http://townandcountryrealty.org/blog/archive_202110/sort_entrydatetime-desc/ A recent survey from LendingTree.com found there are multiple reasons why Americans would choose to purchase a home instead of renting. Some of the most popular non-financial reasons given include:The flexibility to make the space your ownThe pride homeownership offersThe sense of stabilityIn the same survey, 41% of respondents say they’d rather own a home than rent because of the unique way homeownership builds wealth over time.And experts agree – the home you own is an important tool for building your net worth. Here’s what many of those experts have to say about building long-term financial stability through homeownership.According to the National Association of Realtors (NAR):“Homeowners who purchased a typical single-family existing-home 30 years ago at the median sales price of $103,333 with a 10% down payment loan and who sold the property at the median sales price of $357,700 in 2021 Q2 accumulated housing wealth of $349,258, . . .”Mark Fleming, Chief Economist at First American, points out that a home is truly a one-of-a-kind asset. It’s the only asset that’s both an investment and a place for you to call your own.“The major financial advantage of homeownership is the accumulation of equity in the form of house price appreciation. . . . We won’t always have 17% house price appreciation, but we have to take into account the fact that the shelter that you’re owning is an equity-generating or wealth-generating asset.”Homeowners can leverage the wealth they generate in several ways throughout their life. Tapping into accumulated equity has long been used to pay for the cost of an education, to start a business, or to fund various other expenses. The Joint Center of Housing Studies at Harvard points out:“. . . by paying down mortgage principal each month and participating in the long-term appreciation of home values, a family can build wealth that can be used for retirement or other needs, including helping the next generation.”Bottom LineWith home prices expected to continue to appreciate in the coming years, homebuyers have an opportunity to start the long-term wealth-building process right now. Talk to a local real estate advisor today if you’re ready to begin your journey on the path to becoming a homeowner. http://townandcountryrealty.org/blog/249/experts-agree:-homeownership-provides-a-path-to-long-term-wealth/ Thu, 28 Oct 2021 04:00:00 -0500 Sellers have a great opportunity this season as buyer demand still heavily outweighs the current supply of homes for sale. According to the National Association of Realtors (NAR), today’s housing inventory sits at only a 2.6-month supply. To put that into perspective, a neutral market typically features a 6-month supply. That places today’s market firmly in the sellers’ market category.That same NAR data also shows today’s inventory of single-family homes is trailing behind the level we saw last year (see graph below):Because of the ongoing supply challenges, buyers can feel like they’re wandering across a vast, empty desert when searching for their next home. That means your house could provide an oasis for buyers thirsty for options – and it could increase the chances of buyers entering a bidding war for your home.The latest Realtors Confidence Index Survey from NAR shows houses are receiving an average of 3.8 offers. A multiple-offer scenario lets you select the best offer and gives you incredible leverage when you sell this fall.Bottom LineBuyers today are looking for relief as they wander today’s inventory desert. Listing your house this fall – before more options appear on the market – gives your house the best chance to be noticed by multiple buyers. Reach out to a trusted real estate advisor today so your house can stand out as the oasis it truly is. http://townandcountryrealty.org/blog/248/sellers:-your-house-could-be-an-oasis-for-buyers-seeking-more-options/ Thu, 21 Oct 2021 11:31:04 -0500 As you follow the news, you’re likely seeing headlines discussing what’s going on in today’s housing market. Chances are high that some of the more recent storylines you’ve come across mention terms like cooling or slowing when talking about where the market is headed.But what do these terms mean? The housing market today is anything but normal, and it’s still an incredibly strong sellers’ market, especially when compared to the few years leading up to the pandemic. With that in mind, what can previous years tell us about today’s real estate market and if it’s truly slowing?We’re Still Seeing an Above Average Number of SalesYou may see headlines about a drop in home sales. But are those headlines telling the full story? The most recent Existing Home Sales Report from the National Association of Realtors (NAR) does show a drop of about 2% from July to August. But the month-over-month decline doesn’t provide the full picture (see graph below):As the graph shows, historical context is key. Today’s home sales are well ahead of some of the more normal years that led up to the health crisis. That means buyers are still in the market, which is great news if you’re planning to list your home.Houses Are Selling Faster Than UsualWhen headlines mention the market is slowing, sellers may naturally wonder if their house will sell as quickly as they’d like. According to the most recent Realtors Confidence Index from NAR, homes are still selling at record speed (see graph below):Again, if we look back at data from previous years, we can see the average time on market – 17 days –  means homes are selling faster than a normal pace.Bidding Wars Are Still the NormThe Realtors Confidence Index from NAR also shows a drop in the average number of offers homes are receiving in August, and many headlines may simply focus there without providing the important context (see graph below):Again, it’s important to compare today’s market to trends from recent years. Currently, the average number of offers per listing is higher than 39 of the previous 45 months. That means the likelihood of a bidding war on your home is still high. And the number of offers your house receives can have a major influence on the final sale price.So, Is the Market Slowing Down?While there are slight declines in various month-to-month data, it’s important to keep historical context in mind when determining what’s happening in today’s market. Odeta Kushi, Deputy Chief Economist at First American, put it best recently, saying:“It’s not the white-hot market from earlier in the year & it’s not the 2020 market benefiting from a wave of pent-up demand but make no mistake this is still a hot housing market.”Bottom LineDon’t let headlines make you rethink listing your home this fall. Selling today means you can still take advantage of high buyer demand, multiple offers, and a quick sale. If you’re considering selling your house, this fall is the perfect time to do so. http://townandcountryrealty.org/blog/247/what-do-past-years-tell-us-about-today’s-real-estate-market?/ Tue, 19 Oct 2021 11:29:10 -0500 There’s a well-known economic theory – the law of supply and demand – that explains what’s happening with prices in the current real estate market. Put simply, when demand for an item is high, prices rise. When the supply of the item increases, prices fall. Of course, when demand is very high and supply is very low, prices can rise significantly.Understanding the impact both supply and demand have can provide the answers to a few popular questions about today’s housing market:Why are prices rising?Where are prices headed?What does this mean for homebuyers?Why Are Prices Rising?According to the latest Home Price Insights report from CoreLogic, home prices have risen 18.1% since this time last year. But what’s driving the increase?Recent buyer and seller activity data from the National Association of Realtors (NAR) helps answer that question. When we take NAR’s buyer activity data and compare it to the seller traffic during the same timeframe, we can see buyer demand continues to outpace seller activity by a wide margin. In other words, the demand for homes is significantly greater than the current supply that’s available to buy (see maps below):This combination of low supply and high demand is what’s driving home prices up. Bill McBride, author of the Calculated Risk blog, puts it best, saying:“By some measures, house prices seem high, but the recent price increases make sense from a supply and demand perspective.”Where Are Prices Headed?The supply of homes for sale will greatly affect where prices head over the coming months. Many experts forecast prices will continue to increase, but they’ll likely appreciate at a slower rate.Buyers hoping to purchase the home of their dreams may see this as welcome news. In this case, perspective is important: a slight moderation of home prices does not mean prices will depreciate or fall. Price increases may occur at a slower pace, but experts still expect them to rise.Five major entities that closely follow the real estate market forecast home prices will continue appreciating through 2022 (see graph below):What Does This Mean for Homebuyers?If you’re waiting to enter the market because you’re expecting prices to drop, you may end up paying more in the long run. Even if price increases occur at a slower rate next year, prices are still projected to rise. That means the home of your dreams will likely cost even more in 2022.Bottom LineThe truth is, high demand and low supply are what’s driving up home prices in today’s housing market. And while prices may increase at a slower pace in the coming months, experts still expect them to rise. If you’re a potential homebuyer, connect with a trusted real estate advisor today to discuss what that could mean for you if you wait even longer to buy. http://townandcountryrealty.org/blog/246/what-do-supply-and-demand-tell-us-about-today’s-housing-market?/ Thu, 14 Oct 2021 02:31:02 -0500 The financial benefits of buying a home versus renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.According to the latest research from the National Association of Realtors (NAR):“Homeownership is a key pathway to building wealth and narrowing the racial income and wealth inequality gap. Housing wealth (equity) accumulation takes time and is built up by price appreciation and paying off the mortgage.”An increase in equity builds the wealth of the individual that owns it. This wealth can be passed down to future generations. The Federal Reserve in an addendum to their Survey of Consumer Finances explains:“There are numerous ways families can transmit wealth and resources across generations. Families can directly transfer their wealth to the next generation in the form of a bequest. They can also provide the next generation with inter vivos transfers (gifts), for example, providing down payment support to enable a home purchase or a substantial wedding gift.”The Federal Reserve also explains another way wealth (including the additional net worth generated by an increase in home equity) can benefit future generations:“In addition to direct transfers or gifts, families can make investments in their children that indirectly increase their wealth. For example, families can invest in their children’s educational success by paying for college or private schools, which can in turn increase their children’s ability to accumulate wealth.”Here’s a look at how equity can build your wealth over time when you own a home.Equity over the Last 30 YearsThe NAR research reveals that the average gain for homeowners over the last five years was $139,134 and over the last 10 years was $218,505. Looking even further back in time, the article says:“Homeowners who purchased a typical single-family existing-home 30 years ago at the median sales price of $103,333 with a 10% down payment loan and who sold the property at the median sales price of $357,700 in 2021 Q2 accumulated housing wealth of $349,258.”Homeownership builds household wealth which also enables households to more easily move to the home of their dreams. As Mark Fleming, the Chief Economist at First American, explains:“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity.”If you missed out on the equity gains over the last 30 years, don’t fret. Experts are still calling for substantial growth in equity over the next five years.Looking Forward at the Equity To ComeThe most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home values (and therefore equity) to increase as follows:2021: 11.74%2022: 5.82%2023: 3.94%2024: 3.56%2025: 3.55%The survey estimates a 31.8% cumulative appreciation over the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:That’s a potential increase in household wealth of $111,285 over five years.Bottom LineOwning a home is one of the best ways to grow your wealth over time. House wealth can impact generations. In many cases, the largest single investment a household has is their home. As that investment appreciates in value, the financial options also increase. http://townandcountryrealty.org/blog/245/111285-reasons-you-should-buy-a-home-this-year/ Tue, 12 Oct 2021 02:27:14 -0500