3 Reasons This is NOT the 2008 Real Estate Market

3 Reasons This is NOT the 2008 Real Estate Market

No one knows for sure when the next recession will occur. What is known, however, is that the upcoming economic slowdown will not be caused by a housing market crash, as was the case in 2008. There are those who disagree and are comparing today’s real estate market to the market in 2005-2006, which preceded the crash. In many ways, however, the market is very different now. Here are three suppositions being put forward by some, and why they don’t hold up.

SUPPOSITION #1

A critical warning sign last time was the surging gap between the growth in home prices and household income. Today, home values have also outpaced wage gains. As in 2006, a lack of affordability will kill the market.

Counterpoint

The “gap” between wages and home price growth has existed since 2012. If that is a sign of a recession, why didn’t we have one sometime in the last seven years? Also, a buyer’s purchasing power is MUCH GREATER today than it was thirteen years ago. The equation to determine affordability has three elements:  home prices, wages, AND MORTGAGE INTEREST RATES. Today, the mortgage rate is about 3.5% versus 6.41% in 2006.

SUPPOSITION #2

In 2018, as in 2005, housing-price growth began slowing, with significant price drops occurring in some major markets. Look at Manhattan where home prices are in a “near free-fall.”

Counterpoint

The only major market showing true depreciation is Seattle, and it looks like home values in that city are about to reverse and start appreciating again. CoreLogic is projecting home price appreciation to reaccelerate across the country over the next twelve months.

Regarding Manhattan, home prices are dropping because the city’s new “mansion tax” is sapping demand. Additionally, the new federal tax code that went into effect last year continues to impact the market, capping deductions for state and local taxes, known as SALT, at $10,000. That had the effect of making it more expensive to own homes in states like New York.

SUPPOSITION #3

Prices will crash because that is what happened during the last recession.

Counterpoint

It is true that home values sank by almost 20% during the 2008 recession. However, it is also true that in the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6%.

Price is determined by supply and demand. In 2008, there was an overabundance of housing inventory (a 9-month supply). Today, housing inventory is less than half of that (a 4-month supply).

Bottom Line

We need to realize that today’s real estate market is nothing like the 2008 market. Therefore, when a recession occurs, it won’t resemble the last one.

 

 


Posted on November 22, 2019 at 8:00 am
Tammy Fisher | Posted in Loveland Real Estate, Northern Colorado Real Estate, Real Estate Market, Selling Your Home | Tagged , , , ,

What is the ‘Black Friday’ of Real Estate?

Are You Ready for the ‘Black Friday’ of Real Estate?

Every year, ‘Black Friday’ is a highly anticipated event for eager shoppers. Some people prepare for weeks, crafting and refining a strategic shopping agenda, determining exactly when to arrive at each store, and capturing a wish list of discounted must-have items to purchase. But what about buying a home? Is there a ‘Black Friday’ for the home-buying process? Believe it or not, there is.

According to a new study from realtor.comthe week of September 22 is the best time of year to buy a home, making it ‘Black Friday’ for homebuyers.

After evaluating housing data in 53 metros from 2016 to 2018, realtor.com determined that the first week of fall is when buyers “tend to find less competition, more inventory, and the biggest reductions on list price.

The report explains,

“During the first week of fall, buyers tend to face 26% less competition from other buyers, and they are likely to see 6.1% more homes available on the market compared to other weeks of the year…nearly 6% of homes on the market will also see price reductions, averaging 2.4% less than their peak.”

What’s so different about the first week of fall?

George Ratiu, Senior Economist with realtor.com says,

“As summer winds down and kids return to school, many families hit pause on their home search and wait until the next season to start again…as seasonal inventory builds up and restores itself to more buyer-friendly levels, fall buyers will be in a better position to take advantage of today’s low mortgage rates and increased purchasing power.”

Learn more about how prices, listings, and buyer competition stack up during the first week of fall in your metro area.

Bottom Line

If you want to take advantage of the ‘Black Friday’ of home buying, contact a local real estate professional so you can learn about the benefits of making your next move this fall.

 

 


Posted on November 20, 2019 at 8:00 am
Tammy Fisher | Posted in Home Buyers, Loveland Real Estate, New Buyers, New Home, Northern Colorado Real Estate | Tagged , , ,

Homeowners Are Happy! Renters? Not So Much.

Homeowners Are Happy! Renters? Not So Much.

When people talk about homeownership and the American Dream, much of the conversation revolves around the financial benefits of owning a home. However, two recent studies show that the non-financial benefits might be even more valuable.

In a recent surveyBank of America asked homeowners: “Does owning a home make you happier than renting?” 93% of the respondents answered yes, while only 7% said no. The survey also revealed:

  • More than 80% said they wouldn’t go back to renting
  • 88% agreed that buying a home is the “best decision they have ever made
  • 79% believed owning a home has changed them for the better

Those surveyed talked about the “emotional equity” that is built through homeownership. The study says more than half of current homeowners define a home as a place to make memories, compared to 42% who view a home as a financial investment. Besides building wealth, the survey also showed that homeownership enhances quality of life:

  • 67% of current homeowners believed their relationships with family and loved ones have changed for the better since they bought a home
  • 78% are satisfied with the quality of their social life
  • 82% of homeowners said they were satisfied with the amount of time they spend on their hobbies and passions since purchasing a home
  • 75% of homeowners pursued new hobbies after buying a home

Homeowners seem to be very happy.

Renters Tell a Different Story…

According to the latest Zillow Housing Aspirations Report45% of renters regret renting rather than buying — more than five times the share of homeowners (8%) who regret buying instead of renting. Here are the four major reasons people regret renting, according to the report:

  • 52% regret not being able to build equity
  • 52% regret not being able to customize or improve their rentals
  • 50% regret that the rent is so high
  • 49% regret that they lack private outdoor space

These two studies prove that renting is just not the same as owning.

Bottom Line

There are both financial and non-financial benefits to homeownership. As good as the “financial equity” is, it doesn’t compare to the “emotional equity” gained through owning your own home.

 

 


Posted on November 18, 2019 at 8:00 am
Tammy Fisher | Posted in Home Buyers, Loveland Real Estate, New Buyers, New Home, Northern Colorado Real Estate | Tagged , , , ,

62% of Buyers Are Wrong About Down Payment Needs

62% of Buyers Are Wrong About Down Payment Needs

According to the ‘2019 Home Buyer Report conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:

“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”

When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,

“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):

62% of Buyers Are Wrong About Down Payment Needs | Keeping Current MattersThe lack of knowledge about the home-buying process is unfortunately keeping many motivated buyers on the sidelines.

Bottom Line

Don’t let a lack of understanding keep you and your family out of the housing market. Meet with a local real estate professional who can show you your options today.

 

 


Posted on November 15, 2019 at 8:00 am
Tammy Fisher | Posted in Down Payment, Home Buyers, New Buyers, Northern Colorado Real Estate | Tagged , , ,

Existing-Home Sales Report Indicates Now Is a Great Time to Sell

Existing-Home Sales Report Indicates Now Is a Great Time to Sell

The best time to sell anything is when demand for that item is high and the supply of that item is limited. The latest Existing-Home Sales Report released by the National Association of Realtors (NAR), reveals that demand for housing continues to be strong, but the supply is struggling to keep pace. With this trend likely continuing throughout 2020, now is a great time to sell your house.

THE EXISTING-HOME SALES REPORT

The most important data revealed in this report was not actually sales. In reality, it was the inventory of homes for sale (supply). The report explained:

  • Total housing inventory at the end of August decreased 2.6% to 1.86 million homes available for sale.
  • Unsold inventory is lower than the 4.3-month figure recorded in August 2018.
  • This represents a 4.1-month supply at the current sales pace.

According to Lawrence Yun, Chief Economist at NAR,

“Sales are up, but inventory numbers remain low and are thereby pushing up
home prices.”

In real estate, there is a simple guideline that often applies here. Essentially, when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see greater appreciation. Between a 6 to 7-month supply is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and can expect depreciation in home values (see below):Existing-Home Sales Report Indicates Now Is a Great Time to Sell | Keeping Current MattersAs we mentioned before, there is currently a 4.1-month supply of homes on the market, and houses are going under contract fast. The Existing Home Sales Report also shows that 49% of properties were on the market for less than a month when they were sold. In August, properties sold nationally were typically on the market for 31 days. As Yun notes, this should continue,

“As expected, buyers are finding it hard to resist the current rates…The desire to take advantage of these promising conditions is leading more buyers to the market.” 

Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market, and supply will fail to catch up with demand if a sizable supply does not enter the market.

Bottom Line

If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers who are out there searching for your house to become their dream home.

 

 


Posted on November 13, 2019 at 8:00 am
Tammy Fisher | Posted in New Home, Northern Colorado Real Estate, Real Estate Market, Selling Your Home | Tagged , , ,

VA Hom Loans by the Numbers

VA Home Loans by the Numbers [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The Veterans Administration (VA) Home Loan is a benefit that is available to more than 22 million veterans and 2 million active duty service members to help them achieve the dream of homeownership.
  • In 2018, $161 billion was loaned to veterans and their families through the program.
  • In the same year, the average loan amount was $264,197 and 610,513 loans were guaranteed.

 


Posted on November 11, 2019 at 7:41 pm
Tammy Fisher | Posted in Home Buyers, Loveland Real Estate, New Buyers, New Home | Tagged ,

Why You Need a Relevant Informed Market Opinion

Rumor has it we’re heading into a recession, and everyone is talking about it.

When it comes to real estate, the unease linked to that word poses a number of important questions for buyers, sellers, and agents.

  • When will it hit?
  • Will it affect the housing market?
  • Is now the right time to buy/sell?

These are important topics you should be covering with your clients.

More importantly, you should have the facts and sources to back up your opinions.

In a recent Facebook Live with KCM founder, Steve Harney, and leading mortgage lender expert, Jim McMahan, the two discussed the importance of reliable sources and getting the truth out.

Here’s why it’s so important.

DO YOU HAVE AN INFORMED OPINION?

If you don’t already have an informed opinion, now is the time to get one. Many potential buyers or sellers may be making rash and emotional decisions based on sensationalist media headlines.

Instead of letting them just take your word for it, show them the facts.

This is also a great opportunity to step up and become a leading voice in your local market.

HOW DO YOU DEVELOP AN INFORMED OPINION?

If you’re just skimming headlines, your wires could be getting crossed.

By staying informed through a variety of reliable sources, you’re able to form a relevant, valuable market opinion that you can then relay to your clients.

“Any fool can know. The point is to understand.” – Albert Einstein

You know how the saying goes. Everybody’s got an opinion.

This is an important time in the market, and those who aren’t keeping up with the news are missing out on important conversations.

By taking the time to not only know but understand the market conditions, you’re building a reputation as a real estate agent that cares. Checking out the daily KCM Blog is a great way to help you do that. If you want to dig a little deeper, sign up to receive our Monthly Market Report.

STOP THE RUMORS. SPREAD THE WORD.

Getting ahead of the rumors is the best way to put out the fires already spreading.

Talk about it on social media, share articles, send emails and openly communicate to your clients whenever you get the chance.

Changing the narrative is an important part of soothing suspicions and spreading the good news to those who may otherwise not know, clients and competitors alike.

These are the principles Keeping Current Matters were founded on over a decade ago in the wake of the 2008 housing crisis. For the past 11 years, we’ve been helping real estate professionals simply and effectively communicate the market’s facts to help families feel confident when buying and selling a home.

Bottom Line

With the upcoming election, we’re going to see some shifts in our news and media focuses. You can squash a lot of uncertainties and build a relevant and valuable market opinion by taking the time to do your research.

kCM buyer and seller guides

Gather information from various, reliable sources and continue to follow what’s happening now and what’s predicted to happen in the near future.

 


Posted on November 8, 2019 at 8:00 am
Tammy Fisher | Posted in Northern Colorado Real Estate, Real Estate Market, Selling Your Home | Tagged , , ,

How Will the Next Recession Affect the Housing Market?

Given the current media buzz of an impending recession, many Americans are fearing the worst and believe a downturn in the real estate market is inevitable.

Doubts about the market’s stability are completely rational considering the loss many agents and home buyers took when everything went belly-up in 2008.

We’re here to tell you this: don’t panic.

Let’s look at the facts.

RECESSION DOES NOT EQUAL HOUSING CRISIS

The gravity of the 2008 crash, and how it affected the real estate market is impossible to forget. But what we may not be remembering is that there were many economic downturns that resulted in appreciated home values.

Of the last five recessions in U.S. history, three of them saw increases. Two of those three saw prices appreciate faster than the historical average.

Home price change during last 5 recessions

For the two where prices decreased, one of them was by less than 2% and the other was because the housing market caused the recession in the first place. Historically, recessions are not caused by housing alone.

MARKET CONDITIONS ARE NOT THE SAME AS 2008.

This is the biggest indicator that we won’t see a crash like the one a decade ago. Home prices are projected to appreciate for the next 2-5 years. Sales are also projected to increase in 2020.

Don’t worry, the housing market is strong and home prices are forecasted to continue to rise.

Projected home price appreciation 2019, 2020 and 2021

SO WHAT EXACTLY IS A RECESSION?

Looking at the textbook definition of recession may give more insight.

According to Webster’s Dictionary, a recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP for two successive quarters.

To simplify it, a recession means a time when the economy takes a dip for at least six months. We’re currently in the longest running economic recovery in American history. What ends a recovery? A slowdown.

But that doesn’t mean we need to be bracing for a 2008 repeat.

WHAT EXPERTS BELIEVE WILL CAUSE THE NEXT RECESSION

If an upcoming recession occurs, it will likely be due to trade policy, a geopolitical crisis, and/or stock market correction but NOT a housing slowdown, according to Yahoo Finanace.

This is going to be a much shorter recession than the last one. I don’t think the next recession will be a repeat of 2008…the housing market is in a better position,” said George Ratiu, Senior Economist for Realtor.com

The upcoming election along with current trade wars may be the defining factors that ends what has been the longest running economic expansion in U.S. history. But again, a slowdown by no means indicates a hit like the Great Recession.

WHAT YOUR CLIENTS BELIEVE ABOUT A RECESSION

According to a Realtor.com survey, 53% of consumer currently looking for home think a recession will come in the next 15 months. Worse than that, 55% of consumers surveyed said they would temporarily suspend their home search.

“You’re gonna have sellers that were ready to put the house on the market all of a sudden call and say we’re gonna wait a year or two. Those families are getting hurt because they’re making decisions, not on reality, but their perception of reality. The only people who can control that reality are [real estate agents].”

57% of homeowners believe the next recession will be worse

Now is the time to be up-front with your clients. Getting ahead of the panic and communicating the right information to them, backed by cold hard facts, will help dismantle fears.

Bottom Line

The next recession will not duplicate the one we saw in 2008 – but if we allow fear to spread – it could be much worse than it should be. Your clients could be hurt by mistakes made under the pretense of false information.

That is why it is so important that we, as real estate professionals and the trusted advisors, need to reclaim the narrative and eliminate this fear from the market.

People may question you over this, and that’s why you need to have the most relevant information and insights about what it means for you and your clients. Between now and the election next year, this will only become more important.

To stay current on real estate news without having to read every media outlet, KCM offers a Monthly Market Report to provide you with a comprehensive walkthrough of the most up-to-date information regarding the market.

https://www.keepingcurrentmatters.com/article/how-will-the-next-recession-affect-the-housing-market/


Posted on November 6, 2019 at 8:00 am
Tammy Fisher | Posted in Home Buyers, Loveland Real Estate, Northern Colorado Real Estate | Tagged , ,

Our Favorite Real Estate Podcast

 

Podcasts are a growing medium as listeners search for new sources of entertainment and information. In 2018 there were about 550,000 podcasts, in 2019 there are more than 750,000. Listeners are growing too, an estimated 20 million more people in the U.S. are listening to podcasts this year as compared to2018.

This growth in audio entertainment inspired us to pull together a few of our favorite real estate podcasts. Whether you’re interested in investing in real estate, looking to make a move to a new home, or just want to know what’s happening in the market, here are our recommendations:

 

For Investors:

The Millennial Real Estate Investor

Find your niches in Real Estate with Dan Mackin and Ben Welch, who host experts with stories about their investing successes and challenges. Learn from the experienced guests on this show the many ways to get into investing and succeed at it.

Listen to Millennial Real Estate Investor wherever you get your podcasts (Icon linked):

 

Cash Flow Connection

If you’re drawn to the commercial side of real estate, Cash Flow Connections with host, Hunter Thompson, is an informative podcast that interviews leading investors, sponsors and managers. Learn about all the aspects of commercial real estate from all viewpoints to find the right fit for you.

Windermere’s Chief Economist, Matthew Gardner, was just interviewed about the state of the real estate market, and what to expect in the next recession (hint: it won’t be driven by housing). You can listen to that episode here.

Listen to Cash Flow Connection wherever you get your podcasts:

 

For Those About to Move

Windermere Home and Wealth

Host Brian Bushlach interviews business owners, local guides, and Windermere agents in each episode about different areas throughout the Western U.S. and what they have to offer to those who live or visit there. Learn about what’s attracting newcomers to the area, and what the local real estate market looks like. This podcast is sure to stir your wanderlust.

Listen to Windermere Home and Wealth wherever you get your podcasts:

 

Finding Home with 106.1 KISS FM

Join first-time home buyers, and radio personalities, Anthony and Carla Marie from 106.1 KISS FM, as they walk through the home buying journey with their Windermere agents. This podcast is both entertaining and informative as they ask the questions you’ve always wanted answers to. With their knowledgeable real estate agents by their sides, they’re taking you along as they get approved, look for houses, and even put an offer on a home.

Listen to Finding Home on iHeartRadio:

 

Stay Informed

Housing Developments

Hosted by National Association of Home Builders CEO Jerry Howard and Chief Lobbyist Jim Tobin, this podcast covers updates in the housing market and building industry across the nation. Learn from experts in the field about recent laws and the news of the industry.

Listen to Housing Developments wherever you get your podcasts:

 

Real Estate News with Kathy Fettke

This podcast is aimed at real estate investors who want to stay curren on the latest real estate news. Presented in bite sized episodes, listeners can learn about laws, regulations, and economic events that affect real estate and their local market.

Listen wherever you get your podcasts:


Posted on November 4, 2019 at 8:00 am
Tammy Fisher | Posted in Home Buyers, Loveland Real Estate, New Buyers, New Home, Northern Colorado Real Estate | Tagged , ,

The Difference an Hour Will Make This Fall

The Difference an Hour Will Make This Fall [INFOGRAPHIC] | Keeping Current Matters

Every Hour in the U.S. Housing Market: 

  • 614 Homes Are Sold
  • 95 Homes Regain Positive Equity
  • Median Home Values Go Up $1.38

 


Posted on November 1, 2019 at 7:35 pm
Tammy Fisher | Posted in Home Buyers, Just Moved, Loveland Real Estate, New Buyers, New Home | Tagged ,