Tim Helton http://weltonrealty.net A Good Website is a Necessity, A Great Website is an Advantage Thu, 17 Jan 2019 18:39:26 +0000 en-US hourly 1 https://wordpress.org/?v=5.0.3 Last Chance! Homes are a Bargain Compared to Historic Norms http://weltonrealty.net/last-chance-homes-are-a-bargain-compared-to-historic-norms/ http://weltonrealty.net/last-chance-homes-are-a-bargain-compared-to-historic-norms/#respond Thu, 17 Jan 2019 18:39:19 +0000 http://weltonrealty.net/?p=3363 A loaf of bread used to be a nickel. A movie ticket was a dime.  Not anymore. Houses were also much less expensive than they are now. Inflation raised the price of all three of those items, along with the price of almost every other item we purchase. The reason we can still afford to more »

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Last Chance! Homes are a Bargain Compared to Historic Norms | MyKCM

A loaf of bread used to be a nickel. A movie ticket was a dime.  Not anymore. Houses were also much less expensive than they are now. Inflation raised the price of all three of those items, along with the price of almost every other item we purchase.

The reason we can still afford to consume is that our wages have also risen over time. The better measure of whether an item is more expensive than it was before is what percentage of our income it takes to purchase that item today compared to earlier. Let’s look at purchasing a home.

The COST of a home is determined by three major components: price, mortgage interest rate, and wages. The big question? Are we paying a greater percentage of our income toward our monthly mortgage payment today than previous generations? Surprisingly, the answer is no.

Historically, Americans have paid just over 21% of their income toward their monthly mortgage payment.

Though home prices are higher than before, wages have risen as well. And, the most important component in the cost equation – the mortgage rate – is dramatically lower than it was in the 1970s, 1980s, 1990s, and 2000s.

Today, according to the latest Home Affordability Index just released by the National Association of Realtors, Americans are paying 17.4% of their income toward their mortgage payment. That is much lower than the 21% average previous generations have paid.

Last Chance! Homes are a Bargain Compared to Historic Norms | MyKCM

Bottom Line

The cost of purchasing a home today is a bargain compared to previous generations when we look at it from a percentage of income basis. However, with mortgage rates expected to increase and home prices continuing to appreciate, that will not always be the case. Whether you are buying your first home or looking to move-up to a more expensive home, purchasing sooner rather than later probably makes sense.

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Selling Your Home? Make Sure the Price is Right! http://weltonrealty.net/selling-your-home-make-sure-the-price-is-right-2/ http://weltonrealty.net/selling-your-home-make-sure-the-price-is-right-2/#respond Wed, 16 Jan 2019 18:41:09 +0000 http://weltonrealty.net/?p=3361 If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price. In today’s shifting real estate market, where more inventory is coming more »

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Selling Your Home? Make Sure the Price is Right! | MyKCM

If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price.

In today’s shifting real estate market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as they were able to just last year.

They will have to employ the same strategy: be the closest without going over!

As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!

Over the last six months, more inventory has come to market while the months’ supply of inventory available has dropped. This means that the demand for homes to buy is still very strong throughout the country!

Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the homes when in reality nothing was wrong, the price was just too high!

Bottom Line

If you are thinking about listing your home for sale this year, let’s get together to properly price your home from the start!

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Buying a Home Young is the Key to Building Wealth http://weltonrealty.net/buying-a-home-young-is-the-key-to-building-wealth/ http://weltonrealty.net/buying-a-home-young-is-the-key-to-building-wealth/#respond Tue, 15 Jan 2019 18:33:04 +0000 http://weltonrealty.net/?p=3359 Homeowners who purchase their homes before the age of 35 are better prepared for retirement at age 60, according to a new Urban Institute study. The organization surveyed adults who turned 60 or 61 between 2003 and 2015 for their data set. “Today’s older adults became homeowners at a younger age than today’s young adults. Half the more »

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Buying a Home Young is the Key to Building Wealth | MyKCM

Homeowners who purchase their homes before the age of 35 are better prepared for retirement at age 60, according to a new Urban Institute study. The organization surveyed adults who turned 60 or 61 between 2003 and 2015 for their data set.

“Today’s older adults became homeowners at a younger age than today’s young adults. Half the older adults in our sample bought their first house when they were between 25 and 34 years old, and 27 percent bought their first home before age 25.”

The full breakdown is in the chart below:

Buying a Home Young is the Key to Building Wealth | MyKCM

The study goes on to show the impact of purchasing a home at an early age. Those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-twenties and early-30s had close to $50,000 left, but traditionally had purchased more expensive homes.

Buying a Home Young is the Key to Building Wealth | MyKCM

Many housing experts are concerned that the homeownership rate amongst millennials, those 18-34, is much lower than previous generations in the same age range. The study results gave a great reason why this generation should consider buying instead of signing a renewal on their lease:

“As people age into retirement, they rely more heavily on their wealth rather than their income to support their lifestyles. Today’s young adults are failing to build housing wealth, the largest single source of wealth, at the same rate as previous generations.

While people make the choice to own or rent that suits them at a given point, maybe more young adults should take into account the long-term consequences of renting when homeownership is an option.”

Bottom Line

If you are one of the many young people debating whether buying a home this year is right for you, let’s get together to discuss your options!

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Buying a House This Year? This Should Be Your 1st Step! http://weltonrealty.net/buying-a-house-this-year-this-should-be-your-1st-step/ http://weltonrealty.net/buying-a-house-this-year-this-should-be-your-1st-step/#respond Mon, 14 Jan 2019 18:54:05 +0000 http://weltonrealty.net/?p=3357 In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a more »

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Buying a House This Year? This Should Be Your 1st Step! | MyKCM

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

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Is the Recent Dip in Interest Rates Here to Stay? http://weltonrealty.net/is-the-recent-dip-in-interest-rates-here-to-stay/ http://weltonrealty.net/is-the-recent-dip-in-interest-rates-here-to-stay/#respond Wed, 09 Jan 2019 19:30:16 +0000 http://weltonrealty.net/?p=3355 Interest rates for a 30-year fixed rate mortgage climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey. After the first week of 2019, rates have continued their downward trend. As Freddie more »

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Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

Interest rates for a 30-year fixed rate mortgage climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey.

After the first week of 2019, rates have continued their downward trend. As Freddie Mac’s Chief Economist Sam Khater notes, this is great news for homebuyers. He states,

“Mortgage rates declined to start the new year with the 30-year fixed-rate mortgage dipping to 4.51 percent. Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”

In some areas of the country, the combination of rising interest rates and rising home prices had made some first-time buyers push pause on their home searches. But with more inventory coming to market, continued price growth, and interest rates slowing, this is a great time to get back in the market!

Will This Trend Continue?

According to the latest forecasts from Fannie Maethe Mortgage Bankers Associationand the National Association of Realtors,mortgage rates will increase over the course of 2019, but not at the same pace they did in 2018. You can see the forecasts broken down by quarter below.

Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

Bottom Line

Even a small increase (or decrease) in interest rates can impact your monthly housing cost. If buying a home in 2019 is on your short list of goals to achieve, let’s get together to find out if you are able to today.

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Buying A Vacation Property? Now Is A Good Time! http://weltonrealty.net/buying-a-vacation-property-now-is-a-good-time/ http://weltonrealty.net/buying-a-vacation-property-now-is-a-good-time/#respond Tue, 08 Jan 2019 19:04:51 +0000 http://weltonrealty.net/?p=3353 Every year around this time, many homeowners begin the process of preparing their homes in case of extreme winter weather. Some others skip winter all together by escaping to their vacation homes in a warmer climate. For those homeowners staying at their first residence, AccuWeather warns: “The late-week cold shot should fade next week, but this is more »

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Buying A Vacation Property? Now Is A Good Time! | MyKCM

Every year around this time, many homeowners begin the process of preparing their homes in case of extreme winter weather. Some others skip winter all together by escaping to their vacation homes in a warmer climate.

For those homeowners staying at their first residence, AccuWeather warns:

“The late-week cold shot should fade next week, but this is a warning shot for winter’s return late in the month and early February.”

Given this, it’s time to go and stock up on winter weather supplies! However, if you’re tired of shoveling snow and dealing with the cold weather, maybe it’s time to consider obtaining a vacation home!

According to the Investment & Vacation Home Buyers 2018 Report by NAR:

72% of vacation property owners and 71% of investment property owners believe now is a good time to buy.”

It’s time to take advantage of the equity in your home. As the latest Equity Report from ATTOM Data Solutions stated:

“Nearly 14.5 million U.S. properties (are) equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value — up by more than 433,000 from a year ago to a new high as far back as data is available, Q4 2013.

The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage.”

This means that over a quarter of Americans who have a mortgage would be able to use some of their home equity to make a significant down payment toward a vacation home, and many are doing just that! According to the same report by NAR:

“33% of vacation buyers purchased in a beach area, 21% purchased on a lakefront, and 15% purchased a vacation home in the country.”

Many homeowners who are close to retirement will use some of their equity to purchase vacation homes, which may eventually become their permanent homes post-retirement!

Bottom Line

If you are a homeowner looking to take advantage of your home equity by investing in a vacation home, let’s get together to discuss your options!

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Want to Get the Most Money from The Sale of Your Home? Use These 2 Tips! http://weltonrealty.net/want-to-get-the-most-money-from-the-sale-of-your-home-use-these-2-tips/ http://weltonrealty.net/want-to-get-the-most-money-from-the-sale-of-your-home-use-these-2-tips/#respond Mon, 07 Jan 2019 19:04:34 +0000 http://weltonrealty.net/?p=3351 Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house? Here are two keys to ensure that you get the highest price possible. 1. Price it a LITTLE LOW  This may seem counterintuitive, but let’s look more »

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Want to Get the Most Money from The Sale of Your Home? Use These 2 Tips! | MyKCM

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?

Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW 

This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

Want to Get the Most Money from The Sale of Your Home? Use These 2 Tips! | MyKCM

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

HGTV gives this advice:

First impressions are everything when selling your home. Studies have shown that the first two weeks on the market are the most crucial to your success. During these initial days, your home will be exposed to all active buyers.

If your price is perceived as too high, you will quickly lose this initial audience and find yourself relying only on the trickle of new buyers entering the market each day. Markets are dynamic, and your price has an expiration date. You have one chance to grab attention. Make sure your pricing helps you stand out on the shelf — in a positive way.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may believe that he or she will make more money without having to pay a real estate commission, but studies have shown that homes typically sell for more money when handled by a real estate professional.

Research by the National Association of Realtors in their 2018 Profile of Home Buyers and Sellers revealed that,

“the median selling price for all FSBO homes was $200,000 last year. However, homes that were sold with the assistance of an agent had a median selling price of $264,900 – nearly $65,000 more for the typical home sale.”

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the money you get for your house.

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Belief in Homeownership as an Investment is Far from Dead http://weltonrealty.net/belief-in-homeownership-as-an-investment-is-far-from-dead/ http://weltonrealty.net/belief-in-homeownership-as-an-investment-is-far-from-dead/#respond Thu, 03 Jan 2019 18:32:06 +0000 http://weltonrealty.net/?p=3344 Following last year’s real estate market was like riding a rollercoaster. The market started off strong in 2018 and then softened before finishing with a mild flurry. However, one thing that did not waiver was America’s belief that owning a home makes sense from a financial standpoint. An end-of-the-year survey by the Federal Reserve Bank’s Center for Microeconomic Data revealed more »

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Belief in Homeownership as an Investment is Far from Dead | MyKCM

Following last year’s real estate market was like riding a rollercoaster. The market started off strong in 2018 and then softened before finishing with a mild flurry. However, one thing that did not waiver was America’s belief that owning a home makes sense from a financial standpoint.

An end-of-the-year survey by the Federal Reserve Bank’s Center for Microeconomic Data revealed that:

“The majority of households continue to view housing as a good financial investment.”

And that percentage has increased over the last three years.

Belief in Homeownership as an Investment is Far from Dead | MyKCM

Bottom Line

Though there is some uncertainty as to how the real estate market will perform over the next twelve months, one thing remains very certain: America’s belief in homeownership.

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4 Quick Reasons NOT to Fear a Housing Crash http://weltonrealty.net/4-quick-reasons-not-to-fear-a-housing-crash/ http://weltonrealty.net/4-quick-reasons-not-to-fear-a-housing-crash/#respond Thu, 20 Dec 2018 18:15:29 +0000 http://weltonrealty.net/?p=3341 There is a lot of uncertainty regarding the real estate market heading into 2019. That uncertainty has raised concerns that we may be headed toward another housing crash like the one we experienced a decade ago. Here are four reasons why today’s market is much different: 1. There are fewer foreclosures now than there were more »

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4 Quick Reasons NOT to Fear a Housing Crash | MyKCM

There is a lot of uncertainty regarding the real estate market heading into 2019. That uncertainty has raised concerns that we may be headed toward another housing crash like the one we experienced a decade ago.

Here are four reasons why today’s market is much different:

1. There are fewer foreclosures now than there were in 2006

A major challenge in 2006 was the number of foreclosures. There will always be foreclosures, but they spiked by over 100% prior to the crash. Foreclosures sold at a discount and, in many cases, lowered the values of adjacent homes. We are ending 2018 with foreclosures at historic pre-crash numbers – much fewer foreclosures than we ended 2006 with.

4 Quick Reasons NOT to Fear a Housing Crash | MyKCM

2. Most homeowners have tremendous equity in their homes

Ten years ago, many homeowners irrationally converted much, if not all, of their equity into cash with a cash-out refinance. When foreclosures rose and prices fell, they found themselves in a negative equity situation where their homes were worth less than their mortgage amounts. Many just walked away from their houses which led to even more foreclosures entering the market. Today is different. Over forty-eight percent of homeowners have at least 50% equity in their homes and they are not extracting their equity at the same rates they did in 2006.

4 Quick Reasons NOT to Fear a Housing Crash | MyKCM

3. Lending standards are much tougher

One of the causes of the crash ten years ago was that lending standards were almost non-existent. NINJA loans (no income, no job, and no assets) no longer exist. ARMs (adjustable rate mortgages) still exist but only as a fraction of the number from a decade ago. Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.

4 Quick Reasons NOT to Fear a Housing Crash | MyKCM

4. Affordability is better now than in 2006

Though it is difficult to afford a home for many Americans, data shows that it is more affordable to purchase a home now than it was from 1985 to 2000. And, it requires much less of a percentage of your income today than it did in 2006.

4 Quick Reasons NOT to Fear a Housing Crash | MyKCM

Bottom Line

The housing industry is facing some rough waters heading into 2019. However, the graphs above show that the market is much healthier than it was prior to the crash ten years ago

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Homeownership Remains a Huge Part of the American Dream http://weltonrealty.net/homeownership-remains-a-huge-part-of-the-american-dream/ http://weltonrealty.net/homeownership-remains-a-huge-part-of-the-american-dream/#respond Wed, 19 Dec 2018 18:23:44 +0000 http://weltonrealty.net/?p=3339 As we head into 2019, many news outlets and housing experts warn that the housing market may slow down. Over the last six years, the inventory of homes for sale has been near historic lows, which has been the force behind increasing home prices. This has been great news for sellers as many of them more »

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Homeownership Remains a Huge Part of the American Dream | MyKCM

As we head into 2019, many news outlets and housing experts warn that the housing market may slow down. Over the last six years, the inventory of homes for sale has been near historic lows, which has been the force behind increasing home prices.

This has been great news for sellers as many of them have been able to capitalize on the demand in the market and sell their homes quickly and at a great profit.

One of the big reasons why inventory has remained so low for so long is that an entire generation of home buyers is finally buying! The millennial generation (ages 19-35) has been the driving force behind bidding wars in many areas of the country as they ditch their renter lifestyles and put down roots in new communities.

First American recently released a study entitled “How ‘Renter’ Millennials Will Transform the Housing Market.” In their study, they explained that:

“…As more millennials age into their early-to-mid thirties, and begin to get married, have children and form households, they will continue to be the primary drivers of homeownership demand.”

Because of this, it is safe to say that one aspect of 2019’s housing market that WILL NOT slow down is the demand for housing from young renters who are no longer satisfied living in someone else’s homes.

According to the latest Housing Vacancies and Homeownership Report from the Census Bureau, home buyers under 35 are already out-buying older Americans. The chart below shows the year-over-year change in homeownership rate by those under and over the age of 35.

Homeownership Remains a Huge Part of the American Dream | MyKCM

The national homeownership rate spiked to its highest level in 2004 and then steadily declined until the second quarter of 2016 when it reversed course. Homebuyers under the age of 35 are the reason for that shift.

More than half of the purchase mortgages originated by Fannie Mae and Freddie Mac in 2018 were to first-time homebuyers. In fact,

“according to Census Bureau and First American calculations, over the next 10 years, aging millennials are expected to purchase at least 10 million new homes. By 2060, it is estimated millennials will have produced more than 20 million first-time home buyers.”

Bottom Line

If you are a homeowner who is nervous that the demand for your home will slow, don’t worry! If your home is priced competitively, there will be demand for years to come as this generation of renters is finally able to buy!

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