Monday, July 30, 2018

Housing Bubble...Not

housing bubble...not
People are beginning to pause in their real estate activities due to thinking that the housing market is headed for another ‘boom and bust’. However, today’s market is a lot different than the bubble market that happened 12 years ago.

Here I will outline four of the key metrics that will explain to you why we are not headed that way again.
  1. Across the U.S. there is no doubt that in some markets home prices have reached and, in some places, surpassed 2006 levels. But historically, home prices should be a lot higher if you based them on inflation alone. 
  2. With the news lately that the Trump administration wants to lessen the standards for mortgages, there is some concern that lending institutions are going to loosen their grip back to the old standards that put them in trouble in the first place. But there is proof that today’s standards are better than they were. The Urban Institute issues a monthly index that measures the percentage of home purchase loans that are likely to default. This report shows that lenders are unwilling to tolerate defaults and are imposing tighter lending standards which make it more difficult to get a loan. Their July report stated that even if the current default risk doubled across all channels it would still be the well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the mortgage market as a whole. 
  3. Another major cause of the housing crash was the large number of foreclosures that hit the market. This increased the supply of homes across the market and reduced prices since they were sold at 20-50 percent discounts. This drove down the price on all homes for sale. Today’s foreclosure numbers are lower than before the housing boom. Here are some numbers that prove the foreclosure rates have dropped. 
    1. 2003: 203,320 (earliest numbers) 
    2. 2009: 566,180 (in the midst of the crash) 
    3. Today: 76,480 
    4. Foreclosures today are less than 40 percent of what they were in 2003 
  4. Contrary to popular belief and headlines, home affordability is better now that it was before the last housing boom. CoreLogic’s latest blog post on July 18th stated that in most of the U.S. markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain much lower than their pre-crisis peaks.” The main reason is because mortgage rates are still at historical lows. Prices may have risen but mortgage rates have not kept pace with them. 
When we compare these four metrics to the last decade it proves that the current market is not anything like the recent past bubble market.

And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.

Friday, July 20, 2018

Be Wary of Online Home Value Estimators

be wary of online home value estimators
We have all seen the Zestimate® home valuations and perhaps you have visited several other online valuation programs thinking you were getting a good representation of the value of your home. Beware! Most online home evaluation companies have limited base data to pull from and their results may be skewed to only the data that they have available.

AVMs or automated valuation models generate a property price based on computer algorithms and calculations that take several sets of data and then look for relationships and patterns in that data. Computers has no knowledge of specific areas and amenities that might affect the valuation of your home.

Here are some main sources of online AVMs.
  • Realtors Property Resource or RPR. They use two methods; their AVM estimate and the Realtors Valuation Model (RVM). Difference being the RVM uses the AVM data plus input from the MLS. This program shows accuracy based on estimate ranges and confidence scores. Although available only to Realtors, it does allow for customization by the Realtor for your specific property. Valuation using this tool maybe higher than others due to that individual input. 
  • Uses tax assessment records, recent sales of like properties and a few other factors to value your home. This tool is free and available to the consumer. 
  • Redfin. A web-based real estate brokerage that will give you their estimate of what your home is worth. The use market, neighborhood, home-specific and recently sold data from the MLS. They believe their values are more accurate for homes currently on the market than ones off the market. This tool is free and available to the consumer. 
  • HouseCanary. They provide valuations and forecasting. They use property-level data from public records and MLS. Accuracy depends on availability of data. Estimates available upon subscription only. 
  • Zillow and Trulia. As mentioned in the beginning, Zillow has their Zestimate valuation tool which uses public data and user-submitted data available on the property and its location. Since Zillow owns Trulia, it is likely that they use the same data core. Accuracy of valuations are suspect since only valuate based on often incomplete public records and user input which is often not as detailed as it should be. This tool is free and available to the consumer. 
  • Also uses data which is available through public access. Depends on the completeness and accuracy of said data. This tool is free and available to the consumer. 
Some websites will provide you with estimates by request only but rely on user inputs. Some banking and financial institutes will also provide estimates of home value to accompany the other financial services they provide. Some real estate brokerages provide estimators through their websites. All these valuations use various public data available to them and some user input. Accuracy on these valuations would also be suspect.

With technology continuing to advance and more sites becoming available with public data, we may see some of these valuation tools become a bit more accurate in the future. However, no valuation is as accurate as the one your Realtor can give you. They are familiar with the area, neighborhood, amenities and market conditions that all affect your valuation. You can’t justify a high valuation if the local market won’t support it.

This is where I come in. If you are interested in getting a current market value for your home, I can offer you a FREE comparative market analysis (CMA) which will use details from your home and the local area to get you an accurate home evaluation. The only thing better would be paying for an appraisal which might cost you $400-$1000.

And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.

Friday, July 13, 2018

Get Ready to Fall into Savings

get ready to fall into savings
Got to thinking the other day. What are things that you should take advantage of right now that will save you money and help you get ready for fall chores? Well here is what I came up with.
  1. Basement organizing. Especially if it's a cool one. So there are two kinds of items that end up drowning in the basement; seasonal decorations and old clothes we don’t wear. This month tackle that unruly basement and unclutter the clutter. Donate items to Goodwill or another local agency for tax right offs. Regain space by cleaning and help lift your spirits with a change in space.
  2. Finish the unfinished. Maybe you have a basement that is completely unfinished. Now is the time to get it done. A finished basement adds space to your home and can add equity too. Turn it into an entertainment space or a spare room for rent.
  3. Paint sale! Many stores put their paint on sale during July because it’s too hot to paint. So, buy it now to use once the weather cools a bit. Latex and acrylic paint can last up to 10 years. Just remember to have it re-shaken before you open it.
  4. Recycle it in your home. Warmer weather brings out the remodelers in all of us. Something about spring and warm weather and making our spaces fresh. So hit up your local recycle center or home improvement resale stores. Lots of folks don’t want to throw away perfectly good stuff so they will recycle it. Best part is it’s all at great low prices.
And while you’re at it take another look at your outdoor space. A great remake in your patio or deck space can add the cha-Ching in your wallet when you sell. Here are a few tips.
  • Add a winding flagstone walkway
  • Add some stone planters (6 by 2)
  • Add some flowering shrubs
  • Add a tree about 15 feet tall.
  • Add some quality mulch.

Added resale value is about $4,000 on the value of your home.

And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.

Friday, July 6, 2018

The Results are In

CoreLogic’s Home Price Insights monthly report for May 2018 shows home prices are continuing to rise nationally. The change in home prices during May 2018 was 7.1 percent over May 2017 and the change between May and April 2018 was an increase of 1.1 percent. The forecast for June 2018 is 0.3 percent over May which then puts home prices 5.1 percent higher in May 2019 compared to May 2018.

CoreLogic’s Chief Economist Frank Nothaft has stated, “The lean supply of homes for sale is leading to higher sales prices and fewer days on market, and the supply shortage is more acute for entry-level homes. During the first quarter, we found that 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less. Mary's mortgage rates average a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.” 
50% of homeowners had a rate of 3.75% or less in the first quarter 2018

The 2018 CoreLogic Consumer Housing Sentiment Study: May Findings

In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the homebuying or renting decision process. Across the U.S., 15 percent of homeowners and 28 percent of renters have indicated a desire to buy a home in the next 12 months, while only 11 percent have indicated a desire to sell.

The research reported the long-term desire for homeownership is much stronger among renters in markets that have the highest home-price growth. Lagging supply in these markets is likely to continue as fewer current homeowners are considering putting their homes on the market. Over the next 12 months, 41 percent of renters are considering buying while only 11 percent of homeowners are considering selling over that same period. That is nearly four times as many renters than homeowners, which is the crux of the available housing-supply imbalance.

President and CEO of CoreLogic Frank Martell states that, “The CoreLogic consumer research demonstrates that, despite high home prices, renters want to get out of their rental property and purchase a home. Even in the most expensive markets, we found four times as many renters looking to buy than homeowners willing to sell. Until more supply becomes available, we will continue to see soaring prices in cities such as Denver, San Francisco and Seattle.” 

4X as many renters looking to buy as homeowners willing to sell

As for South Carolina, the change in home value for May 2018 stayed at 5.3 percent higher than the same time last year. The projection for May 2019 is 4.6 percent higher. Month over month percent increase is showing an actual of.9 percent and projected 0.7 percent.

Our closest Top U.S. Metro area is still Washington, D.C. which is now showing a 3.0 percent home price index change over the same time last year.

The latest market conditions indicators Metro area maps for May 2018 is showing Greenville-Anderson-Mauldin are overvalued and that trend will continue into May 2023. Our neighboring metro area to the north Spartanburg is showing normal valuation which will continue into May 2023. Columbia metro area continues to be undervalued. While the coastal areas of Charleston, North Charleston, Hilton Head Island, Bluffton and Beaufort continue to be overvalued.

The impact of this latest monthly study proves that home prices in our area and across the U.S. continue to rise due to a lack of inventory and now the pressure of renters wanting to be homeowners. It is a great time to sell! There are lots of buyers. However, interest rates are rising along with the economy so if you are wanting to move up or move down or just buy for the first time, don’t wait, do it this year. I can help you make a plan and get it done.

And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.