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Aug. 18, 2017

58% of CT Homeowners See A Drop in Home Values Coming

58% of Homeowners See a Drop in Home Values Coming | MyKCM

According to the recently released Modern Homebuyer Survey from ValueInsured58 percent of homeowners think there will be a “housing bubble and price correction” within the next 2 years.

After what transpired just ten years ago, I can understand the concern CT residents have about the current increase in home prices. However, this market has very little in common with what happened last decade.

The two major causes of the housing crash were:

  1. A vast oversupply of housing inventory caused by home builders building at a pace that far exceeded historical norms.
  2. Lending standards that were so relaxed that unqualified buyers could easily obtain financing thus enabling them to purchase a home.

Today, housing inventory is at a 20-year low with new construction starts well below historic norms and financing a home is anything but simple in the current mortgage environment. The elements that precipitated the housing crash a decade ago do not exist in today’s CT real estate market.

The current increase in CT home prices is the result of a standard economic equation: when demand is high and supply is low, prices rise.

If you are one of the 58% of CT homeowners who are concerned about home values depreciating over the next two years and are hesitant to move up to the home of your dreams, take comfort in the latest Home Price Expectation Survey.

Once a quarter, a nationwide panel of over one hundred economists, real estate experts and investment & market strategists are surveyed and asked to project home values over the next five years. The experts predicted that houses would continue to appreciate through the balance of this year and in 2018, 2019, 2020 and 2021. They do expect lower levels of appreciation during these years than we have experienced over the last five years but do not call for a decrease in values (depreciation) in any of the years mentioned.

Bottom Line

If you currently own a CT home and are thinking of moving-up to the home your family dreams about, don’t let the fear of another housing bubble get in the way as this housing market in no way resembles the market of a decade ago. Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Market Activity
Aug. 17, 2017

CT Sellers: Your Home is an Oasis in an Inventory Desert

Sellers: Your Home is an Oasis in an Inventory Desert | MyKCM

First-time CT homebuyers are flocking to the real estate market by the thousands to find their dream homes in order to make their dreams of homeownership a reality. Unfortunately for many, the inventory of starter and trade-up homes in CT has struggled to keep up with demand!

According to the National Association of Realtors (NAR), the inventory of CT homes for sale dropped 7.1% year-over-year to a 4.3-month supply and is down for the 25th consecutive month.

Some CT homeowners may be hesitant to list their homes for sale because they are worried that they will also have a problem finding a home to buy and move in to. This is a legitimate concern; no one wants to sell their home quickly and not have anywhere to live.

But there is good news! If you are thinking of moving up to a luxury or premium home in CT, there is more inventory available and you may even get a great deal on a home that has been on the market for a while.

If you are the owner of a starter home in CT and you are looking to move into a trade-up home, or if you are just looking to relocate to a new area in a home of the same size, there is still hope!

In the CT market, homeowners are building contingency plans into their contracts. This means that the homeowner builds in extra time before they close in order to find their dream home and they are upfront about the contingency with any buyers who come to see the house.

Your CThome is an oasis to buyers who are searching for homes in today’s market. The right buyers will sympathize and wait for you and your family to find your next home.

Bottom Line

Don’t let the fear of not finding a home to move in to stop you from moving on with your life. Let’s get together to discuss ways to set expectations with potential buyers from the start. Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Home Owner Tips
Aug. 16, 2017

CT Homeowner's Net Worth is Still Greater Than A Renter's

Homeowner’s Net Worth Is Still Greater Than a Renter’s | MyKCM

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a CT homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400). 

The latest survey data, covering 2014-2016 will be released later this year. In the meantime, Lawrence Yun, the National Association of Realtors’ Chief Economist estimates that the gap has widened even further, to 45 times greater ($225,000 vs. $5,000)! 

Put Your CT Housing Cost to Work for You

As I’ve said before, simply put, CT homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 84% of consumers believe that purchasing a home is a good financial decision. William E. Brown comments:

“Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own. Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home. 

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a CT home, let’s get together and evaluate your ability to buy today! Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Market Activity
Aug. 15, 2017

Hey, CT Millennial Homeowners! It May Be Time to Sell

Hey, Millennial Homeowners!! It May Be Time to Sell | MyKCM

Contrary to what many believe, CT millennials are not the ‘renter’ generation. CT millennials purchased a larger percentage (34%) of homes in the U.S. than any other age group in 2017 and the most recent Census Bureau report shows that the homeownership rate among Millennials is finally on the rise.

Many CT Millennials took advantage of post housing crash prices and the First-Time Homebuyers’ Tax Credit and jumped into homeownership in 2010. If you are one of these buyers, now may be the time to sell for many reasons. Here are a few:

1. Equity Build-Up

CT home prices have been on the rise since the beginning of 2012 and your house may have appreciated by more than you think. ATTOM Data Solutions, in their Q2 2017 U.S. Home Sales Report revealed that:

“…homeowners who sold in the second quarter realized an average price gain of $51,000 since purchase — the highest average price gain for home sellers since Q2 2007, when it was $57,000.

The average home seller price gain of $51,000 in Q2 2017 represented an average return of 26 percent on the previous purchase price of the home, the highest average home seller return since Q3 2007, when it was 27 percent.”

2. Projected Home Price Increases in CT

If you just got married or just found out you are about to become a parent, you may have plans to move up to a bigger home or perhaps move to a different area. Waiting to buy a more expensive home in this market probably doesn’t make sense. The experts contacted for the Home Price Expectation Survey are projecting CT home prices to increase by nearly 5% over the next year. Yes, your house’s price will increase but not as much as a home currently valued higher than yours.

3. Projected Interest Rate Increases in CT

The Mortgage Bankers’ AssociationFreddie Mac, Fannie Mae and the National Association of Realtors are each projecting mortgage rates to increase over the next year.

Higher PRICES + Higher INTEREST RATES = LARGER MORTGAGE PAYMENTS.

Bottom Line

If you are lucky enough to be one of those Millennials who purchased a house in 2010 (or even later), now might be the perfect time to move up to the home of your dreams! Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Market Activity
Aug. 14, 2017

CT Housing Inventory Hits 30- Year Low

Housing Inventory Hits 30-Year Low

Spring is traditionally the busiest season for real estate. CT Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. CT homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

CoreLogic’s President & CEO, Frank Martell added,

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

Overall inventory across Connecticut is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

CT real estate is local.

CT premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

Bottom Line

CT buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, contact a Real Estate professional from Dave Jones Realty to discuss the exact conditions in our area.

Posted in Market Activity
Aug. 11, 2017

CT Homes Have Positive Equity!

93.9% Of Homes in The US Have Positive Equity | MyKCM

CoreLogic’s latest Equity Report revealed that ninety-one thousand residential properties regained equity in Q1 2017. The outlook for 2017 remains positive as well, as an additional 600 thousand properties will regain equity if home prices rise another 5% this year.

The study also revealed that:

  • Roughly 63% of all homeowners have seen their equity increase since Q1 2016
  • The average CT homeowner gained about $14,000 in equity between Q1 2016 and Q1 2017
  • Only 1.6% of residential properties are near-negative equity

Below is a map showing the percentage of homes with a mortgage, in each state, that have positive equity.

93.9% Of Homes in The US Have Positive Equity | MyKCM

Significant Equity Is On The Rise

Frank Martell, President & CEO of CoreLogic, believes this is great news for the “long-term health of the U.S. economy.” He went on to say:

“Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”

Of the 93.9% of homeowners with positive equity in the US, 78.8% have significant equity (defined as more than 20%). This means that nearly three out of four homeowners with a mortgage could use the equity in their current home to purchase a new home, now.

The map below shows the percentage of homes with a mortgage, in each state, that have significant equity.

93.9% Of Homes in The US Have Positive Equity | MyKCM

Bottom Line 

If you are one of the many CT homeowners who are unsure of how much equity they have in their homes and are curious about their ability to move, contact a Real Estate professional from Dave Jones Realty who can help evaluate your situation.

Posted in Market Activity
Aug. 10, 2017

How Long Do Most Families Stay in Their CT Home?

How Long Do Most Families Stay in Their Home? | MyKCM

The National Association of Realtors (NAR) keeps historical data on many aspects of homeownership. One of the data points that has changed dramatically is the median tenure of a family in a home, meaning how long a family stays in a home prior to moving. As the graph below shows, for over twenty years (1985-2008), the median tenure averaged exactly six years. However, since 2008, that average is almost nine years – an increase of almost 50%.

How Long Do Most Families Stay in Their Home? | MyKCM

Why the dramatic increase?

The reasons for this change are plentiful!

The fall in CT home prices during the housing crisis left many homeowners in a negative equity situation (where their home was worth less than the mortgage on the property). Also, the uncertainty of the economy made some CT homeowners much more fiscally conservative about making a move.

With CT home prices rising dramatically over the last several years, 93.9% of homes with a mortgage are now in a positive equity situation with 78.8% of them having at least 20% equity, according to CoreLogic.

With the economy coming back and wages starting to increase, many CT homeowners are in a much better financial situation than they were just a few short years ago.

One other reason for the increase was brought to light by NAR in their 2017 Home Buyer and Seller Generational Trends Report. According to the report,

Sellers 36 years and younger stayed in their home for six years…”

These CT homeowners who are either looking for more space to accommodate their growing families or for better school districts are more likely to move more often (compared to 10 years for typical sellers in 2016). The CT homeownership rate among young families, however, has still not caught up to previous generations, resulting in the jump we have seen in median tenure!

What does this mean for CT housing?

Many believe that a large portion of CT homeowners are not in a house that is best for their current family circumstance; They could be baby boomers living in an empty, four-bedroom colonial, or a millennial couple living in a one-bedroom condo planning to start a family.

These CT homeowners are ready to make a move, and since a lack of housing inventory is still a major challenge in the current housing market, this could be great news.

 

Contact a Real Estate professional at Dave Jones Realty who can assist with any of your Real estate needs!

Posted in Market Activity
July 31, 2017

CT Residents Still Believe Real Estate is the Best Long-Term Investment

Americans Still Believe Real Estate is Best Long-Term Investment | MyKCM

According to Bankrate’s latest Financial Security Index Poll, CT residents who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.

Bankrate asked them to answer the following question:

“What is the best way to invest money you wouldn’t need for 10 years or more?”

 

Real Estate came in as the top choice with 28% of all respondents (3% higher than last year), while cash investments - such as savings accounts and CD’s - came in second with 23% (the same as last year). The chart below shows the full results:

Americans Still Believe Real Estate is Best Long-Term Investment | MyKCM

The article points out several reasons for these results:

“After bottoming out at the end of 2011 following the worst housing collapse in generations, CT home prices have gone gangbusters recently, climbing back above their record pre-crisis levels. Prices jumped 6.6 percent during the 12 months that ended in May, according to CoreLogic.

Toss in persistently low interest rates, tax goodies that come with owning a mortgage, and the psychological payoff from planting your roots, and maybe it’s no wonder real estate remains popular.”

The article also revealed that:

“Bankrate’s Financial Security Index — based on survey questions about how people feel about their debt, savings, net worth, job security and overall financial situation — has hit its third-highest level since the poll’s inception in December 2010.”

Bottom Line

I have often written about the financial and non-financial reasons CT homeownership makes sense. It is nice to see that CT Residents still believe in homeownership as the best investment. Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Market Activity
July 28, 2017

CT Home Inventory Drops Again, Sales Slow

Highlights:

  • Existing CT Home Sales are now at an annual pace of 5.52 million.
  • Inventory of existing CT homes for sale dropped to a 4.3-month supply, marking the 25th month in a row of declines.
  • The median price of homes sold in CT in June was $263,800. This is the 64th consecutive month of year-over-year price gains.

Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Market Activity
July 27, 2017

A CT "Buyer" in Hand is Worth Two in the Bush

A ‘Buyer’ in Hand is Worth Two in the Bush | MyKCM

In today’s highly competitive seller’s market where there are more buyers than there are homes for them to buy, some sellers in CT may feel like the ball is in their court.

And they would be right when it comes to choosing which offer to accept, the closing date, or even which improvements they are willing to make to their house prior to selling.

One thing to remember though, is that there is always a line that shouldn’t be crossed.

Interest rates can change, financing might not go through, the appraisal might not come back at the price that you have agreed to. These are all opportunities to work with your buyer to make sure that the sale still happens.

You may think that, because buyer demand is so high right now in CT, you can choose to make your buyer jump through hoops. But what happens if they reach their limit and need to walk away? You’re starting over… weeks, maybe months later… and other buyers may wonder what’s wrong with the house since the last deal fell through.

The Golden Rule

We were all taught from a young age to “treat others as you would like to be treated.” This shouldn’t change once you have a buyer who seems as though they would do anything to buy your home. Contact a Real Estate professional from Dave Jones Realty who can assist with any of your Real Estate needs!

Posted in Home Owner Tips