Monday, April 30, 2018

Why Home Prices Are Increasing


Why Home Prices Are Increasing

There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.
However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.
It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart below).
Why Home Prices Are Increasing | Keeping Current Matters
According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).
Why Home Prices Are Increasing | Keeping Current Matters

Bottom Line

If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.

Source: Keeping Current Matters | The KCM Crew 043018

Tuesday, April 24, 2018

Thinking Of Selling Your Home? Why You Need A Pro In Your Corner


Thinking of Selling Your Home? Why You Need A Pro in Your Corner
With home prices on the rise and buyer demand strong, some sellers may be tempted to try and sell their homes on their own (FSBO) without using the services of a real estate professional.
Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The termite company if there are challenges
  • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
  • The appraiser if there is a question of value
  • The title company if there are challenges with certificates of occupancy (CO) or other permits
  • The town or municipality if you need to get the CO permits mentioned above
  • The buyer’s buyer in case there are challenges with the house your buyer is selling
  • Your bank in the case of a short sale

Bottom Line

The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Meet with a professional in your local market to see the difference they can make in easing the process.

Source: Keeping Current Matters | The KCM Crew | 042418

Monday, April 23, 2018

Buying A Home Is Cheaper Than Renting In The Majority Of The US


The results of the 2018 Rental Affordability Report from ATTOM show that buying a median-priced home is more affordable than renting a three-bedroom property in 54% of U.S. counties analyzed for the report.
The updated numbers show that renting a three-bedroom property in the United States requires an average of 38.8% of income.
The least affordable market for renting was Marin County, CA, just over the Golden Gate Bridge from San Francisco, where renters spend a staggering 79.5% of average wages on rent, while the most affordable market was Madison County, AL where 22.3% of average wages went to rent.

Other interesting findings in the report include:

  • Average rent rose faster than income in 60% of counties
  • Average rent rose faster than median home prices in 41% of counties
  • While median home prices rose faster than average rents in 58% of counties

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

Source: Keeping Current Matters 04232018

Thursday, April 5, 2018

House Prices: Simply A Matter Of Supply & Demand


House Prices: Simply a Matter of Supply & Demand
Why are home prices still rising? It is a simple answer. There are more purchasers in the market right now than there are available homes for them to buy. This is an example of the theory of “supply and demand” which is defined as:
“the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.”
When demand exceeds supply, prices go up. This is currently happening in the residential real estate market.
Here are the numbers for supply and demand as compared to last year for the last three months (March numbers are not yet available):
House Prices: Simply a Matter of Supply & Demand | Keeping Current Matters
In each of the last three months, demand (buyer traffic) has increased as compared to last year while supply (number of available listings) has decreased. If this situation persists, home values will continue to increase.

Bottom Line

The reason home prices are still rising is because there are many purchasers looking to buy, but very few homeowners ready to sell. This imbalance is the reason prices will remain on the uptick.

Source: Keeping Current Matters | The KCM Crew 040518

Friday, March 30, 2018

The Cost Of Renting Vs. Buying Today

The Cost of Renting vs. Buying Today [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (28.9%) vs. the percentage needed to buy a median-priced home (15.7%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!
Source: Keeping Current Matters | The KCM Crew

Thursday, March 22, 2018

University of Memphis Graduate Students Help Shape City’s Future through Community Engagement


As Memphis prepares to enter its third century as a city in 2019, graduate students at the University of Memphis are helping the City of Memphis and its partners mold a mega-plan to create great neighborhoods, smart land use, connectivity, and better opportunities and improved quality of life for all residents.
The students at the Department of City and Regional Planning at the University of Memphis — part of the School of Urban Affairs and Public Policy — are lending their time, talent and the skills they’ve developed through their education to Memphis 3.0, the city’s first comprehensive development plan in four decades.
The previous plan, drafted roughly 40 years ago, focused on the suburbs and neglected to include citizen input, but Memphis 3.0 is meeting the people where they are — in their own neighborhoods. Graduate students are on the ground in districts throughout the community engaging with residents to ask them what assets are unique to their district, what challenges their neighborhoods face and which areas need improvement.
The Department of City and Regional Planning at the University of Memphis have been part of the planning process since the City launched the Memphis 3.0 initiative in late 2016. In late 2017, the city kicked off a series of meetings in the 14 districts to give the public opportunities to voice their opinions. Citizens participated in neighborhood meetings, online surveys, in-person surveys and one-on-one interviews.
The graduate students toured neighborhoods across the city and conducted workshops where residents participated in asset-mapping exercises, using large maps to mark the neighborhood amenities, sites and resources they most value.
Professor Charlie Santo is chair of the Department of City and Regional Planning at the University of Memphis, which is part of the School of Urban Affairs and Public Policy. The master’s degree program, accredited by the Planning Accreditation Board, prepares students for careers focused on the physical development of communities with concern for their social, economic and environmental wellbeing.
Graduate students at the Department of City and Regional Planning at the University of Memphis are lending their time, talent, and the skills they’ve developed through their education to Memphis 3.0, the city’s first comprehensive development plan in four decades. The plan includes urban art projects, like this one by Memphis artist Yancy Villa Calvo, which engages residents by asking them what they consider to be their neighborhood’s assets or “gems.”

Santo says hands-on learning with strong community partners is an integral aspect of the program; the curriculum emphasizes action and classes and research are structured to support long-term community engagement projects.
He said the long-term emphasis of the program sets it apart from other graduate programs in city planning.
“We have a process where we try, when we’re working with a community partner — whether it be Klondike Smokey City or North Memphis or the Soulsville neighborhood — we get involved for more than one semester. Students get to work with community members to address real challenges, but they also have the opportunity to see planning solutions finish implementation.”
And many graduates of the University of Memphis’ Department of City and Regional Planning have not only continued to work in the community but have become prominent city planning professionals.
Graduates include Ashley Cash, Memphis 3.0 Administrator; John Zeanah, Director of the Division of Planning and Development, a joint agency that serves both Memphis and Shelby County; Paul Young, City of Memphis Director of Housing and Community Development; and John Paul Shaffer with BLDG Memphis, a 3.0 partner that supports the development and redevelopment of healthy, economically sustainable neighborhoods.
Graduate students at the Department of City and Regional Planning at the University of Memphis meet with residents in North Memphis to ask them what assets are unique to their district, what challenges their neighborhoods face, and which areas need improvement.

“Our folks are everywhere and they’re having an impact,” Santo said. “If you look around at what’s going on in Memphis in terms of changing the city, the impact that graduates of our program have had has been amazing.”
Santo said it’s been satisfying to see his students matriculate from the classroom environment to become real-world colleagues. One of those graduates is Jessica Mason, an alumn of the Department of City and Regional Planning at the University of Memphis who has transitioned to a career in city planning as planning coordinator at Self-Tucker Architects, a Memphis 3.0 partner.
“The program at the University of Memphis was very hands-on and project oriented, so I felt very comfortable going into the workplace knowing how to analyze data and how to communicate with community members,” she said.
“It really prepared me to feel comfortable in practice. They did a good job with projects that were related to actual issues in Memphis.”
As a graduate student, she worked on the ground in several districts, including Midtown and North Memphis, serving as a facilitator at community meetings in the pre-planning phase of Memphis 3.0 in late 2016 and early 2017 and volunteering in a workforce development focus group.
“It was a chance for me to be part of a real-life planning process, talking to real people, facilitating and using the skills I learned in the classroom in actual practice,” said Mason, a native Memphian whose graduate work engaged her with residents in historic Memphis neighborhoods like Klondike Smokey City and Orange Mound.
“Growing up, I’ve always seen the differences in Memphis,” she said. “As we all know, things can look really different one street over. I’ve always been curious about the relationship between people and place, and asking why things are the way they are and what can I do to better the city I live in.”
At Self-Tucker, Mason’s on-the-ground projects include working with Knowledge Quest, a youth-focused nonprofit in South Memphis, to help create the Greenleaf Learning Farm, an organic farm that uses hands-on learning techniques to educate students about urban agriculture and healthy eating.
Mason continues her 3.0 engagement work by helping to prepare for community meetings and gather information about what resident want to see in their neighborhoods.
“I’m very excited this process is happening during the time that it is … I feel like 3.0 happened just at the right time and I’m excited to be part of the future of Memphis,” she added.
Source: High Ground | Aisling Maki 032118

Wednesday, March 21, 2018

Are You Aware Of How Much Equity You Have In Your Home? You May Be Surprised!

Are You Aware of How Much Equity You Have in Your Home? You May Be Surprised!
CoreLogic’s latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.
U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year.”

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:
Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years.”
He also believes this is a great sign for the market in 2018, saying:
“Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”  

This is great news for homeowners! But, do they realize that their equity position has changed?

A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).
The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%) when in actuality, 83% do!
Are You Aware of How Much Equity You Have in Your Home? You May Be Surprised! | Keeping Current Matters
This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.
Fannie Mae spoke out on this issue in their report:
“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line

If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018! Meet with a local real estate professional today who can help you evaluate your situation and assist you along the way!


Source: Keeping Current Matters | The KCM Crew 032018