Further Proof the Real Estate Market Is Coming Back

Further Proof the Real Estate Market Is Coming Back

by THE KCM CREW on APRIL 30, 2012 · 2 COMMENTS

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Last week, the National Association of Realtors (NAR) released their Pending Sales Report which showed that contracted sales were 12.8% higher than the same month last year and higher than any time since sales were impacted by the Homebuyers’ Credit back in April of 2010. The index stood at 101.4 which represents a level that is“historically healthy” (see methodology below).

Here is a graph showing pending sales over the last twelve months:

 

METHODOLOGY (as per NAR)

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. 

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.

Short Sale Percentages by State

Short Sale Percentages by State

by THE KCM CREW on APRIL 27, 2012 · 0 COMMENTS

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 InfoGraphic

3 Questions You Must Answer When Buying a Home

3 Questions You Must Answer When Buying a Home

_{by THE KCM CREW on APRIL 17, 2012 · 1 COMMENT}

 If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And some of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought six years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

_{There are three questions you should ask before purchasing in today’s market:}

_{1. What are the experts recommending?}

_{In the last 120 days, many experts have said that buying now makes sense. This list includes: John Talbott, Christopher Thornberg and Warren Buffett.}

_{2. When will I begin to see appreciation if I buy now?}

_{This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010. They ask 100+ housing industry experts to project housing prices through 2016. The most current survey shows that the experts are predicting prices to remain relatively flat in 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2016.}

_{Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: you want to buy low and sell high. This decision should not only be a financial one however.}

_{That leads us to our third and final question:}

_{3. Why am I buying a home in the first place?}

_{This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Survey shows that the four major reasons people buy a home have nothing to do with money:}

_{§    A good place to raise children and for them to get a good education}

_{§    A place where you and your family feel safe}

_{§    More space for you and your family}

_{§    Control of the space}

_{What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason you decide to purchase or not.}

_{Bottom Line}

_{Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway.}

Americans Predict Rents and Home Prices to Increase

Americans Predict Rents and Home Prices to Increase

by THE KCM CREW on APRIL 11, 2012 · 1 COMMENT

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We report on Fannie Mae’s QuarterlyNational Housing Survey every ninety days. Fannie Mae also does a monthly survey covering different aspects of the housing market.

Here are some record numbers we found interesting in Fannie Mae’s March report(emphasis added).

• Thirty-three percent of respondents expect home prices to increase over the next 12 months, the highest level over the past 12 months.
• The percentage of respondents who say it is a good time to buy rose to 73 percent,the highest level in over a year.
• Forty-eight percent of respondents think that home rental prices will go up, the highest number recorded to date.
• On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, the highest number recorded to date.

Doug Duncan, chief economist of Fannie Mae, capped the report off by stating:

“Conditions are coming together to encourage people to want to buy homes. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”

Ultimate Proof I Believe NOW IS THE TIME TO BUY!

Ultimate Proof I Believe NOW IS THE TIME TO BUY!

I truly believe that now is one of the greatest times in American history to buy a home whether it is a primary residence, a vacation home, or an investment. Cynics may believe I speak highly of the benefits of owning real estate simply because I am in the industry as a speaker and lecturer. I want to prove that I believe in the advice I have given to our readers.

Yesterday, my wife and I were absolutely thrilled to receive the mortgage commitment on the small condo we are buying in South Beach, Florida. We are looking forward to enjoying our winters in Miami in the future. We are also excited that the condo will be able to be passed down to our children and eventually their children; enhancing our lifestyle and building family wealth at the same time. That’s exciting!!

National Housing Survey 2012

National Housing Survey 2012

National Housing Survey 2012

by THE KCM CREW on APRIL 4, 2012 · 1 COMMENT

Each quarter, Fannie Mae releases their National Housing Survey. They survey the American public on a multitude of questions concerning today’s housing market. We like to pull out some of the findings we deem most interesting each time it is released. Here they are for the most recent report:

84% of the general population believes that owning a home makes more sense than renting.

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

1. It means having a good place to raise children and provide them with a good education

2. You have a physical structure where you and your family feel safe

3. It allows you to have more space for your family

4. It gives you control of what you do with your living space (renovations and updates)

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes there is a money component to homeownership. Here is what they said on this issue:

§  63% of the general population believes that homeownership is a ‘safe’ investment.

§  53% believe that homeownership has more potential as an investment than any other traditional asset class.

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning.

§  64% of renters have aspirations to someday own their own home

§  70% of renters think that owning is superior to renting

Bottom Line

Our belief in the value of homeownership grows each time this survey is released.