If you’re thinking of buying a home but wondering if waiting a few years will save you in the long run, think again.
The longer the wait, the more you’ll pay, especially when mortgage rates and home prices rise. Even the slightest change in the mortgage rate can have a big impact on your buying power no matter your price point.
Don’t assume waiting will save you money. Let’s connect to set the ball into motion today while mortgage rates are hovering near historic lows.
Some veterans are finding it difficult to obtain a home in today’s market. According to the National Association of Realtors (NAR):
“Conventional conforming mortgages (mortgages that conform to guidelines set by Fannie Mae and Freddie Mac), accounted for 74% of mortgages obtained by homebuyers in May 2021, an increase from about 65% during 2018 through 2019…The share of VA-guaranteed loanshas also decreased to 7% in May 2021 from about 10% in past years.”
Recent data in the latest Origination Insight Report from Ellie Mae sheds light on the continuation of this trend. Below, we can see just how small of a share of total financing VA loans made up in June of 2021, according to that Ellie Mae report:The drop in VA loan usage can be attributed to the difficulties veterans continue to face when buying a home. The NAR article elaborates:
“It is extremely difficult for FHA/VA buyers to get accepted in a multiple offer situation. They are on the bottom of the hierarchy.”
One contributing factor is that buyers with VA loans can’t waive certain contingencies. However, just because a certain contingency must be present for a particular buyer doesn’t mean that buyer’s offer shouldn’t be considered.
What Should Sellers Do To Help Create a Level Playing Field?
As a seller, it’s important to consider every offer in front of you regardless of loan type. If you’re selecting an offer because some contingencies are waived, keep in mind that it doesn’t always mean the offer is what’s best for you.
Buyers who can’t waive specific contingencies may adjust other terms in their offer to make it more appealing to sellers. This may depend on several factors, including their loan type and location, but a motivated buyer and their agent will do everything they can to present an offer that’s as appealing to you as possible.
Ultimately, you should make sure you take time to really understand the terms of their offer and see the big picture. Working with a driven buyer who’s motivated to purchase your house may provide a better opportunity for you to reach your overall best option and what’s most important to you.
Bottom Line
If you’re ready to sell, let’s connect. Together, we can make sure you understand the terms of all offers so you can give each one fair consideration, including those buyers using a VA loan. Our veterans sacrifice so much for our country. They’ve earned our gratitude and should have the same opportunity to obtain the home of their dreams.
Geoff Green, host of the July 2021 Housing Market Update, welcomed viewers. Panelists for this month’s update were Keren Gonen and Kristi Anderson, both with Green Team New Jersey Realty, and Laura Moritz, Director of Sales at Classic Mortgage.
If you missed the July 20 webinar or would like to view it again, it is available here:
Is now a good time to buy a home?
According to J.P. Morgan Insights Report,
“Homebuyers – interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six to nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence…”
However, record price appreciation, extremely low inventory, record high percent of sales over list price, and record low days on market are all contributing to buyer fatigue.
Advice for Sellers
Even though we are in a Seller’s Market, here are some talking points for Sellers:
Don’t be (too) unrealistic
Wait and you’ll miss out on an extremely attractive market
It’s never been a better time to sell
Price appreciation will moderate as rates and inventory rise later this year
“Housekeeping” Items
July 2021 Housing Market Update Panel Discussion
Geoff Green and panelists Keren Gonen, Kristi Anderson, and Laura Moritz discussed what they were seeing in their day-to-day experience with both buyers and sellers. To view the data and panel discussion, click here.
Contact the Panelists
We’ll see you at the next Housing Market Update Tuesday, August 17, 2021 at 12:00 p.m.
To sign up for Housing Market Updates, click here.
With forbearance plans about to come to an end, many are concerned the housing market will experience a wave of foreclosures like what happened after the housing bubble 15 years ago. Here are four reasons why that won’t happen.
1. There are fewer homeowners in trouble this time
After the last housing crash, about 9.3 million households lost their home to a foreclosure, short sale, or because they simply gave it back to the bank.
As stay-at-home orders were issued early last year, the overwhelming fear was the pandemic would decimate the housing industry in a similar way. Many experts projected 30% of all mortgage holders would enter the forbearance program. Only 8.5% actually did, and that number is now down to 3.5%.
As of last Friday, the total number of mortgages still in forbearance stood at 1,863,000. That’s definitely a large number, but nowhere near 9.3 million.
2. Most of the 1.86M in forbearance have enough equity to sell their home
Of the 1.86 million homeowners currently in forbearance, 87% have at least 10% equity in their homes. The 10% equity number is important because it enables homeowners to sell their houses and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.
The remaining 13% might not all have the option to sell, so if the entire 13% of the 1.86M homes went into foreclosure, that would total 241,800 mortgages. To give that number context, here are the annual foreclosure numbers of the three years leading up to the pandemic:
2017: 314,220
2018: 279,040
2019: 277,520
The probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures coming out of the housing crash 15 years ago. The number does, however, draw a similar comparison to the three years prior to the pandemic.
3. The current market can absorb any listings coming to the market
When foreclosures hit the market in 2008, there was an excess supply of homes for sale. The situation is exactly the opposite today. In 2008, there was a 9-month supply of listings for sale. Today, that number stands at less than 3 months of inventory on the market.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains when addressing potential foreclosures emerging from the forbearance program:
“Any foreclosure increases will likely be quickly absorbed by the market. It will not lead to any price declines.”
4. Those in power will do whatever is necessary to prevent a wave of foreclosures
Just last Friday, the White House released a fact sheet explaining how homeowners with government-backed mortgages will be given further options to enable them to keep their homes when exiting forbearance. Here are two examples mentioned in the release:
“For homeowners who can resume their pre-pandemic monthly mortgage payment and where agencies have the authority, agencies will continue requiring mortgage servicers to offer options that allow borrowers to move missed payments to the end of the mortgage at no additional cost to the borrower.”
“The new steps the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA), and Department of Veterans Affairs (VA) are announcing will aim to provide homeowners with a roughly 25% reduction in borrowers’ monthly principal and interest (P&I) payments to ensure they can afford to remain in their homes and build equity long-term. This brings options for homeowners with mortgages backed by HUD, USDA, and VA closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac.”
When evaluating the four reasons above, it’s clear there won’t be a flood of foreclosures coming to the market as the forbearance program winds down.
Bottom Line
As Ivy Zelman, founder of the major housing market analytical firm Zelman & Associates, notes:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
One of the hottest topics of conversation in today’s real estate market is the shortage of available homes. Simply put, there are many more potential buyers than there are homes for sale. As a seller, you’ve likely heard that low supply is good news for you. It means your house will get more attention, and likely, more offers. But as life begins to return to normal, you may be wondering if that’s something that will change.
While it may be tempting to blame the pandemic for the current inventory shortage, the pandemic can’t take all the credit. While it did make some sellers hold off on listing their houses over the past year, the truth is the low supply of homes was years in the making. Let’s take a look at the root cause and what the future holds to uncover why now is still a great time to sell.
Where Did the Shortage Come From?
It’s not just today’s high buyer demand. Our low supply goes hand-in-hand with the number of new homes built over the past decades. According to Sam Khater, VP and Chief Economist at Freddie Mac:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Data in a recent report from the National Association of Realtors (NAR) tells the same story. New home construction has been lagging behind the norm for quite some time. Historically, builders completed an average of 1.5 million new housing units per year. However, since the housing bubble in 2008, the level of new home construction has fallen off (see graph below):The same NAR report elaborates on the impact of this below-average pace of construction:
“. . . the underbuilding gap in the U.S. totaled more than 5.5 million housing units in the last 20 years.”
“Looking ahead, in order to fill an underbuilding gap of approximately 5.5 million housing units during the next 10 years, while accounting for historical growth, new construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year. . . .”
That means if we buildeven more new houses than the norm every year, it’ll still take a decade to close the underbuilding gap contributing to today’s supply-and-demand mix. Does that mean today’s ultimate sellers’ market is here to stay?
We’re already starting to see an increase in new home construction, which is great news. But newly built homes can’t bridge the supply gap we’re facing right now on their own. In the State of the Nation’s Housing 2021 Report, the Joint Center for Housing Studies of Harvard University (JCHS) says:
“…Although part of the answer to the nation’s housing shortage, new construction can only do so much to ease short-term supply constraints.To meet today’s strong demand, more existing single-family homes must come on the market.”
Early Indicators Show More Existing-Home Inventory Is on Its Way
When we look at existing homes, the latest reports signal that housing supply is growing gradually month-over-month. This uptick in existing homes for sale shows things are beginning to shift. Based on recent data, Odeta Kushi, Deputy Chief Economist at First American, has this to say:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
“As the inventory is beginning to pick up ever so modestly, we are still facing a housing shortage, but we may have turned a corner.”
So, what does all of this mean for you? Just because life is starting to return to normal, it doesn’t mean you missed out on the best time to sell. It’s not too late to take advantage of today’s sellers’ market and use rising equity and low interest rates to make your next move.
Bottom Line
It’s still a great time to sell. Even though housing supply is starting to trend up, it’s still hovering near historic lows. Let’s connect to discuss how you can list your house now and use the inventory shortage to get the best possible terms for you.
If you’re a prospective buyer or seller, it’s important to understand the current real estate market conditions and how they affect you. The Counselors of Real Estate (CRE) just released its Top Ten Issues Affecting Real Estate report. Here are three hot topics from the list and how they impact today’s housing market.
Technology Acceleration and Innovation
The past year ushered in many changes to the real estate industry, especially when it comes to technology. The CRE report elaborates on this:
“Lockdown-driven changes in our work, in the economy, in social structures, and in our personal behavior have pushed our reluctance aside. The acceleration and adoption of technology during the pandemic has impacted everything, and real estate is no exception.”
For real estate, innovations like digital documentation, virtual tours, and video chat enable agents to connect with clients no matter their location. These options are ideal for prospective buyers and sellers who aren’t local to the area or those that need the added flexibility signing documents online or doing virtual tours provide. That’s why many trusted real estate advisors will continue to use these technologies moving forward to best serve their clients.
Remote Work and Mobility
Working from home became the reality for many individuals during the pandemic, and the latest list from the CRE identified remote work and mobility as an important influence on the real estate market. As the report notes:
“…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. Most of these relocations remained within their original region—84%—and, while some are returning, it is unknown as to the permanence of these movements or whether they represent a true urban exodus.”
With the added mobility remote work offers, where people are moving and where they can ultimately purchase a home is less dependent on a physical office location. This newfound flexibility is giving remote workers the opportunity to move to more affordable areas and buy more home for their money.
Housing Supply and Affordability
Finally, the limited supply of houses for sale and the related affordability challenges also makes CRE’s list of key factors this year:
“According to the National Association of Realtors®, the state of America’s housing inventory is dire, with a chronic shortage of affordable and available homes needed to support the nation’s population.”
There is good news. Homes are still more affordable than they have been historically thanks to today’s low mortgage rates. And while housing supply is still low, we’re seeing steady increases in the number of homes coming to market, which gives hope to homebuyers. As the supply of homes for sale improves, buyers will have more options.
Bottom Line
New technology, remote work, housing supply, and home affordability are key factors in the housing market right now for both buyers and sellers. If you want to better understand how these topics can impact you, let’s connect today.
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.
Green Team Realty has announced its 2nd Quarter Sales Leaders. They are Keren Gonen, of Green Team New Jersey Realty, and Kasey Malone, Green Team New York Realty.
Keren Gonen
Since joining Green Team New Jersey Realty in 2017, Keren has been a quarterly sales leader many times. In addition, she has twice been the yearly sales leader. Geoff Green, President of Green Team Realty, had this to say about Keren:
“What is most amazing about Keren is not her continued success as a top-producing Realtor, but rather her devotion to people. Keren donates time out of her very busy day to organizations such as Team Up for Hope, and the Sussex County Association of Realtors on top of being a great Mom and Realtor. Congratulations once again Super Star. Keep up the good work.”
Keren stated:
“Being able to assist buyers, sellers, and investors in this market has proven to be a test of my craft. I love Real Estate and hope that each and every one of my clients has felt my passion and desire to serve others. Learning how to serve my clients best in this crazy Market has been the biggest learning curve for me. I’ve had to get creative and definitely think outside the box. I am so grateful that I have been able to assist so many clients in finding or selling their homes or investment. Thank you, to all of you who have chosen me to accompany you on this journey. Be safe and let’s make 2021 the best year we’ve ever had!”
Kasey Malone
Geoff Green congratulated Kasey on being the 2nd Quarter Sales Leader for the New York office:
“A big congratulations to Kasey who is a first-time Quarterly Sales Leader. Kasey lives out the phrase, “work by referral”. Kasey’s friends, neighbors, and relatives all know how honest and hard-working she is. Now the rest of the world does too. Great job Kasey, and keep up the good work.”
Kasey shared her thoughts on being the Q2 Sales Leader at Green Team New York Realty:
“Doing real estate part-time and strictly by word of mouth has made me solely rely on building my reputation as a real estate agent. Each year I set a goal for myself to beat last year’s sales, this year has been my best so far! I had the distinct opportunity to work with famous clients who were referred to me through a close friend and I am grateful that they chose me for their real estate needs. I love my Green Team! They give you all the tools you need to succeed and we get to build great business relationships with each other along the way! This is a huge milestone for me in my real estate career and I am so excited to receive this award!”
As we move into the second half of the year, one thing is clear: the current real estate market is one for the record books. The exact mix of conditions we have today creates opportunities for both buyers and sellers. Here’s a look at four key components that are shaping this unprecedented market.
A Shortage of Homes for Sale
Earlier this year, the number of homes available for sale fell to an all-time low. In recent months, however, inventory levels are starting to trend up. The latest Monthly Housing Market Trends Report from realtor.com says:
“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.”
This is good news for buyers who crave more options. But even though we’re experiencing small gains in the number of available homes for sale, inventory remains a challenge in most states. That’s why it’s still a sellers’ market, giving homeowners immense leverage when they decide to make a move.
Buyer Competition and Bidding Wars
Today’s ongoing low supply, coupled with high demand, creates a market characterized by high buyer competition and bidding wars. Buyers are going above and beyond to make sure their offer stands out from the crowd by offering over the asking price, all cash, or waiving some contingencies. The number of offers on the average house for sale broke records this year – and that’s great news for sellers.
The latest Confidence Index from the National Association of Realtors (NAR) says the average home for sale receives five offers (see graph below):For buyers, the best way to put a compelling offer together is by working with a local real estate professional. That agent can act as your trusted advisor on what terms are best for you and what’s most appealing to the seller.
Home Price Appreciation
The competition among buyers is driving prices up. Over the past year, we’ve seen home price appreciation rise across the country. According to the most recent Home Price Index (HPI) from CoreLogic, national home prices increased 15.4% year-over-year in May:
“The May 2021 HPI gain was up from the May 2020 gain of 4.2% and was the highest year-over-year gain since November 2005. Low mortgage rates and low for-sale inventory drove the increase in home prices.”
Rising home values are a big part of why real estate remains one of the top sought-after investments for Americans. For potential sellers, it also means it’s a great time to list your house to maximize the return on your investment.
A Rise in Home Values and Equity
The equity in a home doesn’t just grow when a homeowner pays their mortgage – it also grows as the home’s value appreciates. Thanks to the jump in price appreciation, homeowners across the country are seeing record-breaking gains in home equity. CoreLogic recently reported:
“…homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020.”
That’s a major perk for households to leverage. Homeowners can use that equity to accomplish major life goals or move into their dream homes.
Bottom Line
If you’re thinking about buying or selling, there’s no time like the present. Let’s connect to talk about how you can take advantage of the conditions we’re seeing today to meet your homeownership goals.
Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams. What’s your home’s value?
Congratulations to Pip Klein as she celebrates 10 years with the Green Team!
In the beginning…
When Pip started at the Green Team as a part-time marketing consultant, she had not even considered real estate as a career. But Geoff Green encouraged her because he felt she had the personality, contacts AND most importantly, her late parents’ home was on the market with another broker!!! “Get your license PIP,” she remembers him saying loudly. And so she did – a decision which she is very grateful that she made. In addition, her techie son Ben was in high school at the time and also joined the team, working on redesigning the Green Team website. It was the right time for both Ben and Pip. Plus, it was fun for them to work together during those last years of his high school.
Goals
One of Pip’s original sales goals was to earn Captains Club status by reaching the $3 million mark. Pip got her license in May 2011, and she made Captains Club in 2015, 2016, 2017, and 2020. She made Presidents Club (for $5-$10 million in sales) in 2018. In addition, she was the 3rd Quarter Sales Leader for that year. Pip achieved honorable mention (for sales of $1.5 to $3 million) in 2019. She found that once her business was up and running, it became easier to achieve goals. Also, the market improved, providing the opportunity for more sales. She is also very proud of being named the Green Team’s first “Momentum Builder,” a new award in 2015 for achievements and helping inspire others. Pip’s goals have been consistent. Keep learning, growing, and enjoying the work. And, to make at least Captains Club every year!
Teamwork and Friendship
Pip has found Green Team is truly a great “team” of people. Over her decade there, she has made valuable friendships with both agents and clients. Indeed, friends for life.
Pip Klein, Associate Broker/Manager Lucyann Tinnirello, and Toni Vogel
A few of Pip’s favorite (and least favorite) things
Pip likes connecting people to the right home. She calls it being a house matchmaker. Once she gets to know people, she can really get a sense of the type of house they want. Pip and her husband Bob bought a unique home 30 years ago. It was a renovated onion barn! She also enjoys writing and hopes to continue with personal blogging about real estate. Pip’s least favorite thing? When transactions become tangled in situations beyond control while everyone is waiting to close. That can be frustrating. Red tape, legal snafus, etc. can be difficult. You have to focus on the endpoint, which is closing.
Biggest Accomplishments since starting at Green Team
Pip believes it has been a decade of accomplishments. Sometimes the smaller transactions are big victories as you help people buy or sell and make their next chapter easier to move on to. According to Pip, no one likes transition, and realtors are in the middle of that angst on all sides. They have to be calm and extend the best advice. Communication is key. She did have one memorable day in 2018. Three closings, $2.4 million volume in a day! That was a once-in-a-lifetime tsunami of good luck. What’s more, the commission hit her bank account on her birthday.
But of course, it’s not about the dollars. Truly, for Pip, it’s the culmination of hard work and getting things to the finish line. Her father always said, “Do what you enjoy, then you enjoy what you do.” Sage advice. He didn’t see his “work” as something separate. When you are a Realtor, you are living, breathing real estate all the time. And it doesn’t feel like “work” when you are truly happy with what you are doing.
Some sage advice from Pip
“Life is an adventure and you have to take risks!” Starting a new career at age 60 was challenge enough, but the best part was that she didn’t realize how much she would learn about herself and others. It really is the type of work that embraces a lot of different aspects of a “job.” Especially because Realtors deal so closely with people, most of whom they don’t know and never met. That keeps it fresh. According to Pip, it was sort of like having a baby in her 40s, which she did. It was a great learning experience and chock full of new friends and experiences. She has no regrets!
One of the biggest lessons that Pip has learned is to accept rejection. Not everything works out in your favor. Sometimes, you just don’t get the listing for whatever reason. Or the deal falls through. Don’t take it personally. Be yourself and carry on.
Memories
Pip has had many memorable experiences. One of her favorites is this:
“A family from NY was looking for their dream home/farm property. They had a very specific wish list, but I found 3 homes for them to see. The FIRST house was spectacular and everything they hoped for. The land, the extra house, and all redone – a great Victorian. While racing around the bottom level I noticed a painting on the wall. There was something familiar about it and I went up close to look. Yes, there it was – my mother’s signature – Phyllis Klein. This was a painting I had donated to a fundraiser years before and the owner of this house had purchased it. I turned to my new client and said, “Well, you simply have to buy this house. My mother’s painting is hanging on the wall!” They did!”
Facebook
X
Pinterest
Copy Link
![Waiting To Buy a Home Could Cost You [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2021/07/29150353/20210723-MEM-1-1046x2403.png)
![Pop Quiz: Can You Define These Key Terms in Today’s Housing Market? [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2021/07/22135823/20210723-MEM-1046x2651.png)
