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Historically Speaking, There’s No Housing Bubble Coming Soon!

Historically Speaking, There’s No Housing Bubble Coming Soon!

Historically Speaking, There’s No Housing Bubble Coming Soon!

Is the continued increase in Southern California home prices leading us to another housing bubble? We say No!

Let’s break this down. From 1975 to 1990, home values trended at standard 5% annual growth. In 1990, when the US entered into a recession, new construction prices fell. Single family resale residence pricing was flat. This resulted in an 8-10 year lull in the standard 5% annual growth. In 1999 the median housing prices began to catch up to 5% standards…then the balloon struck. 2004 through 2007 saw unsustainable price increases. It burst… prices decline in December 2012 to a low. Since 2013, We’ve been on pace to todays, 5% standard home price growth. Here’s the graph to support:

5% Annual Home Price Growth

Recently, five housing experts weighed in on the question.

Rick Sharga, Executive VP at Ten-X:

“We’re definitely not in a bubble.”

“We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but…while prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars.”

Christopher Thornberg, Partner at Beacon Economics:

“There is no direct or indirect sign of any kind of bubble.”

“Steady as she goes. Prices continue to rise. Sales roughly flat.…Overall this market is in an almost boring place.”

Bill McBride, Calculated Risk:

“I wouldn’t call house prices a bubble.”

“So prices may be a little overvalued, but there is little speculation and I don’t expect house prices to decline nationally like during the bust.”

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices:

“Housing is not repeating the bubble period of 2000-2006.”

“…price increases vary unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”

Bing Bai & Edward Golding, Urban Institute:

“We are not in a bubble and nowhere near the situation preceding the 2008 housing crisis.”

“Despite recent increases, house prices remain affordable by historical standards, suggesting that home prices are tracking a broader economic expansion.”

To sum it up:

What we’re realizing is in-line with a 5% annual price growth. The sky isn’t falling nor is the market facing another apocalypse. One thing we do suggest, if you’re considering selling, now… today… is the perfect time. Inventory is at an all time low. Buyers are limited in their options and your home will likely get top dollar.

Call Us Now To Sell Your Home…

Office: 909.985.9392 or Text Us: 714.657.6634

Kris and Kim Darney – REALTORS® – Grandparents – 909.985.9392 – CA BRE# 01930954; 01464957; 01458057

 

 

Low Housing Inventory Results in Double Digit Price Increases

Low Housing Inventory Results in Double Digit Price Increases

Low Housing Inventory Results in Double Digit Price Increases

Fact: 3rd quarter advances for Los Angeles and San Bernardino areas. Home prices results realized 10.1% and 7.9% respectively in median price increases.

The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price Report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady clip in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros.

Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

“Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

What this means to sellers

Rising prices are a homeowner’s best friend. As reported by the Washington Post in a recent article post:

“The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.”

Low Housing Inventory Results in Double Digit Price Increases

What this means to buyers

In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Dive reported, the amount of cash needed to purchase that home will also increase.

“These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

Bottom Line

If you’re thinking of selling and moving down, waiting might make sense. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

Call Us Now To Sell Your Home…

Office: 909.985.9392 or Text Us: 714.657.6634

Kris and Kim Darney – REALTORS® – Grandparents – 909.985.9392 – CA BRE# 01930954; 01464957; 01458057

Buying A Home Or Renting, You’re Paying Someones Mortgage

Buying A Home Or Renting, You’re Paying Someones Mortgage

Buying A Home Or Renting, You’re Paying Someones Mortgage

Buying A Home Or Renting, You’re Paying Someones Mortgage. Why not pay your mortgage?

There’re some people who have not purchased homes yet because they’re uncomfortable taking on the obligation of a mortgage. Everyone should realize, unless you are living rent-free, you’re paying a mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich,”

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Managementorganization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

Buying A Home Or Renting, You’re Paying Someones Mortgage

As an owner, your mortgage payment is a form of ‘forced savings’. This allows you to build equity in your home. You can tap into this equity later in life if you choose. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 3.94% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

Kris and Kim Darney – REALTORS® – Grandparents – 909.985.9392 – CA BRE# 01930954; 01464957; 01458057

Cooling Down and Home Buyers are Heating Up…Time To Sell

Cooling Down and Home Buyers are Heating Up…Time To Sell

Cooling Down and Home Buyers are Heating Up…Time To Sell

Each year, most homeowners wait until the spring to sell their houses because they believe that they can get a better deal during the normal spring buyer’s market. However, recently released data suggests that a seller’s best deal may be available right now. The concept of ‘supply & demand’ reveals that the best price for an item will be realized when the supply of that item is low and the demand for that item is high. Let’s see how this applies to the current residential real estate market.

SUPPLY

It is no secret that the supply of homes for sale has been far below the number needed for over a year. A normal market requires six months of housing inventory to meet the demand. The latest report from the National Association of Realtors (NAR) revealed that there is currently only a 4.2-month supply.

Supply is currently very low!!

DEMAND

A report that was just released tells us that demand is very strong. The most recent Foot Traffic Report (which sheds light on the number of buyers out looking at homes) disclosed that there are more buyers right now than at any other time in the last twelve months. This includes more buyers looking at homes right now than at any time during last year’s spring market.

Demand is currently very high!!

Bottom Line

Waiting until the spring to list your house for sale made sense in the past. This year is different. The best deal is probably available right now.

Want to Sell a home? Text SELL to (714)880-8875

We’ll send you our latest E-Book: Things To Consider When Selling A Home

Kris and Kim Darney – REALTORS® – Grandparents – 909.985.9392 – CA BRE# 01930954; 01464957; 01458057

1st Step To Buying a Home… Know Your Credit Score

1st Step To Buying a Home… Know Your Credit Score

1st Step To Buying a Home… Know Your Credit Score

Knowing your credit score or getting a recent copy of your credit report is one of the first steps that you can take toward knowing how ready you are to start the home buying process.

Make sure all the information listed on your report is accurate and work to correct any mistakes. The higher your credit score, the more likely you will be to receive a better interest rate for your mortgage.  This will translate into more ‘home for your money.’

Many potential buyers believe that they need a 750 FICO® Score or higher to be able to purchase a home. The truth is that according to Ellie Mae’s Origination Report, over 53% of loans were approved with a FICO® score under 750 last month!

Here are some tips for improving your credit score:

  • Make payments, including rent, credit cards, and car loans, on time.
  • Keep your spending to no more than 30% of your limit on credit cards.
  • Pay down high-balance credit cards to lower balances, and consider balance transfers to free up credit.
  • Check for errors on your credit report and work toward fixing them.
  • Shop for mortgage rates within a 30-day period — too many spread-out inquiries can lower your score.
  • Work with a credit counselor or a lender to improve your score.
The bottom line…
Once you know your score, your next step will be finding a lender and getting pre-approved for a mortgage. Doing this will ensure that you know your budget before you start looking for your dream home.

Want to Buy a home? Text Buy to (714)880-8875

We’ll send you our latest E-Book: Things to Consider When Buying A Home

Kris and Kim Darney – REALTORS® – Grandparents – 909.985.9392 – CA BRE# 01930954; 01464957; 01458057

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