Home Matters

Is The Increase In Inventory A Bullish Or Bearish Sign For Real Estate?

In a recent article, National Housing Inventory Crisis Reaches Inflection Point, realtor.com reported that:

New listings jumped 8% year-over-year nationally, the largest increase since 2013
Total listings in the 45 largest markets are now up 6% on average over last year
This increase in housing inventory has sparked two different reactions. Some are saying this is the first sign of a potential collapse while others are saying it is a welcomed reprieve from the lack of inventory that has stalled the market recently. As Zelman & Associates reported in a recent ‘Z Report’:

“With the rate of home price appreciation starting to decelerate alongside the uptick in inventory, we expect significant debate whether this is a bullish or bearish sign.”

Is this a sign the market might crash?
There are those who look at the increase in inventory as a sign that we are returning to the market we saw last decade. However, a closer look shows that we are nowhere near the levels of inventory we reached before the crash in 2008.

A normal market would have about 6-months inventory, but the latest Existing Home Sales Report issued by the National Association of Realtors revealed that:

“Unsold inventory is at a 4.3-month supply at the current sales pace up from 4.1 months a year ago.”

A decade ago, prices began to rapidly depreciate in June 2007. At that time, we had a 9.1-month supply (more than double what it is today) and inventory kept rising until it hit a peak of 11.1 months in April of 2008.

With the current levels of buyer demand, any such increase in months supply is highly unlikely. As Danielle Hale, realtor.com’s Chief Economist explains:

 “After years of record-breaking inventory declines, September’s almost flat inventory signals a big change in the real estate market. Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize. But don’t expect the level to jump dramatically.

Plenty of buyers in the market are scooping up homes as soon as they’re listed, which will keep national increases relatively small for the time being.”

What will be the result of the increase in inventory?
The increase in inventory will allow many families who had been unable to find a home to finally become homeowners. Again, we quote from the ‘Z Report’:

“In our view, the short-term narrative will probably be confusing, but more sustainable growth and affordability will likely be the end result.”

Bottom Line
If you are either a first-time or second-time buyer who has given up, check with a local real estate professional to see if new listings have come to the market in your area.

Benefits of Home Ownership

Thinking Of Selling Your Home? Here’s Why You Need A Pro In Your Corner

With home prices on the rise and buyer demand still strong, some sellers may be tempted to try and sell their homes on their own without using the services of a real estate professional.

Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interests 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 termite company if there are challenges
• The buyer’s lender if the structure of the mortgage requires the sellers’ participation
• The appraiser if there is a question of value
• The title company if there are challenges with certificates of occupancy (CO) or other permits
• The town or municipality if you need to get the CO permits mentioned above
• The buyer’s buyer in case there are challenges with the house your buyer is selling

Bottom Line
The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Meet with a professional in your local market to see the difference that he or she can make in easing the selling process for you.

Are You Spending TOO Much On Rent?

Chances are if you are renting you are spending too much of your income on your monthly housing expense. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their rent or mortgage payment. This percentage allows the household to save money for the future while comfortably covering other expenses.

According to new data released from ApartmentList.com, 49.5 million renters in the United States were cost-burdened in 2017, meaning they spent more than 30% of their monthly incomes on rent. This accounts for nearly half of all renter households in the country and is up 3.1 million from 2007.

When a household is cost-burdened by their monthly housing expense, they are not as easily able to save money for the future. This is a big factor for many renters who dream of owning their own homes someday.

But there is hope for those who are able to save at least a 3% down payment! The percentage of income needed in the US to buy a home is significantly less than renting at 17.1%!

The chart below compares the historic percentage of income needed to rent and buy from 1985-2000 to the first quarter of 2018. As you can see, the cost of renting has climbed above historic numbers while the cost of buying dropped over the same period of time.

Bottom Line

If you are one of the many renters who is spending too much of their monthly income on rent, consider saving money by getting a roommate, moving into a less expensive apartment, or even moving in with family. These are all ways to save for a down payment so that you can put your housing costs to work for you!

How Will Home Sales Measure Up Next Year?

There are many questions about where home sales are headed next year. We have gathered the most reliable sources to help answer this question. Here are our sources:

Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.

The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.

Freddie Mac – An organization which provides liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.

Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets.

Here are their projections:

Bottom Line
Every source sees home sales growing next year. For more on your neighborhood, contact a local real estate professional.

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Home Buyer Blunders

Home Inspections: What To Expect

So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. Oftentimes, agents make your offer contingent on a clean home inspection.

This contingency allows you to renegotiate the price you paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed.

How to Choose an Inspector
Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. HGTV recommends that you consider the following 5 areas when choosing the right home inspector for you:

Qualifications – find out what’s included in your inspection and if the age or location of your home may warrant specific certifications or specialties.
Sample Reports – ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. The more detailed the report, the better in most cases.
References – do your homework – ask for phone numbers and names of past clients who you can call to ask about their experiences.
Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Membership in one of these organizations often means that continued training and education are provided.
Errors & Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human after all, and it is possible that they might miss something they should have seen.
Ask your inspector if it’s okay for you to tag along during the inspection, that way they can point out anything that should be addressed or fixed.

Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace and chimney, the foundation, and so much more!

Bottom Line
They say ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional who you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.

Home equity hits record high

Source: CNBC

Homeowners are racking up record amounts of home equity, thanks to fast-rising values in today's competitive housing market. No surprise, more people are now starting to tap that cash. What are they spending it on?

Mostly making their homes even more valuable.
Renovation spending is soaring, and 80 percent of borrowers taking out home equity lines of credit say they would consider using that money to renovate, according to a survey released in December by TD.

Remodeling spending topped $152 billion in 2017, and renovations for owner-occupied single-family homes will increase 4.9 percent in 2018 over 2017, according to the NAHB. That does not include remodeling done by investors looking to flip or rent properties, both of which are increasing as well.

Moving Up To Your Dream Home? Don’t Wait!

Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.

Where are home values today compared to the beginning of the year?
While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:

January: Prices were up 0.5% over the month before.
February: Prices were up 1% over the month before.
March: Prices were up 1.4% over the month before.
Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.

How can prices rise while mortgage rates increase?
Freddie Mac explained in a recent Insight Report:

“In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

Bottom Line
If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.

Who are the People in Your Neighborhood

Don’t Wait To Sell Your House! Buyers Are Out Now

Recently released data from the National Association of Realtors (NAR) suggests that now is a great time to sell your home. The concept of ‘supply & demand’ reveals that the best price for an item is realized when the supply of that item is low and the demand for that item is high.

Let’s see how this applies to the current residential real estate market.

SUPPLY
It is no secret that the supply of homes for sale has been far below the number needed to sustain a normal market for over a year at this point. A normal market requires six months of housing inventory to meet the demand. The latest report from NAR revealed that there is currently only a 3.6-month supply of houses on the market.

Supply is currently very low!

DEMAND
A report that was just released tells us that demand is very strong. The most recent Foot Traffic Report (which sheds light on the number of buyers who are actually out looking at homes) disclosed that “foot traffic grew 10.5 points to 52.4 in March as the new season approaches.”

Demand is currently very high!
Bottom Line
Waiting to sell will only increase the competition between you and all of the other sellers putting their houses on the market later this summer. If you are debating whether or not to list your home, contact a local real estate professional who can explain the conditions in your market.

One-third of LA homes sell above asking price

Source: Curbed

In Los Angeles, where a very hot housing market shows no signs of slowing, nearly 40 percent of homes now sell above asking price, according to a report from Zillow.

How much above? Around $14,100—more than twice the national median, as measured by the real estate website.

Making sense of the story
Across the country, nearly one-quarter, or 24 percent, of homes sold above the price that the owners were asking in 2017; in the Los Angeles metro area, the figure was 38 percent. That’s the highest share since 2013, when home values were just beginning to recover from the mortgage crisis of 2008.
LA’s share of homes selling above sticker price has also risen in each of the last three years, suggesting that competition among homebuyers is heating up. “You’ve got to move quickly if you’re a homebuyer,” says Jordan Levine, senior economist for the California Association of REALTORS®.
A strong economy and low interest rates on home loans are bringing plenty of buyers to the market. By Zillow’s reckoning, the typical LA home now takes 66 days to sell (including an escrow period); that’s well under the 91 days that homes last on the market nationwide
High demand and low supply is driving up prices to the point that sellers may often undervalue their homes when putting them on the market, explains Zillow senior economist Aaron Terrazas. He says that sellers are often “pleasantly surprised” when homes fetch prices significantly higher than their asking price.
Levine says that rising home values may actually be causing some homeowners not to sell, out of fear they may not be able to afford something better. It’s a seller’s market, he says, “unless you want to turn around and buy again.”
This trend further limits the number of homes available for purchase—meaning that high costs and competition among buyers may be here to stay.

To buy or not to buy? New tax law creates uncertainty for some homebuyers

Source: The Orange County Register

Throughout Southern California, potential homebuyers and their real estate agents are trying to assess how tax cuts President Donald Trump signed into law Dec. 20 will impact housing.

Some are pulling out of the market, local agents say. Others are in a holding pattern and some home shoppers said they plan to buy out of state where the tax consequences won’t be as great.

There also are forecasts showing California house price increases won’t be as big as they would have been before the tax changes.

But interviews with economists, mortgage brokers, accountants and agents show there are just as many who think this is no big deal. The brouhaha will die out, they say, once the industry adjusts to the new reality.

“Every time these new laws are passed, there’s panic. Then it ends up being nothing,” said Blake Roberts, CEO at Pier to Pier Brokers in Hermosa Beach. “Death, divorce and desire keep happening, and people still have a need to buy real estate.”

Why Have Interest Rates Jumped To A 7-Year High?

Interest rates for a 30-year fixed rate mortgage have climbed from 3.95% in the first week of January up to 4.61% last week, which marks a 7-year high according to Freddie Mac. The current pace of acceleration has been fueled by many factors.

Sam Khater, Freddie Mac’s Chief Economist, had this to say:

“Healthy consumer spending and higher commodity prices spooked bond markets and led to higher mortgage rates over the past week.

Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”

But what do gas prices have to do with interest rates?
Investopedia explains the relationship like this:

“The price of oil and inflation are often seen as being connected in a cause-and-effect relationship. As oil prices move up or down, inflation follows in the same direction.”

You may have noticed that filling your gas tank has become substantially more expensive in recent months. The average national gas price has climbed nearly $0.50 from the beginning of the year, leading to the highest price for Memorial Day weekend since 2014.

As rates go up, your purchasing power goes down, but don’t worry; rates are still well below the averages we’ve seen over the last four decades.

“Freddie Mac said this year’s higher rates have not yet caused much of a ripple in the strong demand levels for buying a home seen in most markets, but inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

Buying sooner rather than later will help lock in a lower rate than waiting, as the experts believe rates will continue to climb. Even a small increase in interest rates can have a big impact on your monthly housing cost.

Bottom Line
If you are planning on buying a home this year, keep an eye on gas prices the next time you’re at the pump. If you start to feel a big jump in price, know that rates are probably on their way up, too.

Drop in Inventor Fuels Sales Slowdown

Tax Reform

Selling Your House On Your Own Could Cost You

In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.

However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)

Why would FSBOs net less money than if they had used an agent?

The study makes several suggestions:

“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Conclusions from the study:
FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The data suggests the average price was near 6% lower for FSBO sales of similar properties.


Bottom Line
As Dave Ramsey, America’s trusted voice on money, explains:

“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”

Millennials are saving more than you think

Source: Realtor Mag

Millennials have been stereotyped as a generation that lacks savings or money management skills. But the data isn’t backing that up.

Sixteen percent of millennials ages 23 to 37 have $100,000 or more in savings, which is double the number of young people who had that much stowed away in 2015, a newly released survey from Bank of America shows. Nearly half—or 47 percent—have $15,000 saved, up from 33 percent in 2015.

Millennials came of age during the Great Recession and the financial crisis. They’ve faced high levels of student loan debt. But still, the survey shows that many are getting their financial lives in order, and home buying is increasingly on their to-do list.

Would Amazon's HQ2 exacerbate L.A. and Southern California's housing crisis?

Source: The Mercury News

While Amazon choosing to locate its second headquarters in Southern California could benefit the region’s economy, the new facility could also stress an already under-supplied housing market, experts say.

A California Association of Realtors report released Monday showed the state’s available supply of homes hit its lowest level in 13 years in December.

Due to a lack of home building and an increasing population from people coming from out of state, CAR President Steve White said California is already 1 million housing units below what’s needed.

“We expect that over the next eight years that could grow to 2 million,” White said. “It’s supply and demand. There just isn’t enough housing available for folks in all economic sectors.”

Economist Christopher Thornberg, a founding partner at Beacon Economics, said leaders in the city and county of Los Angeles are “panicked about the rising cost of housing” and the low supply of affordable housing at a time when many low-income people already can’t afford homes.

“So we’re going to plop 50,000 high-tech workers down in the middle of all this?,” Thornberg said. “Are you kidding me?”

Happy 4th of July!

Outdated & Unwanted Design Trends

Nonprofit launches "Saving Calculator" for homeowners considering solar panels

Source: San Diego Union Tribune

 Homeowners in San Diego County have a new tool when considering the costs and benefits of installing rooftop solar panels. The local nonprofit Center for Sustainable Energy launched a web page this week that allows residents to see how much they could save on their electrical bills based on a number of factors. The web-based “Solar Savings Calculator” is intended to inform consumers who are considering whether to contract with a particular installation company, said Christina Machak, senior research analyst for the center.

Read the full story

Major Rental-Home Companies Set to Merge as U.S. House Prices Recover

Source New York Times

 After the housing market collapsed more than a decade ago, new investors poured in to buy foreclosed homes and rent them out. Now, a $4.3 billion deal suggests that the bargain-hunting binge in housing is finally over. Two of the biggest institutional single-family landlords in the United States said Thursday that they planned to merge, an indication that the housing market has recovered much of the ground it lost in the financial crisis. And as home prices rise in many areas, affordable housing, for deep-pocketed investors and young first-time buyers alike, is becoming harder to find. The two institutional landlords, Invitation Homes, a rental business spun out of the private equity giant the Blackstone Group, and Starwood Waypoint Homes said they would combine to create an entity with about 82,000 homes in more than a dozen big markets.

Read the full story

Orange County existing home sales up 6.9 percent

Source: Orange County Register

 The median price of an existing single family home hit $549,460 in California last month, up 7.4 percent from July 2016, the latest figures from the CALIFORNIA ASSOCIATION OF REALTORS® show. Orange County’s median price was at $785,000, up 6.9 percent over July 2016, but less than the record high price of $795,000 earlier this summer. The association’s report covers existing, single-family, detached homes only, or nearly two-thirds of the Orange County market. Los Angeles County’s median price reached $566,240, up 10.2 percent since last July; Riverside County was at $385,500, up 7.1 percent. San Bernardino’s median hit $266,250, climbing 8.3 percent. The statewide median price remained above $500,000 for the fifth month in a row. Read the full story Attending bachelor parties may be keeping you from buying a home Source: San Francisco Chronicle You might have heard that it’s really tough for millennials to buy a home these days. They’re drowning in college debt, struggling with a small housing supply because boomers aren’t selling, and it’s all making them feel bummed about their homeownership prospects. Now one report says they may never own a home if they keep attending bachelor parties in Instagram-worthy locations. The real estate site Zillow found that the average cost of attending nine bachelor or bachelorette parties in a person’s lifetime comes surprisingly close to the 20 percent down payment on a median-priced US home. Though, not so much if you’re living in the Bay Area.

Read the full story

Happy Father's Day

Closing Chaos

Happy Memorial Day

Check out this local Whittier event!

Name: Friday Certified Farmers' Market

Date: May 25, 2018

Time: 8:00 AM - 1:00 PM PDT

Website:http://whittieruptown.org/fridaymarket/

Event Description:

The Uptown Whittier Farmers’ Market is a community gathering place and an opportunity to purchase California grown products. It is a great place for the community, residents and merchants to access locally grown, farm-fresh produce all while personally interacting with the farmer who produces it.

Enjoy the vendors with plentiful supplies and stroll the pedestrian-friendly streets in Historic Uptown Whittier.

A Realtor is Your Best Shot!

Consumers grow more confident in future of economy

Source: Housing Wire

Consumers’ assessment of their current conditions remained at a 16-year high even as their confidence in the future edged higher, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch. The Consumer Confidence Index increased to 121.1 in July up from 117.3 in June. The Present Situation Index increased from 143.9 last month to 147.8 in July and the Expectations Index increased to 103.3, up from 99.6 last month. In 1985, the index was set to 100, representing the index's benchmark. This value is adjusted monthly based on results of a household survey of consumers' opinions on current conditions and future economic expectations. Opinions on current conditions make up 40 percent of the index, while expectations of future conditions make up 60 percent. Consumers’ assessment of their current conditions improved in July as those saying business conditions are good increased from 30.6 percent to 33.3 percent. Those who said business conditions are bad remained unchanged at 13.5 percent. Consumers also held a more favorable view of the labor market, as those saying jobs are plentiful increased from 32 percent to 34.1 percent while those saying jobs are hard to get decreased from 18.4 percent to 18 percent.

Read the full story

Happy Cinco De Mayo

The Great Recession is still hurting Gen X

Source: Market Watch

The recession is continuing affect one aspect of Generation X’s financial health — and it could be putting their retirements at risk. Generation X home owners with mortgage between the ages of 35 and 50 on average have a loan-to-value ratio (LTV) of 70 percent, according to a report released this week by real-estate website Zillow. Comparatively, the average LTV among all home owners is 62 percent. The loan-to-value ratio measures how much a borrower still owes relative to the value of the property. Having a lower LTV means that a home owner has a lower amount left to pay on the mortgage — comparatively, home owners with high LTVs are at a greater risk defaulting on their loans. Making mortgage payments or providing a larger down payment will lower the LTV for a homeowner, and home owners with lower LTVs can qualify for a lower mortgage rate.

Read the full story

Happy Mother's Day

You can Help Prevent Wildfires

Why taking the highest offer isn’t always prudent

Source: CNBC

Sales and prices are moving so quickly that appraisals are not keeping up. If the appraisal doesn't match the contract price, the buyer doesn't get the mortgage, and the deal dies. The national median price of a home sold in June hit $263,800, a record, according to the National Association of Realtors. In addition, the average number of days a listing took to go under contract fell to just 28, down from 34 a year ago. "Anytime prices move up fast, the actual appraisal process, because they're looking back in history, not forward into the future, they are lagging behind," said Lawrence Yun, chief economist at the Realtors group. "From the buyer's perspective, it's a tough situation where they want to rely on the value of the home, on the appraisal, yet they know that if they decide to back away there are other buyers waiting to pounce." Lenders are now far more careful with appraisals than they were during the last housing boom. In turn, appraisers are being very cautious with the current price run-up. That history gives today's cash buyers, many of whom are investors flipping homes for a quick profit, a major advantage over mortgage-dependent buyers. Once again, they're pushing prices higher artificially, but this time they are doing it without the banks.

Read the full story

Opinion: A better way to solve the housing crisis

Source: Los Angeles Times

To address Los Angeles’ housing crisis, Mayor Eric Garcetti has proposed a “linkage fee” on new development. The city would charge new residential developments of more than five units $12 a square foot, and new commercial developments $5 a square foot, to finance subsidized affordable housing. This proposal is well-intentioned. Given our politics, and the realities of Proposition 13, it might be the best L.A. can do. But it won’t raise much money or build much housing, and it dodges rather than solves the fundamental problem in our housing policy. We should try for better. Linkage fees essentially tax new development, but housing in Los Angeles is expensive because L.A. doesn’t have much development. With little to tax, revenue would stay low, and so would affordable housing production. City Hall predicts that the fee will raise $100 million a year. Affordable housing costs, on average, almost $450,000 per unit to build., That works out to about 225 units annually. Those units would unquestionably change the lives of the people who got them, but the city needs hundreds of thousands, not hundreds, of affordable units.

Read the full story

99% Of Experts Agree: Home Prices Will Increase

Some believe that the combined effects of the new tax code and rising mortgage rates will have an adverse impact on residential real estate prices in 2018. However, the clear majority of recently surveyed housing experts believe that home values will continue to rise this year.

What is the Home Price Expectation Survey?
Each quarter, Pulsenomics surveys a nationwide panel of economists, real estate experts and investment & market strategists. Those surveyed include experts such as:

Daniel Bachman, Senior Manager, U.S. Economics at Deloitte Services, LP
Kathy Bostjancic, Head of U.S. Macro Investors Service at Oxford Economics
David Downs, Real Estate Finance Professor at VCU
Edward Pinto, Resident Fellow at American Enterprise Institute
Albert Saiz, Director at MIT Center for Real Estate
Where do these experts see home values headed in 2018?
Here is a breakdown of where they see home values twelve months from now:

21.6% believe prices will appreciate by 6% or more
71.6% believe prices will appreciate between 3 and 5.99%
5.7% believe prices will appreciate between 0 and 2.99%
Only 1.1% believe prices will depreciate
Bottom Line
Almost ninety-nine percent of the top experts studying residential real estate believe that prices will appreciate this year, and over 93% believe home values will appreciate by at least 3%.

Hoppy Easter!

Foreigners buy record number of U.S. homes

Source: Los Angeles Times
Foreign home buyers scooped up a record number of residential properties in the United States in the last year, despite a rising dollar and political uncertainty, according to a survey released Tuesday. The National Assn. of Realtors said foreigners bought 284,455 properties in the 12 months that ended March 31, about a third more than a year earlier. Dollar volume surged nearly 50% to $153 billion, also a record for the survey first taken in 2009. Chinese nationals were the biggest buyers, purchasing $31.7 billion worth of property, up from $27.3 billion a year earlier and more than ever before, the Realtors said. But the largest increase came from a surge in buyers from Canada, where prices have skyrocketed in recent years, partially due to Chinese investment there.Canadians purchased $19 billion worth of residential property, compared with $8.9 billion in the 12 months ended March 2016, the Realtors said in their annual report on international investment.

Read the full story

Happy St. Patrick's Day!

Here are some mortgage tips for first-time buyers!

The more you know about mortgages, the better prepared you’ll be. Here are some mortgage tips for first-time buyers, including:

• Know your credit score. The credit score can be a big key to knowing how much buyers can afford and how much interest they’ll be paying. Home shoppers should be encouraged to check their credit report and FICO score before even starting the homebuying process. 
• Estimate how much can be borrowed. Lenders generally don’t like to see a monthly housing payment—one that includes taxes and insurances—that’s more than 28 percent of a pretax income. The percentage threshold often cited for total debt—which includes the mortgage payment—is then no more than 36 percent. Some lenders will offer differing percentages but these are the most commonly used. 
• Gather the docs. Buyers will need documents showing their income, employment situation, identity, and more when applying for a mortgage. Encourage them to start collecting their latest tax returns, bank and brokerage statements, pay stubs, W-2s, Social Security card, marriage license (if applicable), and contact numbers for their employer’s HR department. 
• Get pre-approved. A preapproval is similar to a full mortgage approval and can be submitted with an offer on a home. It shows the seller the seriousness of the buyer, who has already secured financing to purchase the house. Add up closing costs. Closing costs generally range from 2 to 3 percent of a mortgage principal amount. Make sure your buyers factor in closing costs to their overall homebuying budget.

Is a mortgage with no closing costs right for you?

Source: Yahoo Finance

 A mortgage isn't free -- there are fees associated with getting the loan. Those closing costs usually total thousands of dollars. Besides writing a check to pay those fees at the closing table, there's another way to pay them when you refinance your mortgage: by adding them to the loan amount. The result is called a no-closing-cost refinance. Many lenders offer them. However, you'll probably have to accept a higher interest rate over the life of the loan.

 Making sense of the story: No-closing-cost mortgages are attractive to borrowers who don't have the cash to pay fees upfront. Waiving the closing costs may be the ticket to getting a mortgage for a new home or a refinance. If you don't plan to stay in your home for more than five years, a no-closing-cost mortgage also makes sense. With a traditional mortgage, it could take more than five years to recoup the closing costs. The slightly higher mortgage rate associated with a no-closing-cost mortgage is still likely to be less expensive over five years than what you would pay upfront in closing costs. Paying a slightly higher interest rate to forgo closing costs may also make sense if you need the cash to do renovations on your home. If you plan to stay in your home more than five years, then a no-closing-cost loan likely will end up costing you more than a loan with closing costs. That's true whether you're taking out a mortgage for a new purchase or refinancing an existing loan. Typically, you'll break even on your closing costs in a few years. Going with a no-closing-cost loan saddles you with a higher interest rate over the rest of the home loan. That could end up costing you a lot more than the upfront fees if you keep the mortgage for a long time.

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Don't Forget to Spring Forward!

Financial Fitness

Is California’s housing crisis spinning out of control?

Source: The New York Times

 California has a severe lack of affordable homes and apartments for middle-class families. The median cost of a home in the state has surged to $500,000—double the national cost. A booming economy, home construction, and apartments that haven’t kept up with demand have all fueled a housing crisis throughout the state. Home prices in Los Angeles, San Francisco, San Jose, and San Diego have surged as much as 75 percent over the past five years alone. Homelessness in California is also on the rise. In Silicon Valley, lines of parked recreational vehicles can be found with people living inside them. In Los Angeles, some local residents are reportedly installing makeshift kitchens and living in vans within quiet neighborhoods. The state has introduced 130 housing measures this year. Among one of the most recent actions, the Senate approved a bill to crack down on communities that have delayed or derailed housing construction proposals. The bill would restrict the ability to use zoning, environmental, and procedural laws to kill projects that may be considered “out of character” with the neighborhood. The bill is expected to be voted on again later this summer.

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How to dump private mortgage insurance ASAP

Source: Bankrate.com

 If you bought a house with a down payment of less than 20 percent, your lender required you to buy mortgage insurance. The same goes if you refinanced with less than 20 percent equity. Private mortgage insurance is expensive, and you can remove it after you have met some conditions. Although you can cancel private mortgage insurance, you cannot cancel Federal Housing Administration insurance. You can get rid of FHA insurance by refinancing into a non-FHA-insured loan. There are steps you can take to cancel mortgage insurance sooner or strengthen your negotiating position such as refinancing, getting a new appraisal, prepaying on your loan, or remodeling.

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First-year mistakes new owners make

Source: House Logic

 Homeowners can make a lot of mistakes during that first year in homeownership, especially when eagerness can sometimes lead to ignorance. HouseLogic recently featured several of the most common and costly missteps homeowners most often make in their first year, including:

Always going with the lowest bid - Homeowners may be smart about gathering multiple bids when, say, that HVAC system needs repairs. But they may be tempted to always go with the lowest price. HouseLogic recommends ensuring that all bids include the same project scope. At times, one bid may be less expensive but may not include all of the actual cost or details of the project, or the contractor may lack the experience to do a good job.

 Submitting small insurance claims - Owners shouldn’t be in a rush to submit an insurance claim every single time something goes wrong. Filing a claim or two, particularly over a short time, can prompt an increase to your premium.

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Aspirational, but Practical

Consumers vote for housing as top investment

Source: Bankrate.com

Consumers voted for real estate as their top long-term investment choice for a third year in a row, according to the latest Bankrate.com survey. No-risk cash investments came in second, and stocks came in third. Broken out by age group, younger adults divided their vote for the soundest long-term investments between real estate and cash at 30 percent each. Stocks trailed at 13 percent, behind gold. “Contrary to the notion that millennials don’t want to buy homes, their preference for real estate as a long-term investment is exceeded only by their counterparts in Gen X,” says Greg McBride, Bankrate’s chief financial analyst. Young adults split their vote evenly between real estate and cash (at 30 percent for each), with stocks trailing far behind (at 13 percent, behind gold). Compare that to baby boomers, who choose stocks second after real estate, with cash third.

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How high can Southern California home prices go?

Source: Orange County Register

For 62 straight months, Southern California home prices have gone in one direction. Up. Five years ago, you could snatch up a median-priced condo in Orange and Los Angeles counties for about $280,000, 76 percent less than today’s prices. A median-priced house cost $323,000 in L.A. County five years ago and $495,000 in O.C., about $260,000 less than today’s prices in both counties. Will prices keep rising or are they close to the top? Here’s what economists and industry analysts say about what the future holds for home prices in the region. Southern California home prices aren’t about to drop. In fact, they believe prices will keep rising for two more years, at least, and possibly longer. The market isn’t in a bubble — yet — although bubble talk is starting to “raise its ugly head” at cocktail parties, one economist said. Some analysts are saying Southern California home prices are showing signs of being overvalued. If you’re thinking about buying a home, now just might be the time to act — provided you don’t overextend yourself and you plan to live there awhile.

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How to know when to refinance

Source: Yahoo Finance

 Is now the right time to refinance? If you’re a homeowner, it’s a question you’re bound to ask yourself at some point during the life of your mortgage.The short answer is … It depends on your specific situation and goals. There are a few reasons to refinance your mortgage– maybe interest rates have dropped since you took out your initial loan and you want to take advantage of the lower rate, or you want to shorten your loan’s term. For instance, if you have an adjustable-rate mortgage you might want to switch to a fixed-rate loan in order to lock in the lower interest rate.The good news is that mortgage rates are still near historic lows. The national average for a 30-year fixed mortgage is currently about 4%, according to Bankrate.com. But before you decide to take the plunge, you’ll want to ask yourself a few questions. First, do you own at least 20 percent of your home? Many banks won’t even consider refinancing until you do. Ask yourself how long you have left on your loan and how long you plan to stay in your home. If you have five years or more left on your mortgage and plan to live in your home for at least another three years, it may pay to spend the money and refinance now.

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