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  • written on 05-25-2017

    How's the Real Estate Market? Find Out What the Experts Are Saying | MyKCM

    As we head into summer, it is a great time to review how the 2017 real estate market is doing so far. Here is what the experts are saying:

    Doug Duncan, Fannie Mae Chief Economist

    “Positive demographic factors should continue to reshape the housing market, as rising employment and incomes appear to be positively influencing millennial homeownership rates.”

    Diana Olick, CNBC

    “Even as more homes come on the market for this traditionally popular sales season, they're flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver's seat.”

    Daren Blomquist, Senior VP at Attom

    "I am guessing we will see it get even better… If you are considering moving, it could be a really good time to sell."

    Lawrence Yun, NAR Chief Economist

    "The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month. Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings…for sales to muster a strong gain. Sales will go up as long as inventory does."

    Mark Fleming, First American Chief Economist

    “Despite higher mortgage rates, the potential for home sales increased on an annual basis driven by steady income and job growth, along with a surge in building permits. While it may be a little late for this spring, the increase in building permits is a welcome sign that some relief may be in sight for the inventory shortages that are holding back many markets from realizing their full potential this spring.”


  • written on 05-24-2017

    More Americans Chose to Own a Home Than Rent in Q1 | MyKCM

    According to the latest report from the US Census Bureau, more Americans chose purchasing a home over signing a lease to rent in the first quarter of 2017. This marks the first time since 2006 that the number of new homeowner households outpaced the number of new renter households.

    Of the 1.22 million new households that were formed in the first quarter, 854,000 were new-owner households making the jump straight to homeownership rather than renting first.

    That means that the homeownership rate amongst new households was 70%!

    This is huge news as the national homeownership rate is currently 63.6% and has only ever come close to this figure in the second quarter of 2004 when the homeownership rate reached an all-time high of 69.2%.

    A recent Wall Street Journal article pointed to the uptick in first-time homebuyers coming to market as a reason for the jump:

    “The return of first-time buyers is accelerating. In all they have accounted for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest point during the recent housing cycle in 2011, according to Fannie Mae, which defines first-time buyers as anyone who hasn’t owned a home in the past three years.”

    Ralph McLaughlin, Trulia’s Chief Economist, had this to say about what a bump in new homeowner households could mean for the housing market:

    “Strong renter household formation is one of the reasons why the homeownership rate has continued to drop since the onset of the housing crisis, so any sign this trend is reversing is something to take note of. We look forward to future releases of these data to determine whether this is a statistical blip or a trend.”

    Bottom Line

    As more and more potential first-time buyers realize their ability to buy a home without having to rent first, not only will the homeownership rate benefit, but so will the overall economy.


  • written on 05-16-2017

    Do You Know the Cost of NOT Owning Your Home? | MyKCM

    Owning a home has great financial benefits, yet many continue renting! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

    Zillow recently reported that:

    “With Rents continuing to climb and interest rates staying low, many renters find themselves gazing over the homeownership fence and wondering if the grass really is greener. Leaving aside, for the moment, the difficulties of saving for a down payment, let’s focus on the monthly expenses of owning a home: it turns out that renters currently paying the median rent in many markets could afford to buy a higher-quality property than the typical (read: median-valued) home without increasing their monthly expenses.”

    What proof exists that owning is financially better than renting?

    1. The latest Rent Vs. Buy Report from Trulia pointed out the top 5 financial benefits of homeownership:

    • Mortgage payments can be fixed while rents go up.
    • Equity in your home can be a financial resource later.
    • You can build wealth without paying capital gain.
    • A mortgage can act as a forced savings account
    • Overall, homeowners can enjoy greater wealth growth than renters.

    2. Studies have shown that a homeowner’s net worth is 45x greater than that of a renter.

    3. Just a few months ago, we explained that a family buying an average priced home at the beginning of 2017 could build more than $42,000 in family wealth over the next five years.

    4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment –along with a profit margin!!

    Bottom Line

    Owning a home has always been, and will always be, better from a financial standpoint than renting.


  • written on 05-11-2017

    3 Reasons the Housing Market is NOT in a Bubble | MyKCM

    With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago.

    Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to attain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many markets to overbuild.

    Eventually, the excess in new construction and the flooding of the market with distressed properties (foreclosures & short sales), caused by the lack of appropriate lending standards, led to the housing crash.

    Where we are today…

    1. If we look at lending standards based on the Mortgage Credit Availability Index released monthly by the Mortgage Bankers Association, we can see that, though standards have become more reasonable over the last few years, they are nowhere near where they were in the early 2000s.

    3 Reasons the Housing Market is NOT in a Bubble | MyKCM

    2. If we look at new construction, we can see that builders are not “over building.” Average annual housing starts in the first quarter of this year were not just below numbers recorded in 2002-2006, they are below starts going all the way back to 1980.

    3 Reasons the Housing Market is NOT in a Bubble | MyKCM

    3. If we look at home prices, most homes haven’t even returned to prices seen a decade ago. Trulia just released a report that explained:

    “When it comes to the value of individual homes, the U.S. housing market has yet to recover. In fact, just 34.2% of homes nationally have seen their value surpass their pre-recession peak.”

    Bottom Line

    Mortgage lending standards are appropriate, new construction is below what is necessary and home prices haven’t even recovered. It appears fears of a housing bubble are over-exaggerated.


  • written on 05-05-2017

    Financial Planning: 4 Reasons to Buy a House Today | MyKCM

    Homeownership will always be a part of the American Dream. There are advantages to owning your own home (educationalhealthsocial) that far transcend any economic impact. However, we want to look at several of the financial advantages of homeownership in today’s post.

    1. Buying is Cheaper Than Renting

    The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The report reveals that:

    “Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation…Nationally, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.”

    2. Homeownership “Forces” You to Save

    According to SavingAdvice.com, homeownership is a great way to save. Their advice is quite simple:

    “Homeownership is a “forced” savings account because you own the home, you have no choice – that monthly housing cost has got to be paid no matter what…Homeownership can be an outstanding way to force yourself to be more frugal in the rest of your spending so that you can save and build equity in your home.”

    3. Homeownership Offers Several Tax Deductions

    According to the Tax Policy Center’s Briefing Book -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System” - there are several tax advantages to homeownership. Here are three:

    1. Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage.
    2. Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.
    3. Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale.

    4. Experts Expect Home Price Appreciation to Continue

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

    Over the next five years, home prices are expected to appreciate 3.22% per year on average and to grow by 17.3% cumulatively, according to Pulsenomics’ most recentHome Price Expectation Survey.

    Bottom Line

    Some are afraid that home values may have already peaked. However, we believe that purchasing a home now will prove to be a sound financial decision for years to come. As Warren Buffet said, “When others are greedy, be fearful. When others are fearful, be greedy.”


  • written on 05-02-2017

    Is the Current Pace of Home Sales Maintainable? | MyKCM

    There are some experts questioning whether the current pace of residential home sales is maintainable. Are too many people buying homes like in 2004-2006? Are we headed for another housing crisis? Actually, if we look closely at the numbers, we can see that we are looking at a very healthy real estate market.

    Why the concern?

    Some are looking at the last four years of home sales and comparing them to the three years just prior to the housing bubble. Looking at the graph below, we can understand that thinking.

    Is the Current Pace of Home Sales Maintainable? | MyKCM

    However, if we go further back in history, we can see the real picture. After taking out the “boom & bust” years, the pace of sales is growing at quite a natural pace.

    Is the Current Pace of Home Sales Maintainable? | MyKCM

    And new home sales are way below historic numbers. Dave Liniger, Re/Max CEO explains:

    “We expect a seasonal uptick in sales this time of year and March certainly met and somewhat exceeded that expectation. We don’t anticipate the tightening inventory to ease up in most markets until new home construction can catch up to its pre-recession pace. Until then, sellers will enjoy a fast-paced market and buyers will need to work with their agents to get in the right home.”

    Bottom Line

    The current pace of residential home sales definitely seems maintainable.


  • written on 04-27-2017

    Real Estate Mogul: Here’s Why You Should Buy | MyKCM

    Real Estate mogul, Sean Conlon, host of The Deed: Chicago on CNBC, was recently asked the question, should you buy? Or should you rent a house?

    Conlon responded:

    “I am a true believer that you save every penny and you buy your first house… and that is still the fastest path to wealth in this country.”

    Conlon went on to suggest that first-time buyers put down 10-20% “if they can make it work,” and to remain in their home at least 4-5 years to see a return on their investment.

    Who is Sean Conlon, and why should you listen to his advice?

    Within a few years of working in the real estate industry, Conlon had established himself as one of the leading agents in the United States and has founded 3 billion-dollar brokerages dealing in residential, commercial and investment sales. Since immigrating to America from the United Kingdom in 1990, he believes very strongly in the American Dream and the role that homeownership plays in achieving it. Conlon is quoted on his website as saying:

    “I treat people the way I would like to be treated if I went in to buy a house and I work harder than anybody I know. I think if you do that in America, you will always succeed.”

    Bottom Line

    Homeownership is an investment you can leverage against in the future that not only provides shelter and safety but also helps you build your family’s wealth. If you are debating whether or not to purchase a home this year, let’s get together to discuss the opportunities available in today’s market!


  • written on 04-20-2017

    Tax Return Depressing? Owning a Home Could Help | MyKCM

    Many Americans got some depressing news last week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home.

    According to the Tax Policy Center’s Briefing Book -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System” - there are several tax advantages to homeownership.

    Here are four items, and a quote on each, from the Briefing Book:

    1. Mortgage Interest Deduction

    “Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home. Homeowners also may deduct interest paid on up to $100,000 of home equity debt, regardless of how they use the borrowed funds. Taxpayers who do not own their home have no comparable ability to deduct interest paid on debt incurred to purchase goods and services.”

    2. Property Tax Deduction

    “Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.”

    3. Imputed Rent

    “Buying a home is an investment, part of the returns from which is the opportunity to live in the home rent-free. Unlike returns from other investments, the return on homeownership—what economists call “imputed rent”—is excluded from taxable income. In contrast, landlords must count as income the rent they receive, and renters may not deduct the rent they pay. A homeowner is effectively both landlord and renter, but the tax code treats homeowners the same as renters while ignoring their simultaneous role as their own landlords.”

    4. Profits from Home Sales

    “Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale. But homeowners may exclude from taxable income up to $250,000 ($500,000 for joint filers) of capital gains on the sale of their home if they satisfy certain criteria: they must have maintained the home as their principal residence in two out of the preceding five years, and they generally may not have claimed the capital gains exclusion for the sale of another home during the previous two years.”

    Bottom Line

    We are not suggesting that you purchase a house just to save on your taxes. However, if you have been on the fence as to whether 2017 is the year you should become a homeowner, this information might help with that decision.

    Disclaimer: Always check with your accountant to find out what tax advantages apply to you in your area.


  • written on 04-18-2017

    US Housing Market Continues the Move into ‘Buy Territory’! | MyKCM

    According to the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, the U.S. housing market has continued to move deeper into buy territory, supporting the belief that housing markets across the country remain a sound investment.

    The BH&J Index is a quarterly report that attempts to answer the question:

    In today’s housing market, is it better to rent or buy a home?

    The index examines the entire US housing market and then isolates 23 major cities for comparison. The researchers “measure the relationship between purchasing property and building wealth through a buildup in equity versus renting a comparable property and investing in a portfolio of stocks and bonds.” 

    While most of the metropolitan markets examined moved further into buy territory (15 of the 23), markets like Dallas, Denver, and Houston are currently deep into rent territory. In these three markets, it is estimated that renting will top homeownership 7 out of 10 times.

    Due to a lack of inventory, the home prices in the Dallas, Denver, and Houston, areas have increased by 13%11.4%, and 7.3% respectively. Home prices in these areas will begin to return to more normal levels once residents realize that renting is not the best option, therefore bringing home affordability back as well.

    Bottom Line

    The majority of the country is strongly in buy territory. Buying a home makes sense socially and financially, as rents are predicted to increase substantially in the next year. Protect yourself from rising rents by locking in your housing cost with a mortgage payment now. 

    To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.


  • written on 04-11-2017

    Careful…Don’t Get Caught in the Rental Trap! | MyKCM

    There are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.

    Don’t Become Trapped 

    Jonathan Smoke, Chief Economist at realtor.comreported on what he calls a “Rental Affordability Crisis.” He warns that,

    “Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

    In the Joint Center for Housing Studies at Harvard University's 2016 State of the Nation’s Housing Report, they revealed that The number of cost-burdened households rose to 21.3 million. Even more troubling, the number with severe burdens (paying more than 50% of income for housing) jumped to a record 11.4 million. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

    It’s Cheaper to Buy Than Rent 

    In Smoke’s article, he went on to say,

    “Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

    “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

    Know Your Options

    Perhaps you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:

    "It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment. 

    It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

    Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

    Bottom Line

    Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you can qualify for a mortgage now!


  • written on 03-31-2017

    Looking to Move-Up to a Luxury Home? Now’s the Time! | MyKCM

    If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data fromTrulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.

    The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer, or can be found at a discount.

    Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.

    The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

    But not all who are buying luxury properties have a home to sell first.

    In a recent Washington post article, Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:

    “Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”

    Bottom Line

    The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs, and are looking to step into a luxury home… Now’s the time to list your house for sale and make your dreams come true


  • written on 03-24-2017

    How Low Supply & High Demand Impacts the Real Estate Market [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The concept of Supply & Demand is a simple one. The best time to sell something is when the supply of that item is low & the demand for that item is high!
    • Anything under a 6-month supply is a Seller’s Market!
    • There has not been a 6-months inventory supply since August 2012!
    • Buyer Demand continues to outpace Seller Supply!

  • The Foreclosure Crisis: 10 Years Later

    By Keeping Current Matters

    written on 03-24-2017

    The Foreclosure Crisis: 10 Years Later | MyKCM

    CoreLogic recently released a report entitled, United States Residential Foreclosure Crisis: 10 Years Later, in which they examined the years leading up to the crisis all the way through to present day.

    With a peak in 2010 when nearly 1.2 million homes were foreclosed on, over 7.7 million families lost their homes throughout the entire foreclosure crisis.

    Dr. Frank Nothaft, Chief Economist for CoreLogic, had this to say,

    “The country experienced a wild ride in the mortgage market between 2008 and 2012, with the foreclosure peak occurring in 2010. As we look back over 10 years of the foreclosure crisis, we cannot ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership.”

    Since the peak, foreclosures have been steadily on the decline by nearly 100,000 per year all the way through the end of 2016, as seen in the chart below.

    The Foreclosure Crisis: 10 Years Later | MyKCM

    If this trend continues, the country will be back to 2005 levels by the end of 2017.

    Bottom Line

    As the economy continues to improve, and employment numbers increase, the number of completed foreclosures should continue to decrease.


  • 4 Great Reasons to Buy This Spring!

    By Keeping Current Matters

    written on 03-21-2017

    4 Great Reasons to Buy This Spring! | MyKCM

    Here are four great reasons to consider buying a home today instead of waiting.

    1. Prices Will Continue to Rise

    CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.9% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.8% over the next year.

    The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

    2. Mortgage Interest Rates Are Projected to Increase

    Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4% over the last couple months.The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by at least a half a percentage point this time next year.

    An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

    3. Either Way, You are Paying a Mortgage 

    There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage - either yours or your landlord’s.

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    Are you ready to put your housing cost to work for you?

    4. It’s Time to Move on with Your Life

    The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

    But what if they weren’t? Would you wait?

    Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

    If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.


  • Don't Let Your Luck Run Out

    By Keeping Current Matters

    written on 03-17-2017

    Don’t Let Your Luck Run Out [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
    • Freddie Mac predicts that interest rates will increase to 4.8% by this time next year, while home prices are predicted to appreciate by 4.8% according to CoreLogic.
    • Waiting until next year to buy could cost you thousands of dollars a year for the life of your mortgage!

  • written on 03-16-2017

    Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeksFreddie Mac, along with Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors, is calling for mortgage rates to continue to rise over the next four quarters.

    This has caused some purchasers to lament the fact they may no longer be able to get a rate below 4%. However, we must realize that current rates are still at historic lows.

    Here is a chart showing the average mortgage interest rate over the last several decades.

    Mortgage Interest Rates Went Up Again… Should I Wait to Buy? | MyKCM

    Bottom Line

    Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.


  • Which Homes Have Appreciated the Most?

    By Keeping Current Matters

    written on 03-16-2017

    Which Homes Have Appreciated the Most? | MyKCM

    Home values have risen dramatically over the last twelve months. The latestExisting Home Sales Report from the National Association of Realtors puts the annual increase in the median existing-home price at 7.1%. CoreLogic, in their most recent Home Price Insights Report, reveals that national home prices have increased by 6.9% year-over-year.

    The CoreLogic report broke down appreciation even further into four different price categories:

    1. Lower Priced Homes: priced at 75% or less of the median
    2. Low-to-Middle Priced Homes: priced between 75-100% of the median
    3. Middle-to-Moderate Priced Homes: priced between 100-125% of the median
    4. High Price Homes: priced greater than 125% of the median

    Here is how each category did in 2016:

    Which Homes Have Appreciated the Most? | MyKCM

    Bottom Line

    The lower priced homes (which are more in demand) appreciated at greater rates than the homes at the upper ends of the spectrum.


  • Housing Market Expected to "Spring Forward"

    By Keeping Current Matters

    written on 03-10-2017

    Housing Market Expected to “Spring Forward” | MyKCM

    Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward!” Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market.

    Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right.

    Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

    That hasn’t happened this year.

    Demand for housing has remained strong as mortgage rates have remained near historic lows.

    The National Association of Realtors (NAR) recently reported that the top 10 dates sellers listed their homes in 2016 all fell in April, May or June.

    Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.

    Bottom Line

    If you are planning on selling your home in 2017, let’s get together to evaluate the opportunities in our market.


  • written on 03-07-2017

    The Connection Between Home Prices & Family Wealth | MyKCM

    Over the next five years, home prices are expected to appreciate 3.22% per year on average and to grow by 17.3% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

    So, what does this mean for homeowners and their equity position?

    As an example, let’s assume a young couple purchased and closed on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?

    The Connection Between Home Prices & Family Wealth | MyKCM

    Since the experts predict that home prices will increase by 4.4% this year alone, the young homeowners will have gained $11,000 in equity in just one year.

    Over a five-year period, their equity will increase by nearly $43,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

    Bottom Line

    Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!


  • Why Pre-Approval Should Be Your First Step

    By Keeping Current Matters

    written on 01-17-2017
    Why Pre-Approval Should Be Your First Step | MyKCM

    In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

    Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. 

    Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

    “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

    One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” 

    Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

    1. Capacity: Your current and future ability to make your payments
    2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
    3. Collateral: The home, or type of home, that you would like to purchase
    4. Credit: Your history of paying bills and other debts on time

    Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

    Bottom Line

    Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.


  • written on 01-12-2017
    Top 3 Things Second-Wave Baby Boomers Look for in a Home | MyKCM

    According to data from the U.S Census bureau, there are approximately 76.4 million baby boomers living in the United States today. Contrary to what many think, there are very different segments within this generation, and one piece that sets them apart are their housing needs.

    John McManus, editorial director of Hanley Wood’s Residential Group says his company “is focusing on the preferences of the younger half, or second-wave baby boomers, as they exhibit different needs than the older boomers.”

    What are ‘second-wave baby boomers’ looking for?

    McManus says, “They are seeking a fun, dynamic lifestyle with a home that can also adjust to their changing needs in the future. Living space should either include accessibility features, such as doorway space, lower shelves, and nonslip surfaces, or be easily adjustable when the time comes.

    In a homebuyer study performed by The Farnsworth Group, the participants revealed their reasons for purchasing a new home. The top three factors that influence their purchase include area/location (50.2%), price/affordability (37.4%), and the layout of the home (19%) (as shown in the graph below).

    Top 3 Things Second-Wave Baby Boomers Look for in a Home | MyKCM

    The report also found that when buying a new home, there were other concerns like quality of construction (9%), a safer neighborhood (8.4%), better floor plans (8.25%). The most important rooms or areas are the kitchen (82.8%), master bedroom (59.2%), and great room (36%).

    Technology also plays an important role! Second-wave baby boomers prefer wireless security systems (7.1%), lighting that senses and adapts to them (6.3%) and integrated home technology, including “smart” thermostats and lighting controlled by a smartphone (6.2%).

    Grey Matter Research and Consulting points to a sense of community as a major factor in wanting to purchase:

    The first impressions are important when entering a new community, as is feeling welcome in the community. Amenities such as clubhouses, pools, and walking trails featured prominently in the decision to purchase in a community. Location was key, as residents want their new homes to be near shopping, dining, medical services and entertainment.

    Bottom Line

    If you are one of the many ‘second-wave’ baby boomers who is starting to feel like their current homes no longer fit their needs, take advantage of the low inventory of existing homes in today’s market by selling your current home and moving on to one that truly fits your new lifestyle.


  • written on 01-09-2017
    3 Tips for Making Your Dream of Buying a Home Come True [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Realtor.com recently shared “5 Habits to Start Now If You Hope to Buy a Home in 2017.”
    • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking a lot about it.
    • Living within a budget now will help you save money for down payments and pay down other debts that might be holding you back.

  • Millionaire to Millennials: Buy a Home!!

    By Keeping Current Matters

    written on 01-05-2017
    Millionaire to Millennials: Buy a Home!! | MyKCM

    Last week, CNBC ran an article quoting self-made millionaire David Bach explaining that not purchasing a home is "the single biggest mistake millennials are making" because buying real estate is "an escalator to wealth.”

    Bach went on to explain:

    "If millennials don't buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter."

    In his bestselling book, “The Automatic Millionaire,” Bach does the math:

    "As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!"

    Who is David Bach?

    Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

    He has been a contributor to NBC’s Today Show appearing more than 100 times, has been a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS, and has been profiled in many major publications, including The New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, The Washington Post, The Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

    Bottom Line

    Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.


  • Inadequate Inventory Driving Prices Up

    By Keeping Current Matters

    written on 01-03-2017
    Inadequate Inventory Driving Prices Up | MyKCM

    The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices.

    We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up.

    Year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a ‘normal’ market.

    The median price of homes sold in November (the latest data available) was $234,900, up 6.8% from last year and marking the 57th consecutive month with year-over-year gains.

    NAR’s Chief Economist, Lawrence Yun had this to say:

    "Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."

    But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes and either move up to their dream home or downsize to a property that will better suit their needs. Look for these homes to come to market soon.

    Bottom Line

    Buyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly.


  • written on 12-29-2016

    Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

    In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that by the end of 2016, the net worth gap will widen even further to 45 times greater.

    The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

    Homeowner’s Net Worth Is 45x Greater Than a Renter’s | MyKCM

    Put Your Housing Cost to Work for You

    As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

    The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

    “Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

    Bottom Line

    If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s get together and evaluate your ability to buy today!


  • written on 12-19-2016
    The Impact Your Interest Rate Has on Your Buying Power [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • Your monthly housing cost is directly tied to the price of the home you purchase and the interest rate you secure for your mortgage.
    • Over the last 30 years, interest rates have fluctuated greatly with rates in the double digits in the 1980s, all the way down to the near 4% we are experiencing now.
    • Your purchasing power is greatly impacted by the interest rate you secure. Act now before rates go up!

  • written on 12-13-2016
    Building Your Family’s Wealth Over the Next 5 Years | MyKCM

    Over the next five years, home prices are expected to appreciate 3.24% per year on average and to grow by 21.4% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

    So, what does this mean for homeowners and their equity position?

    As an example, let’s assume a young couple purchases and closes on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?

    Building Your Family’s Wealth Over the Next 5 Years | MyKCM

    Since the experts predict that home prices will increase by 4.0% this year alone, the young homeowners will have gained over $10,000 in equity in just one year.

    Over a five-year period, their equity will increase by over $43,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

    Bottom Line

    Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, let’s get together to find out if you are able to, today!


  • Home Prices: Where Will They Be In 5 Years?

    By Keeping Current Matters

    written on 12-12-2016
    Home Prices: Where Will They Be in 5 Years? | MyKCM

    Today, many real estate conversations center on housing prices and where they may be headed. That is why we 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 they believe 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 4.0% over the course of 2017, 3.2% in 2018 and 3.0% the next three years (as shown below). That means the average annual appreciation will be 3.24% over the next 5 years.

    Home Prices: Where Will They Be in 5 Years? | MyKCM

    The prediction for cumulative appreciation ticked up from 18.7% to 21.4% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 10.2%.

    Home Prices: Where Will They Be in 5 Years? | MyKCM

    Bottom Line

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


  • When Is A Good Time To Rent? Not Now!

    By Keeping Current Matters

    written on 12-06-2016
    When Is a Good Time to Rent? Not Now! | MyKCM

    People often ask if now is a good time to buy a home. No one ever asks when a good time to rent is. However, we want to make certain that everyone understands that today is NOT a good time to rent.

    The Census Bureau recently released their third quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

    When Is a Good Time to Rent? Not Now! | MyKCM

    As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with the decision of whether you should renew your lease or not, you might be pleasantly surprised at your ability to buy a home of your own instead.

    Bottom Line

    One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, let’s get together to determine if you are able to, today!


  • written on 12-05-2016

     

    4 Reasons to Buy Your Dream Home This Winter | MyKCM

    As the temperature in many areas of the country starts to cool down, you might think that the housing market will do the same. This couldn’t be further from the truth! Here are 4 reasons you should consider buying your dream home this winter instead of waiting for spring!

    1. Prices Will Continue to Rise

    CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

    The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

    2. Mortgage Interest Rates are Projected to Increase

    Your monthly housing cost is as much related to the price you pay for your home as it is to the mortgage interest rate you secure.

    Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage are currently at 4.08%. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & theNational Association of Realtors are in unison, projecting that rates will increase by this time next year.

    An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

    3. Either Way You’re Paying a Mortgage

    There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    Are you ready to put your housing cost to work for you?

    4. It’s Time to Move on with Your Life

    The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

    But what if they weren’t? Would you wait?

    Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

    If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.


  • written on 12-01-2016
    5 Reasons Why Homeownership Is a Good Financial Investment | MyKCM

    According to a recent report by Trulia, “buying is cheaper than renting in 100 of the largest metro areas by an average of 37.7%.” That may have some thinking about buying a home instead of signing another lease extension. But, does that make sense from a financial perspective?

    In the report, Ralph McLaughlin, Trulia’s Chief Economist explains:

    “Owning a home is one of the most common ways households build long-term wealth, as it acts like a forced savings account. Instead of paying your landlord, you can pay yourself in the long run through paying down a mortgage on a house.”

    The report listed five reasons why owning a home makes financial sense:

    1. Mortgage payments can be fixed while rents go up.
    2. Equity in your home can be a financial resource later.
    3. You can build wealth without paying capital gains.
    4. A mortgage can act as a forced savings account.
    5. Overall, homeowners can enjoy greater wealth growth than renters.

    Bottom Line

    Before you sign another lease, let’s get together and discuss all your options.


  • written on 11-30-2016

    Click here to start editing!

    Mortgage Interest Rates Just Went Up… Should I Wait to Buy? | MyKCM

    Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie MacFannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters.

    This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows.

    Here is a chart showing the average mortgage interest rate over the last several decades.

    Mortgage Interest Rates Just Went Up… Should I Wait to Buy? | MyKCM

    Bottom Line

    Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago; a lower rate than your parents did twenty years ago and a better rate than your grandparents did forty years ago.


  • written on 11-28-2016

     

    Existing Home Sales Surge Forward Through Fall [INFOGRAPHIC] | MyKCM

    Some Highlights:

    • The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report.
    • First-time homebuyers made up 33% of all sales in October.
    • Homes are selling quickly with 43% of homes on the market for less than a month.
    • A limited supply continues to drive up prices for the 56th consecutive month.

  • Why Are Mortgage Interest Rates Increasing?

    By Keeping Current Matters

    written on 11-22-2016

    According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate jumped up to 3.94% last week. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly. 

    Why did rates go up?

    Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds.

    When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down.  Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again.

    Simply put, the better the economy, the higher interest rates will go. For a more detailed explanation of the many factors that contribute to whether interest rates go up or down, you can follow this link to Investopedia.

    The Good News

    Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%.

    The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades, as you can see in the chart below.

    Why Are Mortgage Interest Rates Increasing? | Simplifying The Market

    Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, “While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated.”

    Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates:

    “First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there’s less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit.”

    Bottom Line

    Interest rates are impacted by many factors, and even though they have increased recently, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.


  • written on 01-11-2016

     

    Don’s a Mortgage Advisor out of our Newport Beach, CA location. On a clear day or night – which are most in southern California – he can see Catalina Island from his office. For someone with his adventurous spirit, this seems perfectly appropriate.

    We had a chat with Don, who spent 15 years in the mortgage industry before joining the Commerce Home Mortgage team, to explore his passion in the mortgage field and well beyond.

    CHM: Why are you interested in the Home Mortgage business?

    Don: I got my real estate license when I was 18 years old. My first job was working for a friend’s dad, who was a bail bondsman. Shortly after learning that business, I realized that people often put up their homes for collateral when raising bail for their loved ones. I saw an opportunity the help these people by lowering their interest rates and refinancing their home loans. I fell in love with the process of helping people through connecting them to the right mortgage products for their needs.

    I went from bail bonds to running a company of nearly 50 employees, to becoming Zillow’s largest non-institutional advertiser, then on to becoming a mortgage banker at Jayco Capital Mortgage. Over all of those years my goal remained the same – to provide awesome loans and service to my clients.

    I found Commerce Home Mortgage in 2014. I knew by joining this outstanding team, I’d be able to provide bigger & better products and new opportunities to my clients.

    CHM: What do you do for fun?

    Don: I’m a private pilot. My wife and I like to travel. I manage a get-away about every 6 weeks or so. Most recently we flew to Zion National Park in Utah. We also love to scuba dive. We’ve been to some spectacular places, like Egypt. We’ve done wreck diving, shark diving, and even deep diving – down to 160 feet.

    CHM: That seems both interesting and dangerous.

    Don: It’s both. I’m a Certified Emergency Responder. When you’re involved in diving or flying, I feel it’s important to stay calm when things go wrong. Early in our marriage, my wife and I went heli-snowboarding near the Whistler ski resort in British Columbia, Canada. We got lost. As heavy weather was closing in, we reached a Sheriff on our cell phone. We described the nearby peaks and he gave us directions to get ourselves out. Turns out we were in an avalanche area. Even if a rescue helicopter could come for us (impossible due to the approaching storm), it would likely set off an avalanche. It took us 8 hours and we had to descend 6,000 feet to get out. I learned from that incident the importance of acting in a way that minimizes further danger when you find yourself in a bad situation.

    CHM: How do your side interests inform the work that you do at Commerce Home Mortgage?

    Don: Being a pilot helps me in the origination process. Both are about detailed checklists. Any mistake can alter the outcome. A pilot has a large responsibility. You have to be perfect 10 out of 10 times. You need to understand the full extent of the capabilities of the plane. I use checklists the same way in diving as well. I check off each box and make sure that everything’s in good working order.

    Good communication is also important when flying. You’re talking to other people, on the ground, in other planes, and in your plane. It’s essential that all communications be clear and concise. What both sides are expecting has to be understood. It keeps everyone safe. It’s the same when I’m working with mortgages. I have to be sure that people are 100% clear about rates, fees, etc. I stay with them from the beginning of the experience to the end. Over the years, I’ve developed a variety of ways to explain complex financial processes in simple terms. That keeps everyone’s expectations lined up.
    CHM: Anything else you feel is important for people to know about you or your approach to mortgages?

    Don: I see every loan as a puzzle to be solved. I love challenges. My favorite loan is for the self-employed borrower. They don’t fit into the typical boxes and I sometimes have check multiple boxes to get it done for them. It’s the most rewarding part of my job. I really dig into the research. What’s more fun than really using your knowledge and experience? I constantly study different investors and guidelines. I’m not afraid to navigate the entire mortgage world to find the best way to get something done.

    CHM: World navigator – That’s Don Stolan.