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Home Buying | 11 Posts
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March
25

Why the Stock Market Correction Probably Won't Impact Home Values

Why the Stock Market Correction Probably Won't Impact Home Values | MyKCM

With the housing crash of 2006-2008 still visible in the rear-view mirror, many are concerned the current correction in the stock market is a sign that home values are also about to tumble. What's taking place today, however, is nothing like what happened the last time. The S&P 500 did fall by over fifty percent from October 2007 to March 2009, and home values did depreciate in 2007, 2008, and 2009 – but that was because that economic slowdown was mainly caused by a collapsing real estate market and a meltdown in the mortgage market.

This time, the stock market correction is being caused by an outside event (the coronavirus) with no connection to the housing industry. Many experts are saying the current situation is much more reminiscent of the challenges we had when the dot.com crash was immediately followed by 9/11. As an example, David Rosenberg, Chief Economist with Gluskin Sheff + Associates Inc., recently explained:

"What 9/11 has in common with what is happening today is that this shock has also generated fear, angst and anxiety among the general public. People avoided crowds then as they believed another terrorist attack was coming and are acting the same today to avoid getting sick. The same parts of the economy are under pressure ─ airlines, leisure, hospitality, restaurants, entertainment ─ consumer discretionary services in general."

Since the current situation resembles the stock market correction in the early 2000s, let's review what happened to home values during that time.Why the Stock Market Correction Probably Won't Impact Home Values | MyKCM

The S&P dropped 45% between September 2000 and October 2002. Home prices, on the other hand, appreciated nicely at the same time. That stock market correction proved not to have any negative impact on home values.

Bottom Line

If the current situation is more like the markets in the early 2000s versus the markets during the Great Recession, home values should be minimally affected, if at all.  Real estate sales in Ocean County New Jersey are encouraging to both sellers and buyers of real estate.  

July
19

Home Price Appreciation Forecast

Home Price Appreciation Forecast | MyKCM

Questions continue to come up about where home prices will head throughout the rest of this year, as well as where they may be going over the few years beyond.

We've gathered current data from the industry's most reliable sources to help answer these questions:

The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter.

Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.

Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives.

Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.

The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.

Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets.

Here's the home price appreciation these experts are projecting over the next few years:

Home Price Appreciation Forecast | MyKCM

Bottom Line

Every source sees home prices continuing to appreciate, which is great news for the strength of the market. The increase is steepest throughout the rest of 2019, and prices should continue to rise as we move through 2020 and beyond.

Home ownership is how most people gain wealth. Buy a first or second home and build your wealth. Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.
Search homes for sale in Ocean County, New JerseySearch Vacation Rentals on Long Beach Island (LBI). Toms River Real Estate  Little Egg Harbor Real Estate

June
12

How Homeownership Delivers Unsurpassed Family Wealth

How Homeownership Delivers Unsurpassed Family Wealth | MyKCM

There are many financial benefits to homeownership, but probably none more important than its ability to create family wealth.

How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is an online resource for research and information on how homeownership contributes to individual and community success.

Their article, The First Rung on the Ladder to Economic Opportunity Is Housing, explains the importance of homeownership to a family's financial health. In that article, they simply stated:

"The ladder to economic success can stretch only so high without the asset-building power of homeownership."

To this point, National Association of Realtors' (NAR) Economists' Outlook Blog revealed in a recent post:

"Housing wealth contributes positively to the homeowner's and children's economic condition, because home equity can be tapped for expenditures such as investing in another property (which can generate rental income), home renovation (which further increases the home value), a child's college education, emergency or major life events, or expenses in retirement…

Housing wealth (or net worth or equity) is built up over time via the home price appreciation and the principal payments that the homeowner makes on the loan."

Here is a graph showing the build-up of wealth over time:How Homeownership Delivers Unsurpassed Family Wealth | MyKCMJust last month, NAR's Chief Economist, Lawrence Yun, explained that even though home appreciation has slowed, homeowners are still building wealth:

"Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth. A typical homeowner accumulated $9,500 in wealth over the past year."

Later in life, this wealth is crucial…

This wealth is important to a family's retirement plans. In a recent report from the Joint Center for Housing Studies at Harvard University titled, Housing America's Older Adults 2018, they revealed that a renter 65 years old or older has a net worth of $6,710. Meanwhile, a homeowner 65+ years old has a net worth of $319,200. That huge difference will allow for a dramatic upgrade in one's lifestyle during your retirement years.

Bottom Line

Homeownership builds wealth. This, in turn, allows families to have more and better options when it comes to their children and their life in retirement.

 

Home ownership is how most people gain wealth. Buy a first or second home and build your wealth. Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.
Search homes for sale in Ocean County, New Jersey.

April
26

Renters Paying Substantially More While Owning Costs Less

Renters Paying Substantially More While Owning Costs Less | MyKCM

In a recent Insights BlogCoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.

"CoreLogic's national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period."

Renters Paying Substantially More While Owning Costs Less | MyKCM

Why the difference between the costs of renting versus owning?

It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogic explained:

"It's mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.

The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018."

Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.

According to the Economists' Outlook Blog, NAR's February 2019 Housing Affordability Index showed that the "percentage of income needed" to pay the typical mortgage has decreased the last three months.

  • November - 17.3%
  • December - 16.9%
  • January - 16.2%
  • February – 15.9%

Bottom Line

What does this all mean to the current housing market? We think First American said it best in a post last week:

"The mortgage rate-driven affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we're in for a great spring home-buying season."

 Home ownership is how most people gain wealth. Buy a first or second home and build your wealth. Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.
Search homes for sale in Ocean County, New Jersey.

April
9

Why Pet-Friendly Homes Are in High Demand

Why Pet-Friendly Homes Are in High Demand | MyKCM

One of the many benefits of owning your own home is the freedom to find your 'furever' friend. By pointing out the aspects of your home that make it 'pet-friendly' in your listing, you'll attract these buyers, rather than alienating the 68% of American households that have a pet!

If you are one of the many homeowners looking to list your home for sale, how do you stand out to the millions of pet parents searching for their dream home?

Whether a dog person, a cat person, or someone who prefers the company of another pet species, 99% of pet owners say that they consider their animal to be family. When finding a home, 95% of animal owners believe it is important that a housing community allows animals.

study by the National Association of Realtors (NAR) revealed that there are many aspects of the home buying, selling and owning experience that have been greatly impacted by our love for our pets.

This should come as no surprise, as $72 billion was spent on pets in the U.S in 2018. NAR's President William E. Brown shed some light on the impact of pet owners and their home search.

"It is important to understand the unique needs and wants of animal owners when it comes to homeownership. REALTORS® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family."

The Power of Pets When Choosing the Right Home

  • 89% of pet owners say they would not give up their pet due to a housing restriction
  • 81% of Americans say their pets play a role in their housing situation
  • 31% of animal owners have refused to put in an offer on a home because it wasn't a good fit for their animals
  • 19% of Americans say they would consider moving for their pet
  • 12% percent have moved for their pet

New home builders have actually begun installing retractable pet gates that tuck away neatly inside door jams as a highly requested feature in new homes to attract pet-parents.

So, if you are a homeowner looking to sell in today's pet-friendly environment, point out the features of your home that will attract pet owners:

  • Fully fenced in backyard – (91% of pet owners ranked this as the most important feature of a home to accommodate their pet)
  • Locations of dog parks/walking paths/pet-friendly beaches in the area (71% ranked this as the top feature of any neighborhood they would consider)
  • Proximity to veterinarians/groomers/pet supply stores (31%)

Vacation Summer Rental homes on Long Beach Island (LBI) New Jersey who allow pets, especially dogs, can often capture a higher weekly rent and fulfill the rental of their entire season sooner.  Search for LBI Summer Vacation Rentals here.

Bottom Line

Americans love their pets and will look for pet-friendly features in the home they wish to buy, so take advantage of this knowledge by pointing out your home's ability to meet their needs.

Home ownership is how most people gain wealth. Buy a first or second home and build your wealth. Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.
Search homes for sale in Ocean County, New Jersey.

 

February
21

Why A Normal Market is Just What We Need

Why A Normal Market is Just What We Need | MyKCM

The National housing market has been hot for a while now. The Ocean County real estate market realized animprovement in January contract sales as opposed to January of 2018.  Homes have been flying off the shelves as fast as they have been listed. Buyers have been competing in bidding wars just to find a home to buy, let alone find their dream home.

This 'seller's market' has driven home prices to new heights. Home price appreciation averaged over 6% across the country.

What's a seller's market?  Most real estate experts agree that when the supply of homes on the market falls below a six month supply, it's a seller's market.  

However, home price growth has recently started to cool down. The latest report from CoreLogic shows that home prices have only risen by 4.7% over the last 12 months.

Many buyers and sellers planning to enter the housing market this year have started to wonder if we are headed towards another housing crash. Ralph McLaughlin, Deputy Chief Economist at CoreLogic, recently stated in an interview,

"There's no reason to panic right now, even if we may be headed for a recession. We're seeing a cooling of the housing market, but nothing that indicates a crash.

The real elephant in the room here is housing supply."

The simple answer is we are returning to a 'normal' market. The inventory of homes for sale more closely matches the demand in the market. The added supply means fewer buyers are outbidding each other. Therefore, prices are experiencing less upward pressure. McLaughlin went on to explain,

"If there are a lot of homes on the market and suddenly no one wants to buy them, you'll get into a downward spiral of price competition. Right now, however, we're in the opposite situation, there isn't an over-abundance of homes on the market."

As more renters looking for their piece of the American Dream enter the housing market, demand for housing will continue to grow. The Joint Center for Housing Studies at Harvard University estimates over 30 million new households will enter the market from now through 2040.

"There's the natural life cycle of young people getting older and starting to do adult life things which include … buying a house and that's a lot of potential inertia that could last indefinitely."

Bottom Line

Home prices will start to appreciate by historical norms as we continue to head towards a more 'normal' market, rather than the over 6% seen over the course of the last couple of years. This is great news! Homeowners looking to sell their New Jersey home will have buyers, as more buyers will be able to afford them!

Home ownership is how most people gain wealth.  Buy a first or second home and build your wealth. Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.  

If you are considering listing your home for sale, contact us, it is important to work with an agent who knows what they are doing.

February
15

How To List Your Home for the Best Price



If your plan for 2019 includes selling your home, you will want to pay attention to where experts believe home values are headed. According to the latest Home Price Index from CoreLogic, home prices increased by 4.7% over the course of 2018.

The map below shows the results of the latest index by state.

How To List Your Home for the Best Price | MyKCM

Real estate is local. Each state appreciates at different levels. The majority of the country saw at least a 2.0% gain in home values, while some residents in North Dakota and Louisiana may have felt prices slow slightly.

This effect will be short lived. In the same report, CoreLogic forecasts that every state in the Union will experience at least 2.0% appreciation, with the majority of the country gaining at least 4.0%! The prediction for the country comes in at 4.6%. For a median-priced home, that translates to over $14,000 in additional equity next year! (The map below shows the forecast by state.)

How To List Your Home for the Best Price | MyKCM

So, how does this help you list your home for the best price?

Armed with the knowledge of how much experts believe your house will appreciate this year, you will be able to set an appropriate price for your listing from the start. If homes like yours are appreciating at 4.0%, you won't want to list your home for more than that amount!

One of the biggest mistakes homeowners make is pricing their homes too high and reducing the price later when they do not get any offers. This can lead buyers to believe that there may be something wrong with the home, when in fact the price was just too high for the market.

Bottom Line

Pricing your home right from the start is one of the most challenging parts of selling your home. Once you decide to list your house, let's get together to discuss where home values are headed in your area!

We list and sell home in all of Ocean County New Jersey.  Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.

February
6

Whose Mortgage Do You Want to Pay? Yours or Your Landlord's?

Whose Mortgage Do You Want to Pay? Yours or Your Landlord's? | MyKCM

There are some people who haven't purchased homes because they are uncomfortable taking on the obligation of a mortgage. However, everyone should realize that unless you are living with your parents rent-free, you are 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."

With home prices rising, many renters are concerned about their house-buying power. Mike Fratantoni, Chief Economist at MBAexplained:

"The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market."

As an owner, your mortgage payment is a form of 'forced savings,' which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.

As mentioned before, 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 4.46% 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.

Home ownership is how most people gain wealth.   Buy a first or second home and build your wealth. Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.

January
24

The Importance of Homeownership to the American Dream

The Importance of Homeownership to the American Dream | MyKCM

For centuries, people in this country have seen homeownership as part of the American Dream. Whether they were born here or immigrated from another country, they wanted to own a piece of America. With so many prominent societal changes over the last few decades, it is fair to ask if people in America still feel the same way about owning a home. The answer was made abundantly clear in two separate reports released earlier this month.

In their market trends report, As Housing Trends Shift, So Does Renter, Buyer and Seller SentimentTrulia revealed that:

"After two years of no change, the share of Americans who say that homeownership is part of their personal "American Dream" ticked up from 72 percent to 73 percent of Americans."

At the same time, the National Association of Realtors released their Aspiring Home Buyers Profile. As the report explained:

"For both homeowners and non-homeowners alike, homeownership is strongly considered a part of the American Dream. For non-owners, roughly 75 percent reported that homeownership is part of their American Dream. For owners, nine in 10 believe it is part of their American Dream."

Bottom Line

The belief among the vast majority of Americans, whether they rent or own, is that purchasing a home still remains a major step toward accomplishing the American Dream.

Home ownership is the method for most people to gain wealth. Buy a first or second home and build your wealth.  Some of the more popular locations we sell homes are in Point Pleasant, Brick, Toms River, Forked River, Beachwood, Berkeley Twp, Bayville, Waretown, Barnegat, Lacey Township, Manahawkin, Tuckerton, Little Egg Harbor and Long Beach Island, New Jersey.

August
3

In today's market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

 

There is no "later."

Sellers sometimes think, "If the home doesn't sell for this price, I can always lower it later." However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.
John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:

"Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price."

Additionally, the "I'll lower the price later" approach can paint a negative image in buyers' minds. Each time a price reduction occurs, buyers can naturally think, "Something must be wrong with that house." Then when a buyer does make an offer, they low-ball the price because they see the seller as "highly motivated." Pricing it right from the start eliminates these challenges.
 
Don't build "negotiation room" into the price.
Many sellers say that they want to price their home high in order to have "negotiation room." But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.
Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in "negotiation room," any potential buyers that search in the $350k-$400k range won't even know your listing is available, let alone come see it!
One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.

Price & Visibility | Simplifying The Market

A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the "right" to purchase your house.

Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right

Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Let's get together to discuss what is happening in the housing market and how it applies to your home.

You need an agent that will tell you what you need to know rather than what you want to hear.  This will put you in the best possible postion to sell you real property.

Published By Coldwell Banker Riviera Realty with seven real estate offices in Ocean County New Jersey.  Visit our website to see all the real estate listings in two multiple listing services.  Get automatic alerts when new properties come on the market in the MLS. 
  

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July
30

Ocean County Real Estate Market Performance Update

June 2015

The upward trend of unsold inventory appears is starting to level off while at the same time last year it was still trending upward.  This years contract sales are ahead of last year and the trend line is level.  Lower unsold inventory and non declining sales are is good news for home prices. 

Near the conclusion of June there was a  6.3 month supply of homes to be sold.  That is down from the January high of 8.6 months. 

The indicators appear to show the state of the real estate market in Ocean County New Jersey is improving.  This is of course good news also for home owners who recently purchased. 

Keep in mind that the majority of American's gain wealth from home ownership.  

 

James "Jim" Joeriman
General Manager
Coldwell Banker Riviera Realty, Inc.
 
 
Source of data:  The Otteau Evaluation Group

 

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