Freddie Mac: Doubtful Rates Will Return to Recent Lows

blue interest rates

"One thing seems certain: we aren't likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012."

– Freddie Mac,  March 24, 2014

There are those that hope that 30-year mortgage interest rates will head back under 4%. Obviously, for any prospective home purchaser that would be great news. However, there is probably a greater chance that interest rates will return to the greater than 6% rate of the last decade before they would return to the less than 3.5% rate of 2012.

Freddie Mac, in one of four original posts on their new blog, explained that current rates are still extremely low compared to historic averages:

"The all-time record low – since Freddie Mac began tracking mortgage rates in 1971 – was 3.31% in November 2012. Conversely, the all-time record high occurred in October of 1981, hitting 18.63%. That's more than four times higher than today's average 30-year fixed rate of 4.32% as of March 20…rates hovering around 4.5% may be high relative to last year, but something to celebrate compared to almost any year since 1971."

Rates over decades 


Posted on March 27, 2014 at 9:45 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

The Truth About NAR’s Home Sales Numbers

Up or Down

The National Association of Realtors (NAR) released their latest Existing Homes Sales Report last Friday. The year-over-year comparison of overall sales did not paint a pretty picture. NAR itself called the sales numbers “subdued”. Other media sources used stronger terminology.

There is no doubt that home sales were lower this February (4.60 million) than last February (4.95 million). However, a closer look at the report gives us some evidence as to why that is. Last year, of the 4.95M homes sold, 25% were distressed properties (foreclosures and short sales). This February, only 16% of sales were made up of distressed properties.

WHY IS THIS IMPORTANT?

Well, if we do the math, we can see that the annualized number of non-distressed properties sold which was revealed in the latest report (3,864,000) was actually greater than the annualized number of non-distressed properties sold that was reported last year (3,712,500). As we sell-off the ‘shadow inventory’ of distressed properties, there will be less homes from which a potential buyer can choose. That will impact sales.

As proof of this point, we can look at the months’ supply of housing inventory available for purchase. In a normal market, a six month supply would be optimum. However, we haven’t reached a six month supply once in over 18 months. This shortage of inventory is the main reason sales are down.

THE GOOD NEWS

As prices continue to rise, more and more homeowners will be freed from the shackles of negative or limited equity. This combined with an improving economy will allow homeowners to again feel confident that they can sell their homes and move on with their future plans. We are already starting to see increases in listings coming onto the market (unsold inventory is 5.3 percent above a year ago). Once housing inventory reaches normal levels (a 6 months’ supply) we will again see home sales begin to increase.


Posted on March 27, 2014 at 9:45 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

Why You Need a Real Estate Agent


Posted on March 27, 2014 at 9:45 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

5 Reasons to Sell Now!

Many sellers are still hesitant about putting their house up for sale. Where are prices headed? Where are interest rates headed? Can buyers qualify for a mortgage?  These are all valid questions. However, there are several reasons to sell your home sooner rather than later. Here are five of those reasons.

1. The Most Serious Buyers Are Out Now

Most people realize that the housing market is hottest from April through June. The most serious buyers are well aware of this and, for that reason, come out in early spring in order to beat the heavy competition. These buyers are ready, willing and able to buy…and are in the market right now!

2. There Is Less Competition Now

Housing supply always grows from the spring through the early summer. The choices buyers have will continue to increase over the next few months. Don’t wait until all the other potential sellers in your market put their homes up for sale.

3. The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. As the market heats up, banks will be inundated with loan inquiries causing closing timelines to lengthen.  Selling now will make the process quicker and simpler.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate at about 4.5% right now. Rates are projected to be well over 5% by this time next year.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire.

That is what is truly important.


Posted on March 18, 2014 at 10:56 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

Home Sales: Are They Increasing or Decreasing?

Road Sign Confused

There has been a lot of chatter about the last few Existing Home Sales Reports from the National Association of Realtors (NAR). Year-over-year sales have been down four of the last five months. Experts are asking whether or not the housing recovery is beginning to stall. Let’s take a closer look at the data.

It is true that last month’s annualized sales rate of 4.62M was less than the 4.87M reported last January. However, after further scrutiny, the report reveals an interesting situation: sales of non-distressed properties are actually up. In January 2013, 23% of the 4.87M sales were distressed properties (foreclosures and short sales) meaning 3.75M non-distressed properties were sold. In January 2014, 15% of the 4.62M sales were distressed properties. That means 3.93M non-distressed properties sold – an increase of 180,000 sales.

When we dig deeper into NAR’s research, we also see that homes at the higher price points are selling at greater increases than the lower price points.

 

This deeper look at the report shows evidence that the housing market is still doing quite well when we removed distressed sales (which are in many cases lower end properties) from the equation


Posted on March 18, 2014 at 10:56 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

Should I Rent My House if I Can’t Sell it?

Home For Rent

A recent study has concluded that 39% of buyers prefer to rent out their last residence rather than sell it when purchasing their next home.

The study cites that many homeowners were able to refinance and “locked in a very low mortgage rate in recent years. That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month, so they are going for it.”

This logic makes sense in some cases. We at KCM believe strongly that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. Are you ready to be a landlord?

Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.

10 Questions to Ask BEFORE Renting Your Home

1.) How will you respond if your tenant says they can't afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

2.) Because of the economy, many homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?

3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?

4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

5.) Will you allow pets? Cats? Dogs? How big a dog?

6.) How will you actually collect the rent? By mail? In person?

7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?

8.) Do you have a list of craftspeople readily available to handle these repairs?

9.) How often will you do a physical inspection of the property?

10.) Will you alert your current neighbors that you are renting the house?

Bottom Line

Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.


Posted on March 18, 2014 at 10:55 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

Where Are Prices Headed Over The Next 5 Years?

Home-Price-Expectation-275Today, 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 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

The latest survey was released last week. Here are the results:

  • Home values will appreciate by 4.5% in 2014.
  • The average annual appreciation will be 3.94% over the next 5 years
  • The cumulative appreciation will be 19.7% by 2018.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of almost 11% by 2018.

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


Posted on March 10, 2014 at 11:21 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

Top 10 Reasons to Hire a Realtor


Posted on March 10, 2014 at 11:03 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

5 Reasons You Shouldn’t For Sale By Owner

Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of our reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the peoplewith whom you must be prepared to negotiate if you 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 appraiser if there is a question of value
  • Your bank in the case of a short sale

2. Exposure to Prospective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3.  Results Come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.


Posted on March 10, 2014 at 11:03 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |

5 Reasons to Hire a Real Estate Professional

Whether you are buying or selling a home, you need an experienced Real Estate Professional to lead you toward your ultimate goal. In this world of instant gratification and Internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened in recent months with the Federal Government continuing to taper bond purchases and the impact that decision has had on mortgage rates.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

Not only is it important for your home to be priced correctly from the start, to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.

According to the National Association of REALTORS“the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the Internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.” – Dave Ramsey

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t hike up Kilimanjaro without a Sherpa, or replace the engine in your car without a trusted mechanic, why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Agents: How do you earn the trust of your clients? Our upcoming FREE webinar“Becoming the Industry Expert in Your Market” is on Thursday, March 20th.  Register now to learn the significance of being seen as the industry expert, the power of branding yourself this way and the essentials required to accomplish these two feats.


Posted on March 10, 2014 at 11:03 PM
Windermere Real Estate The Dalles | Posted in Broker Updates |