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    Current Buyer & Seller Perks in the Housing Market

    Current Buyer & Seller Perks in the Housing Market | MyKCM

    Today’s housing market is making a truly impressive turnaround, and it’s also setting up some outstanding opportunities for buyers and sellers. Whether you’re thinking of buying or selling a home this year, there are perks today that are rarely available, and definitely worth looking into. Here are the top two.

    The Biggest Perk for Buyers: Low Mortgage Rates

    Current Buyer & Seller Perks in the Housing Market | MyKCM

    The most impressive buyer incentive today is the average mortgage interest rate. Just last week, mortgage rates hit an all-time low for the eighth time this year. The 30-year fixed-rate is now averaging 2.88%, the lowest rate in the survey’s history, which dates back to 1971 (See graph below):This is a huge advantage for buyers. To put it in perspective, it means that today you can get a lower rate than any of the past two generations of homebuyers in your family if you decide to purchase at this time.

    In addition, the National Mortgage News notes how today’s buyers have increasing purchasing power due to these low mortgage rates:

    “Purchasing power rose 10% year-over-year…With interest rates hitting record lows, buyers were able to afford $32,000 “more house” as of July 23 than they could the year before with the same monthly payment.”

    This is a great perk for buyers who are hoping to potentially get more for their money in a home, something many are considering today as they re-evaluate the amount of space they ideally need for their families. It is an opportunity not seen in 50 years, and one not to be missed if the time is right for you to buy a home.

    The Biggest Perk for Sellers: Low Inventory

    Today, there are simply not enough houses on the market for the number of buyers looking to purchase them. According to the National Association of Realtors (NAR):

    “Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million).”

    Current Buyer & Seller Perks in the Housing Market | MyKCM

    The red bars in the graph below indicate that the inventory of homes coming into the market continues to decline. It was low as we entered the pandemic and has reduced even further this year. Houses today are selling faster than they’re being listed, and that’s creating an even greater supply shortage (See graph below):The lack of inventory has been a challenging situation for a while now, and with low mortgage rates fueling buyer demand, inventory is even harder for buyers to find today. Buyers are eager to purchase, and because of the shortage of homes available, they’re encountering more bidding wars. This is one of the factors keeping home prices strong, an advantage for sellers. Lawrence Yun, Chief Economist for NAR notes that this trend may continue, too:

    “Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”

    With low inventory and high buyer demand, homeowners can potentially earn an increasing profit on their houses and sell them quickly in this sizzling summer market.

    Bottom Line

    Whether you’re thinking about buying or selling at home, there are some key perks available right now. Let’s connect today to discuss how they may play to your advantage in our local market.

    Posted in: Buying a Home, Housing Market, Real Estate, Selling a Home

    Why Foreclosures Won’t Crush the Housing Market Next Year

    Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCM

    With the strength of the current housing market growing every day and more Americans returning to work, a faster-than-expected recovery in the housing sector is already well underway. Regardless, many are still asking the question: will we see a wave of foreclosures as a result of the current crisis? Thankfully, research shows the number of foreclosures is expected to be much lower than what this country experienced during the last recession. Here’s why.

    Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCM
    Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCM

    According to Black Knight Inc., the number of those in active forbearance has been leveling-off over the past month (see graph below):Black Knight Inc. also notes, of the original 4,208,000 families granted forbearance, only 2,588,000 of these homeowners got an extension. Many homeowners have once again started to pay their mortgages, paid off their homes, or never went delinquent on their payments in the first place. They may have applied for forbearance out of precaution, but never fully acted on it (see graph below):The housing market, and homeowners, therefore, are in a much better position than many may think. Much of that has to do with the fact that today’s homeowners have more equity than most realize. According to John Burns Consulting, over 42% of homes are owned free and clear, meaning they are not tied to a mortgage. Of the remaining 58%, the average homeowner has $177,000 in equity. That number is keeping many homeowners afloat today and giving them options to avoid foreclosure.

    While ATTOM Data Solutions indicates that there is a potential for the number of foreclosures to increase throughout the country, it’s important to understand why they won’t rock the housing market this time around:

    “The United States faces a possible foreclosure surge over the coming months that could more than double the number of households threatened with eviction for not paying their mortgages.”

    Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCM

    That number may sound massive, but it is actually much smaller than it seems at first glance. Today’s actual quarterly active foreclosure number is 74,860. That’s over 7.5x lower than the number of foreclosures the country saw at the peak of the housing crash in 2009. When looking at the graph below, it’s clear that even if the number of quarterly foreclosures today doubles, as ATTOM Data Solutions indicates is a possibility (not a given), they will only reach what historically-speaking is a normalized range, far below what up-ended the housing market roughly 10 years ago.Equity is growing, jobs are returning, and the economy is slowly recovering, so the perfect storm for a wave of foreclosures is not realistically in the housing market forecast. As Odeta Kushi, Deputy Chief Economist for First American notes:

    “Alone, economic hardship and a lack of equity are each necessary, but not sufficient to trigger a foreclosure. It is only when both conditions exist that a foreclosure becomes a likely outcome.”

    While our hearts are with anyone who may end up in foreclosure as a result of this crisis, we do know that today’s homeowners have more options than they did 10 years ago. For some, it may mean selling their house and downsizing with that equity, which is a far better outcome than foreclosure.

    Bottom Line

    Homeowners today have many options to avoid foreclosure, and equity is surely helping to keep many afloat. Even if today’s rate of foreclosures doubles, it will still only hit a mark that is more in line with a historically normalized range, a very good sign for homeowners and the housing market.

    Posted in: Buying a Home, Housing Market, Real Estate, Selling a Home

    Experts Weigh-In on the Remarkable Strength of the Housing Market

    Experts Weigh-In on the Remarkable Strength of the Housing Market | MyKCM

    America has faced its share of challenges in 2020. A once-in-a-lifetime pandemic, a financial crisis leaving millions still unemployed, and an upcoming presidential election that may prove to be one of the most contentious in our nation’s history all continue to test this country in unimaginable ways.

    Even with all of that uncertainty, the residential real estate market continues to show great resilience. Here’s a look at what the experts have said about the housing market over the past few weeks.

    Ivy Zelman, CEO of Zelman & Associates:

    “Whether in terms of pending contract activity or our proprietary buyer demand ratings, the various measures of demand captured in this month’s survey can only be described as shockingly strong, in spite of the resurgence in COVID-19 cases.”

    Logan Mohtashami, Lead Housing Analyst at HousingWire:

    “Existing home sales are still down year over year by 11.3%, but as crazy as this might sound, we have a shot at getting positive year-over-year growth…We may see an existing home sales print of 5,510,000 in 2020.”

    Matthew Speakman, Zillow Economist:

    “In a remarkable show of resilience, the housing market has stared the pandemic right in the eye and hasn’t blinked.”

    Todd Teta, Chief Product Officer for ATTOM Data Solutions:

    “The housing market across the United States pulled something of a high-wire act in the second quarter, surging forward despite the encroaching economic headwinds resulting from the Coronavirus pandemic.”

    Ali Wolf, Chief Economist of Meyers Research:

    “The housing recovery has been nothing short of remarkable. The expectation was that housing would be crushed. It was—for about two months—and then it came roaring back.”

    Clare Trapasso, Senior News Editor of realtor.com:

    “Despite the crippling and ongoing coronavirus pandemic, millions out of work, a recession, a national reckoning over systemic racism, and a highly contentious presidential election just around the corner, the residential real estate market is staging an astonishing rebound.”

    Bill Banfield, EVP of Capital Markets at Quicken Loans:

    “The pandemic has not stopped the consistent home price growth we have witnessed in recent years.”

    Economic & Strategic Research Group at Fannie Mae:

    “Recent home purchase measures have continued to show remarkable strength, leading us to revise upward our home sales forecast, particularly over the third quarter. Similarly, we bumped up our expectations for home price growth and purchase mortgage originations.”

    Mark Fleming, Chief Economist at First American:

    “It seems hard to deny that when one looks at many of the housing market statistics, a “V” shape is quite apparent.”

    Bottom Line

    The experts seem to agree that residential real estate is doing remarkably well. If you’re thinking of jumping into the housing market (whether buying or selling), this may be the perfect time.

    Posted in: Housing Market, Real Estate

    What Are Experts Saying about Home Prices?

    What Are Experts Saying about Home Prices? | MyKCM

    Last week, a very well-respected real estate analytics firm surprised many with their home price projection for the next twelve months. CoreLogic, in their latest Home Price Index said:

    “The economic downturn that started in March 2020 is predicted to cause a 6.6% drop in the HPI by May 2021, which would be the first decrease in annual home prices in over 9 years.”

    The forecast was surprising as it was strikingly different than any other projection by major analysts. Six of the other eight forecasts call for appreciation, and the two who project depreciation indicate it will be one percent or less.

    What Are Experts Saying about Home Prices? | MyKCM

    Here is a graph showing all of the projections:There’s a simple formula to determine the future price of any item: calculate the supply of that item in ratio to the demand for that item. In housing right now, demand far exceeds supply. Last week mortgage applications to buy a home were 33% higher than they were at the same time last year. The available inventory of homes for sale is 31% lower than it was last year. Normally, these numbers should call for homes to continue to appreciate.

    Bottom Line

    Because of the uncertainty with the pandemic, any economic prediction is extremely difficult. However, looking at the limited supply of homes for sale and the tremendous demand for housing, it is difficult to disagree with the majority of analysts who are calling for price appreciation.

    Posted in: Housing Market, Real Estate

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    Every single member of our staff lives and breathes Austin, Texas. Truly, we wouldn’t want to be doing this anywhere else. We love our city, and we want you to fall in love with it too. We work with the Texas spirit of hospitality in mind. We are not happy until you are happy. Whatever your request, big or small, we will work with you until you are completely satisfied. Why will every member of Austin Properties Group make every effort humanly possible to ensure your real estate goals are achieved? Because we really care. We care about this city and we care about you. We want you to feel at home in Austin as soon as possible. We are a unique firm and we are proud to be a part of keeping Austin weird.

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    (512) 222-3015

    1801 S. Mopac, Ste 100
    Austin, Texas 78746

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    (512) 222-3015
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