Home Prices Expected To Rise 5.5% In The Next Year.

As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first-time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let me explain.

There are many factors that influence the ‘cost’ of a home. Two of these are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen over the next 12 months?

According to CoreLogic’s latest Home Price Index, prices are expected to rise by 5.5% by this time next year.

Additionally, Freddie Mac’s most recent Economic Commentary & Projections Tablepredicts that the 30-year fixed mortgage rate will appreciate to 4.5% in that same time.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

14,986 Homes Sold Yesterday...Did Yours?

There are some homeowners that have been waiting for months to get a price they hoped for when they originally listed their house for sale. The only thing they might want to consider is... If it hasn't sold yet, maybe it's not priced properly.

After all 14,986 houses sold yesterday, 14,986 will sell today and14,986 will sell tomorrow.

14,986!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales are at an annual rate of 5.59 million. Divide that number by 365 (days in a year) and we can see that, on average, over 14,986 homes sell every day.

The report from NAR also revealed that there is currently only a 4.0-month supply of inventory available for sale, (6-months inventory is considered ‘historically normal’).

This means that there are not enough homes available for sale to satisfy the buyers who are out in the market now in record numbers.

Bottom Line

We realize that you want to get the fair market value for your home. However, if it hasn't sold in today's active real estate market, perhaps you should reconsider your current asking price.

Why Do Downsizers Dominate The Market In Greenwich?

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Milbank Court, Greenwich CT.

Many adults over the age of 55 are leaving behind the single family home they raised their family in and moving into town homes and condominiums in the downtown Greenwich CT area. Some call this downsizing others refer to it as right sizing. The purpose is to find a home that suites their needs of their current lifestyle. Many factors can go into this decision weather it is to diminish the amount of maintenance required in a larger home and property, the kids have grown and moved out creating the empty nest factor, or another town that offers lower property taxes.

Whichever the scenario this is a growing trend. The U.S. Census Bureau’s population projection forecasts that the amount of Americans’ aged 65 and older will more than double by 2030, increasing from 35 million in 2010 to an estimated 72 million!

There are options as to how a buyer can approach financing a purchase. A home equity line of credit against a current residence, a home equity conversion mortgage or a cross collateral loan may be a way to downsize without having to sell the current residence prior to a purchase easing the downsizing process.

It’s nice to have options so contact a professional that can assist with the search for a new home.

Rates Reach Historic Lows...Again!

Rates are dropping 

Just two weeks ago, I posted an article discussing where mortgage interest rates may be heading over the next twelve months. I quoted projections from Fannie Mae,Freddie Mac, the Mortgage Bankers’ Association and the National Association of Realtors. Each predicted that rates would begin to rise slowly and steadily throughout 2016.

However, shaky economic news and a volatile stock market have actually caused rates to drop six out of the last seven weeks, and have remained at 3.65% for the past two weeks.

Rates have again fallen to historic lows yet many experts still expect them to increase in 2016. The only thing we know for sure is that, according to Freddie Mac, current rates are the best they have been since last April.

Bottom Line

If you are thinking of buying your first home, downsizing, moving up to your ultimate dream home or re-finance your current rate, now is a great time to get a sensational rate on your mortgage. It may also be possible to achieve a lower rate as the 7/1 Arm has dipped below 3%. Calculate how long you will be in the home or need the loan for and choose the product that works best for your needs. 

Where The Housing Market Is Heading In 2016.

Many have questioned the stability of certain sectors of the U.S. Economy, one section in particular is the housing market. Today we would like to share how the experts feel about how we ended 2015 and where they think we are headed in 2016.

How did we do in 2015?

The National Association of Realtors

“Overall, a resilient U.S. economy and very solid job growth in recent years made 2015 a great rebound year for the housing market.

Existing-home sales were at the highest pace (5.26 million) since 2006 (6.48 million) and the Pending Home Sales Index came in at an average of 108.8, the highest annual reading since…you guessed it: 2006 (111.7).”

The National Association of Home Builders

“With the December report on housing starts and permits, preliminary totals for 2015 are now available. Total housing starts at 1.11 million were up 10.8% in 2015 compared to 2014. Single-family starts were up 10.4% to 715,300. All four census regions also experienced increases in single-family starts for 2015.”

What can we expect to start 2016?

Jonathan Smoke, Realtor.com Chief Economist

“All indicators point to this spring being the busiest since 2006…

Demand for for-sale housing will grow and will continue to be dominated by older millennials, aged 25 to 34. This demographic has the potential to claim a third of home sales in 2016 and represent 2 million home purchases.”

The single family housing market in Greenwich CT has had an increase in new listings up 25% with 75 new homes introduced to the market in 2016.

 

The median price point is currently $1,670,000.

Home prices are appreciating. Where are they headed?

The Home Price Expectation Survey is a forward looking report that polls a nationwide panel of over 100 economists, real estate experts and investment & market strategists on where home prices are headed.

The results of their Q4 Expectation Survey were just released and we wanted to give you the visuals you have become accustomed to so you could update your materials accordingly.

And as we have before, we also wanted to update the Increase in Family Wealth Generated by Home Equity Slide with the new predictions. - For a great way to explain this to your clients keep an eye out for Wednesday's blog post.

Buying a home in this current rising market is a great investment.

www.greenwichrealestateexpert.com