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June 18, 2022

Saying Goodbye To Your Family Home

 

It’s easy to tell yourself that your house is just a building made of walls and ceilings and light fixtures and flooring, but when it comes time to sell, you may start to feel the sting of grief.

After all, you don’t know if the new owners will take care of the rows and rows of brilliant iris that line the fence in the spring or if they’ll cut down the tree where robins have nested for years because they don’t realize it waits for the first burst of summer heat to spring back to life.

 

Will they paint your child's former bedroom and cover up the jamb that marks their height each year? Will they take out the built-in desk and bookcases you made that summer?

 

Maybe saying goodbye isn’t the easy process you thought it would be.  Selling your family home is a type of loss.

When you’re selling your family home, it’s not just a building that you’re saying goodbye to. It’s all the memories you made there, the familiariarity and, maybe most importantly, the security of that one place you could always fall back to if life started kicking you too hard. This goes for the house that you raised your kids in as well as the house where you were raised — both are genuine losses.

 

“You’re dismantling something that was once precious, and you have to go through grief and mourning when this happens.” psychologist Dr. Arthur Kovacs explained in an interview with the Chicago Times.

Of course, that’s only part of the story. Another element that makes it so hard to quit a family home is the link between memory and physical space. When your memories are tangled in with your home, it can be hard to let go.

“We have memories and associations that are connected to all of those things that make houses so heavily connected to ourselves,” Duke University’s department of psychology and neuroscience chair, Dr. Scott Huettel, goes on to explain the phenomenon to the New York Times.

Much of the time when you’re looking to sell a family home, it’s due to a big change in life. Maybe your kids have all grown and you’re planning to simplify your life or maybe your parents have died and you’re having to liquidate their estate. No matter the reason, it’s one of the hardest things you can do, even if you think you’re totally prepared.

How do you get ready for such a big shift in your life? It’s all about your mindset. Start to detach from the house by taking down and packing anything that’s personal. This includes photos, crafted decorations, paintings and so forth. As you take these things off the walls, the space starts to become more generic, less personal and it gets easier to consider selling the house.

If you’re still feeling the pain at this point, work on other parts of the house. Remember that crack in the wall from four years ago when the game controller flew from your daughter’s hand and hit the wall at full force? Patch that up. Your buyer probably won’t even notice it, but you will.

 

When the Offer Comes Through

The day will come that you get an offer. Resist the urge to flat out reject it, no matter the price. This is where the rubber meets the road — it’s now grossly apparent that you’re selling the house you poured so much of yourself into rather than just thinking about it.  Here's where your excellent agent comes to the rescue (hi there!)

Getting Ready to Hand Over the Keys

It's time for a party! Call it a “remembrance party” or something festive, but the whole point is to say goodbye in a big way so you can get the closure you need. Some people go room by room to have one last good walk down memory lane, others celebrate by doing something they hadn’t gotten around to doing, like hosting a luau.

Your goodbye will be best if you do it in a way that’s meaningful to you and your family. There aren’t really any shortcuts when it comes to grief, unfortunately. Don’t beat yourself up, it’s not “just a house.” That’s the building that sheltered and protected you year after year. That’s the stuff that attachment is made of.

Contact me to talk about how we market vacation properties in Montana with the least amount of inconvenience and stress for you.

 

June 15, 2022

Early Summer Market Update

The market is stabilizing...what does that mean? New properties on market are not "reaching" to test what buyers will pay, rather they are more grounded in market research.

There has been an uptick in the number of listings. The median price is higher overall in most local markets than this time last year (we continue to have above average equity growth).

The DOM (days on market) have decreased, properties are going under contract faster than this time last year on average.

With the except of Three Forks, which still offers the best value in our southwestern Montana region, closed pricing is ranging from 11-61% higher than spring of 2021.

Click the link below ⬇️⬇️⬇️ to see stats for the area of choice. If your market isn't shown here, DM me and I'll put together a report for you!


🔸 City of Bozeman
🔸 Greater Bozeman area
🔸 Greater Big Sky
🔸 Belgrade
🔸 Greater Manhattan
🔸 Three Forks
🔸 Livingston City Limits
🔸 Park County (w/ Paradise Valley)


May 7, 2022

What’s the Deal With Rents Going up So Fast?

Owning Is More Affordable than Renting in the Majority of the Country | MyKCM

Holy Moly! Owning Is More Affordable than Renting in the Majority of the Country

 

If you were thinking about buying a home this year, but already pressed pause on your plans due to rising home prices and increasing mortgage rates, there’s something you should consider. According to the latestreport from ATTOM Data, owning a home is more affordable than renting in the majority of the country. The 2022 Rental Affordability Report says:

“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.”

Other experts in the industry offer additional perspectives on renting today. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November each year (see graph below):

 

Molly Boesel, Principal Economist at CoreLogic, stresses the importance of what the data shows:

Single-family rent growth hit its sixth consecutive record high. . . . Annual rent growth . . . was more than three times that of a year earlier. Rent growth should continue to be robust in the near term, especially as the labor market continues to improve.”

What Does This Mean for You?

While it’s true home prices and mortgage rates are rising, so are monthly rents. As a prospective buyer, rising rates and prices shouldn’t be enough to keep you on the sideline, though. As the chart above shows, rents are skyrocketing. The big difference is, when you rent, that rising cost benefits your landlord’s investment strategy, but it doesn’t deliver any sort of return for you.

In contrast, when you buy a home, your monthly mortgage payment serves as a form of forced savings. Over time, as you pay down your loan and as home values rise, you’re building equity (and by extension, your own net worth). Not to mention, you’ll lock in your mortgage payment for the duration of your loan (typically 15 to 30 years) and give yourself a stable and reliable monthly payment.

Here's my chicken scratch graph if you are more of a visual person:

When asking yourself if you should keep renting or if it’s time to buy, think about what Todd Teta, Chief Product Officer at ATTOM Data, says:

“. . . Home ownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.”  

If buying takes up a smaller portion of your pay and has benefits renting can’t provide, the question really becomes: is renting really worth it?

Bottom Line

If you’re weighing your options between renting and buying, it’s important to look at the full picture instead of just headlines screaming HIGHER RATES, HIGHER PRICES.  Let's talk so you can make an educated grounded decision that's best for you.  Even if you decide waiting is the way, I'm on board with that and can help strategize a plan for down the road.

April 9, 2022

The Perks of Putting 20% Down on a Home

 

The Perks of Putting 20% Down on a Home | MyKCM

If you’re thinking of buying a home, you’re probably wondering if you could put down less than 20% of the purchase price?  While there are lower down payment programs available that allow qualified buyers to put down as little as 3.5%, it’s important to understand what comes with a 20% down payment.

Here are four reasons why putting 20% down may be a great option if it works within your budget.

1. Your Interest Rate Will Likely Be Lower

A 20% down payment vs. a 3-5% down payment shows your lender you’re more financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage interest rate they’ll likely be willing to give you.

2. You’ll End Up Paying Less for Your Home

The larger your down payment, the smaller your loan amount will be for your mortgage. If you’re able to pay 20% of the cost of your new home at the start of the transaction, you’ll only pay interest on the remaining 80%. If you put down 5%, the additional 15% will be added to your loan and will accrue interest over time. This will end up costing you more over the lifetime of your home loan.

3. Your Offer Will Stand Out in a Competitive Market

In a market where many buyers are competing for the same home, sellers often like to see offers come in with 20% or larger down payments. The seller gains the same confidence as the lender in this scenario,  seeing a stronger buyer with financing that’s more likely to be approved. Therefore, the deal will be more likely to go through.

4. You Won’t Have To Pay Private Mortgage Insurance (PMI)

What is PMI? According to Freddie Mac:

“For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage.

It is not the same thing as homeowner's insurance. It's a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%. . . . Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your monthly payment.”

As mentioned earlier, if you put down less than 20% when buying a home, your lender will see your loan as having more risk. PMI helps them recover their investment in you if you’re unable to pay your loan. This insurance isn’t required if you’re able to put down 20% or more.

Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity they earn from the sale of their house to put 20% down on their next home. With the equity homeowners have today, it creates a great opportunity to put those savings toward a larger down payment on a new home.

Bottom Line

If you’re looking to buy a home, consider the benefits of 20% down versus a smaller down payment option. Let's chat to develop the best strategy for your situation.

April 1, 2022

4 Ways Homeowners Can Use Their Equity

Your equity is a powerful tool that can help you achieve your goals as a homeowner. And chances are, your equity grew substantially over the past year. According to the latest Equity Insights Report from CoreLogic, homeowners gained an average of $51,500 in equity over the past year.

If you’re looking for the best ways to use your growing equity, here are four options:

1. Use Your Equity To Buy a Home That Fits Your Needs

If you’re finding you no longer have the space you need, it might be time to move into a larger home. Or, it’s possible you have too much space and would like something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. Moving into a larger home can provide extra space for remote work or loved ones. Downsizing, on the other hand, may mean saving time and money by caring for a smaller home.

Equity has no value until it is utlilized.

2. Move to the Location of Your Dreams

If the size of your home isn’t a challenge but your current location is, it could be time to relocate to a new area. Maybe you enjoy vacationing in the mountains, at the beach, or another area, and you’re dreaming of living there year-round. Or perhaps the distance between you and your loved ones is greater than you’d like, and you want to close the gap. No matter what, your home equity can fuel your move to the location where you really want to live.

3. Start a New Business

If you’re not ready to move into a new home, you can use your equity to invest in a new business venture. As the U.S. Small Business Administration Office of Advocacy says:

“There is an estimate of 31.7 million small business owners in the United States, many of them started their business with the equity they had in their home.

While it’s not recommended that homeowners use their equity for unnecessary spending, leveraging your equity to start a business that you’re passionate about can potentially grow your nest egg further.

4. Fund an Education

Whether you have a loved one preparing to head off to college or you’re planning to go back to school yourself, the thought of paying for higher education can be daunting. In either situation, using a portion of your growing equity can help with those costs, so you can make an investment in someone’s future.

Bottom Line

Your equity can help you achieve your goals. If you’re unsure how much equity you have in your home, let’s connect today so you can start planning your next move.

March 14, 2022

This Spring = A Golden Selling Opportunity

If you're thinking of selling your house this year, timing is crucial. You'll want to balance getting the most out of the sale of your current home and making the best investment when you buy your next one.

If that's the case, you should know – you may be able to get the best of both worlds today. Here are four reasons why this spring may be your golden window of opportunity.  Listen up!👂

 

1. The Number of Homes on the Market Is Still Low

Today's limited supply of houses for sale is putting sellers in the driver's seat. There are far more buyers in the market today than there are homes available. That means purchasers are eagerly waiting for your house.

Listing your house now makes it the center of attention. And if you work with a real estate professional to price your house correctly, you can expect it to sell quickly and likely get multiple strong offers this season.

 

2. Your Equity Is Growing in Record Amounts

According to the most recent Homeowner Equity Insight report from CoreLogic, homeowners are sitting on record amounts of equity thanks to recent home price appreciation. The report finds that the average homeowner has gained $55,300 in equity over the past year.  But it's on real money if you access it.

That much equity can open doors for you to make a move. It's If you've been holding off on selling because you're worried about how rising prices will impact your next home search, rest assured your equity can help fuel your move. It may be just what you need to cover a large portion – if not all – of the down payment on your next home.

Equity can ebb and flow, accessing it when it's at or near it's highest level maximizes the value of your asset.

3. Mortgage Rates Are Increasing

While it's true mortgage rates have already been climbing this year, current mortgage rates are still below what they've been in recent decades. In the 2000s, the average mortgage rate was 6.27%. In the 1990s, the average rate was 8.12%.

 

For context, the current average 30-year fixed mortgage rate, according to Freddie Mac, is 3.85%. And while recent global uncertainty caused rates to dip slightly in the near-term, experts project rates will rise in the months ahead. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, says:

For homebuyers, we believe that borrowing costs will likely rise with the increase in mortgage rates….

When that happens, it'll cost you more to purchase your next home. That's why it's important to act now if you're ready to sell. Work with a trusted advisor to kickstart the process so you can take key steps to making your next purchase before rates climb further.

 

4. Home Prices Are Climbing Too

Home prices have been skyrocketing in recent years because of the imbalance of supply and demand. And as long as that imbalance continues, so will the rise in home values.

What does that mean for you? If you're selling so you can move into the home of your dreams or downsize into something that better suits your current needs, you have an opportunity to get ahead of the curve by leveraging your growing equity and purchasing your next home before prices climb higher.

 

And, once you make your purchase, you can find peace of mind in knowing ongoing home price appreciation is growing the value of your new investment.

 

Let's meet to discuss your equity.  We'll do a current Equity Update for you!

 

March 8, 2022

More Insights on the 2022 Housing Market



Now that we are well into 2022, what's happening next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, rather than dusting off the crystal ball, let's leave it to the experts. Here’s a look at what they say we can expect through 2022.

Odeta Kushi, Deputy Chief Economist, First American:

“Consensus forecasts put rates at about 3.7% by the end of the year. So, that's still historically low, but certainly higher than they are today.”

Danielle Hale, Chief Economist, realtor.com:

Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”

George Ratiu, Manager of Economic Research, realtor.com:

“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”

Mark Fleming, Chief Economist, First American:

Strong demographic demand will continue to act as the wind in the housing market’s sails.”

What Does This All of This Mean for You?

Hope is on the horizon for 2022. As a buyer, you should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.

What If You Are Selling?

Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Let's not confuse this with a declining market or a crash.

Selling your house while buyer demand is so high will truly put you in the driver’s seat. But...don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.

Need more data or want to discuss how we can partner with you for the greatest chances of success?  Let's do a virtual coffee.  Book it here.

March 4, 2022

What’s Going To Happen with Home Prices This Year?

Let's take a look:

After almost two years of double-digit increases, many experts thought home price appreciation would decelerate or happen at a slower pace in the last quarter of 2021. However, the latest Home Price Insights Report from CoreLogic indicates while prices may have plateaued, appreciation (increase in values) has definitely not slowed. The following graph shows year-over-year appreciation throughout 2021. 

What’s Going To Happen with Home Prices This Year? | MyKCM

As the graph shows, appreciation has remained steady at around 18% over the last five months.

In addition, the latest S&P Case-Shiller Price Index and the FHFA Price Index show a slight deceleration from the same time last year – it's just not at the level that was expected. However, they also both indicate there’s continued strong price growth throughout the country. FHFA reports all nine regions of the country still experienced double-digit appreciation. The Case-Shiller 20-City Index reveals all 20 metros had double-digit appreciation. 

So what does this all mean?

Why Haven’t We Seen the Deeper Deceleration Many Expected?

Experts had projected the supply of housing inventory would increase in the last half of 2021 and buyer demand would decrease, as it typicall does as we move close to the end of a calendar year.  Since pricing is always subject to supply and demand, it seemed that appreciation would wane under those conditions.

But it didn't.

Buyer demand did not slow as much as expected, and the number of listings available for sale dropped instead of improved. The graph below shows data from realtor.com to show the number of available listings for sale each month, including the decline in listings at the end of the year.

What’s Going To Happen with Home Prices This Year? | MyKCM

Here are three reasons why the number of active listings didn’t increase as expected:

1. There wasn't been a surge of foreclosures as the forbearance program came to an end.

2. New construction slowed considerably because of supply chain challenges.

3. Many believed more sellers would put their houses on the market once ththat has not happened eithre.  A recent article published by com explains:

“Before the omicron variant of COVID-19 appeared on the scene, the 2021 housing market was rebounding healthily from previous waves of the pandemic and turned downright bullish as the end of the year approached. . . . And then the new omicron strain hit in November, followed by a December dip in new listings. Was this sudden drop due to omicron, or just the typical holiday season lull?”

No one knows for sure, but it does seem possible.

Bottom Line

Home price appreciation might slow (or actually decelerate) in 2022. However, based on supply and demand, you shouldn’t expect the deceleration to be swift or deep. Waiting for a severe drop in the market?  There's no indication that will happen. If you are waiting it out, remember that appreciation levels are still increasing, meaning you could pay anywhere from 10-20% more for the same house you are eyeing online right now.  If your income isn't increasing to keep pace, or you aren't selling a home to make up that difference, waiting could cost you a pretty penny.

Let's strategize about your options.  Give me a call.

Feb. 22, 2022

Retirement May Be Changing What You Need in a Home

The past year and a half brought about significant life changes for many of us. For some, it meant entering retirement earlier than expected, and for others a reassessment of what's important.  Often this includes where we currently live. Recent data shows more people retired this past year than anticipated. According to the Schwartz Center for Economic Policy Analysis, 2021 saw a retirement boom:

“At least 1.7 million more older workers than expected retired due to the pandemic recession.”

If you’ve recently retired, your home may not fit your new lifestyle. The good news is, you’ve likely built-up significant equity that can fuel your next move. According to the latest Homeowner Equity Insights report from CoreLogichomeowners gained more than $50,000 in equity over the past 12 months alone. That, plus today’s sellers’ market, presents a great opportunity to sell your house and address your evolving needs.

Moving Closer to the Ones You Love

The 2021 Home Buyers and Sellers Generational Trends report from the National Association of Realtors (NAR) provides a look at the reasons people buy homes. For those reaching retirement age, the number one reason to buy is the opportunity to be closer to loved ones.  This doesn't always mean moving closer to family, it could be the desire to spend more time with a close friend or even a physical location that makes you happy.

If you find yourself farther from your loved ones than you’d like to be, retirement and the equity you’ve built in your home may enable you to move closer to the people in your life who matter most.

You Can Find the Right Home for Your Needs

Not only can your equity power a move to a new location, but it can also help you purchase the right size home. Lawrence Yun, Chief Economist at NAR, says many homebuyers 55 and older choose to downsize – or buy a smaller home – when they make a purchase:

“Clearly from the age patterns, young people want to upsize, and the older generation is looking to downsize. . . .”

Whatever your home goals are, a trusted real estate advisor can help you to find the best option for your situation. They’ll help you sell your current home and guide you as you buy your next one while you move into this new phase of life.

I have a national network of vetted agents I can access if you are looking to move somewhere new, and would be happy to do the heavy lifting for you to ensure you find someone that's a good fit.  Let's connect and see what resources I can provide for you this spring as you assess your options.

Feb. 16, 2022

Mid Winter 2022 Market Update

 

Let's take a look at how the market is shaping up for 2022 so far. Click the link below ⬇️⬇️⬇️ to see stats for the area of choice:


🔸 City of Bozeman
🔸 Greater Bozeman area
🔸 Greater Big Sky
🔸 Belgrade
🔸 Greater Manhattan
🔸 Three Forks
🔸 Livingston City Limits
🔸 Park County (w/ Paradise Valley)

How are things shaping up? Generally available properties are still tight throughout the region, the median sales price has risen in almost all locations, and days on market are up or down depending on where you are looking. There are still some areas (Three Forks, Livingston, Manhattan, Park County where the median price isn't skyrocketing quite as quickly. Want a deeper dive or info on an area not covered, just DM me and I'll send you a custom report.