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Homeownership
Easy Chicken Little: Homeownership Rates Are NOT Crashing
The Census recently released their 2015 Q1 Homeownership Statistics, and many began to worry that Americans have taken a step back from the notion of homeownership.
The national homeownership rate (Americans who owned vs. rented their primary residence) increased significantly during the housing boom, reaching its peak of 69.2% in 2004. The Census Bureau just reported the first quarter of 2015 ended with a homeownership rate of 63.7%. Many reported on this and began to question Americans’ belief in the ideal of homeownership as a major part of the American Dream.
Everyone Calm Down…
It is true the homeownership rate has fallen over the last several years. However, if you look at the national rate over the last 30 years (1984-2014), you can see that the current homeownership rate has returned closer to historic norms. The 63.7% rate is less than a percentage point under the rate in 1985 and 1995.
What Will the Future Bring?
In a Housing Wire article this week, Ed Stansfield who manages the housing market research at Capital Economics said:
“The homeownership rate fell further at the start of the year to a 22-year low of 63.7. However, with credit conditions now loosening and employment set to continue growing strongly, we suspect this long downward trend may not last for much longer.”
In the same article referenced above, Jonathan Smoke, chief economist for realtor.com, explained why the homeownership rate will probably begin to increase:
“The homeownership rate is likely to bottom this year or next not far from where we are now. By historical patterns, the rate could indeed go up. The simple math behind what it costs to rent versus buy shows that if you can afford the down payment and qualify for a mortgage, it is cheaper to buy rather than rent in 80% of the counties in the US now.”
Bottom Line
With interest rates and prices still below where experts predict, perhaps we should get together and evaluate your ability to purchase a home.
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GUY & JOI MCKINNEY Realtors®
Triple Crown Realty – Keller Williams
Flower Mound, TX
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All information deemed reliable but not guaranteed. Equal Opportunity Housing Provider. Each office is independently owned and operated.The opinions expressed in this article are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed in this article as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Guy and Joi McKinney at Triple Crown Realty Keller Williams, do not guarantee and are not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involved some degree of risk. Guy and Joi McKinney at Triple Crown Realty Keller Williams, will not be liable for any loss or damage caused by your reliance on information contained in this article.
DENTON COUNTY IS HOT…and I DONT MEAN TEMPERATURE!
Great Morning!
As February comes to a close it has been an extremely busy past 90 days. Lets look at area 41 South Denton County. In our MLS system, there are 586 Active listings and of that number 112 are under contract. There are 307 Pending (firm & waiting to close). In the last 90 days, 649 have sold. What this tells us is that we are very much in a sellers market.
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Some areas sell faster than others and with multiple offers.
Last year, the same 90 day time period 11/27/2013 – 2/27/14 showed up with 751 sold properties in the same area. If we were to add the pending and solds this year, in the last 90 days that is up to about 956 homes sold. There is an obvious increase in numbers of sales from last year to this year and it is only February. Also, the number of buyers is up this year and that is going to increase as the year progresses. People are moving to Texas at record numbers.
THE IMPORTANCE OF A PROFESSIONAL REALTOR®
Real Estate agents are having a more difficult time locating a property for their buyers and that trend will only continue. The buy side and the sell side are becoming more intense. Think about the multiple offers instead of just one offer to sell a property. Can you imagine calling 12 different lenders and vetting out the approval letters? Keeping track of what the contract will net the seller the most money and at the same time finding the right contract to meet the sellers wants and needs? I am seeing more buyers coming into town and contracting on more then one property only to exercise their option on one of the houses and walk away. The buyers are doing this because they can’t find what they want – so after the inspections are done they are selecting the house they want to close on and saying goodby to the other. So yes, homes are selling quickly but not easily. I have heard of sellers asking for deep discounts in commissions, really. Lets look at it this way. Your home is your most expensive asset, the agent that offers to give away their commission to “get the listing” watch how fast they give away your money to get it sold and move on. Hire an agent that knows how to work with multiple offers, knows how to market your property to the best of the buyers, and can position your property on the internet so that it will bring you the most return. The most successful business people out there know that you can not expense your way into higher profit. So if an agent reduces their commission in order to stay in business the agent will have to reduce their services, those services are critical to bringing you your return on investment. We want the best for our clients so we provide the best service. Over time this has provided my clients with more sale price in the least amount of days to sell. There is more to it then sale price. The skill of the agent bringing full service to your listing will give you a level of comfort in that after the close you will not have to look over your shoulder and wonder if you are really through with the transaction. I have seen tons of contract errors that could lead to issues that extend after the close. Are you sure you want that bargain basement service? Would you really trust your largest asset to the agent that gives it away? If a family member needs surgery are you going to price shop or do you want the proven surgeon that has the tools and the know how to bring that family member back to good health? So tell me again how that discount agent is going to keep your goals at the forefront of the transaction, in true Texan lingo “it ain’t gonna happen that a way”. Don’t go for the parlor tricks hire a true professional that cares about your goals. Yes I am a Realtor®
Call me, Joi McKinney, Realtor® @ Triple Crown Realty-KW by calling direct or simply text 214-699-6788 if you have any questions.
My Office is Keller Williams Dallas Metro North 972-874-1905 just ask for me, Joi McKinney!
Make it a Great Day in Real Estate!
2015: A Year of Housing Opportunity
Many believed that when the housing market crashed, so too would the desire of American’s to own a home again. Many reports have shown that, especially among younger generations, the American Dream of homeownership is still very much alive.
Julián Castro, Secretary for HUD, recently summed up what it means to own a home in a speech at the National Press Club.
“Homeownership is still the cornerstone of the American Dream — a fact you can see in the lives of everyday folks.
It’s a source of pride. It’s a source of wealth, providing both a nest and a nest egg. And it strengthens communities and fuels growth in the overall economy.”
Castro appropriately named his speech, “2015: A Year of Housing Opportunity”, a theme that rang true throughout.
“Opportunity is not an abstract concept – it’s a path to a more prosperous life, and housing often serves as its foundation. T.S. Elliot once said that “home is where one starts from.”
“A home is often a primary source of wealth in a family… Having a home is generational way to pass that wealth on. We want people responsible enough to own a home to have that opportunity.”
Bottom Line
“Over the years-through decades of economic downturns and wars-the American people have always held on to this Dream, and always will.”
As the economy continues to improve, more and more Americans will qualify for homeownership, allowing more families to obtain the American Dream.
Cold Weather….Don’t let it flip your life upside down!
Driving can get slippery, but as a homeowner you will need to make sure you are getting your home ready for the cold too!
Click this link for: Tips on how to protect your largest investment…your HOME!
Steps To A Stress-Free Home Closing
Easy Steps for a Stress Free Closing
First it is best to be represented by an experienced Realtor® when buying or selling & preferably before signing any contract. There is much less chance of misunderstandings and missed deadlines, which can be costly on both sides. The return on your investment can be invaluable.
Hire a LOCAL mortgage broker or lender. Internet and out-of-state lenders can wreak havoc on closing. Find a local lender who will be sitting at the closing table with you and be accountable for what was promised and what is delivered.
Your title company and processor are your friends. They should freely provide information requested, and share information that may be pertinent to the transaction.
Know the deadline dates in your contract. Do you have copies of all relevant documents? What is the effective contract date? When must inspections be performed repairs negotiated, etc.? When is your mortgage commitment due? When must title commitment notices be given?
When purchasing a new home, town house or a condominium, it’s imperative to have your homeowners and flood (if applicable) insurance in place at least one week before closing. (If a hail storm is brewing, you may find yourself uninsured and unable to close.)
If you must bring money to closing, don’t wait until the last minute to make arrangements for a wire or guaranteed funds check. Complete this task at least a day or two before closing, unless you are obtaining funds from a brokerage account or IRA – then it’s imperative that you make those arrangements 7 to 10 days prior to closing.
Try not to schedule your closing on the last day of the month – this is the busiest day of the month for lenders, title agents, and Realtors®. Despite everyone’s best efforts, there are often snafus.
When possible, do your walk-thru the day before closing. If there are any problems or disputes this will allow time to work it out or extend the contract. If an escrow agreement is needed, at the very least, this will give the title agent time to prepare that document.
It’s also advisable to schedule your closing for the mid-morning or early afternoon. If you can’t do a walk-thru the day before, a mid-morning/early afternoon closing gives everyone time to work through any issues that may arise. It also gives the lenders time to get their money to the closing table so the transaction can fund. Unfortunately, there are also times a Seller’s proceeds are not available the day of closing. When that happens, it often means the Seller incurs additional interest charges if there is a mortgage on the property. Finally, Sellers should be prepared to provide wiring instructions or a physical address for overnight delivery if you are leaving town right after closing.
Be sure to notify the closing officier of any changes to dates, times and contractual agreements.
Cheat Sheet-Read more: http://buyandsell.houselogic.com/articles/7-steps-stress-free-home-closing/#ixzz3N2ETwCaZ
2015: The Return of the Millennial Home Buyer
Earlier this month, Zillow predicted that millennial buyers (under the age of 35) will become the largest group of buyers, overtaking Gen X (35-50 years old) by the end of 2015. Dr. Stan Humphries, Zillow Chief Economist, explained:
“Roughly 42 percent of millennials say they want to buy a home in the next one to five years, compared to just 31 percent of Generation X, and by the end of 2015 millennials will become the largest home-buying age group. The lack of home-buying activity from millennials thus far is decidedly not because this generation isn’t interested in homeownership, but instead because younger Americans have been delaying getting married and having children, two key drivers in the decision to buy that first home. As this generation matures, they will become a home-buying force to be reckoned with.”
Two days later, Realtor.com also projected that Millennials will be a driving force in the housing market next year. In their 2015 Housing Forecast, they claim:
“Households headed by millennials will see significant growth as a reflection of economic gains. Millennials will also drive two-thirds of household formations over the next five years. Next year’s addition of 2.75 million jobs and increased household formation will be the two key factors driving first-time buyer sales.”
Has the Millennial Home Buyer already re-entered the market?
AEI’s International Center on Housing Risk also released their first First-Time Buyer Mortgage Share Index this month. The report revealed that the percentage of first time home buyers may have been underestimated in 2014. According to the report, the percentage of first time buyers “averaged an estimated 46 percent over the 12 months ending October 2014”.
That number far exceeds other numbers reported by the National Association of Realtors and others.
Bottom Line
The Millennial generation is growing up, finding jobs, getting married and starting families. Homeownership will definitely be the next step.
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