What State Gives You the Most ‘Bang for Your Buck’?

Some Highlights:

  • Thinking of moving across the country? How far will your money take you?
  • The majority of states in the Midwest and South offer a lower cost of living compared to Northeast and Western states.
  • The ‘Biggest Bang for your Buck’ comes in Mississippi where, compared to the national average, you can actually purchase $116.01 worth of goods for $100.
  • For more information regarding the methodology used to create the map, visit the Tax Foundation.
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93.9% Of Homes in The US Have Positive Equity

93.9% Of Homes in The US Have Positive Equity | MyKCM

CoreLogic’s latest Equity Report revealed that ninety-one thousand residential properties regained equity in Q1 2017. The outlook for 2017 remains positive as well, as an additional 600 thousand properties will regain equity if home prices rise another 5% this year.

The study also revealed that:

  • Roughly 63% of all homeowners have seen their equity increase since Q1 2016
  • The average homeowner gained about $14,000 in equity between Q1 2016 and Q1 2017
  • Only 1.6% of residential properties are near-negative equity

Below is a map showing the percentage of homes with a mortgage, in each state, that have positive equity. (The states in gray have insufficient data to report.)

93.9% Of Homes in The US Have Positive Equity | MyKCM

Significant Equity Is On The Rise

Frank Martell, President & CEO of CoreLogic, believes this is great news for the “long-term health of the U.S. economy.” He went on to say:

“Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”

Of the 93.9% of homeowners with positive equity in the US, 78.8% have significant equity (defined as more than 20%). This means that nearly three out of four homeowners with a mortgage could use the equity in their current home to purchase a new home, now.

The map below shows the percentage of homes with a mortgage, in each state, that have significant equity. (The states in gray have insufficient data to report.)

93.9% Of Homes in The US Have Positive Equity | MyKCM

Bottom Line 

If you are one of the many homeowners who are unsure of how much equity they have in their homes and are curious about their ability to move, let’s meet up to evaluate your situation.

Buyer’s Market Helps Premium Home Sales Soar

Buyer's Market Helps Premium Home Sales Soar | MyKCM

We previously reported how a shortage of inventory in the starter and trade-up home markets is driving prices up and causing bidding wars, creating a true seller’s market. At the same time, in the premium home market, an over-abundance of inventory has started to see prices come down and put buyers in the driver’s seat, creating the beginning of a buyer’s market.

Last week, the National Association of Realtors released their Existing Home Sales Report which shed some additional light on the impact of inventory levels on sales in each price range.

The chart below shows the year-over-year difference in sales at each price range.

Buyer's Market Helps Premium Home Sales Soar | MyKCM

The under $100K range has shown declines in recent years due to the shortage of distressed homes available for sale (just 5% of sales this past month, compared to 35% in January 2012). Sales in the next two price ranges are no doubt being hindered by low inventory as buyers compete for the same home.

NAR’s Chief Economist, Lawrence Yun, explained:

“Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”

The biggest surprise? This is the first time in years where the $1M and up price range had the highest jump in sales when compared to last year and to all other price ranges (29.1%)! The two price ranges right underneath the $1M range were a close second and third. As the price went up, so did the sales!

With additional inventory available in the higher price ranges, and the economy improving, many luxury buyers are finding it easier to find their dream homes. Yun commented,

“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level.”

Bottom Line

If you are one of the many homeowners who is looking to sell your starter or trade up home and move up to a luxury home, now is the time!

THREE GREAT REASONS TO CONSIDER A CASH-OUT REFINANCE

Interest rates on home loans are near their best levels of the year, while home values in many parts of the country have increased.  In this environment, many homeowners are considering a “cash-out” refinance.  This is where you pay off your old mortgage by getting a new mortgage with a higher balance.  The difference between the old loan and the higher-balance new loan is called “cash-out.”  That’s because you’re walking away from the new closing with cash.  Here are three reasons why you may want to consider a cash-out refinance:

  • Pay off other debt that may carry a higher after-tax interest rate. For example, the interest on up to $100,000 of cash-out proceeds may be tax deductible if you itemize your deductions and if you’re not subject to the Alternative Minimum Tax (AMT).  Please reference IRS publication 936 and see a CPA or tax advisor for more details.
  • Make home improvements – keep in mind that there are some home improvements that may add to the value of the home or at least help you maintain its value. These may include an addition to the house, a new kitchen, and upgraded landscaping.
  • Prepare for a large upcoming expense – increasing your mortgage balance could be a budgeting strategy if you have a large upcoming expense that would otherwise cause you to go into credit card debt. These expenses can include unexpected medical bills, new furniture or major appliances.

The great thing about today’s low-interest rate environment is that your monthly payment on the new mortgage may end up being very close to what you’re paying right now.  Please contact me for more information or to run the numbers for your specific scenario!

WHAT IS A “NON-CONTINGENT” OFFER?

Many homebuyers today are competing with multiple offers due to the low inventory of homes for sale in their price range.  In this environment, many homebuyers consider placing a “non-contingent” purchase offer on the new home because it could potentially help them win a bidding war. A non-contingent purchase offer means that your offer to buy a house is not contingent (or conditioned upon) any of the common contingencies such as your ability to obtain financing, your ability to sell your current home or an independent appraisal of your new home. Here are three of the common risks associated with making a non-contingent offer:

1 – What if Your Home Doesn’t Sell?
If you waive the contingency of selling your home first, it means that you’re still obligated to purchase the new home even if your old home doesn’t sell.  This only works for homebuyers who don’t currently have a mortgage, or homebuyers who can afford (and get approved for) two mortgage payments – one on the old home, and one on the new home.2 – What if Your Financing Approval Falls Through?
Even if your financing approval is a “done deal”, it’s never really done until you get the money.  For example, what if you lose your job between the time of the financing approval and the time you purchase your new home?

3 – What if the New House Doesn’t Appraise at or Above the Purchase Price?
In this case, you would likely need to come to closing with the difference in the two values.  That’s because mortgage lenders only lend you money based on the LOWER OF the purchase price or appraised value.

Of course, this is not an exhaustive list of everything you should know about waiving contingencies!  That’s why it’s important for you to check with a real estate attorney before making this type of decision.

Contact me for more information about your mortgage options.

Selling Your Home? Is Your Listing ‘Pet-Friendly’?

Selling Your Home? Is Your Listing ‘Pet-Friendly’? | MyKCM

One of the many benefits of owning your own home is the freedom to find your ‘furever’ friend. By pointing out the aspects of your home that make it ‘pet-friendly’ in your listing, you’ll attract these buyers rather than alienate the 61% of American households that have a pet!

If you are one of the many homeowners looking to list your home for sale, how do you stand out to the millions of pet parents searching for their dream homes?

Whether a dog person, a cat person, or someone who prefers the company of another pet species, 99% of pet owners say that they consider their animal to be family. When finding a home, 95% of animal owners believe it is important that a housing community allows animals.

A recent study by the National Association of Realtors (NAR) revealed that there are many aspects of the home buying, selling and owning experience that have been greatly impacted by American’s love for their pets.

This should come as no surprise as $66.75 billion was spent on pets in the U.S in 2016, with $70 billion projected for 2017. NAR’s President William E. Brown shed some light on the impact of pet owners and their home search,

“In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership.  

REALTORS® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family.”

The Power of Pets When Choosing the Right Home

  • 89% of pet owners say they would not give up their pet due to a housing restriction
  • 81% of Americans say their pets play a role in their housing situation
  • 31% of animal owners have refused to put in an offer on a home because it wasn’t a good fit for their animals
  • 19% of Americans say they would consider moving for their pet
  • 12% percent have moved for their pet

New home builders have actually begun installing retractable pet gates that tuck away neatly inside door jams as a highly requested feature in new homes to attract pet-parents, according to Builder.com.

So, if you are a homeowner looking to sell in today’s pet-friendly environment, point out the features of your home that will attract pet owners:

  • Fully fenced in backyard – (91% of pet owners ranked this as the most important feature of a home to accommodate their pet)
  • Locations of dog parks/walking paths/pet-friendly beaches in the area (71% ranked this as the top feature of any neighborhood they would consider)
  • Proximity to veterinarians/groomers/pet supply stores (31%)

Bottom Line

Americans love their pets and will look for pet-friendly features in the home they wish to buy, so take advantage of this knowledge by pointing out your home’s ability to meet their needs.

Slaying Home Buying Myths

Slaying Home Buying Myths [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Interest rates are still below historic numbers.
  • 88% of property managers raised their rent in the last 12 months!
  • The credit score requirements for mortgage approval continue to fall.