Monday, August 28, 2017

AVOID REAL ESTATE REGRET

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Thursday, August 10, 2017

HOW HOME BUYERS CAN OVERCOME TOUGH COMPETITION

Source: Kiplinger 

Redfin Chief Economist says to win in a hot market, home buyers should take advantage of technology to find homes as soon as they are listed.

Making sense of the story:
• Arm yourself with tech tools to find available homes quickly. With the variety of apps available today, you can receive listing alerts so that you're notified as soon as a home in your price range or search area hits the market.
• Buyers will gain an advantage from whatever concessions they can offer. Instead of a small earnest-money deposit, we've seen buyers put into escrow their entire down payment or even half of the purchase price.
• You needn't waive a contingency for inspection in the purchase contract. Rather, you can agree to pay the seller, say, $2,500, or next month's mortgage payment, if you walk away.
• Work with a local or reputable lender to get a preapproval for your mortgage that includes full documentation of your means to obtain a certain amount of financing in advance of a signed purchase contract. That may give you the confidence to waive a contingency for financing, and it’s almost as good as cash for closing a deal quickly.
• Because sellers can sell their homes in days but may take months to buy, you can gain leverage by offering to "rent back" their home to them for a certain number of months.

• Fall can be a good time to buy a home because prices generally peak in the summer and ease up in the fall. There's a bit less inventory, but many fewer buyers. Plus, sellers who list in the fall are serious because they must leave because of job relocation, divorce or something else that made them miss the top of the season.

Full story

http://www.kiplinger.com/article/real-estate/T010-C000-S002-how-home-buyers-can- overcome-tough-competition.html

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HOMEOWNERSHIP RATE JUMPS FROM 50-YEAR LOW

Source: The Wall Street Journal 

The U.S. homeownership rate may have finally bottomed out, as the share of Americans who own homes is steadily climbing. The ownership rate posted an increase in the second quarter, reversing a sharp downward trend that begun in the Great Recession.

The homeownership rate was 63.7 percent in the second quarter, the U.S. Census Bureau reported. That marks nearly a full percentage point increase from a year ago. Last year, the homeownership rate had plunged to a 50-year low of 62.9 percent.

“The addition of 1.2 million households being homeowners is clearly good news, as more households are participating in housing equity gains,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “But let’s keep it in perspective: There are fewer homeowners today compared to a decade ago, while renter households have risen by 8 million. So it is still the case that the massive $7 trillion in housing wealth gains from the cyclical low point has been accumulated by a fewer number of families in America. Further advances in homeownership are required to strengthen and broaden the middle class.”

Full story

http://www.marketwatch.com/story/homeownership-rate-jumps-from-50-year-low-2017-07-27

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SELLERS NET HIGHEST PROFIT IN A DECADE

Source: RealtyTrac/ATTOM Data Solutions

Home sellers in the second quarter of this year sold their properties for an average $51,000 more than they paid for them when they bought them. That’s the highest price gain for sellers since the second quarter of 2007, when it was $57,000, according to a new report by real estate data form ATTOM Data Solutions. This represents an average return on investment of 26 percent.

The report also shows that homeowners who sold in the second quarter had owned an average of 8.05 years, up from 7.85 years in the previous quarter and up from 7.59 years in Q2 2016 to the longest average homeownership tenure as far back as data is available, Q1 2000.

All-cash sales represented 28.9 percent of all single family and condo sales in Q2 2017, down from 31.3 percent of all sales in the first quarter, but up from 27.3 percent of all sales in Q2 2016 — the first annual increase in the share of cash sales since Q1 2013.

Out of 118 metro areas with at least 1,000 homes sales in the second quarter, ATTOM Data Solutions found that San Jose (75 percent), San Francisco (65 percent), Seattle (63 percent), Modesto (62 percent), and Denver (62 percent) had the highest percentage of sales in which sellers got top dollar.

Full story

http://www.realtytrac.com/news/home-prices-and-sales/q2-2017-home-sales-report/

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LOW RISK OF A U.S. HOUSING CORRECTION

Source: CNBC


Sales and prices are moving so quickly that appraisals are not keeping up. If the appraisal doesn't match the contract price, the buyer doesn't get the mortgage, and the deal dies. 

New research from JPMorgan examining historic data found that the risk of a dramatic decline in prices is low, despite current fears of a correction in the U.S. and Canada.

Using data from 14 developed countries dating back to 1950, JPMorgan's research found that sharp price corrections have been relatively uncommon, even following large price increases.

"The data show that sustained increases in real house prices have been the norm rather than the exception in the post-World War II era, as rising populations and incomes have pushed up land prices," Jesse Edgerton, U.S. analyst from the investment bank's economic and policy research team, said in the report entitled "Quantifying housing correction risk in Canada and the U.S."

The research comes as fears grow over a housing bubble forming in the West, particularly in countries like the U.S., Canada and Australia. Since the beginning of the global housing boom around the year 2000, real U.S. housing prices are up 29 percent and Canadian prices up 138 percent, Edgerton noted.

Full story

https://www.cnbc.com/2017/07/26/jpmorgan-points-to-low-risk-of-a-us-housing-correction.html

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