Tuesday, August 28, 2018

The Cost of Renting

According to a special six-month report from CoreLogic, the single-family rent index has had a 4.1% cumulative increase between January and June 2018.

To put it in perspective, single-family rentals make up one-half of all residential rentals nationally but often become an overlooked part of the housing market. These rentals are also affected by market forces and fell rapidly during the Great Recession.

Single-family rentals are bouncing back strongly from 2010 when they were at their low point which mirrors the house price growth. As with the housing market, low rental home inventory is feeling the price increase.

During the Great Recession, the American household lost more than $16 trillion in net worth dropping national home prices drastically. Single-family rental home prices began recovering and kept recovering until their peak in August 2008 and then fell 5.7% to the lowest point in January 2010.

Nevada, Florida and Arizona have seen the most fluctuation between rental prices over the last decade. Las Vegas has been the leader with Orlando and Phoenix close second and third.

The chart below (provided by CoreLogic) shows the single-family rent change for select geographical areas for the first half of this year.
the cost of renting

High-end or luxury rentals saw a higher cumulative rent growth of 4.2% since January 2018 while low-end rentals saw a growth of 3.4% since January.

Another factor is that the 2016 hurricane season blasted the rental market in many coastal metro areas. For a 17-month period that began in May 2016, Houston metro area experienced decreasing year-over-year rental prices. Rental prices have since rebounded because people have short memories in regard to major events and Houston metro area has peaked at 4.4% in May 2018.

High demand and low supply of lower-priced single-family rental properties continue to push up rents for this segment of the rental market. With these market forces expected to stay in place in the near term, rents on lower-priced rental properties should continue to outpace those of higher-end rental properties. – Molly Boesel, Principal Economist at CoreLogic.

What does this mean for you? Well with rents continuing to climb, suddenly the adherent cost of owning a home starts decreasing. The month-over-month cost of paying for a home suddenly begins to look more inviting. And you are not paying someone else’s mortgage for them! Contact me today about becoming a Homeowner!

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.

Saturday, August 18, 2018

Home Prices are Still Climbing

CoreLogic’s Home Price Insights monthly report for June 2018 shows home prices nationwide, which includes distressed sales, are up by 6.8 percent. The change between June and May 2018 was an increase of 0.7 percent. The forecast for July 2018 is that prices will level off with no gain. CoreLogic's forecast is that prices will increase 5.1 percent overall by June 2019.

CoreLogic’s Chief Economist Frank Nothaft has stated, “The rise in home prices and interest rates over the past year has eroded affordability and is beginning to slow existing home sales in some markets. For June, we found in CoreLogic public records data that home sales in the San Francisco Bay Area and Southern California were down 9 and 12 percent, respectfully, from one year earlier. Further increases in home prices and mortgage rates over the next year will likely dampen sales and home-price growth.” 

"Home Sales down 12% in Southern California and down by 9% in the San Francisco Bay Area."

The 2018 CoreLogic Consumer Housing Sentiment Study: June 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., the desire to own a home is significantly higher among younger age cohorts. Younger millennial renters (those under the age of 29) are significantly more likely to want to buy a home in the next 12 months than older millennial or Generation X renters. However, affordability for this group is a significant issue.

Sixty-three percent of younger millennials who are not interested in home ownership identified the inability to afford a home or down payment as the reason they are not interested in buying at this time. This is in comparison to 50 percent of older millennial renters and 52 percent of Generation X renters. For their part, boomer generation renters say their lack of interest in home ownership is driven by a lack of need at this stage in their lives. The graphic below further illustrates this position across all generations. 


President and CEO of CoreLogic Frank Martell states that, “One-third of millennial renters reported feeling they cannot afford a down payment to buy a home. With home prices rising quickly over the past few years and supplied low, first-time homebuyers face ever-growing challenges to find and buy affordable entry-level homes. More needs to be done to help our first-time buyers join the homeownership class.” 

"Affordability: 1/3 of millennials renters feel they can't afford a down payment to buy a home."

As for South Carolina, the change in home value between June 2017 and June 2018 was 5.5 percent. The projection for June 2019 is 5.1 percent higher. Month over month percent increase is showing an actual of.7 percent and projected 0.6 percent.

Our closest Top U.S. Metro area, Washington, D.C. which is now showing a 2.9 percent home price index change over the same time last year.

The latest market conditions indicators Metro area maps for June 2018 is showing Greenville-Anderson-Mauldin are overvalued and that trend will continue into June 2023. Our neighboring metro area to the north Spartanburg is showing normal valuation which will continue into June 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 report shows that although younger renters wish to own a home they are lacking the sentiment that they can afford to buy an entry-level home. Unless mortgage companies are willing to offer programs specifically aimed at the younger first-time buyer to assist them with qualifying for loans, this sentiment will continue. As younger millennials continue to move out of their parent’s homes, rentership will increase making the profitability of being an investment real estate buyer more appealing. Contact me today to see how you can gain a real estate investment portfolio.

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, August 10, 2018

Need Another Reason to Buy Now?

need another reason to buy now?
Single Family rental prices are up 2.9 percent this April compared to April one year ago according to CoreLogic’s Single-Family Rental Index.

Rents on lower-priced rental homes have increased (2.7%) whereas rents on higher-priced homes has only slightly increased (1.1%). Rent growth varies depending on the metro area you are currently living in but the increase across 20 of the larger metros has been around 5.9 percent.

The Foreclosure rate is now back to pre-crisis levels. Unemployment has reached an 18-year low and has enabled more homeowners to remain current on their mortgage payments. In April 2018, the national foreclosure rate was 0.6 percent which is a 4 percent drop from the peak from July 2011 to April 2012. Most of the mortgages that remain outstanding were originated between 2004 and 2008 when mortgage standards were lax.

In the 10 largest U.S. Metro areas, the typical mortgage payment remains below pre-crisis peaks for homebuyers. One way to check home affordability is to calculate a “typical mortgage payment.” Use Freddie Mac’s average 30-year fixed rate mortgage and apply 20 percent down payment. This will not include taxes or insurance but will give you a good feel for what monthly payment you would need to qualify. This is a good indicator of home affordability in your area. You can use this experiment on average sale prices across all price levels, low, medium and high.

Nationally home prices increased 6.7 percent year-over-year in July 2018 with lower priced home values increasing faster than medium or higher priced homes. CoreLogic analyzes four individual home-price tiers calculated relative to the median national home sale price. The lowest price tier has increased 9.1 percent year-over-year.

So, with the information provided above we see that rents are increasing, foreclosures are down, employment is up, home prices are increasing, and mortgage rates are still historically low. How much more motivation do you need?

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, August 3, 2018

Insure Your Vacation...Home

insure your vacation home
The Mountains of South Carolina are beautiful. The beaches around Charleston are to die for. Here are some places to visit when the mountains are calling your name; the Falling Water Scenic Byway, The Foothills Trail, Caesar’s Head State Park overlook, Hotel Domestique, Victoria Valley Vineyards, Devil’s Fork State Park, The Red Horse Inn, Table Rock Trail, Pumpkintown Mountain Restaurant, Travelers Rest and Jones Gap State Park.

Many people have second homes or vacation homes in these areas. Do you have the right coverage for your vacation home? Do you need special coverage for these often part-time residences? Let's explore the answers.

  • Property Crime – unoccupied property can be at a higher risk of break-ins. Property crime which includes burglary has fallen between 2016 and 2017 but you still need to be concerned about an empty home. Of the estimated 7.9 million property crimes, burglary still accounts for about 2 of every 10.
  • Condo or Single-Family Home – owning a condo may give you access to insurance which the condo association pays for but clarify what that coverage entails. It may only cover the structure of the condo and not your contents.
  • Flood Insurance – flooding can happen no matter where your vacation home is located even in the mountains. Check local flood maps for your flood zone to better assess your risk and need for flood insurance. If your mountain vacation home area is prone to heavy downpours and maybe even mudslides, then you may want extra insurance coverage. Remember regular home insurance does not protect against water damage.
  • Property Amenities – review the liability portion of your policy to make sure you have extras like swimming pools adequately covered in the event someone is injured and decides to sue you for damages or medical bills. Look at your home the way a guest would to assess what might be unsafe or dangerous especially around younger children.
  • Correct Value Assessment – most insurance policies place their value on what it would take to rebuild the home in the event of a total loss. You can add on additional coverage for content replacement at current market values, but this often requires keeping an inventory of what is in the home. Work with your professional certified insurance agent to make sure you are only paying for what you need. This will also save you money on insurance premiums.

In the meantime, go visit the mountains of South Carolina and have some fun. There is much to do and plenty to see and explore before the summer comes to an end.

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.