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How's The Market? What Lies Ahead...

by Lorna Calder

“How’s the Market?”
What’s Ahead for Real Estate

While no one can predict the future with certainty, most experts expect to see modest growth in the U.S. housing market for the remainder of this year and next. Inventory will remain tight, mortgage rates will continue to creep up, and affordability will remain a major issue in many parts of the country.

So what does that mean for home buyers and sellers? To answer that question, we take a closer look at some of the top indicators.

CONTINUED GROWTH IN HOUSING MARKET

There’s good news for homebuyers! In many markets across the country, prices have begun to stabilize after a period of rapid appreciation. Nationwide, home sales experienced a slight decline of 1.6 percent in the second quarter, primarily due to higher mortgage rates and housing prices combined with limited inventory.

However, buyers who have been waiting on the sidelines in anticipation of a big price drop may be disappointed. Demand remains strong across the sector and prices continue to rise. The Case-Shiller U.S. National Home Price Index reported a 6.2 percent annual gain in June, a healthy but sustainable rate of appreciation.1

In its latest Outlook Report, Freddie Mac forecasts continued growth in the housing market due to a strong economy and low unemployment rate, which dropped to 3.9 percent in July.

“The housing market hit some speed bumps this summer, with many prospective homebuyers slowed by not enough moderately-priced homes for sale and higher home prices and mortgage rates,” according to Sam Khater, Chief Economist at Freddie Mac. “The good news is, the economy and labor market are very healthy right now, and mortgage rates, after surging earlier this year, have stabilized in recent months. These factors should continue to create solid buyer demand, and ultimately an uptick in sales, in most parts of the country in the months ahead.”3

INVENTORY TO REMAIN TIGHT, NEW CONSTRUCTION MAY HELP

Experts predict that demand for housing will continue to outpace available supply, especially in the entry-level price range.

“Today, even as mortgage rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory accompanying unsustainable home-price increase,” said National Association of Realtors (NAR) Chief Economist Lawrence Yun in a recent release.

"The answer is to encourage builders to increase supply, and there is a good probability for solid home sales growth once the supply issue is addressed,” said Yun. Additional inventory will also help contain rapid home price growth and open up the market to prospective homebuyers who are consequently—and increasingly—being priced out. In the end, slower price growth is healthier price growth."4

With so much demand, why aren’t more builders bringing inventory to the market? According to the National Association of Home Builders, a crackdown on immigration and tariffs on imported lumber have made home construction more difficult and expensive. Those factors—combined with the rising cost of land and increased zoning requirements—have put a damper on the industry overall.5

Still, there’s evidence that a modest rise in the rate of new building projects may be on the way. Freddie Mac predicts new housing construction will increase slightly after a stall last quarter.2 And a recent report by Freedonia Focus Reports forecasts an annual increase in housing starts of 2.4 percent through 2022, led by an uptick in single-family homes.6 The boost in inventory should help drive sales growth and relieve some of the pent-up demand in tight markets.

While the current lack of inventory is generally preferred by sellers because it means less competition, a combination of high prices and rising interest rates has narrowed the pool of potential buyers who can afford to enter the market. Sellers should seek out real estate agents who utilize technologically-advanced marketing tactics to reach qualified buyers in their area.

AFFORDABILITY REACHES LOWEST LEVEL IN A DECADE

According to a recent report by Morgan Stanley, Americans are paying the most in monthly mortgage payments relative to their incomes since 2008.7 And prices aren’t expected to come down any time soon.

"We believe that the current supply and demand environment will continue to push home prices higher, just at a decelerating pace," said John Egan, Morgan Stanley’s Co-Head of U.S. Housing Strategy.

Fortunately, economists aren’t concerned about affordability levels triggering another housing crisis, as lending standards are much higher today than they were during the run-up before the recession. According to credit reporting agency TransUnion, the share of homeowners who made mortgage payments more than 60-days past due fell in the second quarter to 1.7 percent, the lowest level since the market crash.7

NAR Chief Economist Lawrence Yun agreed with this assessment in a recent statement. “Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher than normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession.”4

MORTGAGE RATES EXPECTED TO CONTINUE RISING

The Federal Reserve has taken measures to help keep the housing market—and the overall economy—from overheating. It has raised interest rates twice this year so far, causing mortgage rates to surge in the first half of the year.

Economists predict that the rise in mortgage rates will continue at a more gradual rate through this year and next. The U.S. weekly average mortgage rate rose from 3.99 percent in the first week of January to as high as 4.66 percent in May. Freddy Mac forecasts an average rate of 4.6 percent for 2018 and 5.1 percent in 2019.2

The good news is, mortgage rates still remain near historic lows and a whopping 14 points below the recorded high of 18.63 percent in the early 1980s.8 Buyers who have been on the fence may want to act soon to lock in an affordable interest rate ... before rates climb higher.

"Some consumers may be thinking that because mortgage rates are higher than they were a year ago, maybe I should just wait until rates fall down again," said NAR’s Chief Economist Lawrence Yun in a recent speech. "Well, they will be waiting forever."9

WHAT DOES IT ALL MEAN FOR ME?

If you’ve been waiting to buy a home, you may want to act now. A shortage of available homes on the market means prices are likely to keep going up. And a lack of affordable rental inventory means rents are expected to rise, as well.

If you buy now, you will benefit from appreciating property values while locking in an historically-low interest rate on your mortgage. Waiting to buy could mean paying more for your home as prices increase and paying higher interest on your mortgage as rates continue to rise.

And if you’re in the market to sell your home, there’s no need to wait any longer. Prices have begun to stabilize, and rising interest rates could decrease the number of available buyers for your home. Act now to take advantage of this strong seller’s market.

LET’S GET MOVING

While national real estate numbers and predictions can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood.

If you have specific questions or would like more information about where we see real estate headed in our area, let us know! We’re here to help you navigate this changing real estate landscape.

Sources:

  1. S&P Dow Jones Indices Press Release -
    https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/766551_cshomeprice-release-0828.pdf?force_download=true
  2. Freddie Mac Outlook Report -
    http://www.freddiemac.com/research/forecast/20180827_strong_economic_growth.html
  3. DSNews -
    https://dsnews.com/daily-dose/08-28-2018/freddie-weighs-in-on-housing-market
  4. PR Newswire -
    https://www.prnewswire.com/news-releases/realtors-chief-economist-reflects-on-past-recession-whats-ahead-for-housing-300702632.html
  5. CNN Money -
    https://www.keyt.com/lifestyle/where-is-the-us-housing-market-headed-4-things-you-need-to-know/787471572
  6. PR Newswire -
    https://www.prnewswire.com/news-releases/us-housing-starts-to-rise-2-4-yearly-to-2022--300711989.html
  7. Business Insider -
    https://www.businessinsider.com/housing-affordability-slowing-market-sales-2018-8
  8. Value Penguin -
    https://www.valuepenguin.com/mortgages/historical-mortgage-rates
  9. Times Free Press -
    https://www.timesfreepress.com/news/business/aroundregion/story/2018/aug/14/despite-prospects-higher-mortgage-rateshousin/476979/

ARE YOU POLITICALLY CORRECT?

by Lorna Calder

Monday Morning Coffee

INSPIRATION FOR TODAY:
 
"It's important to let people know what you stand for. It's equally important to let them know what you won't stand for."
 
- B. Bader
 
ARE YOU POLITICALLY CORRECT?
 
How careful we must be today - to avoid the slightest slight to others. If we continue, we will become totally homogenized - each looking, acting, talking, and walking like each other. The unique identity into which we were born will mellow, fade, and eventually become transparent.  The gifts and talents we have to offer will be so diluted as to go unnoticed.
 
What ever happened to our right to speak out against wrong?  Why do we allow ourselves to be hushed and shushed when we verbalize our expectation of respect from the very young?  Why are we so sensitive to what "they" think of our actions when we attempt to do good?
 
Each of us is uniquely individual.  We are one of a kind, not just an ingredient in the soup of humanity.  Each of us is born with the ability to make a difference, to contribute our talent, to expect the best.
 
We have the ability to set standards for ourselves, to choose the principles upon which we live and serve.  We also have the responsibility to teach our children "what we stand for" as well as "what we won't stand for."  By unashamedly living those principles, and expecting the same from our children, we help set the course for others who have not the strength to do so.  We are the example.
 
Political correctness, as it applies to granting full respect for others is perfectly acceptable.  Political correctness, as it is often applied as a choke-chain to restrain the desire to uphold what is right, is a gross misuse of the desire for simple courtesy and politeness.  Let's just drop "political" and be correct!

July 2012 Houston and National Housing Market Trends

by Lorna Calder

This month's video from HAR discusses Multi-Family Property Types.  You will learn the positive aspects, as well as the negative, of owning a Multi-Family Property.  If you are interested in owning a Multi-Family Property and/or have any questions about owning a Multi-Family Property please do not hesitate to contact me.

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decision they need to have all the information they can upfront. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed.

The June 2012 Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statistics and news you need to know to stay current with today's changing housing market.

This month's housing trends issue features:

Summer Safety Tips

Credit Score Fixes

Stay Cool 9 Ways When Paying Your Energy Bill

Home Fix-Ups More Popular Than Upgrades

Bathroom Storage:  Smart Ways to Stow More

You can view the newsletter here.

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

June 2012 Houston and National Housing Market Trends

by Lorna Calder

This month's video from HAR discusses legal subdivisions.  Subdividing means taking a larger lot of land and dividing it into smaller pieces of land to sell or develop.  You will learn about some of the laws that regulate subdivisions to protect consumers.  If you have any further questions about subdivisions after watching this video, please feel free to contact me.  I'd love to hear from you!

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decision they need to have all the information they can upfront. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed.

The May 2012 Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statistics and news you need to know to stay current with today's changing housing market.

This month's housing trends issue features:

Maximize Tax Credits for Energy and Medical Home Improvements

Do You Understand Your Hurricane Deductible?

Do's and Don'ts Before Home Appraisal

10 Ideas for Using Your Space Effectively

Dreaming of a Summer Escape to an Italian Villa?

You can view the newsletter here.

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

May 2012 Houston and National Housing Market Trends

by Lorna Calder

In this video we will discuss why a consumer should always use a realtor when buying, selling or leasing a property.

Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the buying process and selling real estate.  Real estate transactions involve one of the biggest financial investments most people experience in their lifetime.  Your realtor can help you determine how much you can afford to spend, and possibly more importantly, how much you should spend.

Your realtor can take that information and refer you to lenders who are best qualified to help you.  Your realtor has many resources to assist you in your home search.  Sometimes the property you are seeking is available, but not actively advertised in the market, and it will take some legwork by your realtor to find all available properties.

Your realtor can assist you in the selection process by providing objective information about each property.  Agents who are realtors have access to a variety of informational resources.  Realtors can provide local community information on utilities, zoning, schools, etc. 

Your realtor also provides insight during the evaluation of the property.  Depending on the area and property, this could include inspection for termites, asbestos, or roof condition just to name a few.  Your realtor can help you find a qualified responsible professional to do most of these investigations, and provide you written reports.

Your realtor can help you negotiate.  When selling your home your realtor can give you up to date information about what is happening in the marketplace.  This is a key to getting your property sold at the best price quickly and with minimum hassle.

 Your realtor acts as a marketing coordinator, distributing information about your property to other real estate agents through a multiple listing service or other cooperative marketing networks, open houses for agents, etc.  In many markets across the country, more than 50% of real estate sales are cooperative sells, meaning a real estate agent other than yours brings in the buyer.

 Your realtor can guide you through the closing process and make sure everything flows together smoothly.  The required paperwork alone is overwhelming for most sellers.  Your realtor is the best person to objectively help you solve these issues and move the transaction to closing.

So now you’ve learned why you should use a realtor when buying or selling real estate. 

And remember, that a realtor is always the best source of information for all your real estate needs.

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decision they need to have all the information they can upfront. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed.

 

The May 2012 Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statistics and news you need to know to stay current with today's changing housing market.

This month's housing trends issue features:

Buying Condo For College Student is Smart Investment

Amazing Restorations Become Dream Homes

Spring Cleaning 101

7 Gardening Mistakes to Avoid

Swimming Pools: Alternatives to Chlorine

You can view the newsletter here.

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

April 2012 Houston and National Housing Market Trends

by Lorna Calder

This month’s featured video discusses the difference between a townhome and a condominium.

They can look exactly alike! What differentiates a condo from a townhome is what property rights come to consumers who purchase them.  

A buyer of a condominium owns his or her individual unit structure, plus a percentage of the surrounding property, including land and any amenities on the property.  Condo owners are responsible for the space inside their own walls, which means they can paint them however they wish.  They don't enjoy that same privilege on the outside of their homes.  However, residents are members of a home owners association and pay a monthly fee to the association in exchange for the maintenance of the common property.

A buyer of a townhome purchases his or her individual unit and well as the ground underneath that unit.  Townhome property lines are generally more consistent with single family homes and common areas are usually still individually owned.  Townhome communities may also have owner associations which maintain certain external structures, security gates, trash service and other common items.  They may also have restrictions about exterior alterations to the property, parking and maintenance.  

Working with a knowledgeable realtor can help you decide if a condo or townhome is right for you.  Now you've learned something about the difference between a townhouse unit and a condominium unit!  

And remember, that a realtor is always the best source of information for all your real estate needs.

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decision they need to have all the information they can upfront. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed.

 

The April 2012 Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statistics and news you need to know to stay current with today's changing housing market.

This month's housing trends issue features:

Create an Outdoor Resort in Your Backyard

Have $18 Million Lying Around? Coral Gables has a Home for You

Tornado Storm Shelters: Safe Room Protection When it Counts

Are You Looking for Energy Savings in All the Wrong Places?

What to Consider Before Building a Pool

You can view the newsletter here.

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

February 2012 Houston and National Housing Market Trends

by Lorna Calder

This month's featured video discusses why consumers should always use a realtor when buying real estate. 

Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge about the real estate market.  Real estate transactions involve one of the largest financial investments most people experience in their lifetimes.  Your realtor can help you determine how much you can comfortably afford.  They may also be able to refer you to lenders who will be able to help you.  Your realtor has many resources at their disposal to assist you in your home search.  Your realtor can also provide objective information about each property in which you are interested.  They will also provide you valuable insight during the evaluation of the property. 

Your realtor can help you negotiate the price paid, contract terms and closing costs.  Your realtor can guide you through the closing process, and make sure everything flows together smoothly.  The required paperwork alone is overwhelming for most buyers.  Your realtor is the best person to objectively help you resolve any issues, and move the transaction to closing.  So now you’ve learned why you should  use a realtor when buying real estate.

Remember a Realtor is always the source of information for all your real estate needs.

 

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decision they need to have all the information they can upfront. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed.

The February 2012 Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statistics and news you need to know to stay current with today's changing housing market.

This month's housing trends issue features:

Simple Tips to Increase Your Home's Curb Appeal

7 Best Remodeling Projects for the Money

How to Claim your 2011 Energy Tax Credits

What You Need to Know About Buying a Home Security System

Considering Retirement Communities? Top 10 Picks

You can view the newsletter here.

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

January 2012 Houston and National Housing Market Trends

by Lorna Calder

This month's featured video discusses homeowners associations.  These entities can be found in almost every housing environment. Consumers must research to determine if a homeowners association (HOA) has authority over any home they might be considering for purchase. When a person buys a home in an area with a HOA, he or she becomes a member of the association and is responsible for membership dues.  By design a HOA has the goal of ensuring that living in the area or on the property is pleasant for all residents.

The first act of the HOA is to establish a set of rules or guidelines to hopefully accomplish that.  The HOA Board of Directors then establishes monthly dues for all homeowners and can restrict the rights of the way a person can use his or her own property or the joined or common property.  For example the rules may govern the number of people who can occupy a house, the colors one can paint a house, or the time at which common areas like exercise rooms or pools can be used.  Fines or fees can be assessed or even evictions for those that don’t abide by the rules.

Many find the HOA well worth extra fees associated with owning property.  When well administered, the HOA can provide certain predictability to owning a home and clearly delineate both the homeowner’s and association’s responsibility.

Remember a Realtor is always the source of information for all your real estate needs.

 

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decision they need to have all the information they can upfront. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed.

The January 2012  Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statistics and news you need to know to stay current with today's changing housing market.

This month's housing trends issue features:    

2011 Energy Tax Credits: What You Need To Know To Collect

8 Small Space Solutions for Shared Kids' Rooms

Top 3 Most Common Home Defects to Check For

Home Security Cameras: Peace Of Mind While Your Away

Winter Gardening: Plants That Provide Beauty All Year Round

You can view the newsletter here.  

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.   

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

 

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