Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Feb. 6, 2021

Reasons to Hire a Real Estate Professional [INFOGRAPHIC]

Reasons to Hire a Real Estate Professional [INFOGRAPHIC] | Keeping Current Matters

 

Some Highlights

  • Choosing the right real estate professional to work with is one of the most important decisions you can make in your homebuying or selling process.
  • The right agent can explain current market conditions and break down exactly what they mean for you.
  • If you’re considering buying or selling a home this year, make sure to work with someone who has the experience to answer all of your questions about pricing, contracts, negotiations, and more.

Source: Keeping Current Matters

Posted in Blog Posts
Feb. 6, 2021

Why Right Now May Be the Time to Sell Your House

Why Right Now May Be the Time to Sell Your House

 

The housing market made an incredible recovery in 2020 and is now positioned for an even stronger year in 2021. Record-low mortgage interest rates are a driving factor in this continued momentum, with average rates hovering at historic all-time lows.

According to the latest Realtors Confidence Index Survey from the National Association of Realtors (NAR), buyer demand across the country is incredibly strong. That’s not the case, however, on the supply side. Seller traffic is simply not keeping up. Here’s a breakdown by state:Why Right Now May Be the Time to Sell Your House | Keeping Current MattersAs the maps show, buyer traffic is high, but seller traffic is low. With so few homes for sale right now, record-low inventory is creating a mismatch between supply and demand.

NAR also just reported that the actual number of homes currently for sale stands at 1.28 million, down 22% from one year ago (1.64 million). Additionally, inventory is at an all-time low with 2.3 months supply available at the current sales pace. In a normal market, that number would be 6.0 months of inventory – significantly higher than it is today.

What does this mean for buyers and sellers?

Buyers need to remain patient in the search process. At the same time, they must be ready to act immediately once they find the right home since bidding wars are more common when so few houses are available for sale.

Sellers may not want to wait until spring to put their houses on the market, though. With such high buyer demand and such a low supply, now is the perfect time to sell a house on optimal terms.

Bottom Line

The real estate market is entering the year like a lion. There’s no indication it will lose that roar, assuming inventory continues to come to market.

 

Source: Keeping Current Matters

Posted in Blog Posts
Feb. 5, 2021

Should You Choose a Short Sale Over a Foreclosure?

The Pros and Cons of Allowing Your Lender to Lose Money on Your Home

 

Whether you should make a short sale or let a home go to foreclosure depends on several factors. While for some homeowners, it is easier to throw up their hands and let the bank take the home, that might not be the wisest thing to do. Regardless of which approach you choose, always obtain legal and tax advice before deciding.

Benefits of Both

The main advantage of a short sale is that you're in control of the sale, not the bank. Your home sale will be handled like any other home sale, and you may prefer being involved in the selling process and knowing who is buying your home. There is also a negative social stigma that comes along with a foreclosure. Many people find it embarrassing and want to avoid the process by any means. You can also be current on your payments and still apply for a short sale.1

The main advantage of foreclosure is it's an immediate solution and saves you money. If foreclosure is seemingly inevitable, you can just stop making payments and live in the home until you get kicked out. Once that happens, you can leave the home behind and simply walk away. If something happens to break or malfunction during that time, you don't have to fix it.

Buying Afterwards

Fannie Mae's guidelines allow you to reapply for a mortgage four years after a short sale with a 10% downpayment. If you sold your home as a short sale due to extenuating circumstances, you can reapply for a Fannie Mae-backed mortgage after two years with appropriate documentation of the circumstances. You may also qualify for an FHA loan one year after a short sale.

Bear in mind that Fannie Mae and FHA guidelines are not a guarantee you will be able to buy a home after suggested timeframes. Banks have the final say and often include overlays that can change the guidelines set forth by the government. Ask your loan officer to clarify before relying on federal guidelines.

 

If your foreclosure was due to extenuating circumstances, you may be eligible to buy another home in three years. Otherwise, the standard waiting period remains seven years. Similar to its short sale guidelines, FHA allows those who foreclosed on their homes to reapply for mortgages after 12 months.

Effect on Credit

A short sale may be considered to be a derogatory mark on your credit even though credit bureaus do not call them that on your credit report. Your credit report may read "settled for less than full balance," among other categories. Certain HAFA guidelines allow for "no hit to credit" and can show up as paid in full. Depending on your credit history, FICO offers two examples in which a credit score could fall significantly after a foreclosure. Generally, a foreclosure remains on your credit report for seven years.2

Deficiency Judgments

Judgments are often negotiated between the seller and the short sale lender. In some states, such as California, if the home is your personal residence and was financed through purchase money, there is no deficiency judgment. Banks are generally unwilling to negotiate deficiency judgments with the homeowner after a foreclosure.3

Loan Application Questions

Loan applications typically do not require you to include information about short sales. You are, however, required to note if you've ever had a property foreclosed or given a deed-in-lieu thereof in the past seven years. If the lender sees you have had a foreclosure, your loan may be denied.4

Length of Time to Relocate

If you've had a foreclosure notice filed, you may be able to postpone that action while the bank considers a short sale. The wait for short sale approval can take a few months. In a foreclosure, unless prior arrangements have been made, the lender may want you to vacate the property immediately and may commence eviction proceedings if you delay.

Taxation Concerns

 

A personal residence is exempt from mortgage debt relief on a federal level as long as the government continues to extend this exemption, but some states still tax you. An investor is also not exempt from mortgage debt relief, subject to certain conditions. For owners who foreclose on their homes, some lenders immediately send out 1099s, which reports the amount of relief as compensation to the owner, even if the owner is exempt.

 

Source: The Balance

Posted in Blog Posts
Feb. 5, 2021

What Is a Short Sale?

Maybe someone has told you to steer clear of short sales, or maybe you’ve heard they’re a great deal!

No matter what you’ve heard, the bottom line is this: Buying a short sale home is a complicated process. In fact, very few short sales are completed within 30 days. Knowing whether or not it’s worth all the extra effort depends on your specific situation.

Before you jump on a house with a "too good to be true" price, you need to understand how the short sale process works and connect with your real estate agent for more details.

What Is a Short Sale?

A short sale is the sale of a real estate property for which the lender is willing to accept less than the amount still owed on the mortgage.

For a sale to be considered a short sale, these two things must be true:

    1. The homeowner must be so far behind on payments that they can’t catch up.
    2. The housing market must have gone down so much that the house is worth less than the remaining balance on the mortgage.

 

In most cases, the lender (and the homeowner) will try a short sale process in order to avoid foreclosure.

Overall, there are a lot of misunderstandings around short sales. But one common misconception is that lenders just want to be rid of the property and will move quickly to get as much money back as possible.

In reality, the lender will take their time to recover as much of their loss as they can. Here’s the thing: Just because a property is listed as a short sale does not mean the lender has to accept your offer, even if the seller accepts it.

This is what makes the short sale process so tricky.

Short Sale vs. Foreclosure

Neither a short sale nor a foreclosure is an easy way out for sellers who want to be rid of their home mortgage.

Short Sale

In a short sale, the homeowner initiates the sale of their house. For a short sale to take place, the home must be worth less than the amount the homeowners owe, and they must be so behind on their mortgage payments that they don’t think they can catch up.

Potential buyers will deal with the home sellers during the short sale process, but all of the details around the process must be reviewed and approved by the lender. The short sale cannot happen unless the lender approves it.

Because everything is dependent on the lender, the short sale process can be lengthy and unpredictable—even if the homeowner and the potential buyer agree on terms.

Foreclosure

On the other hand, in a foreclosure situation, the bank takes ownership of the home after the buyer is unable to make payments. This process is initiated by the lender. The lender will force the sale of the home in order to try to recover as close to the original loan amount as possible.

Most foreclosed homes have already been abandoned, but if the homeowners are still living in the house, the lender will evict them during the foreclosure process. The lender will then attempt to sell the property either through an auction or through a real estate agent.

The foreclosure process typically takes less time than a short sale because the lender is trying to liquidate the home as quickly as possible.

Which Is Better?

For homeowners, a short sale is typically preferable to a foreclosure for two reasons. First, a short sale is voluntary (while a foreclosure is forced). Secondly, after a foreclosure, most people are required to wait a standard seven years before obtaining another mortgage loan (while a short sale may cause you to wait for at least two years).(1)

Most lenders would prefer a short sale to a foreclosure process because it allows them to recoup as much of the original loan as possible without a costly legal process. In fact, in most cases a homeowner and lender will only pursue a foreclosure after an attempt to sell the home through a short sale process.

How Does a Short Sale Work?

If you’re wondering what the standard steps are that typically happen as part of the short sale process, look no further.

Step 1: The homeowner starts by talking to their lender and a real estate agent about the likelihood of selling their house via short sale. At this point, they may submit a short sale package to their lender. They’ll also have to prove to their lender that they’re no long capable of making their mortgage payments and have no assets that would allow them to catch up on payments.

Step 2: The homeowner works with a real estate agent to list the property. They’ll execute a sales contract for the purchase of the property once a buyer is interested. However, this contract is subject to the lender’s approval and is not final until then—even if both the seller and the buyer agree on the terms.

Step 3: The lender reviews the contract and could then respond in a variety of ways. They could choose not to respond at all, they could reject the offer, they could reject the offer but outline which terms they would agree to, or they just might approve the offer.

Step 4: When the lender’s response is presented to the potential buyer, the contract will either stay the same or the buyer will choose to appease or reject the lender’s terms. So, at this point, the ball is in the buyer’s court!

Step 5: If the contract is approved, the short sale property closes and the home is transferred to the new buyer. The lender receives all proceeds from the sale of the property and releases the original homeowner from their mortgage loan—even though the full mortgage balance was not paid off by the proceeds.

Why Lenders Do Short Sales

The only reason a lender would want to go through a short sale process—and, therefore, accept a mortgage payoff amount that’s less than the balance owed—is because they believe it’s their best chance to recoup as much of the mortgage loan balance as possible.

Because of that reason, a lender will not consider a short sale if:

    • The loan is current. If the homeowner is making regular payments, the lender has no reason to think they can’t continue making them. (That’s a no-brainer!) Usually, the homeowner must be issued a notice of default in order for the lender to even consider a short sale request.

 

  • The homeowner declares bankruptcy. Negotiating a short sale is considered a collection activity, which is not allowed in bankruptcy.

The only benefit to the lender is that a short sale is faster and less expensive for them than a foreclosure. Once it’s clear a foreclosure is going to be unavoidable, a lender is more likely to approve a short sale request.

Why Homeowners Do Short Sales

If a homeowner is considering a short sale, things have gotten bad. For them, a short sale means losing their home without a profit. Plus, they also have to endure the emotional stress of convincing the lender to allow them to do it. Selling a house through the short sale process is never ideal; the only reason a homeowner would want to do it is to avoid foreclosure.

Throughout the process, the homeowner’s focus is convincing the lender that a short sale is the best option. The homeowner must:

    • Prove they won’t be able to bring the mortgage current and that they have no assets—cash, savings, cars, etc.—that can be used to catch up on payments.

 

    • Confirm the local housing market value has gone down so low that the home won’t sell for enough to pay off the current balance of the mortgage.

 

    • Provide most lenders a signed contract with a buyer to consider a short sale.

 

  • Make sure the short sale agreement includes a waiver of the lender’s right to pursue the homeowner for the remaining balance of the loan.

In order for a short sale to take place, both the lender and the homeowner have to be willing to sell the house at a loss. The homeowner will make no profit, and the lender will actually lose money for selling the house for less than the amount owed.

A short sale is not a do-it-yourself deal. A real estate agent who’s experienced in short sales is absolutely essential.

 

Source: Dave Ramsey

Find a Short Sale Expert!

Before you consider buying a short sale home, you need to talk to a real estate agent who has experience with the short sale process.

Posted in Blog Posts
Jan. 27, 2021

Is This the Year to Sell My House?

If one of the questions you’re asking yourself is, “Should I sell my house this year?” consumer sentiment about selling today should boost your confidence in the right direction. Even with the current health crisis that continues to challenge our nation, Americans still feel good about selling a house. Here’s why.

According to the latest Home Purchase Sentiment Index from Fannie Mae, 57% of consumer respondents to their survey indicate now is a good time to buy a home, while 59% feel it’s a good time to sell one:

“The percentage of respondents who say it is a good time to sell a home remained the same at 59%, while the percentage who say it’s a bad time to sell decreased from 35% to 33%. As a result, the net share of those who say it is a good time to sell increased 2 percentage points month over month.”

As you can see, many still believe that, despite everything going on in the world, it is still a good time to sell a house.

Why is now a good time to sell?

There simply are not enough homes available to meet today’s buyer demand, and they’re selling just as quickly as they’re coming to the market. According to the National Association of Realtors (NAR), unsold inventory available today sits at a 2.3-month supply at the current sales pace, which is down from a 2.5-month supply from the previous month. This record-low inventory is not even half of what we need for a normal or neutral housing market, which should have a 6.0-month supply of unsold inventory to balance out.

With so few homes available for buyers to choose from, we’re in a true sellers’ market. Homeowners ready to make a move right now have the opportunity to negotiate the best possible contracts with buyers who are feeling the pull of intense competition when it comes to finding their dream home. Lawrence Yun, Chief Economist for NAR, notes how quickly homes are selling right now, further confirming the benefits to sellers this season:

“The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates.”

However, this sweet spot for sellers won’t last forever. As more homes are listed this year, this tip toward sellers may start to wane. According to Danielle Hale, Chief Economist at realtor.commore choices for buyers are on the not-too-distant horizon:

“The bright spot for buyers is that more homes are likely to become available in the last six months of 2021. That should give folks more options to choose from and take away some of their urgency. With a larger selection, buyers may not be forced to make a decision in mere hours and will have more time to make up their minds.”

Bottom Line

If you’re ready to make a move, you can feel good about the current sentiment in the market and the advantageous conditions for today’s sellers. Contact a local real estate professional today to determine the best next step when it comes to selling your house this year.

 

Source: https://www.keepingcurrentmatters.com/2021/01/07/is-this-the-year-to-sell-my-house/

Posted in Blog Posts
Jan. 27, 2021

Owning a Home Is Still More Affordable Than Renting One

Owning a Home Is Still More Affordable Than Renting One

If spending more time at home over the past year is making you really think hard about buying a home instead of renting one, you’re not alone. You may be wondering, however, if the dollars and cents add up in your favor as home prices continue to rise. According to the experts, in many cases, it’s still more affordable to buy a home than rent one. Here’s why.

ATTOM Data Solutions recently released the 2021 Rental Affordability Report, which states:

Owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed for the report.

That has happened even though median home prices have increased more than average rents over the past year in 83 percent of those counties and have risen more than wages in almost two-thirds of the nation.”

How is this possible?

The answer: historically low mortgage interest rates. Todd Teta, Chief Product Officer with ATTOM Data Solutions, explains:

“Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check.

In 2020, mortgage rates reached all-time lows 16 times, and so far, they’re continuing to hover in low territory this year. These low rates are a big factor in driving affordability. Teta also notes:

“It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the Coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”

Bottom Line

If you’re considering buying a home this year, contact a local real estate professional today to learn more about the options that match your budget while affordability is in your favor.

 

Source: Keeping Current Matters

Posted in Blog Posts
July 31, 2017

Curious About Local Real Estate?

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

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You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates