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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.

 

Feb. 14, 2022

Why Is the Housing Supply Still So Low?

One key question that’s top of mind for homebuyers going into this year is: why is it so hard to find a house to buy? The truth is, we’re in the ultimate sellers’ market, so real estate is ultra-competitive for buyers right now. The number of buyers searching for a home greatly outweighs how many homes are available for sale.

While low inventory in the housing market isn’t new, it’s a challenge that continues to grow over time. Here’s a look at two reasons why today’s housing supply is low and what that means for you.

1. New Home Construction Fell Behind for Several Years

The graph below shows new home construction for single-family homes over the past five decades, including the long-term average for housing units completed. Builders exceeded that average during the housing bubble (shown in red on the graph). The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.

Since then, the level of new home construction has fallen off. For the last 13 straight years, builders haven’t been able to construct enough homes to meet the historical average (as illustrated in green on the graph). That underbuilding left us with a multi-year inventory deficit going into the pandemic.

Buyers Want To Know: Why Is Housing Supply Still So Low? | MyKCM

2. The Pandemic’s Impact on the Housing Market

Then, when the pandemic hit, it fueled a renewed appreciation and focus on the meaning of home. Having a safe space to live, work, school, and exercise became even more important for Americans throughout the country. So, as mortgage rates dropped to at or below 3%, buyers eagerly entered the market looking to capitalize on those low rates to secure a home that would fulfill their changing needs. At the same time, sellers hesitated to put their houses on the market as concerns about the pandemic mounted.

The result? The number of homes available for sale dropped even further. A recent article from realtor.com explains:

Last month, the number of home listings dropped 26.8% compared with the same time a year earlier. This meant there were about 177,000 fewer homes listed in what’s already typically a slower month due to the holidays and colder weather. . . .”

What Does All of This Mean for You?

For a buyer, low inventory can be a challenge. You want to find the home of your dreams, and you don’t want to settle. But what if there just aren’t that many homes to choose from?

There is some good news. Experts are projecting more homes will soon become available thanks to sellers re-entering the market. Danielle Hale, Chief Economist at realtor.com, shares this hope, but offers perspective:

We expect that we’ll start to see a turnaround and inventory will stabilize and start to go up a little bit in 2022. . . . But that means we’re looking at inventory levels of roughly half of what we saw before the pandemic. For buyers, the market is likely to continue to move fast. If you see a home you like, you want to jump on it right away.

The takeaway:  Basically, inventory is still low, even though more homes are coming. But you shouldn’t put your plans on hold because you’re waiting for those additional houses to hit the market.  Instead, stick with your search and persevere through today’s low inventory. You can find your next home if you’re patient and focused.

We can help! Book a virtual coffee chat with Page here.

Jan. 31, 2022

Why Right Now Is a Once-in-a-Lifetime Opportunity for Sellers

If you’re even thinking about selling your house in 2022, you truly have a once-in-a-lifetime opportunity at your fingertips. How can I make such a bold claim?  Well, when selling anything, whether it's small like a pair of skis or large like a home or piece of land, you always hope for strong demand for the item coupled with a limited supply. That how you maximize your leverage when you’re negotiating the sale. Home sellers are in that exact situation right now. Here’s why.

 

Demand Is Very Strong

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), 6.18 million homes were sold in 2021. This was the largest number of home sales in 15 years. Lawrence Yun, Chief Economist for NAR, explains:

 

“Sales for the entire year finished strong, reaching the highest annual level since 2006. . . . With mortgage rates expected to rise in 2022, it's likely that a portion of December buyers were intent on avoiding the inevitable rate increases.”

 

Despite anticipated mortgage rate increases, demand isn’t expected to weaken this year.  In addition, the Mortgage Finance Forecast, published last week by the Mortgage Bankers’ Association (MBA), calls for existing-home sales to reach 6.4 million homes this year.

 

Supply Is Very, Very Limited

The same sales report from NAR also reveals the months’ supply of inventory just hit the lowest number of the century. It notes:

 

“Total housing inventory at the end of December amounted to 910,000 units, down 18% from November and down 14.2% from one year ago (1.06 million). Unsold inventory sits at a 1.8-month supply at the present sales pace, down from 2.1 months in November and from 1.9 months in December 2020.”

 

The reality is, inventory decreases every year in December. That’s just how the typical seasonal trend goes in real estate. However, the following graph emphasizes how this December was lower than any other December going all the way back to 1999.

 

Right Now, Sellers Have Maximum Leverage

As mentioned above, when there’s strong demand for an item and a limited supply of it available, the seller has maximum leverage in the negotiation. In the case of homeowners who are thinking about selling, there may never be a better time than right now. While demand is this high and inventory is this low, you’ll have leverage in all aspects of the sale of your house.  Negotiating repairs, what you leave behind (bye bye pool table or grandma's massive china cabinet).

 

Today’s buyers know they need to be flexible negotiators that make very competitive offers, so here are a few more areas that could tip in your favor when your house goes on the market:

  • Competitive sales price
  • Flexible closing date
  • Potential for a leaseback to allow you more time to find a home
  • Minimal offer contingencies
  • Bottom Line

If you’re thinking of selling your house this year, now is the optimal time to list it. In real estate, we can project trends but if you've been through any of the other highs and lows of the market, you know nothing is guaranteed.  Let's connect so I can share some more info on where I see your home's value trending over the next several months, and what it's worth now vs. if you wait and the market changes.

 

Jan. 25, 2022

Sellers: Sell Now or Wait Until Spring To Make Your Move?

Let's dig in and discuss the benefits of selling now before things heat up.

 

As you plan out your goals for the year, moving may top the list. But, how do you know when to make your move? You want to time it just right so you can get the most out of the sale of your current house. You also want to know you’re making a good investment when you buy your new home, if that's part of the plan. What you may not realize is, that opportunity to get the best of both worlds is already here.

 

You don’t want to wait until spring to spring into action. Current market conditions make this winter an ideal time to make the move. Here’s why:

 

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

Today’s limited supply of houses for sale continues to keep sellers in the driver’s seat. There are far more buyers in the market than there are homes available, and that means buyers are eagerly waiting for your house. Listing your house now makes it the center of attention. As a seller, that means when it’s priced correctly, you can expect it to sell quickly and get multiple strong offers this season. Just remember, experts project more inventory will come to market as we move through the winter months. The realtor.com 2022 forecast says this:

 

“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows.”

 

Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers.

 

2. Your Equity Is Growing in Record Amounts

Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogic, the average homeowner gained $56,700 in equity over the past 12 months ($68K in Montana!)

 

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

 

3. While Rising, Mortgage Rates Are Still Historically Low

In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far 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%

Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home.

 

4. Home Prices Are Going To Keep Rising with Time

According to industry leaders, home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022.

 

What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher.

 

Bottom Line

If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect to discuss our seller strategy program.

Jan. 19, 2022

The 2022 Housing Market Market

Let's create some certainty as we roll into the 2022 market.

How? By understanding trends AND looking at what experts in the field have to say. Speculating there will be a crash based on wishful thinking so you can buy low--not a strategy for certainty.

Inventory is the biggest driver for 2022. Mortgage rates, inflation & COVID will have an effect, but available homes to purchase is down 27% nationwide, $23% in Montana.

Demand for showings did not taper off during the holidays. Activity tracking from Showing Time did not lag the way it typically does. Buyers are pressing on.

Equity use by homeowners has seen a big shift. In the past, owners proudly paid down mortgage to get debt free. Now, homeowners are thinking more like investors, considering how to use equity growth. How? Buying a second home, short-term rental, helping a family member. With an average national gain of 57%, with 68% in, there's a lot of options to maximize the use of your equity. Remember, equity is *air* until it is accessed. Equity is useless you utilize it.

Determine current equity: Market value - loans on home = your equity.

Forbearances are below 1 mil as of Dec 21. It was at 2.76 mil in Dec 20, and 4.76 mil in May of 20. Maiclaire BoltonSmith with Corelogic says we may see a slight uptick, but delinquency is trending very low. Numbers just aren't there like before during the last housing crisis. Soooo, waiting for a crash or downturn is not solid strategy.