Category Archives: what is the value of my home

Where Are Home Values Headed Over the Next 5 Years?

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Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.0% over the course of 2016, 3.4% in 2017 and 3.0% in the next two years, and finally 2.8% in 2020 (as shown below). That means the average annual appreciation will be 3.2% over the next 5 years.

Where Are Home Values Headed Over the Next 5 Years? | Simplifying The Market

The prediction for cumulative appreciation slowed slightly from 25.0% to 24.7% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 9.9%.

Where Are Home Values Headed Over the Next 5 Years? | Simplifying The Market

Bottom Line

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Homeownership Finally Makes Political Debate

Homeownership Finally Makes Political Debate | Keeping Current Matters

This is not a political post!

Finally, the issue of homeownership has become a platform talking point in this year’s presidential debate. Yesterday, one of the candidates running for President spoke out about the importance of homeownership in America.

Hillary Clinton detailed a new economic agenda yesterday. In announcing her new agenda, she remarked:

“Homeownership is about more than just owning a home. It is about putting roots down in a community with better schools, safer streets and good jobs. And it is about building wealth, as homeowners build equity in their home one mortgage payment at a time…We must make sure that everyone has a fair shot at homeownership.”

This post isn’t political!

It doesn’t matter that it was Clinton who said it first. It doesn’t matter that she is a Democrat.

What matters is that EVERY candidate for our country’s highest office realizes the important role homeownership plays in the development of our nation.

The fact that homeownership was finally brought to the forefront of the debate is great news – no matter which way you lean politically.

Future Home Values: Where Do The Experts Think They Are Headed?

Future Home Values: Where Do The Experts Think They Are Headed? | Keeping Current Matters

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 3.7% over the course of 2016, 3.3% in 2017 and 3.2% in the next two years, and finally 3.1% in 2020 (as shown below). That means the average annual appreciation will be 3.3% over the next 5 years.

Future Home Values: Where Do The Experts Think They Are Headed? | Keeping Current Matters

The prediction for cumulative appreciation slowed slightly from 21.6% to 17.7% by 2020. The experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 10.9%.

Future Home Values: Where Do The Experts Think They Are Headed? | Keeping Current Matters

Bottom Line

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Home sales in a lull, median sales price stalls, inventory hovers over 3,400

OCTOBER  2014 RESIDENTIAL SALES STATISTICS

Sales volume decreased for the third straight month, closing with 1,375 single family home sales. This is down 1.5% from the 1,396 homes sold last month. Month‐to‐month since July, sales have decreased 1,548 – 1,428 – 1,396 – 1,375, respectively. Compared with last year, the current figure is down .8% (1,386 sales). Making up this month’s total are 1,208 Equity Sales (87.9%), 83 Short Sales (6%) and 84 REO sales (6.1%). For the month, REO sales remained the same, short sales increased 17.6% and conventional sales decreased 1.1%.

Of the 1,375 sales this month, 256 used cash financing, 654 used conventional (mortgage‐backed) financing, 312 used FHA (Federal Housing Administration), 89 used VA (Veteran’s Affairs) and 64 used Other* types of financing. The average DOM (days on market) for homes sold this month was 37, while the Median DOM was 23. These numbers represent the days between the initial listing of the home as “active” and the day it goes “pending.” Breaking down the Days On Market, there were 816 listings that sold between 1 – 30 days, 293 listings that sold between 31 – 60 days, 148 between 61 – 90 days, 69 between 91 – 120 days and 49 sold after being on the market for over 120 days. This breakdown, as well as types of financing, is show in the graphic below.

October 2014 Housing Stat

The month‐to‐month median sales price decreased 1.1% from $275,000 to $272,000. The current level is 7.3% above the $253,500 median sales price of October 2013. The current figure is up 70% from the January 2012 low of $160,000. When compared to the all‐time high ($392,750/Aug. ’08), the current figure is down 30.1%.

Active Listing Inventory in Sacramento County decreased 2.7% for the month to 3,434 listings, down from the 3,529 listings of September. Year‐to‐year, the current number is up (29.1%) from the 2,659 units of October 2013. The months of inventory remained the same at 2.5 months.

California 2015 Housing Market Forecast Preview

2015 Housing Forecast for California
2015 Housing Forecast for California

With more available homes on the market for sale, California’s housing market will see fewer investors and a return to traditional home buyers as home sales rise modestly and prices flatten out in 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2015 California Housing Market Forecast.”

The C.A.R. forecast sees an increase in existing home sales of 5.8 percent next year to reach 402,500 units, up from the projected 2014 sales figure of 380,500 homes sold. Sales in 2014 will be down 8.2 percent from the 414,300 existing, single-family homes sold in 2013.

“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown. “However, next year, home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”

“Moreover, prospective buyers should know that it’s a misperception that a 20 percent down payment is always required to buy a home. There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” continued Brown.

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 3 percent in 2015, after a projected gain of 2.2 percent in 2014. With nonfarm job growth of 2.2 percent in California, the state’s unemployment rate should decrease to 5.8 percent in 2015 from 6.2 percent in 2014 and 7.4 percent in 2013.

The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.

The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years.

“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years.”

“Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply.”

Dress Your Home For Success

Whether it’s an Open House, or simply presenting your home in the best light, it is necessary to view it from the eyes of a buyer!  Any money spent in this area may result in increased profits and a faster sale.

Maximizing Curb Appeal
Before potential buyers even see what the home has to offer, they view its exterior.  As a result, an unkempt or unattractive view of the outside of the home could potentially result in a missed opportunity.  To show the house in its best light, consider the following:

* Move all materials, including garbage cans and gardening supplies, from the front yard and into a garage or shed

* Mow the lawn and weed and maintain all planted areas

* Replace any outdoor light bulbs that are not working

* Sweep walkways and steps, and remove all small items from the porch or patio

* Replace worn or badly stained door mats

Once a potential buyer enters the home, they need to determine if it will meet their needs and expectations.  Give them the best view of the home’s interior by following these steps:

* Remove the home of any clutter by limiting decorative objects and clearing all unnecessary appliances from the kitchen countertops

* Rearrange or remove furniture to highlight the space in a room

* Review each room and clean or vacuum if necessary

These tips can help ensure you receive the highest price possible for your home.

How Do You Value A Property?

This question was recently asked and here is how I answered:

If you are asking how to determine a property’s value, there are various ways to assist in detemining a property’s value. Ultimately the worth is determined by what was paid for it. How you gather information on what to pay for it depends on what you require the value for. The value of the property, no matter how the info is gathered, should be at or near the same price, no matter which tools you use.

There are currently three acceptable and most common tools of “gathering” that information:

1. CMA (Comparable Market Analysis) – Completed by a licensed real estate agent. When completing a CMA, agents should keep in mind three crucial factors,
a) Only use comps within a half mile radius of your subject property, this helps ensure you are using properties that actually fall within the same parameters (builder, style, year built, etc) of your subject property. It isn’t fool proof, but that’s where your knowledge of the area and market should kick in and adjust for any discrepancies.
b) Keep your filters (min/max sq ft, year, bed/ba, etc) as close as possible to the subject property for the best determination. For example, If your subject property is 1400 sq ft you would be doing an injustice to set your filters at min1000 sq ft and max 1800 sq ft because once you add or subtract 200 or more sq ft to a home (the size of another room), the case could be made that that home now is automtically valued less than or more than your subject property. In the event you need to contest a value determination by a lender (in the case of a short sale), you will be able to make a better case when you use “cleaner” filters.
c) Never tweak your CMA. In this current market, the decision makers are the lenders, not the sellers. All lenders have recruited the assistance of other agents (BPO agents, such as myself ) to ensure they are either getting the correct value to help mitigate their loses, or in the case of a buyer, are making the loan at the appropriate risk value. The bank that I do BPOs for is Bank of America (Landsafe Appraisals), and they have tightened down on their BPO agents so much so that they have actually let some agents go, and they monitor your BPO results on a regular basis to ensure you are being consistent in your formula, as well as share best practices for determining value.

2. Appraisal – These are completed by a licensed appraisal professional and the results are much more detailed than in a CMA and as a result can be used to contest a CMA or BPO if necessary.

3. BPO (Broker Priced Opinion) – Typically requested by Senior lienholders, these reports are usually completed using the senior lienholder’s BPO company’s form (usually electronic and online). A pretty detailed report, asking for info such as can you determine if the property is vacant or occupied, most recent comparable three “solds”, most recent comparable three “listeds” – dates listed/sold, year of build, beds/baths, sq ft, miles from subject property, etc), and normally includes pictures of the subject property, and sometimes pictures of the comparables.

Here is a short sale negotiating tip on BPOs: Currently, these reports are updated normally every three months. That is good information to know when you are negotiating and come to a bump over price. Sometimes a three month old report can mean the difference between a denial (if the buyer’s offer is too low), and an approval (if an updated BPO is completed and comes back slightly lower).

Just to reiterate, whether you are on the REO side, short sale side, or buyer side, the lender has the final say, and they are scrutinizing values more now than before – and rightly so. So just remember to keep your value determinations above board and you will be making the best decision for all involved.

Keisha Mathews
“The Short Sale Lady” TM

How Do You Value A Property?

This question was recently asked and here is how I answered:

If you are asking how to determine a property’s value, there are various ways to assist in detemining a property’s value. Ultimately the worth is determined by what was paid for it. How you gather information on what to pay for it depends on what you require the value for. The value of the property, no matter how the info is gathered, should be at or near the same price, no matter which tools you use.

There are currently three acceptable and most common tools of “gathering” that information:

1. CMA (Comparable Market Analysis) – Completed by a licensed real estate agent. When completing a CMA, agents should keep in mind three crucial factors,
a) Only use comps within a half mile radius of your subject property, this helps ensure you are using properties that actually fall within the same parameters (builder, style, year built, etc) of your subject property. It isn’t fool proof, but that’s where your knowledge of the area and market should kick in and adjust for any discrepancies.
b) Keep your filters (min/max sq ft, year, bed/ba, etc) as close as possible to the subject property for the best determination. For example, If your subject property is 1400 sq ft you would be doing an injustice to set your filters at min1000 sq ft and max 1800 sq ft because once you add or subtract 200 or more sq ft to a home (the size of another room), the case could be made that that home now is automtically valued less than or more than your subject property. In the event you need to contest a value determination by a lender (in the case of a short sale), you will be able to make a better case when you use “cleaner” filters.
c) Never tweak your CMA. In this current market, the decision makers are the lenders, not the sellers. All lenders have recruited the assistance of other agents (BPO agents, such as myself ) to ensure they are either getting the correct value to help mitigate their loses, or in the case of a buyer, are making the loan at the appropriate risk value. The bank that I do BPOs for is Bank of America (Landsafe Appraisals), and they have tightened down on their BPO agents so much so that they have actually let some agents go, and they monitor your BPO results on a regular basis to ensure you are being consistent in your formula, as well as share best practices for determining value.

2. Appraisal – These are completed by a licensed appraisal professional and the results are much more detailed than in a CMA and as a result can be used to contest a CMA or BPO if necessary.

3. BPO (Broker Priced Opinion) – Typically requested by Senior lienholders, these reports are usually completed using the senior lienholder’s BPO company’s form (usually electronic and online). A pretty detailed report, asking for info such as can you determine if the property is vacant or occupied, most recent comparable three “solds”, most recent comparable three “listeds” – dates listed/sold, year of build, beds/baths, sq ft, miles from subject property, etc), and normally includes pictures of the subject property, and sometimes pictures of the comparables.

Here is a short sale negotiating tip on BPOs: Currently, these reports are updated normally every three months. That is good information to know when you are negotiating and come to a bump over price. Sometimes a three month old report can mean the difference between a denial (if the buyer’s offer is too low), and an approval (if an updated BPO is completed and comes back slightly lower).

Just to reiterate, whether you are on the REO side, short sale side, or buyer side, the lender has the final say, and they are scrutinizing values more now than before – and rightly so. So just remember to keep your value determinations above board and you will be making the best decision for all involved.

Keisha Mathews
“The Short Sale Lady” TM