Rate hikes plus record low unemployment begs the question: How’s the Real Estate Market?

moscow id real estate market

While no one can predict the future with certainty, most experts expect to see modest growth in the U.S. housing market for the remainder of this year and next. Inventory will remain tight, mortgage rates will continue to creep up, and affordability will remain a major issue in many parts of the country.

So what does that mean for home buyers and sellers? To answer that question, we take a closer look at some of the top indicators.

 

CONTINUED GROWTH IN HOUSING MARKETmoscow id real state
There’s good news for homebuyers! In many markets across the country, prices have begun to stabilize after a period of rapid appreciation. Nationwide, home sales experienced a slight decline of 1.6 percent in the second quarter, primarily due to higher mortgage rates and housing prices combined with limited inventory.

However, buyers who have been waiting on the sidelines in anticipation of a big price drop may be disappointed. Demand remains strong across the sector and prices continue to rise. The Case-Shiller U.S. National Home Price Index reported a 6.2 percent annual gain in June, a healthy but sustainable rate of appreciation.1

In its latest Outlook Report, Freddie Mac forecasts continued growth in the housing market due to a strong economy and low unemployment rate, which dropped to 3.9 percent in July.

 “The housing market hit some speed bumps this summer, with many prospective homebuyers slowed by not enough moderately-priced homes for sale and higher home prices and mortgage rates,” according to Sam Khater, Chief Economist at Freddie Mac. “The good news is, the economy and labor market are very healthy right now, and mortgage rates, after surging earlier this year, have stabilized in recent months. These factors should continue to create solid buyer demand, and ultimately an uptick in sales, in most parts of the country in the months ahead.”3

 

INVENTORY TO REMAIN TIGHT, NEW CONSTRUCTION MAY HELP
Experts predict that demand for housing will continue to outpace available supply, especially in the entry-level price range.moscow id real estate

“Today, even as mortgage rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory accompanying unsustainable home-price increase,” said National Association of Realtors (NAR) Chief Economist Lawrence Yun in a recent release.

“The answer is to encourage builders to increase supply, and there is a good probability for solid home sales growth once the supply issue is addressed,” said Yun. Additional inventory will also help contain rapid home price growth and open up the market to prospective homebuyers who are consequently—and increasingly—being priced out. In the end, slower price growth is healthier price growth.”4

 With so much demand, why aren’t more builders bringing inventory to the market? According to the National Association of Home Builders, a crackdown on immigration and tariffs on imported lumber have made home construction more difficult and expensive. Those factors—combined with the rising cost of land and increased zoning requirements—have put a damper on the industry overall.5

Still, there’s evidence that a modest rise in the rate of new building projects may be on the way. Freddie Mac predicts new housing construction will increase slightly after a stall last quarter.2 And a recent report by Freedonia Focus Reports forecasts an annual increase in housing starts of 2.4 percent through 2022, led by an uptick in single-family homes.6 The boost in inventory should help drive sales growth and relieve some of the pent-up demand in tight markets.

While the current lack of inventory is generally preferred by sellers because it means less competition, a combination of high prices and rising interest rates has narrowed the pool of potential buyers who can afford to enter the market. Sellers should seek out real estate agents who utilize technologically-advanced marketing tactics to reach qualified buyers in their area.

 

AFFORDABILITY REACHES LOWEST LEVEL IN A DECADE
According to a recent report by Morgan Stanley, Americans are paying the most in monthly mortgage payments relative to their incomes since 2008.7 And prices aren’t expected to come down any time soon.PublicDomainPictures broken-piggy-bank-1472485404YoO

“We believe that the current supply and demand environment will continue to push home prices higher, just at a decelerating pace,” said John Egan, Morgan Stanley’s Co-Head of U.S. Housing Strategy.

Fortunately, economists aren’t concerned about affordability levels triggering another housing crisis, as lending standards are much higher today than they were during the run-up before the recession. According to credit reporting agency TransUnion, the share of homeowners who made mortgage payments more than 60-days past due fell in the second quarter to 1.7 percent, the lowest level since the market crash.7

NAR Chief Economist Lawrence Yun agreed with this assessment in a recent statement. “Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher than normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession.”4

 

 MORTGAGE RATES EXPECTED TO CONTINUE RISING
The Federal Reserve has taken measures to help keep the housing market—and the overall economy—from overheating. It has raised interest rates twice this year so far, causing mortgage rates to surge in the first half of the year.

Economists predict that the rise in mortgage rates will continue at a more gradual rate through this year and next. The U.S. weekly average mortgage rate rose from 3.99 percent in the first week of January to as high as 4.66 percent in May. Freddy Mac forecasts an average rate of 4.6 percent for 2018 and 5.1 percent in 2019.2

Moscow Idaho real estate Financial Graph, upThe good news is, mortgage rates still remain near historic lows and a whopping 14 points below the recorded high of 18.63 percent in the early 1980s.8 Buyers who have been on the fence may want to act soon to lock in an affordable interest rate … before rates climb higher.

 “Some consumers may be thinking that because mortgage rates are higher than they were a year ago, maybe I should just wait until rates fall down again,” said NAR’s Chief Economist Lawrence Yun in a recent speech. “Well, they will be waiting forever.”9

 

 WHAT DOES IT ALL MEAN FOR ME?
If you’ve been waiting to buy a home, you may want to act now. A shortage of available homes on the market means prices are likely to keep going up. And a lack of affordable rental inventory means rents are expected to rise, as well.

If you buy now, you will benefit from appreciating property values while locking in an historically-low interest rate on your mortgage. Waiting to buy could mean paying more for your home as prices increase and paying higher interest on your mortgage as rates continue to rise.

And if you’re in the market to sell your home, there’s no need to wait any longer. Prices have begun to stabilize, and rising interest rates could decrease the number of available buyers for your home. Act now to take advantage of this strong seller’s market.

 

LET’S GET MOVING
While national real estate numbers and predictions can provide a “big picture” outlook, real estate is local. As local market experts, I can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood.

If you have specific questions or would like more information about where I see real estate headed in our area, let me know! I’m here to help you navigate this changing real estate landscape.

 

Sources:

  1. S&P Dow Jones Indices Press Release –
    https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/766551_cshomeprice-release-0828.pdf?force_download=true
  2. Freddie Mac Outlook Report –
    http://www.freddiemac.com/research/forecast/20180827_strong_economic_growth.html
  3. DSNews –
    https://dsnews.com/daily-dose/08-28-2018/freddie-weighs-in-on-housing-market
  4. PR Newswire –
    https://www.prnewswire.com/news-releases/realtors-chief-economist-reflects-on-past-recession-whats-ahead-for-housing-300702632.html
  5. CNN Money –
    https://www.keyt.com/lifestyle/where-is-the-us-housing-market-headed-4-things-you-need-to-know/787471572
  6. PR Newswire –
    https://www.prnewswire.com/news-releases/us-housing-starts-to-rise-2-4-yearly-to-2022–300711989.html
  7. Business Insider –
    https://www.businessinsider.com/housing-affordability-slowing-market-sales-2018-8
  8. Value Penguin –
    https://www.valuepenguin.com/mortgages/historical-mortgage-rates
  9. Times Free Press –
    https://www.timesfreepress.com/news/business/aroundregion/story/2018/aug/14/despite-prospects-higher-mortgage-rateshousin/476979/

Blog Logo, smaller

Moving scams & how to avoid them

https://www.flickr.com/photos/128359034@N07/17027321127Recently, there was a rise in the occurrence of moving scams commonly referred to as the “bait and switch” where movers get your belongings in their truck and then hold it hostage until you pay significantly more than the original amount agreed upon.

To be clear, federal law allows movers to raise the price a total of 10% more than the original contracted price as a buffer of under-estimating the amount to be moved. But, anything above 10% is not permitted.

I have a list of vetted movers who have clean records, so please call me to help out, but if you prefer not, below 3 useful resources that will help you navigate moving a little better….

Moving Apps that help:

  • Unpakt makes getting quotes from multiple movers a stream lined process. Users fill out one form and can pay for the love all on the app or website. The process allows you to add and remove items to see how each effects the bottom line price. They also offer reviews of the moving companies.
  • Wunderlist is an app designed to help organize the moving process, creating lists of things to do like accounts that need switching to new address or closing, items to donate or garage sale, top priorities upon moving in to the new home, etc.
  • MagicPlan can help with designing the layout of your furniture in each room which is handy for moving as well as a remodel plan.

Two Articles:

https://www.flickr.com/photos/museemccordmuseum/2860496396/in/photostream/

If only we had just enough belongings to fill a wagon instead of a big truck. 🙂

Today Show article addressing Moving Scams This article, while from 2009, is full of strategies to avoid being taken advantage of.

MovingScam.com is a site designed to help with being scammed as well as has a list of already vetted movers known to be reputable and not scam clients

UPDATED: Online Home Value Estimates Are NOT Appraisals

I recently discovered that as a real estate who is a REALTOR® I have access to articles that Buyers and Sellers may find useful in their goal to buy/sell a home.

Below is one I have to correct with Sellers when they tell me what they think their home is worth. When they tell me the number they think their home is worth, I ask, where did they get this number, and often, the main source is a third party listing site that tells them what their home could sell for, and then begins my mini lesson in why these numbers are not as reliable as they may think. This article explains it simply.

UPDATED: Online Home Value Estimates Are NOT Appraisals

House Investment moscow idaho real estate

243

This blog was originally published on June 29, 2017.  It has since been updated to reflect new data.

Consumers who are seriously in the home buying and home selling market should be mindful of a variety of competing home price estimators. Solely relying on just one price estimate is likely to skew the views of what a particular property will actually transact for. When it comes to online home value estimates, however, the number one caveat for consumers is that these estimates are not a substitute for formal appraisals, comparative market analyses, and the in-depth expertise of real estate professionals. Nonetheless, it is important to know the different sources of Automated Valuation Models or AVMs and home value estimates available online, so that members can help clients and potential clients understand these estimates in their proper context.

Where are these home value estimates coming from? The prevalence of technology can give anyone more access to a broad spectrum of information on the internet. In real estate, access to property details and values is easier due partly to low-cost immense computing power. AVMs spit out a price for a property based on computer algorithms and calculations that take different sets of property data and look for patterns and relationships between property value and the input data. There are websites that will have a home value estimate available by just searching an address, while others may provide an estimate only upon request.

The most popular sources of home value estimates online are those that use AVMs. These estimates have varying levels of accuracies and may not take into account the unique qualities of a home, a neighborhood, and local markets. The main sources of AVM estimates are:

 

  • Realtors Property Resource® (RPR®): RPR® has two home value estimates, their AVM estimate and the Realtors Valuation Model® (RVM®) estimate. The difference between the two is that RVM® uses the same data as the AVM plus Multiple Listing Service (MLS) Data. Both AVM and RVM® show the accuracy level of the estimate by giving estimate ranges and confidence scores. This resource is available for REALTORS® only and allows a significant amount of expert customization, making it a useful tool for members, especially when working with well-researched clients.
  • REALTOR.com®: Realtor.com® uses tax assessment records, recent sale prices of comparable properties, and other factors to estimate home values. This estimate is free and publicly available.
  • Redfin: Redfin is a web-based real estate brokerage that gives the Redfin estimate for the property, which is based on market, neighborhood, and home-specific data, including MLS data on recently sold homes. Redfin cites that their estimates for properties currently on the market are more accurate than estimates for off-market properties. This estimate is free and publicly available.
  • HouseCanary: HouseCanary has two main services: valuations and forecasting. Their estimates use property level data from public records and the MLS. Their accuracy will vary across markets depending on the availability of data. This estimate is available with subscription to their services.
  • Homes.com: Homes.com’s estimate mainly uses public records. They test and benchmark the accuracy of their estimates. This estimate is free and publicly available.
  • Zillow: Zillow has the Zestimate, which is their home value estimate for properties and is computed using public and user-submitted data. Their estimates have different accuracy levels depending on the data of the property and location. This estimate is free and publicly available.
  • Eppraisal.com: Eppraisal.com uses property records, home sales data, and local market data for their estimates. Their accuracy depends on the accuracy and completeness of public data. This estimate is free and publicly available.
  • Trulia: The estimate from Trulia is likely to be very similar to Zillow’s zestimate since it is part of the same Zillow Group. Having a separate Trulia price estimate is more a marketing gimmick to give the impression to consumers that there is more competition, though it is just the same company trying to establish a greater market power, hence the ability to extract a higher fee from real estate professionals.

There are also websites that provide home value estimates by request only or estimates using user inputs: ForSaleByOwner.com, GuaranteedSale.com, HomeFacts.com, HomeLight.com, HomeValues.com, SmartAlto.com, ValuemyHouse.com, and ZipRealty.com. Some banking and financial institutions, such as Chase Bank, Bank of America, the Federal Housing Finance Agency, Fifth Third Bank, and PennyMac, also provide estimates to accompany their other financial services. Some real estate agents and brokerages also share their estimators through their websites. Again, it is important to know that these estimates have varying levels of accuracies. These sites may or may not use Automated Valuation Models, but can be another source of property and home value data that anyone can access.  Additionally, there are also data companies, such as Attom Data Solutions and CoreLogic, that market propriety AVMs.

As technologies advance and more data becomes available, the number of sites that provide home value estimates may grow. With the knowledge of where to find home value estimates online, it is important to note that these home value estimates are not interchangeable with formal appraisals, comparative market analyses, and they cannot be used as a basis for a loan. Most of these sites, if not all, reiterate the importance of consulting the expertise of real estate professionals to receive an in-depth and in-person analysis of the property and the local market.

 

Source: UPDATED: Online Home Value Estimates Are NOT Appraisals

Blog Logo, smaller

What’s Your Home Buying Power?

So, this is an article I’ve reserved for my clients who are looking to buy that has a nice formula in it to help Buyers figure how far their dollars can go. Decided I would go ahead and make it public. Just be careful to also estimate taxes and insurance when trying to calculate what your monthly payments will be. A good agent can lead you in the right direction for this additional info. 😉

What's your home buying power1 moscow id real estateWhat's your home buying power2 moscow id real estate

How much home equity did you gain last year?

moscow id real estate

Photo by Binyamin Mellish from Pexels

According to a study published on CNBC by Diana Olick, Idahoans gained 21,000 on average in 12 months last year. The national average was 15,000 which was the highest since 2013.

To learn more, click here to read the article and check out the map of year over year equity gain averages per state.

Blog Logo, smaller

Xeriscape & how it can help sell your home or just lower your bills & maintenace…

I have removed an earlier blog on this topic as it is impossible to discuss the design, layout and types of plants ideal for our region and for improving curb appeal without showing images that demonstrate it. Unfortunately due to copyright concerns, I can only discuss this privately and not on a blog. If you wish to learn more about what you can do this spring to improve your landscape’s beauty without adding to your water bill, please feel free to submit a comment below with your email address and I will follow up with you.

The above image is from the EPA’s photo gallery of water smart landscape designs. If this interests you, I’d encourage you to visit their site and explore the photos of xeriscapes in the Northwest.

Blog Logo, smaller

Buyers tricked out of $91,000 in savings: 3 ways to avoid you being next

 

moscow id real estate

Photo by GotCredit

In this digital day and age when business is largely conducted over the cybersphere, we are capable of transactions our forefathers could not have completed with the ease we can today, but this convenience comes at a cost, one which the Bown’s of Utah understand only too well.

Cyber thieves have learned new ways to find out who is buying a home and enough related information that they can trick Buyers into wiring money to them instead of the Title or Escrow company overseeing the purchase of their home-to-be.

As Jotham Sederstrom from Inman noted:

“Acell and Anne Bown of Payson, Utah, were gunning to close the deal on a new home in the small town of Mona by Dec. 22 when they received an email purportedly sent by their agent, Carrie Butterfield of Intermountain Properties. But the email — one letter off from Butterfield’s authentic account — was a hoax, directing the couple to wire $91,000 as a down payment, immediately.

The email also directed the Bowns not to contact Butterfield because she would be tied up in meetings all day, according to a report from local CBS affiliate KUTV 2 in Salt Lake City.

‘The message from our agent said ‘I will be in a workshop all day, so don’t try to call me,’ ‘ Anne Bown told CBS. ‘We were so eager to get everything done in a hurry so we could move.’ ‘ “

The truth was revealed at the time of closing when they discovered they still owed $91,000.

While this type of cyber theft is occurring more often where Buyers are tricked into wiring money to another account and not the Title or Escrow company, there are ways to assure you are not a victim of such theft. Hacking Cyber Security Internet Security

Here are 3 steps you can take to make sure you don’t fall prey to such schemes:

  • Do not share over the internet any information regarding your purchasing of a home so that thieves cannot use it against you.
  • If you cannot personally visit, call the title/escrow company to ensure you understand their process of collecting the money for the purchase of the home you’re buying. (note: get the title company’s contact information from a reliable source such as your agent, walk-in, or the title company’s website, verified that it is the correct site through a third party such as your agent.)
  • If you receive an email from your agent or the title company regarding any changes in closing instructions regarding the exchange of money, follow up in person or over the phone to ensure these changes are correct. (Again, being careful to use a number you already vetted to be the correct company number.)

With a little preparation and clear communication before any changes occur, buyers and sellers can greatly minimize the chances that they fall victim to one of these schemes. In the age of the internet, we have conveniences our ancestors couldn’t even dream of, and so long as we stay in contact with key players in a transaction as large as buying a home, we can enjoy those conveniences without the potential headaches. This I am sure that both Acell and Anne Bown of Utah would much agree with.

 

Blog Logo, smaller

Who’s Buying & Selling in the Mountain Region

The National Association of REALTORS® (NAR) has published a new study on buying and selling patterns in America and here is another infographic sharing in simple terms what it shows for our region….


Real estate moscow ID

On a personal note about how our area plays into these fast facts, I’d say our local median income is lower and buying demand is steady despite the lower than normal inventory.

If you’d like to know more about our local market activity and whether this is a good time to consider buying or selling, feel free to contact me to learn more.