, the market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.

Bottom Line

The end of the forbearance plan will not cause any upheaval in the housing market. Sharga puts it best:

“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect. . . .”

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Why Waiting To Sell Your House Could Cost You a Small Fortune

Why Waiting To Sell Your House Could Cost You a Small Fortune | Simplifying The Market

Many homeowners who plan to sell in 2022 may think the wise thing to do is to wait for the spring buying market since historically about 40 percent of home sales occur between April and July. However, this year’s expected to be much different than the norm. Here are five reasons to list your house now rather than waiting until the spring.

1. Buyers Are Looking Right Now, and They’re Ready To Purchase

The ShowingTime Showing Index reports data from more than six million property showings scheduled across the country each month. In other words, it’s a gauge of how many buyers are out looking at homes at the current time.

The latest index, which covers November showings, reveals that buyers are still very active in the market. Comparing this November’s numbers to previous years, this graph shows that the index is higher than last year and much higher than the three years prior to the pandemic. Clearly, there’s an influx of buyers searching for your home.

Why Waiting To Sell Your House Could Cost You a Small Fortune | Simplifying The Market

Also, at this time of year, only those purchasers who are serious about buying a home will be in the market. You and your loved ones won’t be inconvenienced by casual searchers. Freddie Mac addresses this in a recent blog:

“The buyers who are willing to house hunt in a winter market, when there are fewer options, are typically more serious. Plus, year-end bonuses and overtime payouts give people more purchasing power.”

And that theory is proving to be true right now based on the number of buyers who have put a home under contract to purchase. The National Association of Realtors (NAR) publishes a monthly Pending Home Sales Index which measures housing contract activity. It’s based on signed real estate contracts for existing single-family homes, condos, and co-ops. The latest index shows:

“…housing demand continues to be high. . . . Homes placed on the market for sale go from ‘listed status’ to ‘under contract’ in approximately 18 days.”

Comparing the index to previous Novembers, while it’s slightly below November 2020 (when sales were pushed to later in the year because of the pandemic), it’s well above the previous three years.

Why Waiting To Sell Your House Could Cost You a Small Fortune | Simplifying The Market

The takeaway for you: There are purchasers in the market, and they’re ready and willing to buy.

2. Other Sellers Plan To List Earlier This Year

The law of supply and demand tells us that if you want the best price possible and to negotiate your ideal contract terms, put your house on the market when there’s strong demand and less competition.

A recent study by realtor.com reveals that, unlike in previous years, sellers plan to list their homes this winter instead of waiting until spring or summer. The study shows that 65% of sellers who plan to sell in 2022 have either already listed their home (19%) or are planning to put it on the market this winter.

Again, if you’re looking for the best price and the ability to best negotiate the other terms of the sale of your house, listing before this competition hits the market makes sense.

3. Newly Constructed Homes Will Be Your Competition in the Spring

In 2020, there were over 979,000 new single-family housing units authorized by building permits. Many of those homes have yet to be built because of labor shortages and supply chain bottlenecks brought on by the pandemic. They will, however, be completed in 2022. That will create additional competition when you sell your house. Beating these newly constructed homes to the market is something you should consider to ensure your house gets as much attention from interested buyers as possible.

4. There Will Never Be a Better Time To Move-Up

If you’re moving into a larger, more expensive home, consider doing it now. Prices are projected to appreciate by approximately 5% over the next 12 months. That means it will cost you more (both in down payment and mortgage payment) if you wait. You can also lock in your 30-year housing expense with a mortgage rate in the low 3’s right now. If you’re thinking of selling in 2022, you may want to do it now instead of waiting, as mortgage rates are forecast to rise throughout the year.

5. It May Be Time for You To Make a Change

Consider why you’re thinking of selling in the first place and determine whether it’s worth waiting. Is waiting more important than being closer to your loved ones now? Is waiting more important than your health? Is waiting more important than having the space you truly need?

Only you know the answers to those questions. Take time to think about your goals and priorities as we move into 2022 and consider what’s most important to act on now.

Bottom Line

If you’ve been debating whether or not to sell your house and are curious about market conditions in your area, let’s connect so you have expert advice on the best time to put your house on the market.

Content previously posted on Keeping Current Matters

Avoid the Rental Trap in 2022

Avoid the Rental Trap in 2022 | Simplifying The Market

Are you one of the many renters thinking about where you’ll live the next time your lease is up? Before you decide whether to look for a new house or another apartment, it’s important to understand the true costs of renting in 2022.

As a renter, you should know rents have been rising since 1988 (see graph below):

Avoid the Rental Trap in 2022 | Simplifying The Market

In 2021, rents grew dramatically. According to ApartmentList.com, since January 2021:

. . . the national median rent has increased by a staggering 17.8 percent. To put that in context, rent growth from January to November averaged just 2.6 percent in the pre-pandemic years from 2017-2019.”

That increase in 2021 was far greater than the typical rent increases we’ve seen in recent years. In other words – rents are rising fast. And the 2022 National Housing Forecast from realtor.com projects prices for vacant units will continue to increase this year:

“In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth . . .”

That means, if you’re planning to move into a different rental this year, you’ll likely pay far more than you have in years past.

Homeownership Provides an Alternative to Rising Rents

If you’re a renter facing rising rental costs, you might wonder what alternatives you have. If so, consider homeownership. One of the many benefits of homeownership is it provides a stable monthly cost you can lock in for the duration of your loan.

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“. . . fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”

If you’re planning to make a move this year, locking in your monthly housing costs for 15-30 years can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases.

Homeowners also enjoy the added benefit of home equity, which has grown substantially right now. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $56,700 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage, you grow your wealth through the forced savings that is your home equity.  

Bottom Line

If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s connect so you can see how you can begin your journey to homeownership today.

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How Much Do You Need for Your Down Payment?

How Much Do You Need for Your Down Payment? | Simplifying The Market

As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment?

If you think you have to put 20% down, you may have set your goal based on a common misconception. Freddie Mac says:

“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

Unless specified by your loan type or lender, it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for first-time homebuyers, whose median down payment is only 7% (see graph below):

How Much Do You Need for Your Down Payment? | Simplifying The Market

What Does This Mean for You?

While a down payment of 20% or more does have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize.

If you’re interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.

Bottom Line

Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options.

Content previously posted on Keeping Current Matters