5-Year Outlook

Home Prices: A 5-Year Outlook

  

With inventory presently below historically normal levels, current & future home prices have been the topic of many real estate conversations. The most recent Home Price Expectation Survey was just released; giving insight into where experts believe prices will be leading up to 2019.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 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.

Here are some highlights from their latest survey:

• Home values will appreciate by 4.4% in 2015.
• The cumulative appreciation will be 19.3% by 2019.
• That means the average annual appreciation will be 3.6% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 11.7% by 2019.

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

by The KCM Crew 

Housing Opportunity

2015: A Year of Housing Opportunity

Many believed that when the housing market crashed, so too would the desire of American’s to own a home again. Many reports have shown that, especially among younger generations, the American Dream of homeownership is still very much alive.

Julián Castro, Secretary for HUD, recently summed up what it means to own a home in a speech at the National Press Club.

"Homeownership is still the cornerstone of the American Dream — a fact you can see in the lives of everyday folks.

It’s a source of pride. It’s a source of wealth, providing both a nest and a nest egg. And it strengthens communities and fuels growth in the overall economy."

Castro appropriately named his speech, “2015: A Year of Housing Opportunity”, a theme that rang true throughout.

“Opportunity is not an abstract concept - it's a path to a more prosperous life, and housing often serves as its foundation. T.S. Elliot once said that "home is where one starts from."

“A home is often a primary source of wealth in a family… Having a home is generational way to pass that wealth on. We want people responsible enough to own a home to have that opportunity.”

Bottom Line

“Over the years-through decades of economic downturns and wars-the American people have always held on to this Dream, and always will.”

As the economy continues to improve, more and more Americans will qualify for homeownership, allowing more families to obtain the American Dream
.

by The KCM Crew

Five reasons to sell now

Is spring closer than we think? Depending on which Groundhog you witnessed, you may have less time than you think to get your home on the market before the busy spring season.

Many sellers feel that the spring is the best time to place their home on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.

Here are five reasons to sell now.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that there are currently more prospective purchasers looking at homes than at any other time in the last 12 months, which includes last spring’s buyers’ market. These buyers are ready, willing and able to purchase… and are in the market right now!

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing supply just dropped to 4.4 months, which is under the 6 months’ supply that is needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.

Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

The choices buyers have will increase in the spring. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the 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. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend itself to a smoother transaction.

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 23.5% from now to 2019. 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 below 4% right now. Rates are projected to be a full point higher by the end of 2015.

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

Look at the reason you decided to sell in the first place and determine 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?

Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.