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US Real Estate News for Global Investors　10-7-2021

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

111,285 Reasons You Should Buy a Home This Year 111,285 Reasons You Should Buy a Home This Year | MyKCM The financial benefits of buying a home versus renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner. According to the latest research from the National Association of Realtors (NAR): “Homeownership is a key pathway to building wealth and narrowing the racial income and wealth inequality gap. Housing wealth (equity) accumulation takes time and is built up by price appreciation and paying off the mortgage.” An increase in equity builds the wealth of the individual that owns it. This wealth can be passed down to future generations. The Federal Reserve in an addendum to their Survey of Consumer Finances explains: “There are numerous ways families can transmit wealth and resources across generations. Families can directly transfer their wealth to the next generation in the form of a bequest. They can also provide the next generation with inter vivos transfers (gifts), for example, providing down payment support to enable a home purchase or a substantial wedding gift.” The Federal Reserve also explains another way wealth (including the additional net worth generated by an increase in home equity) can benefit future generations: “In addition to direct transfers or gifts, families can make investments in their children that indirectly increase their wealth. For example, families can invest in their children's educational success by paying for college or private schools, which can in turn increase their children's ability to accumulate wealth.” Here’s a look at how equity can build your wealth over time when you own a home. Equity over the Last 30 Years The NAR research reveals that the average gain for homeowners over the last five years was $139,134 and over the last 10 years was $218,505. Looking even further back in time, the article says: “Homeowners who purchased a typical single-family existing-home 30 years ago at the median sales price of $103,333 with a 10% down payment loan and who sold the property at the median sales price of $357,700 in 2021 Q2 accumulated housing wealth of $349,258.” Homeownership builds household wealth which also enables households to more easily move to the home of their dreams. As Mark Fleming, the Chief Economist at First American, explains: “As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity.” If you missed out on the equity gains over the last 30 years, don’t fret. Experts are still calling for substantial growth in equity over the next five years. Looking Forward at the Equity To Come The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home values (and therefore equity) to increase as follows: 2021: 11.74% 2022: 5.82% 2023: 3.94% 2024: 3.56% 2025: 3.55% The survey estimates a 31.8% cumulative appreciation over the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:111,285 Reasons You Should Buy a Home This Year | MyKCMThat’s a potential increase in household wealth of $111,285 over five years. Bottom Line Owning a home is one of the best ways to grow your wealth over time. House wealth can impact generations. In many cases, the largest single investment a household has is their home. As that investment appreciates in value, the financial options also increase.

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US Real Estate News for Global Investors　10-6-2021

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

What Do Supply and Demand Tell Us About Today’s Housing Market? What Do Supply and Demand Tell Us About Today’s Housing Market? | MyKCM There’s a well-known economic theory – the law of supply and demand – that explains what’s happening with prices in the current real estate market. Put simply, when demand for an item is high, prices rise. When the supply of the item increases, prices fall. Of course, when demand is very high and supply is very low, prices can rise significantly. Understanding the impact both supply and demand have can provide the answers to a few popular questions about today’s housing market: Why are prices rising? Where are prices headed? What does this mean for homebuyers? Why Are Prices Rising? According to the latest Home Price Insights report from CoreLogic, home prices have risen 18.1% since this time last year. But what’s driving the increase? Recent buyer and seller activity data from the National Association of Realtors (NAR) helps answer that question. When we take NAR’s buyer activity data and compare it to the seller traffic during the same timeframe, we can see buyer demand continues to outpace seller activity by a wide margin. In other words, the demand for homes is significantly greater than the current supply that’s available to buy (see maps below):What Do Supply and Demand Tell Us About Today’s Housing Market? | MyKCMThis combination of low supply and high demand is what’s driving home prices up. Bill McBride, author of the Calculated Risk blog, puts it best, saying: “By some measures, house prices seem high, but the recent price increases make sense from a supply and demand perspective.” Where Are Prices Headed? The supply of homes for sale will greatly affect where prices head over the coming months. Many experts forecast prices will continue to increase, but they’ll likely appreciate at a slower rate. Buyers hoping to purchase the home of their dreams may see this as welcome news. In this case, perspective is important: a slight moderation of home prices does not mean prices will depreciate or fall. Price increases may occur at a slower pace, but experts still expect them to rise. Five major entities that closely follow the real estate market forecast home prices will continue appreciating through 2022 (see graph below):What Do Supply and Demand Tell Us About Today’s Housing Market? | MyKCM What Does This Mean for Homebuyers? If you’re waiting to enter the market because you’re expecting prices to drop, you may end up paying more in the long run. Even if price increases occur at a slower rate next year, prices are still projected to rise. That means the home of your dreams will likely cost even more in 2022. Bottom Line The truth is, high demand and low supply are what’s driving up home prices in today’s housing market. And while prices may increase at a slower pace in the coming months, experts still expect them to rise. If you’re a potential homebuyer, let’s connect today to discuss what that could mean for you if you wait even longer to buy.

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US Real Estate News for Global Investors　10-05-2021

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

The Main Key To Understanding the Rise in Mortgage Rates The Main Key To Understanding the Rise in Mortgage Rates | MyKCM Every Thursday, Freddie Mac releases the results of their Primary Mortgage Market Survey which reveals the most recent movement in the 30-year fixed mortgage rate. Last week, the rate was announced as 3.01%. It was the first time in three months that the mortgage rate surpassed 3%. In a press release accompanying the survey, Sam Khater, Chief Economist at Freddie Mac, explains: “Mortgage rates rose across all loan types this week as the 10-year U.S. Treasury yield reached its highest point since June.” The reason Khater mentions the 10-year U.S. Treasury yield is because there has been a very strong relationship between the yield and the 30-year mortgage rate over the last five decades. Here’s a graph showing that relationship:The Main Key To Understanding the Rise in Mortgage Rates | MyKCMThe relationship has also been consistent throughout 2021 as evidenced by this graph:The Main Key To Understanding the Rise in Mortgage Rates | MyKCMThe graph also reveals the most recent jump in mortgage rates was preceded by a jump in the 10-year Treasury rate (called out by the red circles). So, What Impacts the Yield Rate? According to Investopedia: “There are a number of economic factors that impact Treasury yields, such as interest rates, inflation, and economic growth.” Since there are currently concerns about inflation and economic growth due to the pandemic, the Treasury yield spiked last week. That spike impacted mortgage rates. What Does This Mean for You? Khater, in the Freddie Mac release mentioned above, says: “We expect mortgage rates to continue to rise modestly which will likely have an impact on home prices, causing them to moderate slightly after increasing over the last year.” Nadia Evangelou, Senior Economist and Director of Forecasting for the National Association of Realtors (NAR), also addresses the issue: “Consumers shouldn't panic. Keep in mind that even though rates will increase in the following months, these rates will still be historically low. The National Association of REALTORS forecasts the 30-year fixed mortgage rate to reach 3.5% by mid-2022.” Bottom Line Forecasting mortgage rates is very difficult. As Mark Fleming, Chief Economist at First American, once quipped: “You know, the fallacy of economic forecasting is don't ever try and forecast interest rates and or, more specifically, if you're a real estate economist mortgage rates, because you will always invariably be wrong.” That being said, if you’re either a first-time homebuyer or a current homeowner thinking of moving into a home that better fits your current needs, keep abreast of what’s happening with mortgage rates. It may very well impact your decision.

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US Real Estate News for Global Investors　10-4-2021

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

4 Tips To Prep for Your Home Sale This Fall 4 Tips To Prep for Your Home Sale This Fall | MyKCM Even in a hot sellers’ market like today’s in which homes are selling so quickly, it’s still important to make a good first impression on potential buyers. Taking the time upfront to prep your house appropriately can bring in the greatest return on your investment. Here are four simple tips to make sure you maximize the sale of your house this fall. 1. Price It Right One of the first things buyers will notice is the price of your house. That’s why it’s important to price it right. Your goal in pricing your house is to draw attention from competing buyers and let bidding wars push the final sales price up. Pricing your house too high to begin with could put you at a disadvantage by discouraging buyers from making an offer. Your trusted real estate advisor can help you find the price for your home that reflects the current market value. Lean on your agent to help you with this crucial first step. 2. Keep It Clean It may sound simple, but keeping your house clean is key to making sure it gets the attention it deserves. As realtor.com says in the Home Selling Checklist: “When selling your home, it’s important to keep everything tidy for buyers. . . . Remember to take special care with the bathroom, making sure the tile, counters, shower, and floors shine.” Before each buyer visits, assess your space and determine what needs your attention. Wash the dishes, make the beds, and put away any toys. Doing these simple things can reduce any potential distractions for buyers. 3. Make It Easy To Visit Giving buyers the opportunity to see your house on their schedule can be a true game-changer. Buyers are less likely to make an offer if it’s difficult to plan a tour or they can’t easily fit it into their schedule. Making your house available as often as possible helps create opportunities for more buyers to fall in love with your house. Rest assured your trusted real estate advisor will keep your health and safety top of mind when buyers tour your home. Agents use the latest guidance to stay up to date on any protocols and sanitization recommendations. 4. Help Buyers Feel at Home Finally, it’s important for buyers to see all the possible ways they can make your house their next home. As the realtor.com article puts it: “The goal is to create a blank canvas on which buyers can project their own visions of living there, and loving it.” An easy first step to create this blank canvas is removing personal items – pictures, awards, and sentimental belongings – from your space. If you’re unsure what should be packed away and what can stay, consult your trusted real estate advisor. Spending the time on this step can pay off in the long run, as the 2021 Profile of Home Staging from the National Association of Realtors notes: “Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%.” Bottom Line To make the most of today’s sellers’ market, avoid the temptation to skip over the essential preparation steps. Let’s connect today to discuss all the ways you can maximize your home sale.

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US Real Estate News for Global Investors　10-01-2021

Posted By Yoshi Takita on October 01, 2021 in Global Real Estate

Reasons Renters Buy [INFOGRAPHIC] Reasons Renters Buy [INFOGRAPHIC] | MyKCM Some Highlights When deciding whether you should rent or buy, make sure you’re considering these factors. Buying a home means consistent monthly payments. Homeownership also helps to build your wealth. And owning a home gives you greater flexibility than renting. If you’re ready to take advantage of the perks of homeownership, let’s connect to explore your options.

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US Real Estate News for Global Investors　９－３０－２０２１

Posted By Yoshi Takita on September 30, 2021 in Global Real Estate

As Home Equity Rises, So Does Your Wealth As Home Equity Rises, So Does Your Wealth | MyKCM Homeownership is still a crucial part of the American dream. For those people who own a home (and those looking to buy one), it’s clear that being a homeowner has considerable benefits both emotionally and financially. In addition to long-term stability, buying a home is one of the best ways to increase your net worth. This boost to your wealth comes in the form of equity. Equity is the difference between what you owe on the home and its market value based on factors like price appreciation. The best thing about equity is that it often grows without you even realizing it, especially in a sellers’ market like we’re in now. In today’s real estate market, the combination of low housing supply and high buyer demand is driving home values up. This is giving homeowners a significant equity boost. According to the latest data from CoreLogic, the amount of equity homeowners have has continued to grow as home values appreciate. Here are some key takeaways from the Homeowner Equity Insights Report: The average homeowner gained $51,500 in equity over the past year There was a 29.3% increase in national homeowner equity year over year To give you an idea of what that looks like in your area, the map below shows the average equity gains by state.As Home Equity Rises, So Does Your Wealth | MyKCM What does all of that mean for you? If you’re already a homeowner, you likely have more equity in your house than you realize. The numbers in the map above reflect year-over-year growth. If you’ve been in your home for longer than a year, you’ll likely have even more equity than that. That equity can take you places. You can use the equity you’ve gained to fuel your next move, achieve other life goals, and more. On the other hand, if you haven’t purchased a home yet, understanding equity can help you realize why homeownership is a worthwhile goal. Homeowners across the nation gained an average of over $50,000 in equity this year. Don’t miss out on this chance to grow your net worth. Bottom Line If you want to learn more, let's connect. A trusted advisor can help you understand where home prices are today, how they contribute to a homeowner’s net worth, and the impact equity can have when you own a home.

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US Real Estate News for Global Investors 9-29-2021

Posted By Yoshi Takita on September 29, 2021 in Global Real Estate

Don’t Tackle Selling Your Home on Your Own – an Agent Can Help Don’t Tackle Selling Your Home on Your Own - an Agent Can Help | MyKCM If you’re looking to maximize your sale and minimize your effort, you need to work with a real estate professional. In a sellers’ market like today’s, it can be tempting to list your house on your own – known as For Sale By Owner (FSBO). But the truth is, a real estate professional can save you time and money by managing every step of the process, from pricing your home to reviewing documents and handling negotiations. Before you decide to sell your house on your own, here are five reasons why working with an agent is your best bet to maximize the sale of your home. 1. First impressions are everything – and an agent knows how to make a great one. Prepping a house for sale requires a significant amount of time and effort, even though it may seem simple at first glance. Doing it right so it stands out takes expertise and an understanding of what buyers are looking for. An agent considers things like: Should you take down any personal art or pictures? How much landscaping should you invest in to boost your house’s curb appeal? What wall colors are most appealing to buyers? An expert real estate advisor relies on their experience to answer these questions and more so you don’t invest in the wrong things. Your time and money are important – you shouldn’t waste either. 2. Agents have tools to maximize the number of views your home gets. Put plainly, the more buyers that view your house, the better your return will be. In our current market, homes are receiving 3.8 offers on average per sale, according to recent data from the National Association of Realtors (NAR). While that’s promising for the sale of your home, it’s important to understand your agent’s role in bringing buyers in. Agents have multiple tools at their disposal – from social media to agency resources – to ensure your home is viewed by more prospective buyers. Leveraging the tools available to your agent and your agent’s expertise may help boost your sale price as well. 3. An agent won’t miss anything in the fine print. Your agent can also save you time by taking any guesswork out of navigating the required documentation. Today, more disclosures and regulations are mandatory, meaning the number of legal documents you need to juggle is growing. Because there’s so much to take care of, it can be hard to truly understand all of the requirements and the fine print. That’s where an expert advisor can truly shine. They’ve been through the process before and can be your guide to avoid any costly missteps. 4. Expert advisors know the market and how to price your home. Another way your agent maximizes the sale of your home is by making sure it’s priced right. Real estate professionals have the experience to compare your house to recently sold homes in your area. They also understand the market at large and can factor in any upgrades you’ve completed to your home. Combining these factors is the key to making sure your home is priced to move quickly – and at a competitive price. When you FSBO, you’re operating without this expertise. Even with your own research, you may not find the most up-to-date information and could risk setting a price that’s inaccurate or unrealistic. If you price your house too high, you could turn buyers away before they’re even in the front door. This could also cause problems when it’s time for the appraisal. 5. Your agent will be an expert negotiator. In addition to their experience navigating sales, real estate professionals understand how to negotiate every aspect of a deal. They also know all the parties that will be involved with the sale, including: The buyer, who wants the best deal possible. The buyer’s agent, who will use their expertise to advocate for the buyer. The inspection company, which works for the buyer and will almost always find concerns with the house. The appraiser, who assesses the property’s value to protect the lender. An agent relies on their experience and training to make the right moves during the negotiation. They’ll know what levers to pull, how to address each individual’s concerns, and when you may want to get a second opinion. Selling your house as a FSBO means you’ll need to be prepared to have these conversations on your own. Bottom Line Selling a house takes time, effort, and expertise – don't go at it alone. Let’s connect to make sure you have an expert on your side to make the most of your sale

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US Real Estate News for Global Investors　9-28-2021

Posted By Yoshi Takita on September 29, 2021 in Global Real Estate

Early October is the Sweet Spot for Buyers Early October is the Sweet Spot for Buyers | MyKCM Are you looking to buy a home? If so, we’ve got good news for you. While there’s no denying the housing market is having a great year, many of the headlines are focused on the perks for sellers. But what about buyers today? As a buyer, you’re likely braving bidding wars and weighing low mortgage rates versus price appreciation as you search for your dream home. If you find yourself a bit discouraged, hear this: there are clear signs buyers may have more opportunities this fall. According to realtor.com, the sweet spot for buyers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years. When applied to the current market, experts determined the ideal week to buy a home this year. The research says: “Nationally, the best time to buy in 2021 is the week of October 3-9. This week historically has shown the best balance of market conditions that favor buyers.” So, what’s that mean for you? If you’re looking to buy a home, there’s a golden window of opportunity coming. Here’s what you can expect from that week. Increased Housing Supply The number of homes available for sale should increase. According to realtor.com, you can expect to see more new listings come to market the week of October 3. The findings estimate we’ll see roughly 17.6% more homes available than we saw at the start of the year. This means you’ll have more options to choose from which should be a welcome relief in a market with tight housing supply. Fewer Bidding Wars With more homes available, you should also see a slight decline in the number of bidding wars. Having more options means buyers may not be competing as intensely for the homes on the market because there are more choices to go around. This means when you write an offer, you may have less competition and a better chance of being the top bid. Just remember, it’s still important to come in with a strong offer. Adjusted Homes Prices As we move into the end of the year, the findings from realtor.com note this week may also be one of the peak weeks for price reductions in 2021. Historically the data shows an average of 7.0% of homes have a price reduction that week. Why? When housing supply ticks up, sellers need to look for other ways to make their house stand out. This means, while home prices are still appreciating overall, you may see some homes with price adjustments from eager sellers. The process of closing a house takes time. To close before end of year, sellers may be more motivated this October. Bottom Line If you’re in the market for a home, don’t lose steam now. Data shows early October may give you the long-awaited opportunity to find the home of your dreams. Let’s connect so you have a trusted ally and advisor to help keep you motivated so you can find the perfect home for you.

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US Real Estate News for Global Investors　9-27-2021

Posted By Yoshi Takita on September 28, 2021 in Global Real Estate

If You’re a Buyer, Is Offering Asking Price Enough? If You’re a Buyer, Is Offering Asking Price Enough? | MyKCM In today’s real estate market, buyers shouldn’t shop for a home with the expectation they’ll be able to negotiate a lower sales price. In a typical housing market, buyers try to determine how much less than the asking price they can offer and still get the home. From there, the buyer and seller typically negotiate and agree on a revised price somewhere in the middle. Things Are Different Today Today’s housing market is anything but normal. According to the National Association of Realtors (NAR), homes today are: Receiving an average of 3.8 offers Selling in just 17 days Homes selling quickly and receiving multiple offers highlights how competitive the housing market is right now. This is due, in large part, to the low supply of homes for sale. Low supply and high demand mean homes often sell for more than the asking price. In some cases, they sell for a lot more. Selma Hepp, Deputy Chief Economist at CoreLogic, explains how these stats can impact buyers: “The imbalance between robust demand and dismal availability of for-sale homes has led to a continual bidding over asking prices, which reached record levels in recent months. Now, almost 6 in 10 homes listed are selling over the asking price.” You May Need To Rethink How You Look at a Home’s Asking Price What does that mean for you? If you’ve found your dream home, you need to be realistic about today’s housing market and how that impacts the offer you’ll make. Offering below or even at a home’s asking price may not cut it. In today’s market, the highest bidder often wins the home, much like at an auction. Currently, the asking price is often the floor of the negotiation rather than the ceiling. If you really love a home, it may ultimately sell for more than the sellers are asking. That’s important to keep in mind as you work with your agent to craft an offer. Understand An Appraisal Gap Can Happen Because of today’s home price appreciation and the auction-like atmosphere in the selling process, appraisal gaps – the gap between the price of your contract and the appraisal for the house – are more frequent. According to data from CoreLogic: “Beginning in January 2020, nationally, 7% of purchase transactions had a contract price above the appraisal, but by May 2021, the frequency had increased to 19% of purchase transactions.” When this happens, your lender won’t loan you more than the home’s appraised value, and the seller may ask you to make up the difference out of pocket. Buyers in today’s market need to be prepared for this possibility. Know your budget, know what you can afford, and work with a trusted advisor who can offer expert advice along the way. Bottom Line Bidding wars and today’s auction-like atmosphere mean buyers need to rethink how they look at the asking price of a home. Let’s connect so you have a trusted real estate professional who can advise you on the current market and help determine what the market value is on your dream home.

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US Real Estate News for Global Investors　9-24-2021

Posted By Yoshi Takita on September 24, 2021 in Global Real Estate

The Path to Homeownership [INFOGRAPHIC] The Path to Homeownership [INFOGRAPHIC] | MyKCM Some Highlights If you’re thinking of buying a home and not sure where to start, you’re not alone. Here’s a map with 10 simple steps to follow in the homebuying process. Let’s connect today to discuss the specific steps along the way in our local area.

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