The Mendosa-Balboni Team would like to share that according to a report from the National Association of Realtors, the fall real estate market has gained momentum with an increasing pace of existing home sales regardless of a struggle due to the deficit of available supply.
The total number of existing home sales of single-families, townhomes, condos and co-ops has increased by 2.0% in the month of October to an adjusted rate of 5.48 million. After this increase sales are at their best pace since this past June, but are still lower than last year at this time by 0.9%.
Lawrence Yun, NAR chief economist, says sales activity in October picked up for the second straight month, with increases in all four major regions. “Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home,” he said. “While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
Added Yun, “The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida. However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms.”
The median existing home price for all types of property was up by 5.5% this past October over that of last year. This price increase is the 68th month in a row of year-over-year gains.
Housing inventory by the end of October had diminished 3.2% and is now 10.4% lower than a year ago. This has also been the 29th month in a row for the decreasing amount of available housing levels. The total unsold housing stock is at a 3.9 month supply currently which is down from 4.4 months at this time in 2016. Properties also remained on the market for typically 34 days this October which has decreased from the 41 days from a year ago. Additionally, 47% of the the homes sold in October were on the market for less than one month.
The process of buying a home can seem overwhelming until you know all of the facts. There is a lot of false facts out there about the process and the benefits of buying real estate which can make it appear much more arduous than it really is. Here are some facts to help clear up any worries about the path to homeownership.
Is it hard to get approved for a mortgage?
Getting pre-qualified for a loan is actually fairly easy. Begin by contacting a reputable mortgage agent and give them with some accurate details of your financial profile and they will pull your credit report. Based on that information they will give you with a prequalification letter with the amount that you could afford.
Once you find a home that you submit an offer on, then you will follow up by providing them with all the necessary supporting documents that confirm that the information you initially provided is accurate. The essential docs will include your pay stubs, bank statements and your tax returns. Statistically more than 75% of loan applications get approved.
Must you put 20% down?
There are a bunch of loan types for financing your home these days with some benefits for first time buyers as well. One thing to consider if you are putting less than 20% down is that this will mean you will be paying “PMI” or mortgage insurance. This is a small monthly amount that will be tacked on to your overall payment for the first few of years of your loan or however long until you build up to over 20% equity. Forty percent of millennials who bought homes this year had put less than 10% down on their homes as their down payment.
Do you need perfect credit?
Having good credit will help you for qualifying for a mortgage and getting the best rate, but this does not mean that you have to have a score of 800. It is a good idea to clean up your credit by pulling your report and checking for accuracy, avoid making any larger purchases and paying down your outstanding balances. The average score for loans that were approved at the start of fall was 724 which goes to show that you don’t need to have picture perfect credit to buy a home.
Is buying more expensive than renting?
Rents are on the rise today and mortgage rates are still historically low so buying can oftentimes be cheaper than renting. In a recent report it was shared that buying a home is 36% less expensive than renting nowadays in the United States. Buying a home earlier will also help you build equity now and over time and it can perform much like a savings account that you can cash in on the benefits from later when you sell.
Do I have enough equity in my home to consider a move?
Many think that you have to have a lot of equity in your home in order for you to sell. The reality is that more than 80% of homeowners in the U.S. have significant equity, as in more than 20% in their property which should be plenty to afford paying your closing costs with additional money left to put towards your next home.
Sources: CoreLogic, Ellie Mae
The Mendosa-Balboni Team knows that when you own real estate there are always going to be some property enhancements that you will want to make or that you will have to make. Making some repairs or additions can oftentimes increase the value of your home while you enjoy them for as long as you live in the home. Here are some of the best financial investments for your property:
The best place to start is always with repairing any major or serious issues. This could include things like an old or broken air conditioning system, leaky pipe or old roof. Some of these things are better to fix sooner than later as they can lead to further damage. Furthermore, if you plan on selling in the near future then these enhancements will add value for prospective buyers.
Investing some money into your home’s exterior can also bring about some positive returns. Upgrading your windows, replacing front doors, painting and landscaping can all have a large impact. If you don’t wish to financially commit to repainting the whole house, sometimes even a good pressure washing can make your home look better for a lot less.
Kitchen and Bathrooms
Bathrooms can sometimes be easily upgraded with the replacement of more visible things like toilets, sinks and vanities. If your tilework and flooring are in good shape then spending your money on the fixtures may be a better use of your money.
Kitchens are often regarded as the heart of every home with much attention focused for value. Functional things like cabinetry and appliances are where you should invest your money for quality products. You don’t necessarily always need to buy top of the line models, but you should keep up with current trends and stay within the parameters of what is expected for the price range of your home in particular. High efficiency models are always a good bet where there can be both tax incentives as well as a realized monthly savings in energy costs.
Your front door will always be greeting your visitors before you even do so it plays a large part in creating the first impression. Replacing your entry door with something both aesthetically pleasing and efficient will help add value while potentially saving you on your energy costs.
Making some additional payments on your mortgage can be a great idea where it can save you thousands of dollars while trimming years off of the loan duration. It is suggested that you do this on your own terms rather than enrolling in an accelerated payment plan as they can cost you money.
Here are a few helpful tips for paying down your mortgage ahead of schedule.
1. Make one extra annual payment
Making an additional payment is easier if you get something like a yearly bonus, a nice tax refund or similar lump sum of money. Take this money and apply it to the next mortgage payment that you make towards the principal. This will help reduce the principal so you will be ahead of schedule and will also help shorten the lifespan of the loan.
2. Increase your monthly payment by one twelfth
The additional money that you are applying towards your loan balance is typically credited automatically to the principal. The principal is the total amount that you owe less the interest. The majority of the money you pay early on in the mortgage term is primarily interest so paying down the principal will save you a lot of money in the years ahead.
3. Pay half of your regular payment every two weeks
Some mortgage lenders will allow you to do this at no cost while others may require that you enroll in a plan for a small cost. Otherwise you can manage this sort of schedule yourself on your own accounts. Try transferring these payments from checking to savings accounts every two weeks, then pay the total amount to your lender when payment is due typically at the beginning of the month.
The end result is that after a year you will have made 26 half payments or 13 full payments which translates to 1 extra per year. For an example of potential savings, a $200,000 30-year loan with one extra payment per year will reduce it to 26 years with a savings of over $32,000 in interest.
After a slower summer with a declining number of sales, the fall has shown to have reversed the negative trend of slowing sales. Regardless of the ongoing shortage of available homes for sale and recent hurricanes which have caused their challenges in certain areas, a relatively typical uptick in activity for fall has been seen.
The total existing number of home sales, which are sold transactions of townhomes, single-family homes, condominiums and coops increased by 0.7% to an adjusted annual rate of 5.39 million for the month of September. This was an increase from 5.35 million in August yet the sales pace is 1.5% below last year’s.
Lawrence Yun, National Association of Realtors chief economist, has shared “Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country,” he said. “Realtors® this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings – especially at the lower end of the market – and fast-rising prices that are straining the budgets of prospective buyers.”
Added Yun, “Sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida – hit by Hurricanes Harvey and Irma – saw temporary, but notable declines.”
The median existing home price for all housing types was $245,100 for the month of September. This was up by 4.2% from last year at the same time. This was also the 67th month of consecutive gains.
Housing inventory had increased by 1.6% to 1.9 million available for sale in September for fall market, yet this is still 6.4% lower than last year. “A continuation of last month’s alleviating price growth, which was the slowest since last December (4.5 percent), would improve affordability conditions and be good news for the would-be buyers who have been held back by higher prices this year,” said Yun.
Studies show that almost two-thirds of renters still think that now is a good time to buy, yet increasing prices and limited inventory is making it tough for this group to reach the market.
The Mendosa Balboni Team knows that the day of your closing for some is formal and filled with many pages of documents to review and sign. For others, it is just a process to go through as you progress to ownership. However you view it, here are some helpful things to consider as you go through the day.
The mortgage process
Some buyers may think that after they have finished the prequalification process then they are all set. However, this is not the case. Mortgage lenders will still want to verify your income, assets and employment all the way up to the last minute before closing. It is strongly suggested that you not make any significant purchases during this time period like a new car, furniture or the like. Sometimes these purchases can affect your ability to have your loan approved which you won’t want to jeopardize.
Mortgage rates range daily and the rate quote your lender originally gives you will not remain forever. Banks will “lock you in” for 45, 60 or a similar set number of days. However, once that time frame expires, you may have to pay a higher rate. Closing dates sometimes get pushed out during negotiations so don’t forget to bear in mind when your rate lock expires.
The final walk through
Most agreements stipulate a walk-through 24 hours before the closing date and it is a good idea to take advantage of this. Inspect the overall condition of the home, be sure all of the seller’s items are removed and everything is in good working order before you assume ownership.
In some areas the closing happens in parts and the two parties do not meet. In others the buyer, seller and attorneys all gather at once and all of the paperwork gets signed and monies get passed.
How else could you prepare?
The the most valuable advice is to pay close attention to all of the steps involved and be on high alert for any red flags. Be sure to hire the right people to help like a credible mortgage agent, home inspection company and attorney. The better your team is prepared, the smoother the sale is going to be.
When you are beginning the stages of moving, getting organized can seem like a lower priority. Getting pre-qualified for a mortgage, searching for homes available for purchase and the like all seem to take precedence. However, there are many benefits to getting your home organized ahead of schedule. For one, reducing the clutter can help as you stage your home to be viewed by many prospective buyers. Additionally, getting your home well prepared in the beginning is only going to save you more time when it actually comes to moving day. Here are 5 tips that can help you get started for a more simplified move.
Create groups of items – Begin by sifting through your belongings. You may create a few piles with some for trash, some for donating or some to give to friends or family. You may even create an additional “maybe” pile for items you feel you may want to keep. Give yourself a time limit on this pile.
Give yourself time – The process of getting organized can take some time. Especially where there may be personal or sentimental items that require thought, be sure to give yourself enough time to sort through everything.
Invest in clear plastic bins – Keeping your items stowed in clear plastic bins will keep everything stored away but also allows you to see what is inside. Alternatively, if you already have boxes or colored bins, be sure to clearly label what is inside.
Recycle paper – Many households have one common problem – a paper trail in each room. Whether its documents, old mail, newspapers, magazines or the like it can certainly add up. Consider scanning in anything valuable to an online storage location. Recycle non valuable items and shred anything else that may have account numbers or personal information.
Begin now – Time can be the most valuable asset. Begin as soon as you can as depending on your home’s size and the amount of possessions you have, getting organized may take some time. Go as far as scheduling some time slots in on your calendar to hold yourself accountable.
The Mendosa – Balboni Team knows that aside from the kitchen, your living room is one of the top communal rooms in your house that is often used for just about anything. Watching TV, doing homework, eating a quick meal or just spending time with the family. With numerous activities that take place, the living room can accumulate belongings and become cluttered rather quickly. Being your own judge to evaluate where to begin decluttering is sometimes difficult so here are 10 tips to consult as you create a more organized room.
Remote controls – Today everyone has smart TV’s, Apple TV’s, Stereos and DVD players so remote controls can multiply quickly. If keeping them in a basket is not enough, consider purchasing a universal remote to cut down on the number of controls. Smartphones also can be an easy solution with remote apps omitting the additional devices altogether.
Organize the hearth – Avoid letting the hearth become a storage space during the warmer months. Stay organized during the winter with neatly stacked wood and tools. Sweep clean the fireplace during summer months and warm it up with decorative candles or the like.
Pillows – Take a look at your pillow collection. Do you have too few? Too many? Toss pillows should add color and function, but too many pillows will only get in the way and be more of a nuisance than a comfort.
Reading material – A lot of reading is done online these days, but some periodicals and magazines can offer design and a three dimensional ability that your Kindle cannot. Keep recent and current issues of magazines and recycle any older copies.
Store games – Get rid of the old or broken games that nobody plays with. Store any of your frequently used games in a cabinet or organized storage bins. Closed storage can prevent things from being damaged or broken.
Put a limit on decorations – Decorative items can multiply over time. Perhaps you have gifts from holidays, travels or friends that have accumulated. Although you may appreciate them, too many can simply be too much for one room. Try cutting down on items gradually rather than all at once. Relocating sentimental items to other rooms or away in storage can be a good solution.
Toys – Toy collections can grow quickly, but can also be outgrown just as fast. Keep your current and basic toys and consider donating the ones that are old and have been outgrown.
Junk drawer – Everything should have a place to be stored in. Even with your smaller, odds and ends just tossing them into a junk drawer will only be relocating the chaos. Invest in drawer organizer, bins or shelving systems so that things are neatly put away and easily found when you need them.
Office space – Most people have a dedicated space for a home office or computer. Consider a hideaway desk or a roll out desk so that all of your papers and bills can be stored away as they can often quickly pile up.
Minimize pet items – Pets can have just as many toys as children. Designate a basket or bin to keep all of their stuffed toys and balls in so they are neat and organized.
Median home sale prices have been increasing for the past few years now and they reached another all-time high. It is evident that much of this has been due to a simple equation of low supply with greater demand. However, what effects are there on a micro level within a specific real estate market? What factors drive the price of a particular home in a particular location?
An appraiser informs that pricing is based on three factors: location, product and timing. Product and location are in large part connected where it can be a great home in the great neighborhood. Timing is more of a sliding variable that can have to do with what the local competing inventory is at that given time.
How Appraisers Determine Value
Appraisers will approach the value of a home starting with a physical inspection of the home’s structural elements. This includes items such as roof, HVAC system, bathrooms, kitchen and the general conditio. The appraiser will then factor in location and neighborhood which will include researching the comps and adjusting the price based on comparing your home to those.
Home Features Currently in demand
These items can have a significant impact on the price. Granite counters used to be a highly sought after item, but today they are considered standard. Design trends are indicating that interior colors have switched from beige and brown to more of shades of gray. These trends along with other preferences can vary regionally including having a pool or a second story which may or may not add value.
How a Seller can add Value
One aspect that is universal is to have your home in excellent condition when listing it on the real estate market for sale. If you have been deferring some repairs or improvements then taking care of them beforehand is always best. Buyers often pass on a home if there are obvious signs of disrepair. Additionally, these more significant repairs will certainly be found in a home inspection anyway. Finally, be sure that your home’s exterior is looking outstanding. Your home’s curb appeal is very important being the first and last thing that every buyer will see.
Traps to Avoid
In markets like the current one, there can be multiple offers and bidding wars. When this happens, the purchase becomes more emotional than practical. Don’t lose sight of the property’s true market value and replace it with your own. Additionally, if you are planning on securing a loan then your home will need to appraise accordingly otherwise the deal will fall through.
The Mendosa-Balboni Team knows that the purchase of luxury real estate is driven by different factors for different people and at any given time there will always be some who are in pursuit of finding a home to buy regardless of market conditions.
There has been an increasing demand recently for luxury property among younger crowds. As their disposable income is on the rise the desire for higher living standards has followed suit. No longer is a basic home of interest. Now a luxury home with more amenities and comforts become part of the wish list in a home. Here are four reasons why now is a great time to purchase a luxury property.
Low Rates – Despite expectations of rates increasing, they are still very low. The lower your loan rate, the lower your new home mortgage payment will be. This all plays a part in your overall budget for a new home.
Rents are on the rise – Some real estate market reports have indicated that luxury rentals will rise at a minimum of 3% per year. With this being the case, it makes for a compelling reason to make your purchase even sooner. As mortgage rates are at all-time lows, it can often be cheaper on a monthly basis to pay a mortgage than to pay a hefty rent.
Begin building equity – Renters are spending thousand of dollars on rent per year that they will never see again. Stop paying your landlord’s mortgage and start paying your own. The sooner you purchase your home, the sooner you will begin building equity in your home. As many people get a 30 year loan product for a mortgage, don’t waste anymore time so you can be in a better financial position as you near retirement.
Affordable Insurance – Mortgage insurance premiums are less expensive right now which also helps purchase a luxury home. Purchase a luxury property now while the mortgage odds are more in your favor rather than waiting until house prices and interest rates may also increase. With a more expensive home purchase it may be more challenging to come up with 20% for a downpayment to avoid PMI.