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There’s More to a Bubble Than Rising Home Prices

by Christie Cannon

There’s More to a Bubble Than Rising Home Prices



What truly causes a housing bubble and the inevitable crash? For the best explanation, let’s go to a person who correctly called the last housing bubble – a year before it happened.

“A bubble requires both overvaluation based on fundamentals and speculation. It is natural to focus on an asset’s fundamental value, but the real key for detecting a bubble is speculation…Speculation tends to chase appreciating assets, and then speculation begets more speculation, until finally, for some reason that will become obvious to all in hindsight, the ‘bubble’ bursts.

I have taken to calling the housing market a ‘bubble’.”

– Bill McBride of Calculated Risk calling the bubble back in April 2005

Where do we stand today regarding speculation?

There are two measurements that are used to determine the speculation in a housing market:

1. The number of homes purchased by an investor and
2. The number of homes being flipped (resold within a twelve-month period)

As compared to 2005, investor purchases are down dramatically (from 23% to 13%) and so is flipping (from 8.2% to 5.7%). McBride explains:

“There is currently some flipping activity, but this is more the normal type of flipping (buy, improve and then sell). Back in 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation.”

What are the experts saying about speculation in today’s market?

DSNews recently ran an article which asked two economists to compare the speculation in today’s market to that in 2005-2007. Here is what they said:

Dr. Eddie SeilerChief Housing Economist at Summit Consulting:

“The speculative ‘flipping mania’ of 2006 is absent from most metro areas.”

Tian LiuChief Economist of Genworth Mortgage Insurance:

“The nature of housing demand is different as well, with more potential homeowners and far fewer speculators in the housing market compared to the 2005-2007 period.”

And what does McBride, who called the last housing bubble, think about today’s real estate market?

Sixty days ago, he explained:

“In 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation. And even more dangerous during the bubble was the excessive use of leverage (all those poor-quality loans). Currently lending standards are decent, and loan quality is excellent…

I wouldn’t call house prices a bubble – and I don’t expect house prices to decline nationally like during the bust.”

Bottom Line

Speculation is a major element of the housing bubble formula. Right now, there are not elevated percentages of investors and house flippers. Therefore, there is not an elevated rate of speculation.

 

Christie Cannon | REALTOR
The Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com

 

Keller Williams Does It Again

by Christie Cannon

Keller Williams Continues to Lead the Pack

2017 has been a great year and Keller Williams has been honored to receive a number of prestigious awards.  We are excited to continue excelling in our field!

  • Training Magazine
    #1 training organization across all industries
  • REAL Trends 500
    Keller Williams had more offices (161) represented on top real estate brokerages list than any other franchise
  • REAL Trends/ Wall Street Journal "The Thousand"
    Keller Williams had more agent teams ranked by closed transactions and sales volume than any other franchise
  • RIS Media Power Broker Report
    Keller Williams ranked #1 Power Broker by Brand - home to 32 percent of top brokers
  • REALTOR Magazine
    Keller Williams home to industry-leading five 30 Under 30 winners
  • Swanepoel Power 200
    Eight representatives on list of most powerful people in residential real estate, including Gary Keller, John Davis, and Mary Tennant
  • Inman Real Estate Influencers of 2017
    Seven representatives on list of industry influencers, including Chief Innovation Officer Josh Team
  • National Association of Hispanic Real Estate Professionals 250
    Keller Williams is home to 37 agents on NAHREP's list of top-producing Latino agents including 7 of the Top 10
  • Forbes
    #3 on list of Happiest Companies to Work for in 2017
  • Entrepreneur Magazine
    Top Company Cultures
  • Entrepreneur Magazine
    Moved up 63 spots on Franchise 500 list of top franchises
  • Franchise Business Review
    Top-rated real estate franchise based on franchisee satisfaction
  • Franchise Business Review 
    One of the Top 50 Franchises for Women
  • Franchise Times
    Only real estate company on "Fast & Serious" list of 40 smartest-growing brand

Just one more reason Keller Williams is ranked #1 happiest place to work in 2018!!​​

Christie Cannon | REALTOR
The Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com

 

500 High-Skill Jobs Coming to Sherman

by Christie Cannon

500 High-Skill Jobs Coming to Sherman

More companies are deciding that North Texas is the place to be! Apple recently announced that it has awarded Finisar, an optical communication components manufacturer, $390 million from its Advanced Manufacturing Fund.  Finisar is expected to create 500 high-skill jobs, including engineers, technicians and maintenance teams right here in North Texas.

Finisar will transform a shuttered, 700,000-square-foot manufacturing plant in Sherman, Texas, into a high-tech facility developing VCSEL (vertical-cavity surface-emitting laser) chips. VCSEL technology is used to power Apple product features such as Face ID, Animoji, portrait mode selfies and proximity-sensing capabilities. One hundred percent of the VCSELs Apple buys from Finisar will be made in Texas. The hiring process has already begun and the Sherman plant is scheduled to start shipping out products by late 2018.

The City of Sherman has been investing significantly in improved infrastructure and amenities, creating an unparalleled quality of life for its citizens. One more reason DFW is one of the fastest growing areas in the US!

 

Christie Cannon | REALTOR
The Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com
 

Full Speed Ahead - Texas Bullet Train Moving Forward

by Christie Cannon

High-Speed Texas Bullet Train Takes Another Step Forward    


The proposed Texas bullet train would connect Dallas and Houston. (Photo courtesy of Texas Central Partners)

It may soon be a whole lot faster to get from Dallas to Houston!  The Federal Railroad Administration approved a route for the high-speed Texas Bullet Train that would connect Dallas to Houston, the state’s two largest urban areas.  According to the Texas Tribune, there aren’t many surprises in the announced route, as it had already been largely solidified. Now that the route has been finalized, there will be a public process in the early part of the year to gather feedback about the route. The release of the draft Friday marked a major step toward getting federal clearance for the project. The high-speed rail project will require the developer to buy up thousands of rural properties across the state.

Central Texas Partners released this map showing the likely route of a high-speed rail line between Dallas and Houston.  Graphic by Emily Albracht for The Texas Tribune

Texas Central promises to run high-speed trains that would travel up to 205 mph as they carry people between the state's two biggest urban areas in only 90 minutes. The $12 billion project will have stations in Dallas, Grimes County & Houston. The Dallas Station will be located just south of Downtown, while there are three potential Houston station locations. They are planning on breaking ground in late 2018 or early 2019 with expected operations to begin in 2023. A high-speed rail line between two of the country’s biggest, fastest-growing metros could have a major impact on transportation, jobs and economic development!

 

Christie Cannon | REALTOR
The Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com

 

 

Tips to Making a Successful Offer!

by Christie Cannon

Before You Make an Offer, Here Are 4 Tips for Success!

So, you’ve been searching for that perfect house to call a ‘home,’ and you finally found it! The price is right, and in such a competitive market, you want to make sure that you make a good offer so that you can guarantee that your dream of making this house yours comes true!

Freddie Mac covered “4 Tips for Making an Offer” in their Executive Perspective. Here are the 4 tips they covered along with some additional information for your consideration:

1. Understand How Much You Can Afford

“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

This ‘tip’ or ‘step’ should really take place before you start your home search process.

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).

2. Act Fast

“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.” 

The inventory of homes listed for sale has remained well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.

Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.

3. Make a Solid Offer

Freddie Mac offers this advice to help make your offer the strongest it can be:

“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”

Talk with your agent to find out if there are any ways that you can make your offer stand out in this competitive market!

4. Be Prepared to Negotiate

“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.

Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller, or cancel the contract.

Bottom Line 

Whether buying your first home or your fifth, having a local real estate professional who is an expert in their market on your side is your best bet to make sure the process goes smoothly. Let’s talk about how we can make your dreams of homeownership a reality!

 

Christie Cannon | REALTOR
The Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com

 

Reasons to Smile: Keller Williams Ranked #1 Happiest Place to Work

by Christie Cannon

Reasons to Smile: Keller Williams Ranked #1 Happiest Place to Work

Ask most business leaders and they’ll tell you that success starts with smart hiring & satisfied workers.  Keller Williams is undoubtedly following this key business guideline and giving its employees plenty of reasons to smile these days. According to career site CareerBliss, Keller Williams is ranked the number one happiest company in America to work for in 2018. The rankings recognize businesses that are dedicated to to creating a happier work environment for their employees.  Each company’s BlissScore includes factors such as company culture, leadership, overall work atmosphere, and one’s relationship with coworkers. Keller Williams tops this list because it prides itself on a unique, agent-centric culture that focuses on cutting edge technology, education & services.

The Christie Cannon Team is proud to be partnered with Keller Williams Realty and look forward to passing on its high level of professionalism & expertise to our clients. You can view the full list of Happiest Places to Work in 2018 here.

 

Christie Cannon | REALTOR
The Christie Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com

 

How Many Hours to Pay Your Mortgage

by Christie Cannon

Many people understand & believe that home ownership is key to fulfilling the American Dream.  In a world where affordability varies so widely and is affected by so many factors, the folks over at HowMuch.net created an amazing visual aid to offer an easy apple-to-apples comparison.  Using US Census Data  to determine median incomes v/s media sale prices, these experts broke down each cities respective housing costs to the number of hours required to cover an average mortgage.  While Memphis, TN can be home by Wednesday, New York, NY will be putting away some late night hours.

 

Want to see how your individual city faired, be sure to check out the source data found here: https://howmuch.net/sources/hours-work-afford-home

Christie Cannon | REALTOR
The Christie Cannon Team
Keller Williams Realty Frisco
469-951-9588
www.ChristieCannon.com
 

 

 

Your Guide to the Best Christmas Light Displays in DFW

by Christie Cannon

The DFW area literally lights up and twinkles as the holidays draw near.  Everywhere from Dallas to Frisco to the Ft. Worth Stockyards light up in spectacular displays.  With looks of excitement on children's faces, the sound of carolers singing familiar tunes, the taste of sweet holiday favorites and the smell of Christmas pine flooding the area, you can't help but get into the holiday spirit.  We have compiled a list of our favorite spots to view holiday lights in the DFW area.  Make the rounds and find your family's next holiday tradition!

  •         Frisco Square - Drawing over 750,000 visitors annually, Frisco Square offers North TX largest choreographed light display!  Boasting snow flurries every 15 minutes, ice skating, inner tubing snow slide, horse drawn carriage rides, light & music shows, trackless train rides & even a parachuting Santa - this place has it all!  Going on now through Dec 31st!
  •         Deerfield, Plano - Running from December 1st - 30th, this quintessential Plano neighborhood is jammed packed with gorgeous homes competing for the best, funniest & most traditional displays.  Check out their website for best routes & carriage ride info!
  •        Vitruvian Lights in Addison - Wander through Vitruvian Park’s 12 Acres and view over 550 illuminated trees wrapped in 1.5 million sparkling LED lights.  Enjoy free live music in the park, food trucks & free pictures with Santa!     
  •         Highland Park & Highland Park Village - What can I say?  Gorgeous architecture complemented by professional Christmas lighting.  Spanning about 20 blocks, this is the perfect time to splurge on a horse drawn carriage ride.
  •         Enchant Christmas - A world of Christmas wonder awaits you in Arlington at Globe Life Park! Surrounded by millions of dazzling lights, experience the world’s largest Christmas light maze, ice skating, Santa’s palace, live entertainment & a Christmas marketplace.
  •         12 Days of Christmas - The Dallas Arboretum plays host to this elaborate exhibition featuring 25ft Victorian style gazebos filled with costumed characters, whimsical animals & music made famous the beloved Christmas carol.
  •         Prairie Lights - Growing larger each year, this Grand Prairie display is located in Lynn Creek Park and has become a destination in its own right.  Offering a 2-mile path of lights, a snow maze, holiday lighted walk-through forest, holiday village, & more.  Be sure to check out their website as there are costs for this one!
  •        Interlochen in Arlington - This year marks the 42nd Anniversary of one of the largest drive-thru Christmas light displays in North TX.
  •        Tour of Lights in Farmers Branch - A drive thru animated display of over 500,000 twinkling lights. Located in the Farmers Branch Historical park with a variety of different scenes & themes.
  •        Texas Motor Speedway - Supporting Toys for Tots, this huge display boasts a drive-thru display & Santa's Village.  Be sure to check out the website for pricing!
  •        ICE & the Gaylord Texan Resort - Ice skating, gingerbread house building, sled riding, Santa photos, Holiday village, light displays, 2+ million pounds of ice, what do they not have?

Have some ideas & comments that will help our list?  We would love to hear from you! 

Thank you & we wish you a very Merry Christmas & Happy Holiday Season!

Every North TX Home Must Be Sold TWICE!

by Christie Cannon

Every Home must be Sold Twice!

Homeowners: Your House Must Be Sold TWICE | MyKCM

In today’s housing market, where supply has been low and demand high, home values have increased rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.  This is a topic that you may have seen us discuss previously - Appraisals & Why Every Home Must be Sold Twice.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth, and an appraiser’s evaluation of that same home.

Bill Banfield, Executive VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge:

“Based on the HPPI, it appears homeowners in the markets where prices are rising faster than the national average – like Denver, Seattle and San Francisco – are continuing to underestimate just how quickly home values are rising, so the average appraisal is higher than homeowner estimate.

On the inverse of that, homeowners in areas where the values aren’t rising as fast may think they are rising faster than they are, leading to the appraisal lagging the estimate.”

The chart below illustrates the changes in home price estimates over the last 12 months.

Homeowners: Your House Must Be Sold TWICE | MyKCM

Every house on the market must be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacles that may arise.

Mortgages Getting Easy Again? North Dallas Real Estate

by Christie Cannon

Too Easy to Get a Mortgage?  Is This the Start of a New Bubble?

Bubble Alert! Is it Getting Too Easy to Get a Mortgage? | MyKCM

There is little doubt that it is easier to get a home mortgage today than it was last year. The Mortgage Credit Availability Index (MCAI), published by the Mortgage Bankers Association, shows that mortgage credit has become more available in each of the last several years. In fact, in just the last year:

  • More buyers are putting less than 20% down to purchase a home
  • The average credit score on closed mortgages is lower
  • More low-down-payment programs have been introduced

This has some people worrying that we are returning to the lax lending standards which led to the boom and bust that real estate experienced ten years ago. Let’s alleviate some of that concern.

The graph below shows the MCAI going back to the boom years of 2004-2005. The higher the graph line, the easier it was to get a mortgage.

Bubble Alert! Is it Getting Too Easy to Get a Mortgage? | MyKCM

As you can see, lending standards were much more lenient from 2004 to 2007. Though it has gradually become easier to get a mortgage since 2011, we are nowhere near the lenient standards during the boom.

The Urban Institute also publishes a Home Credit Availability Index (HCAI). According to the Institute, the HCAI:

“Measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates … it is easier to get a loan.”

Here is a graph showing their findings:

Bubble Alert! Is it Getting Too Easy to Get a Mortgage? | MyKCM

Again, today’s lending standards are nowhere near the levels of the boom years. As a matter of fact, they are more stringent than they were even before the boom.

Bottom Line

It is getting easier to gain financing for a home purchase. However, we are not seeing the irresponsible lending that caused the housing crisis.

Displaying blog entries 11-20 of 43

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Photo of Christie Cannon Real Estate
Christie Cannon
Keller Williams Realty
5933 Preston Road #300
Frisco TX 75034
972-215-7747
Fax: 972-215-7748
Keller Williams Frisco - The Christie Cannon Team - http://www.christiecannon.com