The Wave of Millenial Buyers Continues to Grow

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as a part of attaining their American Dream.

Comparatively speaking, millennials have taken longer to obtain traditional milestones (like getting married, having kids and buying a home) than generations before them, but that does not mean that they do not aspire to still achieve those things.

For older millennials (aged 25-34) who have established themselves in their career and are starting to build their families, homeownership is the next logical choice.

According to the Urban Institute’s State of Millennial Housing, the probability of a millennial becoming a homeowner increases by 17.9% if they are married, and by an additional 6.2% if they have children.

Last year, according to the US Census Bureau, the average age at first marriage was 30 for men and 27 for women, while the National Association of Realtors (NAR) reports that the average first-time homebuyer was 32 years old.

With most of this generation having yet to age into the ‘Responsibility Zone’ (the time in their lives when their responsibilities start to dictate their behaviors), there will be a steady wave of buyers for years to come!

Those who are currently out in the market searching for a home are being met with a strong, highly competitive seller’s market. NAR’s Chief Economist Lawrence Yun recently commented,

“Realtors® throughout the country continue to stress that there’s considerable pent-up demand for buying a home among the millennial households in their market.

Unfortunately, they’re just not making meaningful ground, and continue to be held back by too few choices in their price range, and thereby missing out on homeownership and wealth gains.”

Bottom Line

If you are currently renting and thinking about jumping into the real estate market this year, chat with me at 972-813-9788 or atfowler@newavenuerealty.com who can help you navigate your market.

Buying a Home is Cheaper Than Renting? How Sway.

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage, in 98 of the 100 largest metro areas in the United States.

In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in any of the metropolitan areas.

It’s no surprise, however, that those two metros are San Jose and San Francisco, CA, where median home prices have jumped to over $1 million dollars this year. Home values in San Jose have risen 29% in the last year, while rents have remained relatively unchanged.

For the 98 metros where homeownership wins out, 97 of them show a double-digit advantage when buying. The range is an average of 2.0% less expensive in Honolulu (HI), all the way up to 48.9% in Detroit (MI), and 26.3% nationwide!

Below is a map of the 100 metros that were studied. The darker the blue dot on the metro, the cheaper it is to buy there.

Buying Is Now 26.3% Cheaper Than Renting in the US | Keeping Current Matters

In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here.

Below is a chart created with the data from the last six years of the study, showing the impact of the median home price, rental price, and 30-year fixed rate interest rate used to calculate the ‘cheaper to buy’ metric.

Buying Is Now 26.3% Cheaper Than Renting in the US | Keeping Current Matters

In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

Cheryl Young, Trulia’s Chief Economist, had this to say,

“One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

Bottom Line

Homeownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

Mortgage Process

  • Many buyers are purchasing a home with a down payment as little as 3%.
  • You may already qualify for a loan, even if you don’t have perfect credit.
  • Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.

Tips When Making An Offer on Your Home

So, you’ve been searching for that perfect house to call a ‘home,’ and you’ve finally found it! The price is right, and in such a competitive market, you want to make sure that you make a great offer so that you can guarantee that your dream of making this house yours comes true!

Below are 4 steps provided by Freddie Mac to help buyers make offers, along with some additional information for your consideration:

1. Determine Your Price

“You’ve found the perfect home and you’re ready to buy. Now what? Your real estate agent will be by your side, helping you determine an offer price that is fair.”

Based on your agent’s experience and key considerations (like similar homes recently sold in the same neighborhood or the condition of the house and what you can afford), your agent will help you to determine the offer that you are going to present.

Getting pre-approved will not only show home-sellers that you are serious about buying, but it will also allow you to make your offer with confidence because you’ll know that you have already been approved for a mortgage in that amount.

2. Submit an Offer

“Once you’ve determined your price, your agent will draw up an offer, or purchase agreement, to submit to the seller’s real estate agent. This offer will include the purchase price and terms and conditions of the purchase.”

Talk with your agent to find out if there are any ways in which you can make your offer stand out in this competitive market! A licensed real estate agent who is active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer.

3. Negotiate the Offer

“Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or to adjust the closing date. In these cases, the seller’s agent will submit a counteroffer to your agent, detailing their desired changes, at this time, you can either accept the offer or decide if you want to counter.

Each time changes are made through a counteroffer, you or the seller have the option to accept, reject or counter it again. The contract is considered final when both parties sign the written offer.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller or even cancel the contract altogether.

4. Act Fast

The inventory of homes listed for sale has remained well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.

Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as quickly as possible.

Bottom Line

Whether you’re buying your first home or your fifth, having a local professional on your side who is an expert in his or her market is your best bet in making sure the process goes smoothly. Happy house hunting!

Arrowbrooke Summer Bash

It’s summer time. School is almost out. What do you do with that time? You throw a Summer Bash in your favorite neighborhood.

I had this idea late last year and needed the perfect neighborhood to execute the idea. I met up with the HOA with the Arrowbrooke neighborhood and explained how I would love to sponsor an event. We came up with this “block party” for the neighborhood. We decided to scale back and connect it with another event that was scheduled.

We got a group of men from the neighborhood to grill food. I had some of my real estate partners sponsor the DJ and giveaways. It ended up being this awesome party for the neighborhood.

Supply & Demand of Real Estate

Just in case you slept through Economics/Civics class in high school and/or college 🙋🏾‍♀️……

Ever wondered why the prices of homes keep increasing in DFW? Is it the new companies constantly moving here? The new Dallas transplants? Or simple supply and demand?

Here’s the DFW answer.

Why are home prices still rising? It is a simple answer. There are more purchasers in the market right now than there are available homes for them to buy. This is an example of the theory of “supply and demand” which is defined as:

“the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.”

When demand exceeds supply, prices go up. This is currently happening in the residential real estate market.

Here are the numbers for supply and demand as compared to last year for the last three months (March numbers are not yet available):

House Prices: Simply a Matter of Supply & Demand | Keeping Current Matters

In each of the last three months, demand (buyer traffic) has increased as compared to last year while supply (number of available listings) has decreased. If this situation persists, home values will continue to increase.

Bottom Line

The reason home prices are still rising is because there are many purchasers looking to buy, but very few homeowners ready to sell. This imbalance is the reason prices will remain on the uptick.

2 Ways to Get the Most from the Sale of Your Home

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?

Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW

This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

2 Ways to Get the Most Money from The Sale of Your Home | Keeping Current Matters

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

A study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.

The Finale: I BOUGHT A HOUSE

It’s a few weeks before closing, I’ve worked out situations with my lender on what I need to do and find out NOT one but TWO of my deals are falling through. In real estate, every deal doesn’t go through. Those aren’t the things I share publicly because that isn’t sexy. How many Realtors out there are really talking about those things? One of the two was deal set to close FOUR days before my home. That WAS my downpayment. I couldn’t sleep at all after finding out. I really was about to watch something I dreamed of walk away so easily. However, when you really work your business, you are never without business. I had another deal come through and close a few weeks prior that secured the extra funds I needed to pay off my car. We even worked everything out to where I brought in $1300 at closing.

I swear every call I received from the lender, my heart would drop. I’m like I have no more money to give without completing falling out of my living comfort zone.

What I learned from the whole process is

1. Never depend on others to do what you REALLY want to do. I know deals may fall through however that one deal set me back because I was dependent on it for my home. Had I not had my house tied to it, I would have been okay.

2. Be resourceful. Just because you have one way or doing things doesn’t make it the only or best way. I was able to use a mortgage credit certificate (which helps me qualify for a tax credit for the life I own the home) to help offset my debt to income ratio. This helped me not really break the bank after paying the car off.

3. Always have MORE money. Down payment assistance route was never my option because I knew the cost of that would have me way out of my comfort zone. I settled for a slightly higher rate than I felt I should have gotten because of the money I wanted to bring to closing. I still feel like my rate should be lower and somewhere between now and April, I hope that can happen.

4. Don’t sweat the small stuff. I tossed and turned every night until I signed the papers. I never got to really enjoy my home when I moved in because I suddenly had to move as my lease ended the day after closing. In my mind, I had to grind for the first mortgage payment. It’s like bills are due and there is no time to slack off. This made me not really sit back and enjoy my hard work. I overworked myself for 2017 because I had grand goals. The first and most important one has been accomplished.

Let’s take a look at the process:

https://youtu.be/_StcYD9o-f0

I BOUGHT A HOUSE: Building the Dream (Part 3)

The ball is now rolling and it’s official, I’m buying a house. Although I was quite excited, deep down I felt like something was going to happen during this time. I kept wondering why the other lender kept saying I wouldn’t qualify but my new one was like Yes! Would I get so far in my process and it not come true? Honestly, it was these thoughts that stopped me from publicly discussing building a home.

So here we are. It’s May 2017 and I’m starting. It’s getting real. I’m nervous and excited at the same time.

After returning from my little sister’s baby shower in Atlanta.
Foam boards going in.
Roughing plumbing

Before foundation is poured.

I LIVED for this moment here. I literally cried at this very moment.
Foundation has been poured.

I went away for the Fourth of July weekend at Essence and came back to this.

It was at this moment who I was emotionally invested. I needed to do whatever it took to keep the no and nay says away. It’s July 2017 and my home is slated to be completed in 2 months. I started to pay off EVERYTHING. When I say EVERYTHING, I did everything. That tax bill that I should have paid off in 2016 was finally paid off. Those credit cards were finally paid off. I did whatever the lender saw fit. However, there was a hold up. The lender I was using had internal issues that affected me. I get a call from a random person saying he’s know my loan officer. I am NOT receptive to it. I’ve been working with this particular lender for the company and I like him. He had a Realtor Day at his lake house and I really enjoyed him. Your personal finance is heavily on display when buying a home so it is important to work with someone you can trust. I trusted this guy not the new guy calling. I let that be known and it was told to me that my regular guy would finish up my loan process. Well, two weeks later, they LOCKED him out of the file.

As a Realtor, I understood the internal issues but as the now consumer, I was hot. The communication now lagged because my second lender guy was ON IT. I had questions and he had answers. This mess from the inside meant a delay on getting an answer. I was in debate with should I pay my car off. Can I do this instead? Can we use this program to help offset my DTI (Debt to income ratio because that was really my main issue anyway. It wasn’t my debt more so the income I claimed. I wanted to pay lower taxes so the income that I actually made was lower)? I remember distinctly waiting a week and a half for my question to be answered when I responded 5 minutes later to an original email. It was at that moment that I said GOODBYE.

I didn’t want to be involved in the tussle anymore and communication is MAJOR for me. Buying a home or better yet financing a home is stressful enough. I didn’t need the extra stress. I went back to my sales rep and said okay, who is next on the list. I told her I’d try one of the preferred lenders again and if it didn’t work, I’d go with one of my own lenders and just pay $20K extra because I’d lose my incentives for working with an outside lender.

She recommends Mortgage Financial Services and Jim Ward. I thoroughly explained to Jim what was happening, what I needed, and to guarantee he could get me to the closing table. If he couldn’t do it, just let me know ahead of time. He mentioned he could but I would have to pay off my car. I was trying to avoid that. I was like Jim, “I don’t owe like $2000 on the car. I owe almost $8000 and now we are interfering with the money I have saved for my downpayment. After counting my resources, I knew I had a closing right before the scheduled date to close on my home. In some way, this could work out OR it could end really bad. Just my luck, it got bad before it got good.

Supposed to be a half wall instead it was a whole one. I paid an additional $100 for a half one.
Me to My Builder: Just as long as they remember. I’d hate for them to continue and have to come take it all off.

I’ve extended this to four parts. I couldn’t add so much for part 3. Thanks for reading and stay tune for the final part next week*

Why You Need An Agent for New Construction

Are you ready to buy a home and considering going in the route of new builds? It may seem like an easy enough process, where you get to call the shots of how you want your dream home to be, but there is a lot of risk when it comes to new construction if you are going in blindly. It’s unfortunately not as trouble free as we’d like to hope, if you don’t have the right representative by your side to help with the things that need to be looked out for from a professional’s eye. Below, we’ll dive into the many reasons you need a professional buyer’s agent representing you in the sale. They are, after all, on your side. And it’s their role to ensure you aren’t taken advantage of by the builders and their representatives in the transaction.
1. HIRING THE RIGHT BUILDER

The most important part of finding an agent is having a professional’s perspective to finding a builder with a great reputation. You get to benefit from your agent’s network of vendors, lenders, and home builders. They have the industry expertise to connect you with a builder that matches your needs, and more than likely, have already had experience with the builder with a past client. Or, if they haven’t worked with a builder you want to use directly, they can gather person-to-person recommendations from other agents to know the expected experience with said builder. They will help you find one, that not only delivers exactly what their clients want, but in a timely fashion.

2. THE RIGHT LOT IN THE RIGHT NEIGHBORHOOD

The lot you choose to go with in a new build can either be a positive to your new home, or detrimental. In the excitement of the process, we tend to overlook important features of a property. It’s important to have a professional to ensure you make a purchase that will best serve you. They’ll be able to find a neighborhood that best fits your lifestyle and a lot that has a location that works for you. Whether you’re single with pets, or a family with children, the lot location can really make a huge impact. Especially when it comes time to selling it in the future. These are important things your agent will be able to help walk you through, so your decisions work in your favor in the long term, as well as now.

3. UPGRADES AND PLAN MODIFICATIONS

Not only will your agent be able to ensure you get the upgrades and modifications that will best suit your lifestyle, but will also help you make decisions that will increase the value of your home in the long term. They are working for your best interest long term, and with an agent’s guidance, you can be sure to make changes that end up benefiting you.

4. HANDLING CONTRACTS AND PAPERWORK

Your agent will handle the contract and all of the paperwork, and they will be sure to review it to ensure that it is in your best interest. They will be able to help you break down the best loan types, purchasing processes, and steps to take that benefit YOU, not the builder. They are, after all, working for you. They’ll make sure there are no overlooked terms in a builder’s contract that could end up hurting you after you move in. Or even during the building process. You want to make sure you have a professional who is experienced with the paperwork and contracts and knows how to make revisions that work in a way that make you happy.

5. NEGOTIATIONS

It is imperative in the purchasing process to have an agent that is able to represent you and negotiate for you. The building process is so much more than having the builder put in your favorite counters and floors. They will be able to get you a price that actually benefits you – not the builder. They will be able to run a comparative market analysis to ensure you are paying a fair price for the property. You don’t want to end up overpaying for the home – it could put you in a tough spot when it comes time to sell. They’ll also be able to negotiate terms around building time frame, closings costs, and so many other aspects of a contract that you may otherwise overlook.

6. BUILDER’S AGENT REPRESENTS THEM, NOT YOU

It may seem easy just to pop into an office of a new build, or a builder’s office, and use the onsite agent. But keep in mind that this agent works FOR the builder, NOT for you. So they will be working to make sure the builder gets the best deal at the end of the day. By having a buyer’s agent of your own, you can ensure there is a professional on your side that can walk you through the process and avoid being taken advantage of during the transaction. They will also have a better handle on things when you hit bumps along the way. If you end up working with a builder who isn’t holding their end of the deal, they will have the power to make connections that ensure the builder holds their end of the contract terms.