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Three Factors Expected to Shape the Housing Market in 2018

CoreLogic (a data provider that primarily serves the real estate industry) recently published a list of factors they believe will influence the U.S. housing market in 2018. Specifically, these are trends the company expects will reduce affordability for many home buyers in 2018.

These three factors also make a strong argument for buying a home sooner rather than later. If these forecasts prove to be accurate, buyers who postpone their purchases until later in 2018 will likely end up paying more.

In its “U.S. Economic Outlook for December 2017,” CoreLogic’s economists cited three current real estate trends that could shape the market in 2018 as well. Their forecasts include the following:

  1. Home prices will continue to rise in most parts of the country.
  2. Mortgage rates will rise gradually during 2018.
  3. Tight inventory conditions will carry over into 2018.

Home Prices Still Moving North

Rising home values could affect home buyers nationwide in 2018, by reducing affordability and buying power. This is especially true in those cities and metro areas where there is a lot of demand from buyers.

CoreLogic’s Home Price Index (HPI) for the nation rose at a pace of 6%, or more, over the past year. The annual gains were even higher in the “starter home” price range where first-time buyers tend to shop, but it has affected the broader market as well.

“We expect this trend [of appreciation] to continue in 2018, with the CoreLogic Home Price Index for the U.S. up another 5 percent,” the company stated.

This is a primary consideration for anyone who is thinking about buying a home in 2018, because it relates to affordability. Buyers who stay “on the fence” too long could encounter higher housing costs.

Mortgage Rates Expected to Rise as Well

Mortgage rates are another hot topic among home buyers, particularly those who rely on financing to make their purchases. And there’s a cautionary tale here as well. CoreLogic points to an ongoing policy shift at the Federal Reserve as one of several factors that could increase mortgage rates in 2018.

As the company wrote on its blog:

“The Federal Reserve has signaled its plan to increase its federal funds target, pushing other short-term interest rates up including initial rates on ARMs … Fixed-rate loans are forecast to rise in 2018 by at least one-half a percentage point to as much as a full percentage point.”

Granted, this is just a prediction from one group of economists. Housing and mortgage rate forecasts have been wrong in the past. But the general consensus appears to be that mortgage rates will rise during 2018, after a long period of hovering at historical lows.

This outlook, combined with the expectation of rising home values, should create a sense of urgency among buyers who are eying a purchase in 2018.

Low Housing Inventory Fuels Competition

Over the last couple of years (and especially during 2017) real estate markets across the country have experienced inventory shortages. A limited supply of homes for sale has increased competition among buyers, leading to multiple-offer scenarios and quick sales. These conditions will likely carry over into 2018, for many cities across the U.S.

“As low inventory confronts the rising desire for homeownership by a growing number of millennials, home sale conditions will favor the seller,” CoreLogic wrote.

Real estate conditions vary from one market to the next. But the trends outlined above could affect the majority of home buyers across the country in 2018.

Buying, Selling

“How are Real Estate Agents Paid?”

I get this question a lot from clients and even friends. Now usually people don’t like to discuss pay but I believe being transparent can educate others interested in the industry or those who are simply curious of the structure. Real estate agents aren’t paid by the hour, nor are they paid for the work they perform. They only get paid for their work if the transaction is formally closed. An agent can spend days and months working with a buyer or seller. They don’t get rewarded for their time if the buyer and seller don’t go through with the transaction. Agents only get paid at closing.

 

Infographic Source : DIGGSY

how are real estate agents paid

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Should you have an open house?

Should you have an open houseMy professional opinion-absolutely!

According to the NAR 2017 Profile of Home Buyers and Sellers, open house’s are the third way buyers found the home they purchased. In a highly populated area such as South Florida 7% is a lot to give up when you want to sell your home quickly and for the best price.

Exposure is key when selling a home!

When you list with me …

I can provide your property with additional U.S. and international exposure.

Your property will immediately be marketed to my entire International Referral Network and to as many as 500 websites around the world.

Your property will be marketed in 19 different languages – so no matter where your buyer comes from the information on your property is available in the language they speak.

On top of that, my listings are featured on my website, WestonMag, Sun-Sentinel, Facebook, Instagram, Twitter, and Craigslist.

I provide all my clients with forward-thinking ideas, consistent communication and superior hands on service!

Call me today if you are looking to buy, sell, lease or invest in South Florida 954-812-2832

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The Home Buying Process: 7 Steps to Success

Home buyers tend to have a lot of questions about the house hunting and buying process. This is particularly true for first-time buyers who have never navigated their way through it before. This article lays it all out for you, from start to finish. Here are seven steps you should take when buying a home.

1. Review your credit situation.

Credit scores are an important qualifying factor for home buyers who need mortgage financing. The FICO score, in particular, is the one most commonly used by mortgage lenders. According to industry experts, home buyers generally need a credit score of 600 or higher to qualify for a loan. But that number is not set in stone, and some loan programs are more flexible than others.

You can order your credit reports from Experian, Equifax and TransUnion, and then review them for errors. You can also order your credit scores (different from your reports) to see how you stack up against the national average. A higher score could help you qualify for a better mortgage rate.

2. Determine your monthly housing budget.

A mortgage lender cannot tell you how much of a monthly payment you can comfortably afford. They can only tell you the amount you qualify for. You should determine your home-buying budget for yourself, before shopping for a loan. The idea is to get a basic budget on paper, including the most you are comfortable spending each month toward your housing costs. This will come in handy later on.

3. Get pre-approved for a mortgage loan. 

If you’re planning to pay cash for a home, you can obviously skip this step. But if you’re like most home buyers, and you need mortgage financing to complete your purchase, you can benefit from getting pre-approved.

Pre-approval is when a mortgage lender reviews your financial and credit history to determine your “creditworthiness.” When you get pre-approved for a specific loan amount, you’ll be able to narrow your house search to that price range.

Having a pre-approval letter also shows sellers that you are serious about (and capable of) purchasing their home. This can make a big difference in active real estate markets, where the seller may receive multiple offers from competing buyers.

4. Find a real estate agent to help you.

All home buyers can benefit from having professional help from an agent. This is especially true if you are buying a home for the first time, or in a new city you’re not familiar with. An agent can help you find a home that meets your needs, evaluate the seller’s asking price, put together a strong offer, and negotiate effectively based on current market conditions.

5. Start house hunting.

House hunting is the most exciting part of the home buying process. This is where you and your agent visit homes to find one that matches your needs. If you have a smart phone, be sure to bring it along so you can take pictures. And focus on the more permanent features of the home, such as the location, the lot, the square footage, etc. Don’t worry about the paint or the decor — you can always change those things.

6. Make a smart offer based on market conditions.

Once you’ve determined that the seller’s asking price is fair and reasonable, you are ready to make an offer on the property. In most cases, it’s wise to make the offer contingent upon the home inspection. It gives you a way to back out of the deal if the inspector uncovers an issue you’re not comfortable with. Your agent will help you prepare an effective offer. It’s one of their core skills.

7. Attend closing to sign your paperwork — and get your keys! 

Once you’ve made it through the inspection stage, you’re ready to attend the closing. (It’s also called “settlement” in some parts of the country.) This is when the title to the property is transferred from the seller to the buyer. You’ll also be signing a lot of paperwork and paying any other fees that are due.

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5 Most Common Questions Asked by First-Time Home Buyers

First-time home buyers typically have a lot of questions about the buying process. This is understandable, given the size of the investment involved. This article answers five of the most common questions asked by first-time buyers.

1. How do I determine my price range?

Determining your price range should be one of the first steps you take. Once you know how much you can comfortably afford to pay each month, you’ll be able to narrow your house-hunting process to homes that fall within your budget. This will save you a lot of time and energy.

To determine your price range, sit down and compare your monthly income to your monthly expenses (savings, credit card payments, car payment, groceries, entertainment, etc.). How much is left over each month? Your monthly mortgage payment should be less than this amount. Now you can use an online mortgage calculator to break each sale price down to a monthly amount, and determine if that amount is inside or outside your comfort zone.

2. Do I need a real estate agent?

The short answer is yes. If you’re buying a first home, it’s a good idea to have a real estate agent. Buying a home is one of the biggest financial transactions you will ever make. So it makes sense to have professional help.

Your agent will help you find homes that match your price range and desired features. He or she will also help you validate the asking process (see below), prepare a purchase offer, negotiate with the seller, and navigate the rest of the home buying process.

3. How do I research the asking price?

First, you have to realize that it’s called an “asking price” for a reason. The price set by the seller is never set in stone. It’s what they are asking for, but it might not be the true market value of the home. Your real estate agent will help you validate the asking price by looking at comparable, recent sales in the area. This will tell you if the asking price is reasonable or too high, based on current marketing conditions.

4. Which type of mortgage loan should I choose?

First, do some research on the basic types of home loans — fixed rate, adjustable rate (ARM), FHA versus conventional, etc.

When researching the different mortgage types, pay attention to paragraphs that begin with: “This type of mortgage might be best for you if…” Generally, this type of statement is usually followed by a series of pros and cons that will explain the type of buyer who might choose that option.

As a general rule, if you’re going to be in the home for quite a while (five years or more), it’s probably best to choose a fixed-rate mortgage. On the other hand, if you think you’ll only be in the home for two or three years, you might want to choose an adjustable-rate mortgage to save money during your short period of ownership.

5. What happens at the real estate closing?

The real estate closing (also known as a “settlement”) is when property ownership transfers from seller to buyer. All remaining fees will be paid as well, and these are known as closing costs. The seller receives their portion of the payment, minus what they still owe on the mortgage. The deed of ownership is transferred to reflect the new owner.

As a home buyer, you would be wise to save more money than you think you’ll need at closing, just to be safe. You should also make sure you receive a HUD-1 statement (or “settlement statement”) at least one day prior to the closing date. This document gives you an itemized list of the costs you’ll be expected to pay at closing. The Real Estate Settlement Procedures Act (RESPA) requires that the escrow agent or lender provide this document at least one day before the closing.

Buying, First Time Home Buyer

The Importance of a Pre-Closing Inspection When Buying a Home

The pre-closing home inspection is the buyer’s opportunity to ensure the house they are buying is in the same condition it was in when they first inspected it. It’s an important part of the purchasing process, but one that is often overlooked. This article explains why the pre-closing inspection is important, and what you should look for when visiting the home.

Protecting Your Interests

The pre-closing inspection, also referred to as “the final walk-through” is a critical step in the home buying process. But many buyers fail to take it seriously. As a home buyer, you need to conduct a thorough inspection prior to closing on the house. Why? Because in most states, once the closing is completed, the seller has no further obligations to you. It’s your house at that point.

How to Conduct a Pre-Closing Inspection

When you are doing the final inspection, start with the basics. Examine the windows and doors and make sure all of them open, close and lock. Double-check that the windows are not cracked or broken, and that all of the screens are present (if they were present when you first viewed the property).

Make sure there are no signs of flooding, leaking, or water damage of any kind. Look on the ceilings and floors for evidence of this. If you see anything that seems out of place, make sure you speak to your agent about it.

Check that all appliances are working. That includes turning the oven on and ensuring it gets hot. Turn on the burners on the stove to make sure all of them light. Actually open the refrigerator and freezer to make sure they are working. Briefly turn on the washing machine and the dryer.

Though you may feel uncomfortable doing all of this, it could save you money and time down the road.

You should also turn all lights on and off to make sure they work. You might even check all of the electrical plugs to ensure they work. Make sure none of the walls were damaged by movers or anyone else. Verify that any pools, hot tubs, saunas or other items are operational.

Follow up on Requested Repair Items

If the seller was required to do any work on the home (at your request), inspect the work carefully. Ask if there are any copies of work orders and warranties / guarantees by the vendors who performed the work. Make sure they fixed what they were supposed to fix, according to the signed purchase agreement.

It’s generally a good idea to have your agent present for the pre-closing inspection. That way, you can speak to him or her about any concerns you have along the way. Your agent can negotiate any agreements that need to be made based on your findings.

Don’t Be Shy

This is not the time to be shy or feel awkward. You are about to make what will probably be the largest investment of your life. Make sure you protect your investment by spending sufficient time conducting your pre-closing inspection.

The pre-closing inspection usually takes place right before the closing (within 24 hours in most cases). Because of this, many buyers are anxious and excited, and therefore fail to do a thorough inspection. Slow down, keep a cool head, and give your future home a thorough pre-closing inspection.

Buying, Real Estate

What to Look for When House Hunting for the First Time

House hunting is one of the most exciting parts of the home buying process, and for obvious reasons. But it requires a bit of preparation as well. In this lesson, we will discuss some of the things you should focus on before and during the house-hunting process.

Before you go out looking at homes, it’s a good idea to write down a list of wants versus needs. These items should be placed in separate columns on a piece of paper. A need is something you can’t live without, such as the number of bedrooms in the home. A want is something that would be nice to have, but isn’t an absolute necessity, such as a great view. This will help you a lot when you actually begin the house hunting process. It will serve as a constant reminder of what’s most important to you — and what you can live without.

One of the biggest mistakes first-time home buyers make when house hunting is to become too emotional about the process. Sure, it’s a very exciting time in your life. Anyone who has ever bought a home before can understand that. But it’s also a financial investment, and like any other investment you need to look at it with an analytical eye. Enjoy the process, but stay calm enough to view each property with an objective eye.

Consider the Neighborhood

So what else should you look for when house hunting for the first time? Well, you want to consider the neighborhood as well as the home. This is another thing first-time buyers often overlook. They fall so in love with a house when they first see it that they forget to consider the neighborhood, the geographical location, the distance from work or school, etc. Remember, when you buy a home, you also buy into the neighborhood and community around it. This is a quality-of-life issue, so it’s an important consideration to keep in mind throughout the process.

House Hunting and Inspections are Different

Now let’s talk about some of the things you should look at when house hunting and touring homes. Keep in mind that you’re going to have a home inspector come out and examine the house from top to bottom, after you make an offer to buy it. (At least, you should hire a home inspector.) So you don’t necessarily need to look at the roof and the foundation and other structural elements. Not yet anyway.

Sure, you want to make sure the home appears to be in good condition overall. But more importantly, you should focus on that list of wants and needs you created at the beginning of the house hunting process. A full inspection can come later.

You also want to make sure the home is laid out in such a way that’s conducive to your lifestyle. Does it have enough bedrooms and bathrooms? Is the master bedroom upstairs or downstairs? Does it have a fenced-in lot, if that’s important to you? Is it located near work or school? What is the neighborhood like? Do people in the area seem to take pride in their homes, or is it a neighborhood in decline?

These are some of the most important things you should look for when shopping for house.

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How to Prepare for a Home Appraisal When Selling

As a home seller, you will most likely encounter a home appraiser at some point. You might even hire one yourself, to help you determine the current market value (and asking price) of your house. Or you might go through the process later on, when the buyer’s mortgage lender sends an appraiser to visit.

In either case, there are certain things you can do to prepare for the home appraisal process. You probably won’t be able to add value to the house — at least not on short notice. But you can give the appraiser a positive first impression, so he doesn’t reduce the appraised value.

How a Home Appraisal Works

If you want to know what your home is worth in the current market, a professional home appraisal is your best option. Sure, you can get a ballpark estimate from one of the many home-value websites online today. But these websites only account for recent sales data in your area. They don’t know about, or consider, the improvements and upgrades you might have made to the home. After all, how could a website possibly know about such things?

If you want to get the best possible estimate on your home for pricing purposes, you should pay for an appraisal. Through this process, a licensed home appraiser will visit your house to evaluate it in person. He will do a room-by-room assessment of the home. He will look at the overall condition. He will account for upgrades to the property and the landscaping. Lastly, he will look at recent sales data for comparable homes in your area.

In the end, you’ll be presented with an appraiser’s report. You can use this document to help determine your asking price (if you’re selling), or to determine how much equity you have (in the case of refinancing). Just bear in mind that if you do sell the home, the buyer’s lender will have their own appraiser pay a visit as well. Still, it helps to do your own research ahead of time.

How to Prepare for It

As for how to prepare for an appraisal, I can sum that up with one statement. Prepare the home like you would for a buyer’s visit, and then don’t sweat it. Many of the things on the appraiser’s checklist are things you cannot change — the size of the home, the location, the number of rooms, recent sales data, etc. You have no control over these factors. They are what they are. So you shouldn’t worry about that side of things.

Instead, focus your attention on the things you can do to prepare for a home appraisal. In essence, these are the same things you should do when preparing the home to sell:

* Make any necessary repairs around the house.
* Update any outdated fixtures (but don’t overspend in this area).
* Freshen up any paint that might be faded, chipped, etc.
* Do whatever you can to improve your curb appeal.

It’s important to note that the items listed above won’t add a lot of value to your home appraisal. They may help some, and every little bit helps. But more importantly, they will prevent the appraiser from entering your home with a negative mindset. When somebody is coming to put a value on your house, the last thing you want to do is give them a bad first impression. That’s where the above list of items comes into play.

It’s also important to tell the appraiser about any upgrades you’ve made to the house. This is critical, because it could increase the base appraised value of the home. This includes new flooring, decks, major landscaping additions, swimming pools, new cabinets or counters, etc.

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The HOTTEST investment on the Market Today | The Residences at W Fort Lauderdale

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The Residences at W Fort Lauderdale offer an investment opportunity that is calling your name! Here’s a great article detailing beachfront investments! Starting in the LOW $700,000’s, The Residences at W Fort Lauderdale offer an amazing return on investment and a great luxurious escape when you want to vacation in one of the HOTTEST spots South Florida has to offer!

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EPIC HOUSING SHORTAGE BEING REPORTED

EPIC HOUSING SHORTAGE BEING REPORTEDThe Joint Center of Housing Studies (JCHS) at Harvard University recently released their 2017 State of the Nation’s Housing Study, and a recent blog from JCHS revealed some of the more surprising aspects of the study.

The first two revelations centered around the shortage of housing inventory currently available in both existing homes and new construction.

Regarding Existing Home Inventory:

“For the fourth year in a row, the inventory of homes for sale across the US not only failed to recover, but dropped yet again. At the end of 2016 there were historically low 1.65 million homes for sale nationwide, which at the current sales rate was just 3.6 months of supply – almost half of the 6.0 months level that is considered a balanced market.”

Regarding New Home Inventory:

“Markets nationwide are still feeling the effects of the deep and extended decline in housing construction. Over the past 10 years, just 9 million new housing units were completed and added to the housing stock. This was the lowest 10-year period on records dating back to the 1970s, and far below the 14 and 15 million units averaged over the 1980s and 1990s.”

Bottom Line

The biggest challenge in today’s market is getting current homeowners and builders to realize the opportunity they have to maximize profit by selling and/or building NOW!!

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