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US Real Estate News for Global Investors 5-17-2021

Posted By Yoshi Takita on May 17, 2021 in Global Real Estate

Don’t Forget to Budget for Closing Costs Don’t Forget to Budget for Closing Costs | MyKCM When buying a home, it’s important to have a budget and make sure you plan ahead for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing costs required to get a mortgage is just as important. What Are Closing Costs? According to Trulia: “When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.” For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater. As mentioned above, closing costs are typically between 2% and 5% of your purchase price. Trulia gives more great advice, explaining: “There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time. The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.” Bottom Line As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Let’s connect to be sure you have everything you need to land your dream home.

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US Real Estate News for Global Investors　5-14-2021

Posted By Yoshi Takita on May 14, 2021 in Global Real Estate

The Importance of Home Equity in Building Wealth The Importance of Home Equity in Building Wealth | MyKCM Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted: “Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.” Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home. You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, co

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US Real Estate News for Global Investors　5-13-2021

Posted By Yoshi Takita on May 13, 2021 in Global Real Estate

Your House Could Be the Oasis in an Inventory Desert Your House Could Be the Oasis in an Inventory Desert | MyKCM Homebuyers are flooding the housing market right now to take advantage of record-low mortgage rates. Many have a sense of urgency to find a home soon since experts forecast a steady rise in both rates and home prices this year and next. As a result, buyer demand greatly outweighs the current housing supply. Here’s how the shortage of houses for sale sets yours up to be the oasis in an inventory desert. According to the National Association of Realtors (NAR), today’s housing inventory sits at an incredibly low 2.1-month supply, far below the 6-month mark for a neutral market. Inventory of single-family homes a year ago was already very low, and as you can see in the graph below, this year’s levels are even lower:Your House Could Be the Oasis in an Inventory Desert | MyKCMDue to these market conditions, today’s buyers frequently enter fierce bidding wars while trying to purchase a home. This in turn drives up home prices and gives sellers incredible leverage in the negotiation process, two big wins if you’re going to sell your house this year. Bottom Line In such a hot market, it can feel as though the supply of homes has virtually dried up, leaving buyers to wander in an inventory desert. That’s why there’s never been a better time to sell. To a parched buyer needing to secure a home as soon as possible, your house could be a true oasis.

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US Real Estate News for Global Investors　　5-12-2021

Posted By Yoshi Takita on May 12, 2021 in Global Real Estate

It’s Not Too Late To Apply For Forbearance It’s Not Too Late To Apply For Forbearance | MyKCM Over the past year, the pandemic made it challenging for some homeowners to make their mortgage payments. Thankfully, the government initiated a forbearance program to provide much-needed support. Unless they’re extended once again, some of these plans and the corresponding mortgage payment deferral options will expire soon. That said, there’s still time to request assistance. If your loan is backed by HUD/FHA, USDA, or VA, you can apply for initial forbearance by June 30, 2021. Recently, the Consumer Finance Institute of the Federal Reserve Bank of Philadelphia surveyed a national sample of 1,172 homeowners with mortgages. They discussed their familiarity with and understanding of lender accommodations that might be available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The results indicate that some borrowers didn’t take advantage of the support available through forbearance: “Most borrowers who had not used forbearance during the pandemic reported that it was because they simply did not need it. However, among the remainder, a lack of understanding about available accommodations may also be playing a role. Around 2 out of 3 in this group reported not seeking forbearance because they were unsure or pessimistic about whether they would qualify — even though a high fraction of borrowers are eligible for forbearance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.” Here are some of the reasons why those borrowers didn’t opt for forbearance: They were concerned forbearance may be costly They didn’t understand how to request forbearance They didn’t understand how the plans worked and/or whether they would qualify If you have similar questions or concerns, the following answers may ease your fears. If you’re concerned forbearance may be costly: The Consumer Financial Protection Bureau (CFPB) explains: “For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account, and you do not need to submit additional documentation to qualify. You can simply tell your servicer that you have a pandemic-related financial hardship.” It’s important to contact your mortgage provider (the company you send your mortgage payment to every month) to explain your current situation and determine the best plan available for your needs. If you’re not sure how to request forbearance: Here are 5 steps to follow when requesting mortgage forbearance: Find the contact information for your servicer Call your servicer Ask if you’re eligible for protection under the CARES Act Ask what happens when your forbearance period ends Ask your servicer to provide the agreement in writing If you don’t understand how the plans work and/or whether you will qualify: This is how the Consumer Financial Protection Bureau (CFPB) explains the program: “Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances… Forbearance doesn’t mean your payments are forgiven or erased. You are still obligated to repay any missed payments, which, in most cases, may be repaid over time or when you refinance or sell your home. Before the end of the forbearance, your servicer will contact you about how to repay the missed payments.” The CFPB also addresses who qualifies for forbearance relief: “You may have a right to a COVID hardship forbearance if: You experience financial hardship directly or indirectly due to the coronavirus pandemic. You have a federally backed mortgage, which includes HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac loans. For mortgages that are not federally backed, servicers may offer similar forbearance options. If you are struggling to make your mortgage payments, servicers are generally required to discuss payment relief options with you, whether or not your loan is federally backed.” Bottom Line Like many Americans, your home may be your biggest asset. By acting quickly, you might be able to take advantage of critical relief options to help keep you in your home. Even if you tried to apply at the beginning of the pandemic and for some reason it didn’t work out, try again. Contact your mortgage provider today to determine if you qualify. If you have additional concerns, let’s connect to answer your questions and determine if there are other mortgage relief options in our area as well.

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US Real Estate News for Global Investors 5-11-2021

Posted By Yoshi Takita on May 11, 2021 in Global Real Estate

Experts Say Home Prices Will Continue to Appreciate Experts Say Home Prices Will Continue to Appreciate | MyKCM It’s clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for “When is the housing market going to crash?” has actually spiked 2450% over the past month. In addition, Jim Dalrymple II of Inman News notes: “One of the most noteworthy things that came up in Inman’s conversations with agents was that every single one said they’ve had conversations with clients about whether or not the market is heading into a bubble.” To alleviate some of these concerns, let’s look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here are their statements on the issue: Goldman Sachs’ Research Note on Housing: “Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. ... consumer surveys indicate that household buying intentions are now the highest in 20 years. … As a result, the model projects double-digit price gains both this year and next.” Joe Seydl, Senior Markets Economist, J.P.Morgan: “Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.” Morgan Stanley, Thoughts on the Market Podcast: “Unlike 15 years ago, the euphoria in today's home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.” Merrill Lynch’s Capital Market Outlook: “There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.” Bottom Line If you’re concerned about making the decision to buy or sell right now, let’s connect to discuss what’s happening in our local market.

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US Real Estate News for Global Investors　５－１０－２０２１

Posted By Yoshi Takita on May 10, 2021 in Global Real Estate

3 Graphs Showing Why You Should Sell Your House Now 3 Graphs Showing Why You Should Sell Your House Now | MyKCM There’s no doubt that 2021 is the year of the seller when it comes to the housing market. If you’re a homeowner thinking of moving to better suit your changing needs, now is the perfect time to do so. Low mortgage rates are in your favor when you’re ready to purchase your dream home, and high buyer demand may give you the leverage you need to negotiate the best contract terms on the sale of your house. Here’s a look at what’s driving this sellers’ advantage and why there’s so much opportunity for homeowners who are ready to move this season. 1. Historically Low Inventory The National Association of Realtors (NAR) explains: “Total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February's inventory . . . Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February's 2.0-month supply and down from the 3.3-month supply recorded in March 2020.” Even with a slight rise in the number of houses for sale this spring, inventory remains near an all-time low (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMHigh buyer interest is creating a major imbalance between supply and demand, but as the small uptick in inventory shows, sellers are beginning to reenter the market. Selling your house now enables you to take advantage of buyer demand and get the most attention for your house – before more listings come to the market later this year. 2. Frequent Bidding Wars As a result of the supply and demand imbalance, homebuyers are entering bidding wars at an accelerating rate. NAR reports the average number of bids received on the most recently closed sales is 4.8 offers. This number has doubled since the first quarter of 2020 (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMAs buyers face increasingly tough competition while searching for homes to purchase, they’re more likely to be flexible and generous in their negotiations. This gives a seller the opportunity to choose the best buyer for their needs and be selective about things like time to close, contingencies, renovations, and more. Working with your trusted agent is the best way to determine how to navigate the negotiation process when selling your house. 3. Days on the Market In today’s market, sellers aren’t waiting very long to find a buyer for their house, either. NAR reports: “Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. 83% of the homes sold in March 2021 were on the market for less than a month.” (See graph below): 3 Graphs Showing Why You Should Sell Your House Now | MyKCMNAR Chief Economist Lawrence Yun explains: "The sales for March would have been measurably higher, had there been more inventory…Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.” Bottom Line If you’re thinking about moving, these three graphs clearly show that it’s a great time to sell your house. Let’s connect today so you can learn more about the opportunities in our local area.

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US Real Estate News for Global Investors　5-7-2021

Posted By Yoshi Takita on May 07, 2021 in Global Real Estate

The Power of Mortgage Pre-Approval [INFOGRAPHIC] The Power of Mortgage Pre-Approval [INFOGRAPHIC] | MyKCM Some Highlights Mortgage pre-approval means a lender has reviewed your finances and, based on factors like your income, debt, and credit history, determined how much you’re qualified to borrow. Being pre-approved for a loan can give you clarity while planning your homebuying budget, confidence in your ability to secure a loan, and a competitive edge in a bidding war. In today’s market, connecting with a lender to get pre-approved may be the game-changer that helps you secure your dream home.

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US Real Estate News for Global Investors　5-6-2021

Posted By Yoshi Takita on May 06, 2021 in Global Real Estate

Don’t Sell on Your Own Just Because It’s a Sellers’ Market Don’t Sell on Your Own Just Because It’s a Sellers’ Market | MyKCM In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO. Let’s unpack why that’s a big mistake and may actually cost you more in the long run. According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as a FSBO did so to avoid paying a commission or fee. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when yo

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US Real Estate News for Global Investors　5-5-2021

Posted By Yoshi Takita on May 05, 2021 in Global Real Estate

Are Interest Rates Expected to Rise Over the Next Year? Are Interest Rates Expected to Rise Over the Next Year? | MyKCM So far this year, mortgage rates continue to hover around 3%, encouraging many hopeful homebuyers to enter the housing market. However, there’s a good chance rates will increase later this year and going into 2022, ultimately making it more expensive to borrow money for a home loan. Here’s a look at what several experts have to say. Danielle Hale, Chief Economist, realtor.com: “Our long-term view for mortgage rates in 2021 is higher. As the economic outlook strengthens, thanks to progress against coronavirus and vaccines plus a dose of stimulus from the government, this pushes up expectations for economic growth . . . .” Lawrence Yun, Chief Economist, National Association of Realtors (NAR): “In 2021, I think rates will be similar or modestly higher . . . mortgage rates will continue to be historically favorable.” Freddie Mac: “We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.” Below are the most recent mortgage rate forecasts from four top authorities – Freddie Mac, Fannie Mae, the Mortgage Bankers Association (MBA), and NAR:Are Interest Rates Expected to Rise Over the Next Year? | MyKCM Bottom Line If you’re planning to buy a home, purchasing before mortgage interest rates rise may help you save significantly over the life of your home loan.

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US Real Estate News for Global Investors　5-4-2021

Posted By Yoshi Takita on May 04, 2021 in Global Real Estate

4 Big Incentives for Homeowners to Sell Now 4 Big Incentives for Homeowners to Sell Now | MyKCM The housing market keeps sailing along. The only headwind that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons. Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today. 1. Homeowners don’t know if they’ll be able to secure their next home before selling. In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side. In today’s market, buyers have compelling reasons to purchase a home now: To own a home of their own To buy before prices continue to appreciate To secure a mortgage at a historically low rate, while they last These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built. This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation. 2. Homeowners don’t know if their current home will sell for the asking price or top market price. This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers. Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported: “For the first time ever, the average U.S. home is selling for above its list price.” If a seller is looking for a top-dollar sale, there’s no better time to sell than right now. 3. Homeowners don’t know if they will get an offer without their home requiring work or updates. Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after. A recent post on whether or not to renovate before selling notes: “It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.” If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house. 4. Homeowners don’t know if they can have a quick closing process. When speed is important, there are two points sellers should look at: The time it takes to find a buyer for the home The time it takes to close the transaction In the latest Existing Home Sales Report, NAR explains: “Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.” Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state:4 Big Incentives for Homeowners to Sell Now | MyKCMRegarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days. If a mortgage is necessary, the most recent Origination Insight Report from Ellie Mae shows: “Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.” If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time. Bottom Line Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Let’s connect today so you can learn more about the opportunities for homeowners who are ready to sell.

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