• Today’s Housing Market Is Nothing Like 15 Years Ago,KCM Crew

    Today’s Housing Market Is Nothing Like 15 Years Ago

    There’s no doubt today’s housing market is very different than the frenzied one from the past couple of years. In the second half of 2022, there was a dramatic shift in real estate, and it caused many people to make comparisons to the 2008 housing crisis. While there may be a few similarities, when looking at key variables now compared to the last housing cycle, there are significant differences.In the latest Real Estate Forecast Summit, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), drew the comparisons below between today’s housing market and the previous cycle:Looking at the facts, it’s clear: today is very different than the housing market of 15 years ago.There’s Opportunity in Real Estate TodayAnd in today’s market, with inventory rising and less competition from other buyers, there’s opportunity right now. According to David Stevens, former Assistant Secretary of Housing:“So be advised…this may be the one and only window for the next few years to get into a buyer’s market. And remember…as the Federal Reserve data shows…home prices only go up and always recover from recessions no matter how mild or severe. Long term homeowners should view this market…right now…as a unique buying opportunity.”Bottom LineToday’s housing market is nothing like the real estate market 15 years ago. If you’re a buyer right now, this may be the chance you’ve been waiting for.Bottom LineToday’s housing market is nothing like the real estate market 15 years ago. If you’re a buyer right now, this may be the chance you’ve been waiting for.

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  • The Truth About Negative Home Equity Headlines,KCM Crew

    The Truth About Negative Home Equity Headlines

    Home equity has been a hot topic in real estate news lately. And if you’ve been following along, you may have heard there’s a growing number of homeowners with negative equity. But don’t let those headlines scare you. In truth, the headlines don’t give you all the information you really need to understand what’s happening and at what scale. Let’s break down one of the big equity stories you may be seeing in the news, and what’s actually taking place. That way, you’ll have the context you need to understand the big picture.Headlines Focus on Short-Term Equity Numbers and Fail To Convey the Long-Term ViewOne piece of news circulating focuses on the percentage of homes purchased in 2022 that are currently underwater. The term underwater refers to a scenario where the homeowner owes more on the loan than the house is worth. This was a huge issue when the housing market crashed in 2008, but it much less significant today. Media coverage right now is based loosely on a report from Black Knight, Inc. The actual report from that source says this:“Of all homes purchased with a mortgage in 2022, 8% are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, . . .”Let’s unpack that for a moment and provide the bigger picture. The data-bound report from Black Knight is talking specifically about homes purchased in 2022, but media headlines don’t always mention that timeframe or provide the surrounding context about how unusual of a year 2022 was for the housing market. In 2022, home price appreciation soared, and it reached its max around March-April. Since then, the rate of appreciation has been slowing down. Homeowners who bought their house last year right at the peak or those who paid more than market value in the months that followed are more likely to fall into the category of being marginally underwater. The qualifier marginally is another key piece of the puzzle the media isn’t necessarily including in their coverage. So, what does that mean for those who purchased a home in 2022? It’s important to remember, owning a home is a long-term investment, not a short-term play. When headlines focus on the short-term view, they’re not necessarily providing the full context. Typically speaking, the longer you stay in your home, the more equity you gain as you pay down your loan and as home prices appreciate. With recent market conditions, you may not have gained significant equity right away if you owned the home for just a few months. But it’s also true that many homeowners who recently bought their house are unlikely to be looking to sell quite yet.Bottom Line As with everything, knowing the context is important. If you have questions about real estate headlines or about how much equity you have in your home, let’s connect.Bottom LineAs with everything, knowing the context is important. If you have questions about real estate headlines or about how much equity you have in your home, talk to your local real estate advisor. 

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  • What Experts Are Saying About the 2023 Housing Market,KCM Crew

    What Experts Are Saying About the 2023 Housing Market

    If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market this year. In 2022, the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices. But what about 2023?An article from HousingWire offers this perspective:“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.The 2023 forecast from the National Association of Realtors (NAR) says:“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”Danielle Hale, Chief Economist at realtor.com, adds:“. . . buyers will not face the extreme competition that was commonplace over the past few years.”Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”Mark Fleming, Chief Economist at First American, says:“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.” Bottom LineIf you’re looking to buy or sell a home this year, the best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect.Bottom LineIf you’re looking to buy or sell a home this year, the best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor.

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