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Homeowner Equity Increases an Astonishing $1 Trillion

by Christie Cannon

Homeowner Equity Increases an Astonishing $1 Trillion

Homeowner Equity Increases an Astonishing $1 Trillion | MyKCM
 

In a year that was financially devastating for many Americans, some good news for most homeowners is the dramatic gain in home equity over the last twelve months. Last week, CoreLogic released its 2020 3rd Quarter Homeowner Equity Insights report, which reveals four major findings:

  1. U.S. homeowners with mortgages have seen their equity increase by a total of $1 trillion since the third quarter of 2019.
  2. The average homeowner gained approximately $17,000 in equity over the past year.
  3. This is a 10.8% increase in equity over last year.
  4. The average household with a mortgage now has $194,000 in home equity.

This has given many homeowners the ability to redesign their homes to meet their changing needs. Frank Martell, President and CEO of CoreLogic, explains in the report:

“The housing market has remained a strong pillar in an otherwise tumultuous economic year. A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity. And with many people now spending more time than ever before at home, some homeowners have tapped into their strengthening equity to fund renovations.”

This build-up in equity also gives more options to homeowners who have been financially impacted by the pandemic. Today, homeowners with substantial equity are in a much better position to work out a deal with their lender if they cannot pay their mortgage. Alternatively, they also have the power to sell and walk away with their equity in the form of cash or as a down payment toward a more affordable house. Frank Nothaft, Chief Economist for CoreLogic, addresses the issue in the report:

"Over the past year, strong home price growth has created a record level of home equity for homeowners…This provides an important buffer to protect families if they experience financial difficulties and is one reason for the generational-low in foreclosure rates reported."

Here’s a map showing equity gains by state:Homeowner Equity Increases an Astonishing $1 Trillion | MyKCMThis gain in home equity is a blessing for homeowners in these trying times, and it seems that the next two years will continue to reward those who own a home.

Last week, the National Association of Realtors (NAR) held their 2020 Real Estate Forecast SummitAt the summit, they shared the results of a recent survey of 23 economic and housing market experts. The median forecast among the experts called for home values to increase further by 8% in 2021 and 5.5% in 2022.

Bottom Line

In a year that has many of us reevaluating what “home” really means, those who own their homes have been rewarded with a financial windfall that averages $17,000 individually and totals $1 trillion nationally.

3 Reasons to Be Optimistic about Real Estate in 2021

by Christie Cannon

3 Reasons to Be Optimistic about Real Estate in 2021

3 Reasons to Be Optimistic about Real Estate in 2021 | MyKCM
 

This year will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.

1. The Economy Is Expected to Continue Improving

Tim Duy from the University of Oregon puts it this way:

“There is nothing fundamentally ‘broken’ in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter…Don’t let the near-term challenges distract from the economic stage being set for next four years.”

2. Interest Rates Are Projected to Stay Low

In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing in 2021.3 Reasons to Be Optimistic about Real Estate in 2021 | MyKCM

3. Future Home Sales Are Forecasted to Grow

While the economy improves and interest rates remain low, homes are also expected to continue appreciating as more people buy in the coming year. Danielle Hale, Chief Economist at realtor.comsays:

“We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”

Bottom Line

Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Let’s connect to take the first step toward your new home today.

Winning as a Buyer in a Sellers’ Market

by Christie Cannon

Winning as a Buyer in a Sellers’ Market 

Winning as a Buyer in a Sellers’ Market [INFOGRAPHIC] | MyKCM
 

Some Highlights

  • Buying a home in today’s sellers’ market doesn’t have to feel like an uphill battle.
  • Here are four ways to make sure you’re positioned for success when making a home purchase, even when the scale tips toward sellers.
  • Let's connect to make sure you're armed for victory in the housing market this season.

10 BEST PLACES TO INVEST IN REAL ESTATE IN 2021

by Christie Cannon

With the US real estate market managing to thrive during the coronavirus pandemic, many investors are beginning to make plans to enter the market next year. If you want to ensure a high return on investment in the US housing market 2021, turn to our list of the best places to invest in real estate.

This list is based on the PwC’s Emerging Trends in Real Estate 2021: US and Canada report. The annual report put out by the PwC and the Urban Land Institute features key data, trends, and insights from over 1,600 real estate experts. In this year’s report, the effects of COVID-19 were analyzed among other market factors in order to rank US cities in the Markets to Watch list. Those listed below ranked in the top 10 for overall real estate prospects. Read the full report here. 

In addition to breaking down information from the report, we have included key real estate market statistics derived from Mashvisor’s database and other top resources.

The 10 Best Places to Invest in Real Estate in 2021

best places to invest in real estate 2021 infographic

  1. Raleigh/Durham, NC
  2. Austin, TX
  3. Nashville, TN
  4. Dallas/Fort Worth, TX
  5. Charlotte, NC
  6. Tampa/St. Petersburg, FL
  7. Salt Lake City, UT
  8. Washington, DC–Northern VA
  9. Boston, MA
  10.  Long Island, NY

#1. Raleigh/Durham, North Carolina

Last year and pre-COVID-19, the Raleigh/Durham real estate market came in #2 in the report for overall real estate prospects. Now, amid the pandemic, the location has managed to take the title of the best place to invest in real estate for 2021. 

The report labels Raleigh/Durham as a “Magnet City” – a place where both people and businesses have been migrating to during COVID-19. As an 18-hour city, the location’s culture, general way of life, and the local job opportunities continue to attract residents. 

Another factor that is attracting newcomers is the relative affordability of homes for sale in the market. At the same time, both the Durham and Raleigh real estate markets have a high price to rent ratio (see Mashvisor’s data below). This is one of the factors that make the location one of the best cities to buy a rental property for 2021. Residents still find it more affordable to rent than to buy a home. In Raleigh, the current renter population is around 51%. For Durham, the population sits at around 53%.

In terms of general economic health, the Raleigh/Durham housing market ranked #3 based on the expert opinions in the report. Although much of the US still suffers from high unemployment rates, the Raleigh-Durham-Cary metropolitan area had an unemployment rate of 6.2% at the end of September 2020. Compared to the national average of 7.9%, the area’s job market is slowly but surely recovering from the high unemployment rate witnessed in April of this year (10.7%). 

Raleigh Real Estate Market Statistics:
  • Median Property Price: $477,440
  • Price per Square Foot: $197
  • Price to Rent Ratio: 27
  • Traditional Rental Income: $1,485
  • Traditional Cash on Cash Return: 2.2%
  • Top Raleigh Neighborhood for Real Estate Investing: Northeast Raleigh
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 7% 
Durham Real Estate Market Statistics:
  • Median Property Price: $377,133
  • Price per Square Foot: $209
  • Price to Rent Ratio: 22
  • Traditional Rental Income: $1,413
  • Traditional Cash on Cash Return: 2.5%
  • Top Durham Neighborhood for Real Estate Investing: Scarsdale Village
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 6.9% 
Other Raleigh/Durham Housing Market Rankings for 2021:
  • #1 for Homebuilding Prospects
  • #6 for Real Estate Investor Demand
  • #1 for Development and Redevelopment Opportunities
  • #11 for Availability of Debt and Equity Capital
Raleigh/Durham Multifamily Market 2021 Outlook:

 

 

 

#2. Austin, Texas

One reason the Austin real estate market has managed to weather the coronavirus is its lack of major economic dependence on the leisure and hospitality industries. As these sectors were hit the hardest during the pandemic, economics wholly dependent on them continue to struggle. Fortunately, Austin enjoys a diverse economy – just one of the reasons it takes the second spot on the list for the best places to invest in real estate in 2021. Austin ranked #1 for its local economy, according to the experts interviewed. As of September 2020, the unemployment rate was 6.5%.

The report labels the Austin housing market as a “Boom Market.” These are locations where real estate is in high demand and property values continue to appreciate rapidly. At the same time, Austin homes for sale have managed to remain relatively affordable, driving in-migration from West Coast areas like the California housing market during COVID-19.

Still, the local renter population remains high – around 56%. So Austin rental property owners will continue to enjoy good occupancy rates and high rental income next year as in-migration drives rental demand higher.

Related: 50 Best Cities for Rental Income

Austin Real Estate Market Statistics:
  • Median Property Price: $631,959
  • Price per Square Foot: $326
  • Price to Rent Ratio: 26
  • Traditional Rental Income: $2,036
  • Traditional Cash on Cash Return: 1.6%
  • Top Austin Neighborhood for Real Estate Investing: West University
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 7.7%
Other Austin Housing Market Rankings for 2021:
  • #2 for Homebuilding Prospects
  • #1 for Real Estate Investor Demand
  • #4 for Development and Redevelopment Opportunities
  • #1 for Availability of Debt and Equity Capital
Austin Multifamily Market 2021 Outlook:
  • 63% of experts recommend buying a multifamily property
  • 26% of experts recommend holding onto your multifamily property
  • 12% recommend selling

#3. Nashville, Tennessee

The Nashville real estate market is being hailed as a “New Boomtown” in the report and as a “strong housing market.” As such, it has managed to maintain its #3 spot on the annual list of the best places to invest in real estate.

Being an 18-hour city, it continued to attract new residents during COVID-19. However, it is one of the few major cities that has managed to draw in a large amount of “smart, young workers.” This has allowed Nashville to officially begin recovering from the pandemic-driven job losses witnessed earlier this year. The unemployment rate for the metro area dropped to 5.9% at the end of September. The city ranked #4 for the general health of its local economy.

If you are considering buying rental property in the Nashville real estate market in 2021, know that the renter population is around 48%. Based on Mashvisor’s statistics below, the rental demand drives a good monthly income and cash on cash return.

Nashville Real Estate Market Statistics:
  • Median Property Price: $481,706
  • Price to Rent Ratio: 25
  • Traditional Rental Income: $1,612
  • Traditional Cash on Cash Return: 2.6%
  • Top Nashville Neighborhood for Real Estate Investing: Trinity Hills
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 7.2%
Other Nashville Housing Market Rankings for 2021:
  • #10 for Homebuilding Prospects
  • #3 for Real Estate Investor Demand
  • #8 for Development and Redevelopment Opportunities
  • #3 for Availability of Debt and Equity Capital
Nashville Multifamily Market 2021 Outlook:
  • 59% of experts recommend buying a multifamily property
  • 37% of experts recommend holding onto your multifamily property
  • 4% recommend selling

Related: The 7 Best Nashville Neighborhoods to Invest in Real Estate

#4. Dallas/Fort Worth, Texas

The Dallas/Fort Worth market has moved up the list from #6 in 2020 to #4 for 2021. 

Dallas is grouped with Nashville as a “New Boomtown.” However, the housing market also falls into another group: the Super Sun Belt Magnet Cities. Locations are labeled as such for their ability to offer an affordable environment for both residents and businesses. They also have thriving economies that are home to a diverse range of businesses. The location ranked #2 for its local economy. 

This points to a positive job outlook, with the report estimating that cities like Dallas/Fort Worth will see 28% new jobs from 2019 – 2025. Currently, however, the local unemployment rate remains high amid the pandemic compared to other cities on this list – 8.4% for September 2020.

A diverse economy and a growing job market definitely earn the Dallas/Fort Worth housing market a spot on the list of the best places to invest in real estate. And those looking to enter the residential market should know that the renter population is high in both locations: 59% for the Dallas real estate market and 44% for the Fort Worth real estate market.

Dallas Real Estate Market Statistics:
  • Median Property Price: $490,477
  • Price per Square Foot: $227
  • Price to Rent Ratio: 21
  • Traditional Rental Income: $1,966
  • Traditional Cash on Cash Return: 1.9%
  • Top Dallas Neighborhood for Real Estate Investing: Reunion District
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 6.1%
Fort Worth Real Estate Market Statistics:
  • Median Property Price: $324,337
  • Price per Square Foot: $152
  • Price to Rent Ratio: 16
  • Traditional Rental Income: $1,655
  • Traditional Cash on Cash Return: 2.7%
  • Top Fort Worth Neighborhood for Real Estate Investing: Village Creek
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 7.3%
Other Dallas/Fort Worth Housing Market Rankings for 2021:
  • #3 for Homebuilding Prospects
  • #2 for Real Estate Investor Demand
  • #9 for Development and Redevelopment Opportunities
  • #2 for Availability of Debt and Equity Capital

#5. Charlotte, North Carolina

Another entry for the state of North Carolina, the Charlotte real estate market takes the #5 spot. The city is another labeled as a “New Boomtown” as people continue to migrate to the location during the pandemic.

Looking at the local economy, experts interviewed ranked Charlotte in position #5. As of the end of September 2020, the unemployment rate was 8.1%. So if you’re considering a real estate investment in Charlotte in 2021, keep an eye on the developing situation with the job market.

Charlotte rental properties enjoy demand as the renter population is around 48%.

Charlotte Real Estate Market Statistics:
  • Median Property Price: $435,448
  • Price per Square Foot: $219
  • Price to Rent Ratio: 23
  • Traditional Rental Income: $1,561
  • Traditional Cash on Cash Return: 2.4%
  • Top Charlotte Neighborhood for Real Estate Investing: Lakewood
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 7.7%
Other Charlotte Housing Market Rankings for 2021:
  • #11 for Homebuilding Prospects
  • #4 for Real Estate Investor Demand
  • #2 for Development and Redevelopment Opportunities
  • #5 for Availability of Debt and Equity Capital
Charlotte Multifamily Market 2021 Outlook:
  • 56% of experts recommend buying a multifamily property
  • 36% of experts recommend holding onto your multifamily property
  • 8% recommend selling

#6. Tampa/St. Petersburg, Florida

Tampa is one of the best places to invest in real estate 2021

 

The Tampa/St. Petersburg market did not make it onto last year’s list for the 10 best places to invest in real estate. For 2021, however, it has climbed up to position #6. 

As a “Boom Market,” the location has benefited from in-migration during COVID-19. Similarly to Dallas/Fort Worth, the Tampa/St. Petersburg real estate market is a “Super Sun Belt Magnet” city.

For local economic prospects, the market was ranked #11. The unemployment rate for the metro area has been generally dropping since highs reached in April 2020. As of the end of September, the rate is 6.9%.

Tampa is a good rental market with a high renter population. The population in the Tampa real estate market is about 54%. It’s lower in the St. Petersburg real estate market, around 43%.

Tampa Real Estate Market Statistics:
  • Median Property Price: $516,442
  • Price per Square Foot: $254
  • Price to Rent Ratio: 24
  • Traditional Rental Income: $1,768
  • Traditional Cash on Cash Return: 2.5%
  • Top Tampa Neighborhood for Real Estate Investing: Northeast
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 8.0%
St. Petersburg Real Estate Market Statistics:
  • Median Property Price: $537,210
  • Price per Square Foot: $336
  • Price to Rent Ratio: 24
  • Traditional Rental Income: $1,902
  • Traditional Cash on Cash Return: 2.3%
  • Top St. Petersburg Neighborhood for Real Estate Investing: Bartlett Park
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 8.6%
Other Tampa/St. Petersburg Housing Market Rankings for 2021:
  • #5 for Homebuilding Prospects
  • #22 for Real Estate Investor Demand
  • #10 for Development and Redevelopment Opportunities
  • #28 for Availability of Debt and Equity Capital
Tampa/St. Petersburg Multifamily Market 2021 Outlook:
  • 67% of experts recommend buying a multifamily property
  • 30% of experts recommend holding onto your multifamily property
  • 2% recommend selling

#7. Salt Lake City, Utah

This is the first time in a few years that Salt Lake City makes it onto the list of the 10 best places to invest in real estate in the US. 

The Salt Lake City real estate market has continually been a destination for those leaving California – before and during the coronavirus. As such, it is another 18-hour city to be called a “Magnet.”

The city’s economy ranked #13 in the report. At the same time, the city had the lowest unemployment rate of cities on this list by the end of September – 5.4%. And it is this improvement in employment opportunities during the pandemic that has kept in-migration high in the city.

A Salt Lake City real estate investment rented out long term would find demand from the general population as 53% currently live in rental properties.

Salt Lake City Real Estate Market Statistics:
  • Median Property Price: $562,222
  • Price per Square Foot: $288
  • Price to Rent Ratio: 33
  • Traditional Rental Income: $1,426
  • Traditional Cash on Cash Return: 1.6%
  • Top Salt Lake City Neighborhood for Real Estate Investing: Bonneville Hills
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 7.3%
Other Salt Lake City Housing Market Rankings for 2021:
  • #18 for Homebuilding Prospects
  • #19 for Real Estate Investor Demand
  • #11 for Development and Redevelopment Opportunities
  • #25 for Availability of Debt and Equity Capital
Salt Lake City Multifamily Market 2021 Outlook:
  • 67% of experts recommend buying a multifamily property
  • 27% of experts recommend holding onto your multifamily property
  • 6% recommend selling

 

#8. Washington DC- Northern VA

It may be surprising to see Washington DC, an “out-migration market”, make it onto the list of the 10 best places to invest in real estate in 2021. However, keep in mind it is a suburban area of Washington DC that ranks in position #8. And despite the fact that the city has lost some of its popularity among the general population, most of the experts interviewed believe this COVID-19 trend is not a permanent one. It’s likely that the Washington DC real estate market will remain an influential center in the United States. 

In terms of market groupings, the Washington DC housing market is an “Establishment.” This is because the city is considered to be a major center in the US and has continued to offer real estate opportunities for years. Washington DC- Northern VA is subcategorized as “Suburbs Ascending,” as it has gained popularity due to the coronavirus, allowing it to break into the top 10 for 2021.

For economy rankings, Washington DC- Northern VA came in #6. Although the unemployment rate initially showed signs of improvement back in May, it has remained steady, near 8.8% for a few months now.

Not only is the renter population in the Washington DC real estate market high (61%), but there is another reason to buy a rental property in the city in 2021. Studies show that after an election year, the DC housing market typically gets a boost.

Washington DC Real Estate Market Statistics:
  • Median Property Price: $711,007
  • Price per Square Foot: $577
  • Price to Rent Ratio: 23
  • Traditional Rental Income: $2,596
  • Traditional Cash on Cash Return: 2.8%
  • Top Washington DC Neighborhood for Real Estate Investing: Garfield Heights
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 6.3%
Other Washington DC Housing Market Rankings for 2021:
  • #19 for Homebuilding Prospects
  • #13 for Real Estate Investor Demand
  • #24 for Development and Redevelopment Opportunities
  • #8 for Availability of Debt and Equity Capital
Washington DC Multifamily Market 2021 Outlook:
  • 54% of experts recommend buying a multifamily property
  • 43% of experts recommend holding onto your multifamily property
  • 3% recommend selling

#9. Boston, Massachusetts

The Boston real estate market is another “Establishment” on the list of best cities for 2021. One that is also witnessing out-migration during COVID-19 but that is expected to quickly regain its footing as a popular city center in the future. It’s subcategorized as a “Multitalented Metro Area.” Not only is Boston’s economy diverse, but it is considered to be a leader in a few different sectors, including biotech, education, healthcare, and even finance. 

The Boston housing market is the only “Multitalented Metro Area” to be named one of the best places to invest in real estate in 2021, likely due to the specific industries it leads. Boston is also expected to experience growth, despite being an expensive market to do business or buy a home. Experts strongly believe that Boston will continue to attract residents in the future thanks to its leadership and the top universities in the area.

With all of that said, the local economy was ranked #9 in the report. The city still struggles with a high unemployment rate of 11% although it has been significantly improving over the last few months.

The Boston real estate market is clearly not the cheapest place to invest for 2021. Naturally, housing costs keep the renter population high – 67%. However, if you can afford to buy a Boston investment property for sale, you will find high demand and a low vacancy rate.

Boston Real Estate Market Statistics:
  • Median Property Price: $1,040,905
  • Price per Square Foot: $787
  • Price to Rent Ratio: 32
  • Traditional Rental Income: $2,714
  • Traditional Cash on Cash Return: 1.6%
  • Top Boston Neighborhood for Real Estate Investing: Mission Hill
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 6.9%
Other Boston Housing Market Rankings for 2021:
  • #29 for Homebuilding Prospects
  • #5 for Real Estate Investor Demand
  • #23 for Development and Redevelopment Opportunities
  • #4 for Availability of Debt and Equity Capital
Boston Multifamily Market 2021 Outlook:
  • 60% of experts recommend buying a multifamily property
  • 32% of experts recommend holding onto your multifamily property
  • 9% recommend selling

#10. Long Island, New York

The Long Island market has been slowly growing for years now and as such, it’s not typical to see it named as one of the best places to invest in real estate. However, with the surge in demand for suburban homes, the location has quickly climbed the list and broke into the top 10 for 2021. It falls under the category of “Establishment” and the subcategory of “Suburbs Ascending” in the report.

Related: Suburban Real Estate Market Boom Due to COVID-19

The local economy placed #15 with the region’s unemployment continuing to drop, landing at 9.5% at the end of September.

Long Island Real Estate Market Statistics:
  • Median Property Price: $1,185,517
  • Price per Square Foot: $618
  • Price to Rent Ratio: 35
  • Traditional Rental Income: $2,789
  • Traditional Cash on Cash Return: 1.2%
  • Top Long Island Neighborhood for Real Estate Investing: Arverne
  • Seller’s Market
  • Forecasted Real Estate Appreciation for 2021: 5.6%
Other Long Island Housing Market Rankings for 2021:
  • #22 for Homebuilding Prospects
  • #9 for Real Estate Investor Demand
  • #14 for Development and Redevelopment Opportunities
  • #6 for Availability of Debt and Equity Capital
Long Island Multifamily Market 2021 Outlook:
  • 46% of experts recommend buying a multifamily property
  • 54% of experts recommend holding onto your multifamily property
  • 0% recommend selling

 

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Knowledge Is Power on the Path to Homeownership

by Christie Cannon

Knowledge Is Power on the Path to Homeownership

Knowledge Is Power on the Path to Homeownership | MyKCM
 

Homeownership is on the goal list for many young adults, but sometimes it’s hard to know exactly how to get there. From understanding the homebuying process to pre-approval and down payment assistance options, uncertainty along the way can ultimately hold some buyers back.

Today, there are over 75 million Millennials and 67 million Gen Z’ers in the U.S., making up a significant number of both current and soon-to-be homebuyers. According to a recent Fannie Mae survey of more than 2,000 of these individuals:

“88% said they are confident they will achieve homeownership someday.”

In addition, the survey also reveals that for younger generations, the motivation to own a home may be more emotional than financial compared to previous generations:

  • <50% say they want to use their home as an asset
  • 78% believe it’s the best way to live the way they want, without restrictions
  • 80% believe homeownership is the best way to make it on their own

Whether homeownership goals come from the heart or are driven by financial aspirations (or maybe both), the obstacles standing in the way don’t have to bring these dreams to a screeching halt. The same survey also reveals two key roadblocks for potential buyers. Thankfully, they’re both easily overcome with the power of knowledge and trusted advisors leading the way. Here’s a look at these two challenges potential homebuyers face today:

1. 73% of future homebuyers are unaware of low-down-payment mortgage options

For those who want to purchase a home, low-down-payment options are instrumental to affording one sooner rather than later, especially given the amount of debt many younger adults have accumulated. Fannie Mae also notes:

“Among the challenges they face is an unprecedented amount of debt, along with a lack of understanding of the mortgage process and their own purchasing power. Debt, in particular, creates many obstacles such as a limited ability to save and the fear of taking on more debt.”

Today, there are more than 2,340 down payment assistance programs available nationwide to help relieve this pressure. Understanding what’s out there and the options available may help many buyers become homeowners faster than they thought possible. In a year like this, with record-low mortgage rates making their mark in the history books, being able to take advantage of the opportunity buyers have right now is essential to long-term affordability.

2. 64% of buyers expect lenders and other real estate professionals to educate them about the mortgage process

While many people love to do a quick search online to find instant answers to their questions, it isn’t the only way younger generations want to consume information or build their knowledge base. As the survey mentions, having trusted professionals help them learn what it takes to achieve their dreams is definitely on their wish list too.

Bottom Line

If you’re aiming for homeownership someday, it may be in closer reach than you think. Let’s connect so you can learn about the process and get the guidance you need to make it happen.

Your House May Be High on the Buyer Wish List This Holiday Season

by Christie Cannon

Your House May Be High on the Buyer Wish List This Holiday Season

Your House May Be High on the Buyer Wish List This Holiday Season | MyKCM
 

Around this time each year, many homeowners decide to wait until after the holidays to sell their houses. Similarly, others who already have their homes on the market remove their listings until the spring. Let’s unpack the top reasons why selling your house now, or keeping it on the market this season, is the best choice you can make. This year, buyers want to purchase homes for the holidays, and your house might be the perfect match.

Here are seven great reasons not to wait to sell your house this holiday season:

1. Buyers are active now. Mortgage rates are historically low, providing motivation for those who are ready to get more for their money over the life of their home loan.

2. Purchasers who look for homes during the holidays are serious ones, and they’re ready to buy.

3. You can restrict the showings in your house to days and times that are most convenient for you, or even select virtual options. You’ll remain in control, especially in today’s sellers’ market.

4. Homes decorated for the holidays appeal to many buyers.

5. Today, there’s minimal competition for you as a seller. There just aren’t enough houses on the market to satisfy buyer demand, meaning sellers are in the driver’s seat. Over the past year, inventory has declined to record lows, making it the opportune time to sell your house (See graph below):Your House May Be High on the Buyer Wish List This Holiday Season | MyKCM6. The desire to own a home doesn’t stop during the holidays. Buyers who have been searching throughout the fall and have been running into more and more bidding wars are still on the lookout. Your home may be the answer.

7. This season is the sweet spot for sellers, and the number of listings will increase after the holidays. In many parts of the country, more new construction will also be available for sale in 2021, which will lessen the demand for your house next year.

Bottom Line 

More than ever, this may be the year it makes the most sense to list your house during the holiday season. Let’s connect today to determine if selling now is your best move.

Winter Will Bring a Flurry of Activity to the Housing Market

by Christie Cannon

Winter Will Bring a Flurry of Activity to the Housing Market

Winter Will Bring a Flurry of Activity to the Housing Market | MyKCM
 

In the second half of this year, the housing market surged with activity. Today, real estate experts are looking ahead to the winter season and the forecast is anything but chilly. As Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), notes:

“It will be one of the best winter sales years ever.”

The typical winter slowdown in the housing market is simply not on the radar. Here’s why.

While today’s historically low mortgage rates are expected to remain low, they won’t be this low for much longer. This could be the last chance for homebuyers to secure such low rates, and they’re ready to take action. In a recent articleBankrate explained:

“If you’re looking to buy a home…expect mortgage rates to remain low into 2021. However, the possibility of rates falling to 2.5 percent or lower has faded as the U.S. economy has rebounded.”

As long as we continue to see low interest rates, we’ll see hopeful buyers on the hunt for their dream homes. Yun confirmed:

“The demand for home buying remains super strong…And we're still likely to end the year with more homes sold overall in 2020 than in 2019…With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”

The challenge, however, is the lack of homes available for sale. With that in mind, all eyes are on homeowners to see if they’ll sell this winter or wait until spring. Danielle Hale, Chief Economist for realtor.comsays it’s best for sellers to capitalize on this moment sooner rather than later:

“We currently see buyers sticking around in the housing market much later than we usually do this fall. If that trend continues, we will see more buyers in the market this winter, too. So, this winter is likely to be a good time to sell.”

With buyers ready to stay active this winter, sellers who want to close a deal on the best possible terms shouldn’t wait until spring to put their homes on the market.

Bottom Line

Experts agree the winter housing market could potentially be bigger than ever. Whether you’re ready to buy or sell, let’s connect today so you can be in your dream home by the new year.

Is it Safe to Sell My House Right Now?

by Christie Cannon

Is it Safe to Sell My House Right Now?

Is it Safe to Sell My House Right Now? | MyKCM
 

In today’s real estate market, the buzz is all about how it’s a great time to sell your house. Buyer demand is high, and there simply aren’t enough homes available to buy to meet that growing need. This means now is the time to make a move so you can close the deal on your ideal terms.

Even in today’s strong sellers’ market, there are homeowners who are choosing not to sell due to ongoing concerns around the health crisis, financial uncertainty, and life in general. According to Zillow, here are the top three reasons homeowners who are thinking of selling sometime in the next three years are not putting their houses on the market right now:

  • 34% - Life is too uncertain right now
  • 31% - Financial uncertainty
  • 25% - COVID-19 health concerns

If you identify with any of these, you’re not alone. Whether it’s the future of your employment situation or simply being uncomfortable having guests in your home for showings, life feels a lot different than it did at this time last year. The good news is, real estate professionals have spent the majority of 2020 figuring out how to sell homes safely, and it’s paying off for those who are choosing to move this year.

Real estate agents are doing two things very well to make selling your house possible:

1. Agents Are Implementing Technology in the Process

While abiding by state and local regulations as a top priority, real estate agents are making sales happen safely and effectively by leveraging key pieces of technology. Agents know exactly what today’s buyers and sellers need and how to put the necessary digital steps in place. For example, agents have capitalized on the technology buyers find most helpful when deciding on a new home:

  • Virtual tours
  • Accurate and detailed listing information
  • Detailed neighborhood information
  • High-quality listing photos
  • Agent-led video chats

They’re listening to their audience and leveraging the tools that help buyers get an initial look at a home without having to step inside. This helps reduce the number of people entering your home, so only those who are very seriously interested need to take the next step: in-person showings.

2. Agents Are Facilitating Safe and Effective In-Person Showings

After leveraging technology, if you have serious buyers who still want to see your house in person, agents are following the guidelines set by the National Association of Realtors (NAR) and utilizing safe ways to proceed. Here are a few of them, understanding again that the agent’s top priority is always to follow­ state and local restrictions first:

  • Limiting in-person activity
  • R­­­equiring guests to wash their hands or use an alcohol-based sanitizer
  • Removing shoes or covering them with booties
  • Following CDC guidance on social distancing and wearing face coverings

Getting comfortable with your agent – a true trusted advisor – taking these steps under the modern-era safety standards might be your best plan. This is especially important if you’re in a position where you need to sell your house sooner rather than later.

As Jeff Tucker, Senior Economist for Zillow notes:

“Homeowners who feel life is uncertain right now may think they can still get a strong price if they delay selling until they have more clarity. The catch is that waiting to sell may raise the cost of a trade-up. This fall's record low mortgage rates, which make a trade-up more affordable on a monthly basis, are not guaranteed to last.”

Bottom Line

In this new era in our lives, things are shifting quickly, and virtual strategies for sellers may be your ideal option. Opening your doors up to new approaches could be game-changing when it comes to selling your house while the market is leaning in your favor. Let’s connect so you have a trusted real estate professional to help you safely and effectively navigate all that’s new when it comes to making your next move.

Three Ways Low Inventory Is a Win for Sellers

by Christie Cannon

Three Ways Low Inventory Is a Win for Sellers

Three Ways Low Inventory Is a Win for Sellers | MyKCM
 

The number of houses for sale today is significantly lower than the high buyer activity in the current housing market. According to Lawrence Yun, Chief Economist for the National Association of Realtors (NAR):

"There is no shortage of hopeful, potential buyers, but inventory is historically low."

When the demand for homes is higher than what’s available for sale, it’s a great time for homeowners to sell their house. Here are three ways low inventory can help you win if you’re ready to make a move this fall.

1. Higher Prices

With so many more buyers in the market than homes available for sale, homebuyers are frequently entering into bidding wars for the houses they want to purchase. This buyer competition drives home prices up. As a seller, this can definitely work to your advantage, potentially netting you more for your house when you close the deal.

2. Greater Return on Your Investment

Rising prices mean homes are also gaining value, which drives an increase in the equity you have in your home. In the latest Homeowner Equity Insights ReportCoreLogic explains:

“In the second quarter of 2020, the average homeowner gained approximately $9,800 in equity.”

This year-over-year growth in equity gives you the ability to put that money toward a down payment on your next home or to keep it as extra savings.

3. Better Terms

When we’re in a sellers’ market like we are today, you’re in the driver’s seat if you sell your house. You have the power to sell on your terms, and buyers are more likely to work with you if it means they can finally move into their dream home.

So, is low housing inventory a big deal?

Yes, especially if you want to sell your house at the perfect time. Today’s market gives sellers immense negotiating power. However, it won’t last forever, especially as more sellers return to the housing market next year. If you’re considering selling your house, the best time to do so is now.

Bottom Line

If you’re interested in taking advantage of the current sellers’ market, let’s connect today to determine your best move in our local market.

Two Important Impacts of Home Equity

by Christie Cannon

Two Important Impacts of Home Equity

Two Important Impacts of Home Equity | MyKCM
 

Equity continues to rise, helping American homeowners secure a much more stable financial future. According to the most recent data from CoreLogic, the average homeowner gained $9,800 in equity over the past year. In addition, experts project 2020 home prices to continue rising. With prices going up, equity gains will also keep accelerating. Black Knight just reported:

“The annual percent change in the overall median existing single-family-home price has skyrocketed in the past several months, with recent numbers at three to five times higher than rates seen in the past several years.”

Jeff Tucker, Senior Economist at Zillow, just qualified recent price increases as “jaw-dropping” and “within a hair's breadth of double-digit year-over-year appreciation.”

Knowing equity will help enable many homeowners to better survive the economic distress caused by the ongoing pandemic, it’s important to break down two key homeowner benefits of increasing equity.

1. Equity Increases a Homeowner’s Options to Buy a New Home

Aside from the financial damage of the last seven months, there has also been a tremendous emotional toll on many people. Shelter-in-place mandates, quarantine requirements, and virtual schooling have all made us re-evaluate the must-have requirements a home should deliver. Having equity in your current house gives you a better opportunity to move-up or build your perfect home from scratch.

Mark Fleming, Chief Economist at First American, recently explained:

“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 need to make a move, the equity in your current home can help make that possible – right now.

2. Equity Enables Homeowners to Help Future Generations

An increase in home equity grows overall wealth, which can transfer to future generations. The Federal Reserve, in an addendum to their recent 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.”

Bottom Line

Equity can help a homeowner grow their confidence in a more stable financial future. It provides near-term move-up options and creates a positive impact for future generations. In many cases, the largest single investment a person has is their home. As that investment appreciates in value, financial options increase too.

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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