Pop Quiz: Can You Define These Key Terms in Today’s Housing Market? [INFOGRAPHIC]

Pop Quiz: Can You Define These Key Terms in Today’s Housing Market? [INFOGRAPHIC] | MyKCM

Some Highlights

  • The language of buying and selling a home may sound scary at first, but knowing how key terms relate to today’s market can help you. For example, current low mortgage rates and higher wages positively impact affordability for buyers, while home price appreciation continues to grow home equity, which sellers can use to fuel a move up.
  • Terms like appraisal (what lenders rely on to validate a home’s value) and contingencies (which buyers can minimize to make their offer stand out) directly impact the transaction.
  • You don’t need to be fluent in the language of the market to buy or sell. Instead, let’s connect today so that we can translate the process together.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too?

Over the past year, many homeowners realized what they need in a home is changing, especially with the rise in remote work. If you’re longing for a dedicated home office or a change in scenery, now may be the time to find the home that addresses your evolving needs.

Working from Home Isn’t a Passing Fad

Before the pandemic, only 21% of individuals worked from home. However, if you’ve recently discovered remote work is your new normal, you’re not alone.

survey of hiring managers conducted by Statista and Upwork projects 37.5% of U.S. workers will work remotely in some capacity over the next 5 years (see chart below):Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too? | MyKCM

Working from Home Gives You More Flexibility and More Options

If you fall in that category, working from home may provide you with opportunities you didn’t realize you had. The ongoing rise in remote work means a portion of the workforce no longer needs to be tied to a specific area for their job. Instead, it gives those workers more flexibility when it comes to where they can live.

If you’re one of the nearly 23% of workers who will remain 100% remote, you have the option to move to a lower cost-of-living area or to the location of your dreams. If you search for a home in a more affordable area, you’ll be able to get more house for your money, freeing up more options for your dedicated office space and more breathing room. You could also move to an area you’ve always dreamed of vacationing in – somewhere near the beach, the mountains, or simply an area that features better weather and community amenities. Without your job tying you to a specific location, you’re bound to find your ideal spot.

If you’re one of the almost 15% of individuals who will have a partially remote or hybrid schedule, relocating within your local area to a home that’s further away from your office could be a great choice. Since you won’t be going into work every day, a slightly longer commute from a more suburban or rural area could be a worthy trade-off for a home with more features, space, or comforts. After all, if you’ll still be at home part-time, why not find a home that better suits your needs?

According to the latest Top Ten Issues Affecting Real Estate from The Counselors of Real Estate (CRE), many homebuyers are already taking advantage of their newfound flexibility:

“. . . after years of apparent but variant trends towards urbanization, the pandemic universally caused a movement away from urban cores, particularly for those with higher incomes who could afford to move and for lower-income individuals seeking lower costs of living.”

Bottom Line

If you’ve found what you’re looking for in a home has changed due to remote work, it may be time to make a move. Let’s connect today to start prioritizing your home needs.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

What You Should Do Before Interest Rates Rise

In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average. Here are some options you should consider if you want to take advantage of today’s current low rates before they rise.

Sell and Move Up (or Downsize)

Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.

The chart below shows average mortgage rates by decade compared to where they are today:What You Should Do Before Interest Rates Rise | MyKCMToday’s rates are below 3%, but experts forecast rates to rise over the next few years.

If the interest rate on your current mortgage is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. Lower rates mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.

Waiting, however, might mean you miss out on this historic opportunity. Below is a chart showing how your monthly payment will change if you buy a home as mortgage rates increase:What You Should Do Before Interest Rates Rise | MyKCM

Breaking It All Down:

Using the chart above, let’s look at the breakdown of a $300,000 mortgage:

  • When mortgage rates rise, so does the monthly payment you can secure.
  • Even the smallest increase in rates can make a difference in your monthly mortgage payment.
  • As interest rates rise, you’ll need to look at a lower-priced home to try and keep the same target monthly payment, meaning you may end up with less home for your money.

No matter what, whether you’re looking to make a move up or downsize to a home that better suits your needs, now is the time. Even a small change in interest rates can have a big impact on your purchasing power.

Refinance

If making a move right now still doesn’t feel right for you, consider refinancing. With the current low mortgage rates, refinancing is a great option if you’re looking to lower your monthly payments and stay in your current home.

Bottom Line

Take advantage of today’s low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect today to discuss which option is best for you.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Diving Deep into Today’s Biggest Buyer Concerns

Last week, Fannie Mae released their Home Purchase Sentiment Index (HPSI). Though the survey showed 77% of respondents believe it’s a “good time to sell,” it also confirms what many are sensing: an increasing number of Americans believe it’s a “bad time to buy” a home. The percentage of those surveyed saying it’s a “bad time to buy” hit 64%, up from 56% last month and 38% last July.

The latest HPSI explains:

“Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and home-selling conditions. While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners. It’s likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments.”

Let’s look closely at the market conditions that impact home affordability.

A mortgage payment is determined by the price of the home and the mortgage rate on the loan used to purchase it. Lately, monthly mortgage payments have gone up for buyers for two key reasons:

  1. Mortgage rates have increased from 2.65% this past January to 2.9%.
  2. Home prices have increased by 15.4% over the last 12 months.

Based on these rising factors, a home may be less affordable today, but it doesn’t mean it’s not affordable.

Three weeks ago, ATTOM Data released their second-quarter 2021 U.S. Home Affordability Report which explained that the major ownership costs on the typical home as a percent of the average national wage had increased from 22.2% in the second quarter of 2020 to 25.2% in the second quarter of this year. They also went on to explain:

“Still, the latest level is within the 28 percent standard lenders prefer for how much homeowners should spend on mortgage payments, home insurance and property taxes.

In the same report, Todd Teta, Chief Product Officer with ATTOM, confirms:

Average workers across the country can still manage the major expenses of owning a home, based on lender standards.”

It’s true that monthly mortgage payments are greater than they were last year (as the ATTOM data shows), but they’re not unaffordable when compared to the last 30 years. While payments have increased dramatically during that several-decade span, if we adjust for inflation, today’s mortgage payments are 10.7% lower than they were in 1990.

What’s that mean for you? While you may not get the homebuying deal someone you know got last year, that doesn’t mean you shouldn’t still buy a home. Here are your alternatives to buying and the trade-offs you’ll have with each.

Alternative 1: I’ll rent instead.

Some may consider renting as the better option. However, the monthly cost of renting a home is skyrocketing. According to the July National Rent Report from Apartment List:

“…So far in 2021, rental prices have grown a staggering 9.2%. To put that in context, in previous years growth from January to June is usually just 2 to 3%. After this month’s spike, rents have been pushed well above our expectations of where they would have been had the pandemic not disrupted the market.”

If you continue to rent, chances are your rent will keep increasing at a fast pace. That means you could end up spending significantly more of your income on your rental as time goes on, which could make it even harder to save for a home.

Alternative 2: I’ll wait it out.

Others may consider waiting for another year and hoping that purchasing a home will be less expensive then. Let’s look at that possibility.

We’ve already established that a monthly mortgage payment is determined by the price of the home and the mortgage rate. A lower monthly payment would require one of those two elements to decrease over the next year. However, experts are forecasting the exact opposite:

  • The Mortgage Bankers Association (MBA) projects mortgage rates will be at 4.2% by the end of next year.
  • The Home Price Expectation Survey (HPES), a survey of over 100 economists, investment strategists, and housing market analysts, calls for home prices to increase by 5.12% in 2022.

Based on these projections, let’s see the possible impact on a monthly mortgage payment:Diving Deep into Today’s Biggest Buyer Concerns | MyKCMBy waiting until next year, you’d potentially pay more for the home, need a larger down payment, pay a higher mortgage rate, and pay an additional $3,696 each year over the life of the mortgage.

Bottom Line

While you may have missed the absolute best time to buy a home, waiting any longer may not make sense. Mark Fleming, Chief Economist at First Americansays it best:

“Affordability is likely to worsen before it improves, so try to buy it now, if you can find it.”

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Housing Supply Is Rising. What Does That Mean for You?

An important factor in today’s market is the number of homes for sale. While inventory levels continue to sit near historic lows, there are indications we may have hit the lowest point we’ll see. Odeta Kushi, Deputy Chief Economist at First American, recently said of our supply challenges:

It looks like inventory may have hit a bottom (we’ve seen this in the higher frequency data as well). Unsold inventory in May was at 2.5 months supply, up from 2.4.

To put it into perspective, the graph below shows levels of inventory rising since the beginning of the year:Housing Supply Is Rising. What Does That Mean for You? | MyKCMWe’re still not close to a balanced market, which would be a 6 months’ supply of homes for sale. However, we are seeing a slow but steady increase in homes coming up for sale. And that leaves many buyers and sellers wondering the same thing: what does that mean for me?

Buyers: More Options Are Arriving, so It’s Time To Act

If you’re a buyer, more inventory coming to market is a welcome sight. More supply means more options and less competition, which could mean fewer bidding wars.

According to the latest Monthly Housing Market Trends Report, supply levels are continuing to increase, which is different from the typical summer market:

“In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.

If you’re having trouble finding your next home, this news should give you the hope and motivation to keep your buying process moving forward. Experts project mortgage rates will begin increasing, which will make purchasing a home less affordable as time passes. You can still capitalize on today’s low interest rates, so stick with your search as more homes come to market.

Sellers: Our Supply Challenges Aren’t Over Yet, so Now Is the Time To Sell

If you’ve been putting off selling your house, you shouldn’t wait much longer. The year’s month-over-month gains in homes for sale have helped buyers, but we’re still very much in a sellers’ market.

As the graph below shows, even with the number of homes for sale rising, we’re still well below the supply levels we’ve seen historically:Housing Supply Is Rising. What Does That Mean for You? | MyKCMOf course, more homes are coming to market now, and more are expected in the coming months. Selling your house this summer gives you the chance to get ahead of the competition and maximize your sales potential before more homes are put up for sale in your neighborhood.

Bottom Line

More homes for sale means more options for buyers and more competition for sellers. Whether you’re looking to buy or sell, let’s connect today to discuss your options and why it’s still a good time to make your move.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Why This Isn’t Your Typical Summer Housing Market

In real estate, it’s normal to see ebbs and flows in the market. Typically, the summer months are slower-paced than the traditionally busy spring. But this isn’t a typical summer. As the economy rebounds and life is returning to normal, the real estate market is expected to have an unusually strong summer season.

Here’s how this summer is stacking up against the norm and what it means for you.Why This Isn’t Your Typical Summer Housing Market | MyKCM

Inventory is increasing.

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), inventory levels have been rising since February of this year. Looking at the graph below, there’s a clear upward trend, as shown in the green bars. Currently, there’s roughly a 2.5 months’ supply of homes for sale. And while inventory is trending up as more houses are coming to the market, it’s still much lower than several of the previous summers, as the orange bars indicate.Why This Isn’t Your Typical Summer Housing Market | MyKCMIf you’re looking to buy, some relief is on the way in the form of more homes coming to the market. Just remember, we still have less inventory than the norm, so be patient in your search.

If you’re thinking of selling, now is the time. Work with your agent to list your house before it has more competition on the market.

Time on the market is still shorter than normal.

Unlike the typical summer trend, time on the market is moving at the fastest speed we’ve seen since NAR started collecting this survey-based information in 2011. The most recent Realtors Confidence Index shows that the average home is on the market for just 17 days, as shown in green in the graph below. This means houses are selling at a much faster pace than a typical summer, which the orange bars represent.Why This Isn’t Your Typical Summer Housing Market | MyKCMIf you’re looking to buy, this means you need to be prepared to move fast. Brace for a quick pace and rely on your agent to stay in the know on the available homes in your area.

If you’re thinking of selling, data shows your house will likely sell quickly. If you’re worried about where you’ll go once your house sells, consider a newly built home as a good way to move up.

Price appreciation is still rising.

The last big factor making this an unusually strong market this summer is home price appreciation. According to the State House Price Index from the Federal Housing Finance Agency (FHFA), we’re currently experiencing double-digit house price appreciation and have an average of 12.6% appreciation across the country. The graph below uses data from NAR to show a more granular view of how prices have changed month-to-month over the past few years. The green bars show the current price appreciation we’re experiencing today. Our current levels are well above what we’ve seen in recent summers, shown by the orange bars.Why This Isn’t Your Typical Summer Housing Market | MyKCMIf you’re looking to buy, competition and bidding wars are driving prices up. Getting pre-approved can show the seller you’re serious and help you know what you can afford. Once you do, work with your agent to make a strong offer that stands out.

If you’re thinking of selling, seize this opportunity to use your additional equity from this price appreciation to power your next move.

Bottom Line

This isn’t a typical summer. Whether you’re buying or selling, let’s connect to talk about how you can capitalize on today’s market conditions to sell your house or find your dream home.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Selling Your House? Make Sure You Price It Right.

There’s no denying we’re in a sellers’ market. With low inventory and high buyer demand, homes today are selling above the asking price at a record rate. According to the latest Realtors Confidence Index Survey from the National Association of Realtors (NAR):

  • Homes typically sell within 17 days (compared to 26 days one year ago).
  • The average home sold has five offers to pick from.
  • 54% of offers are over the asking price.

Because so many buyers are competing for so few homes, bidding wars are driving up home prices. According to an average of leading expert projections, existing home prices are expected to increase by 8.9% this year.

Yet even in today’s red-hot sellers’ market, it’s important to price your house right. While it may be tempting to price your house on the high side to capitalize on this trend, doing so could limit your house’s potential.

Why Pricing Your House Right Matters

Here’s the thing – a high price tag doesn’t mean you’re going to cash in big on the sale. While you may be trying to maximize your return, the tradeoff may be steep. A high list price is more likely to deter buyers, sit on the market longer, or require a price drop that can raise questions among prospective buyers.

Instead, focus on setting a price that’s fair. Real estate professionals know the value of your home. By pricing your house based on its current condition and similar homes that have recently sold in your area, your agent can help you set a price that’s realistic and obtainable – and that’s good news for you and for buyers.Selling Your House? Make Sure You Price It Right. | MyKCMWhen you price your house right, you increase your home’s visibility, which drives more buyers to your front door. The more buyers that tour your home, the more likely you’ll have a multi-offer scenario to create a bidding war. When multiple buyers compete for your house, that sets you up for a bigger win.

Bottom Line

When it comes to pricing your house, working with a local real estate professional is essential. Let’s connect so we can optimize your exposure, your timeline, and the return on your investment, too.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

The Truths Young Homebuyers Need To Hear

For many young or first-time homebuyers, purchasing a home can feel intimidating. A recent survey shows some homebuyers ages 25 to 40 may be unsure about the homebuying process and what they can afford. It found:

  • “1 in 4 underestimated their buying potential by $150k or more”
  • “1 in 4 underestimated the increase in value by $100k or more”
  • “47% don’t know what a good interest rate is”

Because they feel uncertain, many young homebuyers have given up on their search, or worse, they’ve decided homebuying isn’t for them and never started on their journey to begin with.

If you’re interested in buying but aren’t sure where to begin, here are three key concepts about homeownership you should understand before you get started.

1. What You Need To Know About Down Payments

Saving for a down payment is sometimes viewed as one of the biggest obstacles for homebuyers, but that doesn’t have to be the case. As Freddie Mac says:

The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

According to the most recent Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. That number is even lower when we control for age – for buyers in the 22 to 30 age range, the median down payment was only 6%.

2. You May Be Able To Afford More Home Than You Think

Working remotely, exercising, and generally spending more time than ever in our homes has changed what many people are looking for in their living space. However, some young homebuyers don’t feel they can afford a home that suits their growing needs and have decided to continue renting instead. That means they’ll miss out on some of the long-term benefits of owning a home. As an article recently published by NAR points out:

“Many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years…”

Knowing how much home you can afford when starting the buying process is critical and could be the game-changer that gets you from renting to buying.

3. Homeownership Will Become Less Affordable the Longer You Wait

Finally, with mortgage rates starting to rise along with home prices appreciating, putting off buying a home now could cost you much more later. Sam Khater, Chief Economist at Freddie Mac, notes:

As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”

Most experts forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying powerIf you’ve been on the fence about buying a home, there’s no time like the present.

Bottom Line

If you feel overwhelmed by the prospect of starting your home search, you’re not alone. Let’s connect today so we can talk more about the process, what you’ll need to start your search, and what to expect.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

A Look at Home Price Appreciation Through 2025

Home prices have increased significantly over the last year, which in turn has grown the net worth of homeowners. Appreciation and home equity are directly linked – as the value of a home increases, so does a homeowner’s equity. And with these recent gains, homeowners are witnessing their financial stability and well-being grow to record levels.

In more good news for homeowners, the most recent Home Price Expectations Survey – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists – forecasts home prices will continue appreciating over the next five years, adding to the record amount of equity homeowners have already gained over the past year. Below are the expected year-over-year rates of home price appreciation from the report:A Look at Home Price Appreciation Through 2025 | MyKCM

What Does This Mean for Homeowners?

Home prices are climbing today, and the data in the survey indicates they’ll continue to increase, but at rates that approach a more normal pace. Even still, the amount of household wealth a homeowner stands to earn going forward is substantial. This truly becomes clear when we consider a scenario using a median-priced home purchased in January of 2021 and the projected rate of appreciation on that home over the next five years. As the graph below illustrates, a homeowner could increase their net worth by a significant amount – over $93,000 dollars by 2026.A Look at Home Price Appreciation Through 2025 | MyKCM

Home Price Appreciation and Home Equity

CoreLogic recently released their quarterly Homeowner Equity Insights Report, which tracks the year-over-year increases in equity. It shows an average annual gain of $33,400 per borrower over the past 12 months. In the report, Dr. Frank Nothaft, Chief Economist for CoreLogic, further explains:

Double-digit home price growth in the past year has bolstered home equity to a record amount. The national CoreLogic Home Price Index recorded an 11.4% rise in the year through March 2021, leading to a $216,000 increase in the average amount of equity held by homeowners with a mortgage.”

The expected, sustained growth of home prices means homeowners can continue to build on the past year’s record levels of home equity – and their financial prosperity. It also presents today’s homeowners with a unique opportunity: using their growing equity for a home upgrade. With so few homes available to purchase and strong buyer demand, there may not be a better time to sell your current house and move into one that better meets your needs.

Bottom Line

Home prices are expected to continue appreciating over the next five years, and the associated equity gains are the quickest way homeowners can build household wealth. If you’re a current homeowner who’s ready to take advantage of your built-up equity, let’s connect today to discuss your options.


(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Are We in a Housing Bubble? Experts Say No.

The question of whether the real estate market is a bubble ready to pop seems to be dominating a lot of conversations – and everyone has an opinion. Yet, when it comes down to it, the opinions that carry the most weight are the ones based on experience and expertise.

Here are four expert opinions from professionals and organizations that have devoted their careers to giving great advice to the housing industry.

The Joint Center for Housing Studies in their The State of the Nation’s Housing 2021 report:

“… conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in house prices instead reflects strong demand amid tight supply, helped along by record-low interest rates.”

Nathaniel Karp, Chief U.S. Economist at BBVA:

“The housing market is in line with fundamentals as interest rates are attractive and incomes are high due to fiscal stimulus, making debt servicing relatively affordable and allowing buyers to qualify for larger mortgages. Underwriting standards are still strong, so there is little risk of a bubble developing.”

Bill McBride of Calculated Risk:

“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while, because Millennials need houses. Prices will keep rising for a while, because inventory is so low.”

Mark Fleming, Chief Economist at First American:

Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally…

Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”

Bottom Line

All four strongly believe that we’re not in a bubble and won’t see crashing home values as we did in 2008. And they’re not alone – Goldman Sachs, JP Morgan, Morgan Stanley, and Merrill Lynch share the same opinion.

 

(818) 581-7518

Alex@TrevinoProperties.com

CalBre # 01324975

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Trevino Properties does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Trevino Properties will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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