"Get REAL with JO" is quality content with the purpose of educating, and hopefully entertaining, both home buyers and sellers on all aspects of residential and commercial real estate with some straight talk and some light humor. A mixture of national posts and Northern NV area focused articles.

 

Dec. 11, 2018

Is Winter the Right Time to Sell?

Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

The #1 Reason to List Your Home in the Winter Months is Less Competition!

Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.

As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February). 

Temperatures aren’t the only thing that heats up in the spring – so do listings!

 

In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.

Added Bonus: Only Serious Buyers Are Out in the Winter

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

 

Posted in Market Updates
Nov. 24, 2018

Current Market Conditions November 2018

Posted in Market Updates
Nov. 13, 2018

Sell or Stay? That is the BIG Question...

Over the past few years, two trends have emerged in the housing market:

  1. Home renovations have shot up
  2. Inventory of homes available for sale on the market has dropped

A ‘normal’ housing market is defined by having a 6-month supply of homes for sale. According to the latest Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply.

This low inventory environment has many current homeowners worried that they would be unable to find a home to buy if they were to list and sell their current houses, which is causing many homeowners to instead renovate their homes in an attempt to fit their needs.

According to Home Advisor, homeowners spent an average of $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers.

A new study from Zillow asked the question, "Given a choice between spending a fixed amount of money on a down payment for a new home of fixing up their current home, what would you do?" Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below.

More and more studies are coming out about the intention that many Americans have to ‘age in place’ (or retire in the area in which they live). Among retirees, 91% would prefer to renovate than spend their available funds on a down payment on a new home.

If their current house fits their needs as far as space and accessibility are concerned, then a renovation could make sense. But if renovations will end up changing the identity of the home and impacting resale value, then the renovations may end up costing them more in the long run.

With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this low-competition environment could net you more money than your renovations otherwise would.

If you are one of the many homeowners who is thinking about remodeling instead of selling, let's sit down and I can help you make the right decision for you based on the demand for your house in today’s market.

For your FREE market analysis contact me, John Oliver (775) 544-6615

 

 

 

 

Posted in Market Updates
Oct. 26, 2018

Did you Know???

Nevada is moving up as a popular destination for folks looking to make a move.

The Silver State ranked among the top places in the nation that posted a higher rate of people moving in versus residents moving out last year, according to separate reports from two moving companies.

In one of the studies, Washoe County posted a higher rate of inbound relocations than the state as a whole, although the Las Vegas area still had a higher number of total movers. Reno-Sparks is also outpacing the nation for its influx of younger people moving into the area in the last decade, according to an analysis from the University of Nevada, Reno.

The numbers are good news for a region that saw negative migration numbers at certain points of the recession. At the same time, others warned that rising housing costs could curtail interest, particularly in Northern Nevada, as affordability gets squeezed further.

Nevada ranked third in the nation for having the highest rate of inbound moves in Atlas Van Lines’ year-end migration study for 2017. Its inbound rate of 62.4 percent vs. 37.6 percent for people moving out was behind only Idaho and Washington state. Nevada did not make Atlas Van Lines’ Top 10 list in 2016.

In another report, the state placed fourth with an inbound rate of 61 percent compared to an outbound rate of 39 percent in United Van Lines’ annual Movers Study, just behind Vermont, Oregon and Idaho. Nevada was ranked ninth in the United Movers Study in 2016. Washoe County did even better than the state as a whole, posting an inbound migration rate of more than 69 percent in the United study. That means nearly 3 in 4 moves handled by United Van Lines in Washoe involved people moving into the area.

The numbers mark a return to form for the Silver State as a whole, said Melissa Sullivan, United Van Lines spokeswoman. Nevada was the fastest-growing state in the nation from 2000 to 2010 with a growth rate of 35.1 percent, according to the U.S. Census Bureau. The recession, however, took a large bite out of that momentum.

“Historically, Nevada has always been at the top of the inbound list,” Sullivan said. “But we saw Nevada traffic level off right after the recession.”

Making the move

The improving inbound migration numbers were good news to those who promote the region.

“I don’t think anyone is surprised if they have been on the roads lately, or have tried to buy a home or rent an apartment — there are more people in the area than ever before,” said Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada.  “Every indicator we track points to continued growth for at least the next five to 10 years.”

Retirement was cited by nearly 34 percent of respondents to the United Movers Study as their reason for moving to Nevada. The Mountain West was also the most popular destination for retirees in the study overall.

Other reasons cited for moving include lifestyle, family and health. The No. 1 factor for migration to Nevada, however, was jobs. More than 36 percent of the United Movers Study’s respondents cited work as their reason for moving to the state.

The improving economy also was cited as a key factor by those behind the Atlas Van Lines study.

“There are a variety of factors for why Nevada continues to see individuals moving into the state, including the growth in the job market, record high small business employment and the fact that it’s the fastest growing private sector in the United States,” said Jeff Schimmel, vice president of transportation services at Atlas Van Lines. “Nevada boasts an economy that has expanded quarter over quarter throughout 2017 which could help explain the migration of Americans flocking to the state.”

Kazmierski also cited job growth, combined with a favorable business and tax climate for the Silver State’s place as a popular destination for movers. In Northern Nevada, the arrival of big-name companies such as Apple, Tesla and Google are also helping dispel old stereotypes of Reno as a poor man’s Las Vegas. Costs that remain lower compared to next-door neighbor California remain a factor as well.

“We have averaged around 4 percent (job growth) in the region and from the looks of our prospect activity will continue in that range for at least the next five years,” Kazmierski said.  “When you add the new tax laws and the improving image of the region, I would expect increasing migration from California retirees and the young families that just can’t make in California.”

The numbers bear out a youth movement for the greater Reno-Sparks area. While people age 50 and older accounted for 35.8 percent of inbound movers to Washoe County from 2010 to 2016, those in the sought-after prime age group of 18 to 34 account for a larger share at 44.7 percent, according to the Center for Regional Studies at the University of Nevada, Reno. Washoe’s share of incoming people at that younger age range is also higher than the national average of 23.6 percent.

“That youth number for us is huge because it’s considered very important for communities, whether it be the future labor force, entrepreneurs or promoting technology,” said Brian Bonnenfant, Center for Regional Studies project manager. “They’re also the ones that go to bars and restaurants and eventually buy houses so it’s good to have that infusion of young blood coming into your region.”

Growing challenges

Although the migration numbers look good for the state, it’s important to view it in the proper context, said Jeff Hardcastle, Nevada state demographer.

The sample size for the Atlas and United interstate mover studies, for example, is relatively small — at least on a statewide basis. While Atlas’ study looked at nearly 73,000 total inbound and outbound moves nationwide, Nevada’s numbers only represent 1,554 of those moves. The state also accounted for 2,500 of United’s 110,000 inbound and outbound moves, with nearly 700 of those involving Washoe County.

Nationwide, state-to-state moves have also either been down or flat in the last decade, Hardcastle said. Atlas Van Lines, for example, noted that the total number of cross-state border moves that it handled fell by 3 percent from the previous year.

(Interstate migration) has been relatively flat since 2006,” Hardcastle said. “It’s part of a larger trend nationwide of fewer people moving across state lines.”

Many theories have been floated to explain the reason for the decline such as the recession, housing costs and people preferring to stay in the communities they already know. With the economy rebounding from the last downturn, other issues are also starting to pop up on the business side of the equation.

“Over the last couple of years, we’ve seen the number of full-service interstate moves level off for a variety of reasons in our industry,” United Van Lines’ Sullivan said. “One is a shortage of truck drivers so we’ve had to turn away customers during the busy summer season because we don’t have enough people to haul shipments.”

Although the inbound numbers for Nevada are not as big as they were when it was consistently topping the charts as the fastest growing state in the nation, they still represent a marked improvement from the recession. Washoe County, for example, saw negative net migration during three years of the recession up to 2011 based on U.S. Census Bureau data, Hardcastle said. By 2016, the same data showed positive net migration of 4,400 people.

Data from the IRS back up those numbers, showing a net migration of just over 4,000, said the Center for Regional Studies’ Bonnenfant. Although Nevada counties such as Clark and Lyon topped the list of originations, counties in states such as California and Arizona also fueled a nice chunk of the moves to Washoe last year. These include areas such as Sacramento, Silicon Valley and Phoenix.

Job growth and an improving economy helped spur a lot of those moves. Housing, however, is proving to be a wildcard for the area’s continued attractiveness as a move-in destination.

“Housing prices correlate highly with in-migration numbers,” Bonnenfant said. “In the early 2000s, you saw much higher (inbound) numbers but once housing prices started hitting $350,000, those numbers slacked off.”

After setting a record of $387,250 in July last year, the city of Reno closed 2017 with a median price of $350,000 for an existing single-family home, according to the Reno/Sparks Association of Realtors. In November, less than 100 homes in the Reno-Sparks area were priced below $300,000. Reno-Sparks also set a record for median down payment at $42,000 during the third quarter of last year, the 16th highest jump among 99 metro areas surveyed.

Housing supply, or the lack thereof, continues to be an issue that is helping drive up house prices, Kazmierski said. The area is also slow to incentivize infill developments within Reno, which will only lead to more urban sprawl and traffic, he added. As a result, Kazmierski expects more development north of Reno as well as in outlying areas such as Dayton, Fernley and Silver Springs in the next five years.

Despite the area’s rising costs for housing, however, California should continue to be a reliable source of inbound movers as it has always been in the past.

“Our increasing cost of housing could slow the migration but for those moving from California that is not a factor,” Kazmierski said. “Even at our current prices our housing is a fraction of the housing there.”

 

Posted in Market Updates
Oct. 17, 2018

Are Home Prices Rising or Falling?

We are beginning to see reports that more housing inventory is coming to the market and that buyer demand may not be increasing at the same pace it did earlier this year. The result will be many headlines written to address the impact that these two situations will have on home values.

Many of these headline writers will confuse “softening home prices” with “falling home prices,” but there is a major difference between the two.

The data will begin to show that home values are not appreciating at the same levels as they had over the last several years (softening prices). This does NOT mean that prices are depreciating (falling prices).

Here is an example: Over the last several years, national home values increased by more than 6% annually. If you had a home worth $300,000 at the beginning of the year, it would be worth $318,000 by year’s end. If the appreciation rate “falls” to 4%, that $300,000 house would be worth $312,000 at the end of next year – a $6,000 difference.

The price of the home did not fall. It just didn’t increase at the level it had the previous year.

Appreciation rates are projected to end this year at approximately 5%, and then drop to somewhere between 4-5% next year. This drop in appreciation rate will cause home price increases to soften.

Again, this does not mean that home prices will depreciate, but instead that they will appreciate more slowly. 

Bottom Line

Be careful when reading headlines that discuss home values. Some headline writers will be legitimately confused and will use the word falling in place of softening. Others will realize that the headline “Home Prices are Falling!” will get more clicks than “Home Prices are Softening” and will intentionally write the more compelling headline. Read the article. If the word depreciation is not mentioned, home values are not falling.

Posted in Market Updates
Oct. 10, 2018

The Cost of NOT Paying PMI

Saving for a down payment is often the biggest hurdle for a first-time homebuyer as median incomes, rents, and home prices all vary depending on where you live.

There is a common misconception among homebuyers that a 20% down payment is required, and it is this limiting belief that often adds months, and sometimes even years, to the home-buying process.

So, if you can purchase a home with less than a 20% down payment… why aren’t more people doing just that?

One Possible Answer: Private Mortgage Insurance (PMI)

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment."

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. The monthly cost of your PMI depends on the home’s value, the amount of your down payment, and your credit score.

 

Below is a table showing the difference in monthly mortgage payment for a $250,000 home with a 3% down payment and PMI vs. a 20% down payment without PMI:

The first thing you see when looking at the table above is no doubt the added $320 a month that you would be spending on your monthly mortgage cost. The second thing that should stand out is that a 20% down payment is $50,000!

If you are buying your first home, $50,000 is a large sum of money that takes discipline and sacrifice to save. Many first-time buyers save for 5-10 years before buying their homes.

To save $50,000 in 10 years, you would need to save about $420 a month. On the other hand, if you save that same $420 a month, you could afford a 3% down payment in less than a year and a half.

In a recent article by My Mortgage Insider, they explain what could happen in the market while you are waiting to save for a higher down payment:

“The time it takes to save a (larger) down payment could mean higher home prices and tougher qualifying down the road. For many buyers, it could prove much cheaper and quicker to opt for the 3% down mortgage immediately.”

The article went on to say,

“Since renters typically devote a higher percentage of their income to housing than homeowners, providing flexible down payment options can help renters with solid earnings purchase a home – and gain a fixed-rate mortgage with principal and interest payments that will not increase over the life of the loan.”

If the prospect of having to pay PMI is holding you back from buying a home today, Freddie Mac has this advice,

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Based on results of the most recent Home Price Expectation Survey, a homeowner who purchased a $250,000 home in January would gain $50,000 in equity over the next five years based on home price appreciation alone (shown below).

Bottom Line

 

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let's meet so I can explain the market’s current conditions and help you make the best decision for you and your family. (775) 544-6615

Posted in Market Updates
Oct. 3, 2018

Where are Mortgage Interest Rates Headed in 2019?

The interest rate you pay on your home mortgage has a direct impact on your monthly payment; the higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily over the course of the next year.

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.2% from this time last year and are predicted to be 5.1% higher next year.

If both the predictions of home price and interest rate increases become a reality, families would wind up paying considerably more for their next homes.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth, so don’t wait until next year! Give me a call to evaluate your ability to purchase your dream home now. (775) 544-6615

Posted in Market Updates
Sept. 26, 2018

How Much Has Your Home Increased in Value?

Home values have risen dramatically over the last twelve months. In CoreLogic’s most recent Home Price Index Report, they revealed that national home prices have increased by 6.2% year-over-year.

CoreLogic broke down appreciation even further into four price ranges, giving us a more detailed view than if we had simply looked at the year-over-year increases in national median home price.

The chart below shows the four price ranges from the report, as well as each one’s year-over-year growth from July 2017 to July 2018 (the latest data available). 

It is important to pay attention to how prices are changing in our local market. The location of your home is not the only factor which determines how much your home has appreciated over the course of the last year.

Lower-priced homes have appreciated at greater rates than homes at the upper ends of the spectrum due to demand from first-time home buyers and baby boomers looking to downsize.

Bottom Line

If you are planning to list your home for sale in today’s market, give me a call so I can explain exactly what’s going on in our area and your best price range. (775) 544-6615

 

Posted in Market Updates
Sept. 17, 2018

Who's Mortgage Are YOU Paying?

Some people have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize however, that unless you are living with your parents rent-free, you are paying a mortgage... either yours or your landlord’s.

While renting on a temporary basis isn’t terrible, you should most certainly own the roof over     your head if you’re serious about your finances. As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Whether you are looking for a primary residence for the first time or are considering a vacation home at the lake, now may be the time to buy.

Call me to discuss your buying or selling needs! (775) 544-6615

 

Posted in Tips from JO
Sept. 10, 2018

The season is changing. Does this mean you should hold off buying a house?

Just because the season is changing, it does not mean you should hold off buying a home until next year. Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights report reveals that home prices have appreciated by 6.2% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.1% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have already increased by half of a percentage point, to around 4.5% in 2018. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by half a percentage point to around 5.1% by this time next year.

An increase in rates will impact your monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

There are some renters who have not yet purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home which you can then tap into later in life. As a renter, you guarantee your landlord is the person building that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Give me call for your FREE home analysis! (775) 544-6615

Posted in Market Updates