The economists at CoreLogic recently released a special report entitled, Evaluating the Housing Market Since the Great Recession. The goal of the report was to look at economic recovery since the Great Recession of December 2007 through June 2009.
One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from December 2012 to December 2017 to show how prices over the last five years have fared.
Frank Nothaft, Chief Economist at CoreLogic, commented on the importance of breaking out the data by state,
“Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011. After finally reaching bottom in 2011, home prices began a slow rise back to where we are now.
Greater demand and lower supply – as well as booming job markets – have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”
The map below was created to show the 5-year appreciation from December 2012 – December 2017 by state.
Nationally, the cumulative appreciation over the five-year period was 37.4%, with a high of 66% in Nevada, and a modest increase of 5% in Connecticut.
Where were prices expected to go?
Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).
According to the December 2012 survey results, national homes prices were projected to increase cumulatively by 23.1% by December 2017. The bulls of the group predicted home prices to rise by 33.6%, while the more cautious bears predicted an appreciation of 11.2%.
Where are prices headed in the next 5 years?
Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%.
Every day, thousands of homeowners regain positive equity in their homes. Some homeowners are now experiencing values even higher than before the Great Recession. If you’re wondering if you have enough equity to sell your house and move on to your dream home, contact a local real estate professional who can help!
Source: Keeping Current Matters, 3-7-18
Even though a burglary occurs every 20 seconds in the U.S., you can still protect yourself without installing top-dollar security features.
Home burglary generally has a pattern; criminals are looking for an easy target they can rob fast. Learn from the pros. Here are six tips from career burglars you can use to defend your home and prevent break-ins.
1. Nighttime Burglaries Aren’t the Best Time
Burglars like to break in to homes during daytime hours—the last thing criminals want is to encounter someone at home. Weekdays are ideal for thieves, since weekend schedules are too unpredictable. Between 12:30 p.m. and 2:30 p.m. are the most popular times because there’s a high chance people will be away at work or school.
2. They Know When You’re Not Home—Thanks to Social Media
While it’s tempting to post about your vacation to your social media feed, wait to share those trip photos and exotic location check-ins until you’re back home. Criminals scout public social media accounts like Twitter, Instagram, Facebook, and Foursquare to find victims.
Locating someone’s home address using basic information from their social media profile is surprisingly easy. In one survey of convicted burglars, more than 10 percent say they used social media to determine who was out of town. The same survey found one burglar stole over $250,000 in electronics and jewelry from 33 women he saw in public—he used GPS data embedded in photos they posted online to find their homes.
Even if all your accounts are private, that old friend from high school or new neighbor down the street could be a potential criminal. Never post what times you’re not home or how long you’ll be out.
3. They Don’t Like Your Security Practices
Burglars want nothing to do with alarm systems (whether they’re from the best home security companies or not). Homes without a security system are almost 300 percent more likely to be targeted for a break-in. If you do install an alarm system, make sure you guard it with a strong code. Don’t use your house number or birthday, and clean any dirt or grease off your keypad so a burglar won’t guess your code based off the numbers you’ve hit the most. Unlocked windows, unused deadbolts, poorly lit homes, and residences without security systems are prime targets for burglars, so make sure you are using the security features you already have.
Also, tricks that make it look like you’re home really work, professional burglars reveal. Burglars run from properties that look like people are inside. Motion sensor lights, bright flood lights, and timed lights are inexpensive security features for a home’s exterior that scare criminals away. TVs or radios left on, as well as cars parked in the driveway, make burglars nervous that someone is home.
4. Great Targets Advertise Their Weapon Supply
If you’re a proud gun owner, that won’t scare away burglars—it entices them. A gun is stolen roughly every two minutes in the U.S., so homeowners should be sure to always lock up their guns. NRA bumper stickers on a car or Smith & Wesson signs on a house advertises that there are lots of guns to steal.
5. Shrubs and Architecture Make Great Hiding Spots
Tall bushes are favorites of burglars since they offer an obstructed view from the street and an easy way to hide from neighbors. Keep shrubs and large landscaping features trimmed. If you want big plants by your windows, choose something thorny that will detract a burglar, like roses or cacti.
Think twice about large architecture features, too, like fences, half walls, and big fountains. Thieves are searching for crimes of opportunity, and such decor elements give a burglar more time to hide and plot their method of entry. The best defense is a clear view of your front porch.
6. Valuables in the Open Help Them Decide on a Target
Keep your expensive items out of sight. You’re making it too easy for a burglar by advertising the type of valuables they can steal. Don’t leave a new MacBook in front of your first-floor kitchen window, iPads on your living room ottoman, or even a nice car in a garage window with a clear sight line to the street. Key hooks—especially with labels for each key—need to be concealed out of view from windows, too.
“A burglar appreciates such kindness, but you will find it expensive when you have to replace all the locks after a break-in,” says Mike Fraser, former professional burglar and host of the BBC show Beat the Burglar.
Fraser also advises to leave large family calendars out of view. You’re inviting a break-in by detailing when you’ll be away, Fraser says. This advice goes for any ID documents, too. Mail or other personal information left in plain view is a gold mine for a criminal looking to easily steal your details for identity theft.
Using these tips can help you protect your home from break-ins. Also, be sure to research crime rates and trends in your neighborhood and state. Just like some houses are safer than others, some states are safer than others. Where does your state rank?
Source: Krystal Rogers-Nelson, RIS Media’s Housecall, 4-21-17
The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.4% over last year.
How will this impact buyers?
More inventory means more options. Lawrence Yun, NAR’s Chief Economist, explained this is good news for the housing market – especially for those looking to buy:
“This rise in single-family housing construction will help tame home price growth, and the increase in multifamily units should continue to help slow rent growth.”
How will this impact sellers?
More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:
- A great price on their home as buyers outbid each other for it
- A quick sale as buyers have so little to choose from
- Fewer hassles as buyers don’t want to “rock the boat” on the deal
With an increase in competition, the seller may not enjoy these same benefits. As Chief Economist Nela Richardson, added:
“Because existing home inventory has been so low for so long, new construction is taking a larger share of the market…Builders meet the buyers and see the demand firsthand.”
If you are considering selling your house, you’ll want to beat this new competition to market to ensure you get the most attention for your listing and the best price.
Source: Keeping Current Matters, 3-6-18
Last week, the National Association of Realtors (NAR) released their most recent Existing Home Sales Report.According to the report:
“The median existing-home price for all housing types in January was $240,500, up 5.8 percent from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.”
Seventy-one consecutive months of price increases may have some concerned that current home values may be overinflated.
However, at the same time, Zillow issued a press release which revealed:
“If the housing bubble and bust had not happened, and home values had instead appreciated at a steady pace, the median home value would be higher than its current value.”
Here are two graphs that help show why home prices are exactly where they should be.
The first graph shows actual median home sales prices from 2000 through 2017.
By itself, this graph could heighten concerns as it shows home values rose in the early 2000s, came tumbling down and are now headed up again. It gives the feel of a rollercoaster ride that is about to take another turn downward.
However, if we also include where prices would naturally be, had there not been a boom & bust, we see a different story.
The blue bars on this graph represent where prices would be if they had increased by the normal annual appreciation rate (3.6%). By adding 3.6% to the actual 2000 price and repeating that for each subsequent year, we can see that prices were overvalued during the boom, undervalued during the bust, and a little bit LOWER than where they should be right now.
Based on historic appreciation levels, we should be very comfortable that current home values are not overinflated.
Source: Keeping Current Matters, 3-1-18
PORTLAND, OR (KPTV) – In Portland’s booming real estate market, bidding wars and cash buyers can make it tough for first time home buyers to compete. But, a new program is now trying to help those buyers break into the market.
The Home Partners of America’s new Ownership Conversion Pilot Program is essentially a new twist on the old lease to own program.
Home Partners tells FOX 12 applicants can choose from any home on the market $650,000 or less that’s right for them and also meets their criteria. Households must make at least $50,000 a year to qualify for the program.
“I’m a huge fan of the program,” Licensed Broker Jeanie Williams of Berkshire Hathaway Home Services said. “I meet a lot of buyers who aren’t ready to buy, usually there are credit issues and this opens the doors for them.”
Williams says once a client is approved for the program a purchase price is established.
“It’s based on property taxes, HOA’s, things like that. So we look at the price point, what they want and then go out searching like any other buyer and agent,” Williams said.
Home Partners will then buy the home and lease it to an applicant with pre-determined rent. That rent will increase annually but at a set rate tenants agree on. The company will then provide a tenant with the right to purchase the home down the road at a preset price.
The Home Partners of America’s pilot program is so new many tenants rights organizations in Portland did not want to weigh in on this story. The Portland Housing Bureau also declined to comment.
“There’s a lot of first time home buyers who are not prepared to purchase today, perhaps they don’t have the down payment funds that are necessary, or maybe financial circumstances does not deem them ready, this will serve those consumers in the market,” Ayoub Rabah, Senior VP of Marketing for Home Partners of America said.
Rabah tells FOX 12 the company’s pilot program was first tested out in Texas but has since expanded to 40-plus real estate markets across the country.
He says his company is particularly interested in Portland because of the demand for housing.
“We’re very excited about the housing market in Portland, there’s a lot of opportunity and need,” Rebah added.
For Melody Oxford and her family of four, the program seems to be a good fit. It made it possible for her to get into a home in southeast Portland.
“They really just made the dream become more of a reality for us,” Oxford said.
She’s hoping to purchase the home by the end of this year.
“To be able to get into a home that it would take you years to do, to come home to it every day, it’s a reminder why we’re going to work, what we’re working for,” Oxford said.
For more information about the pilot program visit: www.homepartners.com/
Source: Fox 12 Staff, Fox 12 Oregon, 2-22-18
Happy Chinese Lunar New Year! As we usher in the Year of the Dog, here are some tips from the National Association of REALTORS® to make your pooch more comfortable in your home.
Source: Jane Dollinger, National Association of Realtors, 2-16-18
- Many buyers are purchasing a home with a down payment as little as 3%.
- You may already qualify for a loan, even if you don’t have perfect credit.
- Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.
Source: Keeping Current Matters, 2-23-18
- The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
- Freddie Mac predicts interest rates to rise to 5.1% by 2019.
- CoreLogic predicts home prices to appreciate by 4.3% over the next 12 months.
- If you are ready and willing to buy your dream home, find out if you are able to!
Source: Keeping Current Matters, 2-16-18
The price of any item (including residential real estate) is determined by ‘supply and demand.’ If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.
According to the National Association of Realtors (NAR), the supply of homes for sale dramatically increases every spring. As an example, here is what happened to housing inventory at the beginning of 2017:
Putting your home on the market now instead of waiting for increased competition in the spring might make a lot of sense.
Buyers in the market during the winter months are truly motivated purchasers. They want to buy now. With limited inventory currently available in most markets, sellers are in a great position to negotiate.
Source: Keeping Current Matters, 2-12-18
Talk of a US housing affordability crisis misses a key element of household budgets according to a real estate industry economist.
Mark Fleming, chief economist at title insurer First American says that while unadjusted house prices have risen more than household income (6% vs. 2.8% in the 12 months to November 2017), the proclamations of a crisis are only using a single metric of household buying power.
“A consumer’s house-buying power, how much one can afford to buy, is also based on changes in mortgage interest rates,” said Fleming. “Even if one’s income doesn’t change, but interest rates go down, house-buying power increases.”
He added that consumer house-buying power, based on changes in income and interest rates, was unchanged between October and November 2017 and actually improved by 1%, compared with a year earlier.
“In fact, consumer house-buying power is 2.3 times higher than it was in 2000, almost two decades ago. It’s also only 2.9% below the peak in July 2016,” said Fleming, noting that mortgage interest rates have been trending lower from their peak of 18% in 1981.
Prices keep climbing
First American’s Real House Price Index for November 2017, the latest month of data available, was up 0.5% month-over-month and 5% year-over-year. Real buying power was up 0.9% year-over-year but unchanged from the previous month.
Delaware (12.4%), Nevada (10.7%) and Missouri (10.6%) saw the largest year-over-year increases while Pittsburgh was the only market analyzed which decreased (by 2.5%).
Source: Steve Randall, Mortgage Professional America, 1-30-18