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Empty Nesters: Best to Remodel or Time to Sell?

by Diana Burgon

Empty Nesters: Best to Remodel or Time to Sell?

Empty Nesters: Best to Remodel or Time to Sell? | MyKCM

Your children have finally moved out and you and your spouse now live alone in a four-bedroom colonial (or a similar type of house). You have two choices to make:

  1. Remodel your house to fit your current lifestyle and needs
  2. Sell your house and purchase the perfect home

Based on the record of dollars spent on remodeling and renovations, it appears that many homeowners are deciding on number one. But, is that the best long-term solution?

If you currently live in a 3-4-bedroom home, you probably bought it at a time when your children were the major consideration in determining family housing needs. Along with a large home, you more than likely also considered school district, the size of the property and the makeup of other families living in the neighborhood (example: you wanted a block with other kids your children could play with and a backyard large enough to accommodate that).

Remodeling your home to meet your current needs might mean combining two bedrooms to make one beautiful master suite and changing another bedroom into the massive walk-in closet you always wanted. However, if you live in a neighborhood that historically attracts young families, you may be dramatically undermining the value of your house by cutting down the number of bedrooms and making it less desirable to the typical family moving onto your block.

And, according to a recent study, you will recoup only 64.4% of a remodeling project’s investment dollars if you sell in the future.

Your home is probably at its highest value as it stands right now. Instead of remodeling your house, it may make better financial sense to sell your current home and purchase a home that was built specifically to meet your current lifestyle and desires.

In many cases, this well-designed home will give you exactly what you want in less square footage (read less real estate taxes!) than your current home.

Bottom Line

If you are living in a house that no longer fits your needs, at least consider checking out other homes in your area that would meet your lifestyle needs before taking on the cost and hassle of remodeling your current house.

Home Prices Up 6.64% Across Country

by Diana Burgon

Home Prices Up 6.64% Across the Country! [INFOGRAPHIC]

Home Prices Up 6.64% Across the Country! [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
  • In the report, home prices are compared both regionally and by state.
  • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
  • Alaska & West Virginia were the only states where home prices are lower than they were last year.

58% of Homeownder See a Drop in Home Values Coming

by Diana Burgon

58% of Homeowners See a Drop in Home Values Coming

58% of Homeowners See a Drop in Home Values Coming | MyKCM

According to the recently released Modern Homebuyer Survey from ValueInsured58 percent of homeowners think there will be a “housing bubble and price correction” within the next 2 years.

After what transpired just ten years ago, we can understand the concern Americans have about the current increase in home prices. However, this market has very little in common with what happened last decade.

The two major causes of the housing crash were:

  1. A vast oversupply of housing inventory caused by home builders building at a pace that far exceeded historical norms.
  2. Lending standards that were so relaxed that unqualified buyers could easily obtain financing thus enabling them to purchase a home.

Today, housing inventory is at a 20-year low with new construction starts well below historic norms and financing a home is anything but simple in the current mortgage environment. The elements that precipitated the housing crash a decade ago do not exist in today’s real estate market.

The current increase in home prices is the result of a standard economic equation: when demand is high and supply is low, prices rise.

If you are one of the 58% of homeowners who are concerned about home values depreciating over the next two years and are hesitant to move up to the home of your dreams, take comfort in the latest Home Price Expectation Survey.

Once a quarter, a nationwide panel of over one hundred economists, real estate experts and investment & market strategists are surveyed and asked to project home values over the next five years. The experts predicted that houses would continue to appreciate through the balance of this year and in 2018, 2019, 2020 and 2021. They do expect lower levels of appreciation during these years than we have experienced over the last five years but do not call for a decrease in values (depreciation) in any of the years mentioned.

Bottom Line

If you currently own a home and are thinking of moving-up to the home your family dreams about, don’t let the fear of another housing bubble get in the way as this housing market in no way resembles the market of a decade ago.

What States Give You The Most For Your Dollar

by Diana Burgon

What State Gives You the Most ‘Bang for Your Buck’? [INFOGRAPHIC]

Some Highlights:

  • Thinking of moving across the country? How far will your money take you?
  • The majority of states in the Midwest and South offer a lower cost of living compared to Northeast and Western states.
  • The ‘Biggest Bang for your Buck’ comes in Mississippi where, compared to the national average, you can actually purchase $116.01 worth of goods for $100.
  • For more information regarding the methodology used to create the map, visit the Tax Foundation.

U.S. Housing Inventory Hits a New Low… List Your House TODAY!

U.S. Housing Inventory Hits a New Low… List Your House TODAY! | MyKCM

Every summer, families across the country decide if this will be the year they sell their current house and move into their dream home.

Mortgage rates have hovered around 4% for all of 2017, forcing buyers off the fence and into the market, resulting in incredibly strong demand RIGHT NOW!! At the same time, inventory levels of homes for sale have dropped dramatically as compared to this time last year.

Trulia reported that “U.S. home inventory has tumbled 8.9% over the pastyear and has now fallen for nine consecutive quarters.” There is now 20% less inventory than there was five years ago.

Here is a chart showing the decrease in inventory levels by category:

U.S. Housing Inventory Hits a New Low… List Your House TODAY! | MyKCM

Bottom Line

Demand for your home is very strong right now while your competition (other homes for sale) is at a historically low level. If you are thinking of selling in 2017, now may be the perfect time.

Thinking of Selling? You Should Act NOW!

by Diana Burgon

Thinking of Selling? You Should Act NOW!

Thinking of Selling? You Should Act NOW! | MyKCM

If you thought about selling your house this year, now more than ever may be the time to do it! The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.

Lawrence Yun, Chief Economist at the National Association of Realtors, recently commented:

“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

Yun goes on to say:

"Current demand levels indicate sales should be stronger, but it's clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions."

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction, including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.

Homeowners: Your Home Must Be Sold TWICE

by Diana Burgon

Homeowners: Your Home Must Be Sold TWICE

Homeowners: Your Home Must Be Sold TWICE | MyKCM

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measuresthe disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.

Bill Banfield, VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge: 

“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage. 

A homeowner [or a buyer] could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.”

The chart below illustrates the changes in home price estimates over the last 12 months.

Homeowners: Your Home Must Be Sold TWICE | MyKCM

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacle that may arise.

Homeowners: Your Home Must Be Sold TWICE

by Diana Burgon

Homeowners: Your Home Must Be Sold TWICE

Homeowners: Your Home Must Be Sold TWICE | MyKCM

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measuresthe disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.

Bill Banfield, VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge: 

“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage. 

A homeowner [or a buyer] could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.”

The chart below illustrates the changes in home price estimates over the last 12 months.

Homeowners: Your Home Must Be Sold TWICE | MyKCM

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacle that may arise.

Homeowners: Your Home Must Be Sold TWICE

by Diana Burgon

Homeowners: Your Home Must Be Sold TWICE

Homeowners: Your Home Must Be Sold TWICE | MyKCM

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measuresthe disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.

Bill Banfield, VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge: 

“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage. 

A homeowner [or a buyer] could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.”

The chart below illustrates the changes in home price estimates over the last 12 months.

Homeowners: Your Home Must Be Sold TWICE | MyKCM

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacle that may arise.

Your Opportunity to Achieve the American Dream Keeps Getting Better!

Your Opportunity to Achieve the American Dream Keeps Getting Better! | MyKCM

Forbes.com recently released the latest results of their American Dream Index, in which they measure “the prosperity of the middle class, and…examine which states best support the American Dream.”

The monthly index measures several different economic factors, including goods-producing employment, personal and commercial bankruptcies, building permits, startup activity, unemployment insurance claims, labor force participation, and layoffs.

The national index score was rounded out to 100.0 in January as a baseline for comparison and it rose the fourth straight month in a row to 101.8.

Alaska, coming in at 89.4, represented the lowest score on the index due in part to the recent collapse in oil prices. In contrast, Wyoming came in with the highest score at 115.1. The full results can be seen in the map below.

Your Opportunity to Achieve the American Dream Keeps Getting Better! | MyKCM

Forbes Senior Editor Kurt Badenhausen explained why many states saw a boost in the index last month:

“The American Dream Index rose for the fourth straight month to 101.8 propelled by gains in goods-producing jobs and building permits, as well as declines in unemployment claims and mass layoffs.

Goods-producing jobs (manufacturing, mining, construction and agriculture) were up for the ninth straight month in May…Building permits rose for the fourth straight month compared to the prior year.”

Bottom Line

The American Dream, for many, includes being able to own a home of one’s own. With the economy improving in many areas of the country, that dream can finally become a reality.

Displaying blog entries 1-10 of 49

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Diana Burgon
eXp Realty
1321 King St.
Bellingham WA 98225
Office: 360-927-8588
Cell: 360-927-8588