There Won’t Be a Wave of Foreclosures in the Housing Market

 

Screen Shot 2022-01-18 at 12.51.08 PM

 

When mortgage forbearance plans were first announced and the pandemic surged through the country in early 2020, many homeowners were allowed to pause their mortgage payments. Some analysts were concerned that once the forbearance program ended, the housing market would experience a wave of foreclosures like what happened after the housing bubble 15 years ago.

Here’s a look at why that isn’t the case.

1. There Are Fewer Homeowners in Trouble This Time

After the last housing crash, over nine million households lost their homes to a foreclosure, short sale, or because they gave it back to the bank. Many believed millions of homeowners would face the same fate again this time.

However, today’s data shows that most homeowners exited their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The latest data from the Mortgage Bankers Association (MBA) studies how people exited the forbearance program from June 2020 to November 2021.

Here are those findings:

38.6% left the program paid in full

  • 19.9% made their monthly payments during the forbearance period
  • 11.8% made up all past-due payments
  • 6.9% paid off the loan in full

44% negotiated work-out repayment plans

  • 29.1% received a loan deferral
  • 14.1% received a loan modification
  • 0.8% arranged a different repayment plan

0.6% sold as a short sale or did a deed-in-lieu

16.8% left the program still in trouble and without a loss mitigation plan in place

2. Those Left in the Program Can Still Negotiate a Repayment Plan

As of last Friday, the total number of mortgages still in forbearance stood at 890,000. Those who remain in forbearance still have the chance to work out a suitable plan with the servicing company that represents their lender. And the servicing companies are under pressure to do just that by both federal and state agencies.

Rick Sharga, Executive Vice President at RealtyTrac, says in a recent tweet:

“The [Consumer Financial Protection Bureau] and state [Attorneys General] look like they’re adopting a ‘zero tolerance’ approach to mortgage servicing enforcement. Likely that this will limit #foreclosure activity for a good part of 2022, while servicers explore all possible loss [mitigation] options.”

For more information, read the warning issued by the Attorney General of New York State.

3. Most Homeowners Have More Than Enough Equity To Sell Their Homes

For those who can’t negotiate a solution and the 16.8% who left the forbearance program without a work-out, many will have enough equity to sell their homes and leave the closing with cash instead of facing foreclosures.

Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. As Frank Martell, President & CEO of CoreLogic, explains:

“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”

4. There Have Been Far Fewer Foreclosures Over the Last Two Years

One of the seldom-reported benefits of the forbearance program was that it allowed households experiencing financial difficulties prior to the pandemic to enter the program. It gave those homeowners an extra two years to get their finances in order and work out a plan with their lender. That prevented over 400,000 foreclosures that normally would have come to the market had the new forbearance program not been available. Otherwise, the real estate market would have had to absorb those foreclosures. Here’s a graph depicting this data:

 

Screen Shot 2022-01-18 at 12.52.37 PM

 

 

5. The Current Market Can Easily Absorb Over a Million New Listings

When foreclosures hit the market in 2008, they added to the oversupply of houses that were already for sale. That resulted in over a nine-month supply of listings, and anything over a six-month supply can cause prices to depreciate.

It’s exactly the opposite today. The latest Existing Home Sales Report from the National Association of Realtors(NAR) reveals:

“Total housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.”

A balanced market would have approximately a six-month supply of inventory. At 2.1 months, the market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.

Bottom Line

The end of the forbearance plan will not cause any upheaval in the housing market. Sharga puts it best:

“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect. . . .”

Avoid the Rental Trap in 2022

 

Screen Shot 2022-01-13 at 10.04.44 AM

 

Are you one of the many renters thinking about where you’ll live the next time your lease is up? Before you decide whether to look for a new house or another apartment, it’s important to understand the true costs of renting in 2022.

As a renter, you should know rents have been rising since 1988 (see graph below):

 

Screen Shot 2022-01-13 at 10.05.27 AM

 

In 2021, rents grew dramatically. According to ApartmentList.com, since January 2021:

. . . the national median rent has increased by a staggering 17.8 percent. To put that in context, rent growth from January to November averaged just 2.6 percent in the pre-pandemic years from 2017-2019.”

That increase in 2021 was far greater than the typical rent increases we’ve seen in recent years. In other words – rents are rising fast. And the 2022 National Housing Forecast from realtor.com projects prices for vacant units will continue to increase this year:

“In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth . . .”

That means, if you’re planning to move into a different rental this year, you’ll likely pay far more than you have in years past.

Homeownership Provides an Alternative to Rising Rents

If you’re a renter facing rising rental costs, you might wonder what alternatives you have. If so, consider homeownership. One of the many benefits of homeownership is it provides a stable monthly cost you can lock in for the duration of your loan.

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“. . . fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”

If you’re planning to make a move this year, locking in your monthly housing costs for 15-30 years can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases.

Homeowners also enjoy the added benefit of home equity, which has grown substantially right now. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $56,700 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage, you grow your wealth through the forced savings that is your home equity.  

Bottom Line

If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Connect with a local real estate advisor to see how you can begin your journey to homeownership today.

 

WHAT WILL HAPPEN WITH THE HOUSING MARKET IN 2022?

 

 

 

 

 

 

Screen Shot 2022-01-11 at 2.33.32 PM

WHAT WILL HAPPEN WITH THE HOUSING MARKET IN 2022?

 As we wrap another crazy year for real estate, there’s one big question on everyone’s minds right now: will the 2022 housing market continue to follow the same trajectory, or are we facing a possible downturn?

In today’s market, the most powerful tool you have to beat your competition is knowledge.

So, let’s take a deep dive into what leading real estate experts are projecting for 2022 so you have the confidence you need to crush your goals this year.

2022 HOUSING MARKET PREDICTIONS

 The past two years have been full of exciting and record-breaking moments. It’s also seen its fair share of buyer fatigue, hesitancy and confusion.

Here’s what industry experts are saying about what they anticipate for the 2022 housing market.

Screen Shot 2022-01-11 at 1.42.54 PM

Will Home Prices Go Up or Down?

 In the past 12 months, home price appreciation has been the topic of many headlines and not in a good way. Speculation that we’re in another housing bubble has kept many buyers and sellers hesitant that we’re headed for another crash.

So, what does the future hold for home prices?

It’s important to remember that the 2021 market was anything but normal, and that escalating home values were a direct result of record-low inventory.

However, experts project that the inventory situation should improve in the coming year, slowing price appreciation.

But will home prices depreciate in 2022? Over 100 industry experts don’t think so. Instead, they are projecting a more modest appreciation of 5.1% in the next 12 months compared to the nearly 20% rise seen on average in 2021.

 

Screen Shot 2022-01-11 at 1.46.25 PM

What’s Going to Happen with Mortgage Rates?

 In case you didn’t know, the past year saw the lowest mortgage rates in the history of real estate.

So, if you have clients who are waiting for those rates to come back down or go down more, they may be waiting a very long time.

What’s important to remind your clients is that while homes right now may be less affordable than they were a year ago, they’re still extremely affordable.

If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade:

  • 1970s: 8.86%
  • 1980s: 12.7%
  • 1990s: 8.12%
  • 2000s: 6.29%
  • 2010s: 4.09%

While experts don’t project that mortgage rates will rise a large amount, any increase would mean an increase in monthly mortgage payments.

A couple decimal points may not seem like a lot to most people, but it could make or break someone’s budget.

If you have buyers that are playing the waiting game, the best advice you can give to them is that a rise in mortgage rates coupled with continued home price appreciation only means one thing: paying more for the same house they’d buy now.

Screen Shot 2022-01-11 at 2.08.15 PM

Will Housing Inventory Rise in 2022?

 Inventory has been, without a doubt, the biggest player in the anything but ordinary real estate market we’ve experienced in the last two years.

With buyer fatigue running high, you’re probably getting asked, “Will housing inventory increase in 2022?”

The good news is, there are many factors that lead industry experts to anticipate a rise in homes for sale.

Of homeowners planning to enter the market in the next year:

  • 65% – Have just listed (19%) or plan to list this winter
  • 93% – Have already taken steps toward listing their home, including working with an agent (28%)
  • 36% – Have researched the value of their home and others in their neighborhood

The other big factor playing into a possible rise in inventory is the large amount of equity accumulated nationwide in 2021. According to experts, homeowners gained an average of $56,700 in equity in the past 12 months, a big incentive for sellers to list this winter.

While more inventory may take a bit of the edge off of today’s competitive market, it’s important to remind your clients that it doesn’t mean prices will fall or homes will become more affordable. There will just be more available to choose from.

WHAT DOES THIS MEAN FOR BUYERS &SELLERS FOR 2022?

 There is still a lot of motivation for buyers and sellers in the market, and that’s not expected to change in the coming months.

With experts projecting a rise in inventory and mortgage rates remaining relatively low, both sides of the real estate transaction stand to benefit from making a move this year.

While today’s market might not be as crazy as it was a year ago, it’s still strong. Waiting until next year could mean losing out on a less competitive market and better affordability: the two biggest factors positively impacting buyers and sellers today.

 Bottom Line
 If we’ve learned anything in the past couple of years, it’s that while we can project the future, we can’t predict it.

 

 

How Much Do You Need for Your Down Payment?

 

 

 

 

Screen Shot 2022-01-05 at 2.56.18 PM

As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment?

If you think you have to put 20% down, you may have set your goal based on a common misconception. Freddie Mac says:

“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

Unless specified by your loan type or lender, it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for first-time homebuyers, whose median down payment is only 7% (see graph below):

 

Screen Shot 2022-01-05 at 2.54.38 PM

 

What Does This Mean for You?

While a down payment of 20% or more does have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize.

If you’re interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.

Bottom Line

Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, reach out to a trusted real estate professional to start the conversation and explore your down payment options.

Key Things To Avoid After Applying for a Mortgage

 

20211227-KCM-Share

 

Once you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting to start thinking about moving in and decorating your new place, but before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.

Here’s a list of things you shouldn’t do after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process.

1. Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender.

Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

2. Don’t Make Any Large Purchases Like a New Car or Furniture for Your Home.

New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Since higher ratios make for riskier loans, qualified borrowers may end up no longer qualifying for their mortgage.

3. Don’t Co-Sign Other Loans for Anyone.

When you co-sign, you’re obligated. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

4. Don’t Change Bank Accounts.

Remember, lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.

5. Don’t Apply for New Credit.

It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores can determine your interest rate and possibly even your eligibility for approval.

6. Don’t Close Any Credit Accounts.

Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

16 NEW YEAR’S RESOLUTIONS FOR REAL ESTATE AGENTS IN 2022

 

red

 

Ah, the New Year.

Within one day, the world hits a giant reset button, and you get to start all over again.

And with the year we had, well, just about everyone could use a bit of a fresh start.

The thing is, experts are predicting that the real estate market might be just as busy (or busier) in the next year. Therefore, there’s no better time for you to take a step back and see what’s working in your business and what isn’t.

From productivity to morning routines and marketing strategy, we’ve rounded up our top 16 new year’s resolutions for real estate agents to maximize your success in 2022.

Start Dialing

The best way to start the new year off right is to just pick up the phone and start dialing. Whether it’s new leads, old leads or your sphere of influence, this is the closest you’ll get to making personal connections without talking face-to-face.

Try dedicating one hour each day to making calls. You can even set it up as an appointment in your calendar. That way, you hold yourself accountable.

Social media is an important part of building your brand. With millenials making up the lion’s share of new homebuyers, you best believe they’re checking your social media pages. Posting daily on social media is not only good for branding, but it’s also good for establishing yourself as an expert in your local market.

Don’t have time to go digging for new content? A Keeping Current Matters membership includes a personalized blog and graphics that make it easy to share to Facebook, Twitter, LinkedIn and more.

If we learned anything this year, it’s that video is an invaluable tool for communicating with your sphere, at any time, from anywhere. Top agents are already finding ways to use video to build their businesses. If you’re not doing this yet, you could be missing out on key opportunities to reach your audience, especially in times like these.

Whether it’s a weekly market update, new listing tour or buyer/seller tips, videos are a great way to generate engagement and establish authenticity with your prospects.

Fun fact: 85% of buyers and sellers want to work with an agent who uses video.

If you’re not sure where to start, KCM personalized video is an easy way to get professional real estate videos without the hassle. Just download and share!

Set Your Goals
 Want to do 25% more in GCI? Need more work/life balance in your day-to-day?

Start visualizing the year you want to have and set your goals early. No matter how big or small, this will help you stay on track keep your top priorities your top priorities.

It’s easy to get lost as soon as the year kicks off. This will make sure you’re focused on the most important things for you and your business.

Forming relationships with the businesses in your community is one of the best ways to build good rapport, keep you top of mind all the while opening up your sphere of influence.

For example, try partnering up with a local hardware store to offer discounts or coupons to your buyers and sellers. The same goes for painters, plumbers, electricians, or anything else a new homeowner might need. Small businesses were some of the hardest hit in the pandemic, and many of them may be extra grateful for the extra business.

This type of marketing strategy is equally as important as lead generation and building genuine connections with your community should always be a priority.

Webinars are one of the best and easiest ways to learn something new. They don’t require travel, are often free and don’t last longer than 60 minutes. It’s a very low-cost and low-time commitment way to expand your education and develop new skills.

Identify the areas you want to work on in 2022 and look up webinars that can help close your knowledge gap. We recommend checking out Boomtown, Tom Ferry, Jared James and KCM!

This small task can mean significant time savings in 2022. If it’s been a while since you last update your sphere of influence, make this one of your first tasks of the new year.

Not only will you avoid spending time chasing leads that aren’t relevant, but you’ll also probably add some that could turn into new business.

The new year is a great time to assess what’s working in your business-and what isn’t. There are so many tools and technologies out there that can help streamline your processes-letting you focus more time on your clients and closing deals.

If you’re not sure where to start, check out our Top 5 Tools for Real Estate Agents and see if something piques your interest.

If you found that your lead generation was a little lean last year, this could be a good time to amp up your digital marketing efforts.

Take a course, swap out photos or start a blog. This could make all the difference for your business in 2022.

A new headshot is more than investing in your business, it’s about investing in your brand. This is a great way to kick off the New Year with confidence, and a more professional you.

On the other side of that, amateur photos or headshots of yesteryear can send the wrong message: inauthenticity and unprofessionalism.

In an age where social media is important for marketing and promotion, your headshot is often one of the first things people notice. Make your first impression count! Branded content is where it’s at.

No longer reserved for recipes and personal diaries, blogging has become an important part of marketing strategy. This goes twofold for small businesses like real estate.

Blog are an inexpensive way to drive traffic to your website, great for customer engagement and building trust with your audience in a more personal and conversational way.

The idea of starting a blog is easy but the execution can be intimidating and time-consuming. If you don’t know where to start, try KCM personalized blogs. The pre-written content is delivered daily and can be a great way to get the benefits of a blog without the hassle of actually writing them!

Wake up, shower, coffee, energy bar, and you’re out the door.

Does this sound familiar?

Sometimes you convince yourself that those extra 30 minutes of sleep matter more than anything else. In reality, they may be hurting you more than they help.

If you look at the habits of highly successful real estate agents, a morning routine is an important part of staying productive, organized and energized.

It’s even been linked to success in sales fields *ahem real estate.*

Feeling a little rusty on your marketing strategy? Could your scripts use a boost?

A conference could be just what you need.

Not only do they help stay fresh and current on real estate trends, they’re also a great way to get your face out there, rub elbows with top agents and re-energize your sales strategy. Bonus points: many conferences and workshops have no gone digital. Get all the education you need without the hassle or expense of travel.

Tom Ferry, the #1 rated real estate coach in America, offers a number of different types of conferences that focus on specific areas of an agent’s business.

Remember, it’s an investment in you.

It’s no joke that agents spend a lot of time in the car.

But are you capitalizing on those minutes driving to and from showings and back again?

If you’re not, podcasts can be a great way to maximize productivity without adding one more thing to your “to-do” list.

According to Boomtown, here are some of the top podcasts for real estate agents this year:

  • Kevin and Fred’s Next Level Agents Podcast
  • Harvard Business Review Ideacast
  • Hack the Entrepreneur
  • Tom Ferry Podcast
  • Caravan Confessions

Whether you’re looking for a laugh or a new marketing strategy, podcasts offer a little bit of something for every real estate agent.

If there is one big lesson we can take away from this year, it’s that one of the most important parts of being a real estate agent is knowing what is happening in the market. Why? Because your clients look to you to be their trusted advsior.

Being knowledgeable helps give you an edge over the competition and builds trust with your clients.

The Monthly Market Report is a 60-minute snippet about what is currently happening in the market, why and how it will affect the real estate market. It’s one of the greatest tools you could have for communicating the present market, and what experts predict for the near future.

Email marketing is often one of the most crucial yet overlooked parts of a business’ marketing. If done right, you can convert leads faster than a snap of the fingers. If not, you could send probably future clients running to the competition.

This new year, go through your email marketing and see where you could refresh your content. Sometimes changing out some wording and adding a new signature is all they need.

Whatever you do, just avoid these 7 email mistakes that could be costing you clients.

Bottom Line

Sometimes the smallest tweak in routine can end with a big reward.

This new year, take a long hard look at your business and see where you can focus your efforts to maximize your success.

Once you find areas you want to focus on, make sure you create a gameplan, act and set reminders constantly so you don’t fall behind.

Remember, biting off more than you can chew is a recipe for burnout. We recommend focusing on small tasks and then slowly implementing the others so you set yourself up for success in 2022.

Good business practice is all about good habits and using your resources right. KCM is a great way to knock out many of your resolutions with one membership.

Bottom Line

Sometimes the smallest tweak in routine can end with a big reward.

This new year, take a long hard look at your business and see where you can focus your efforts to maximize your success.

Once you find areas you want to focus on, make sure you create a gameplan, act and set reminders constantly so you don’t fall behind.

Remember, biting off more than you can chew is a recipe for burnout. We recommend focusing on small tasks and then slowly implementing the others so you set yourself up for success in 2022.

What Everyone Wants To Know: Will Home Prices Decline in 2022?

 

 

Screen Shot 2021-12-20 at 12.11.47 PM

 

If you’re thinking of buying a home in today’s housing market, you may be wondering how strong your investment will be. You might be asking yourself: if I buy a home now, will it lose value? Or will it continue to appreciate going forward? The good news is, according to the experts, home prices are not projected to decline. Here’s why.

With buyers still outweighing sellers, home prices are forecast to continue climbing in 2022, just at a slower or more moderate pace. Why the continued increase? It’s the simple law of supply and demand. When there are fewer items on the market than there are buyers, the competition for that item makes prices naturally rise.

And while the number of homes for sale today is expected to improve with more sellers getting ready to list their houses this winter, we’re certainly not out of the inventory woods yet. Thus, the projections show continued appreciation, but at a more moderate rate than what we’ve seen over the past year.

Here’s a look at the latest 2022 expert forecasts on home price appreciation:

 

 

Screen Shot 2021-12-20 at 12.10.43 PM

 

What’s the biggest takeaway from this graph? None of the major experts are projecting depreciation in 2022. They’re all showing an increase in home prices next year.

And here’s what some of the industry’s experts say about how that will play out in the housing market next year:

Brad Hunter of Hunter Housing Economics explains:

“. . . the recent unsustainable rate of home price appreciation will slow sharply. . . . home prices will not decline. . . but they will simply rise at a more sustainable pace.”

Danielle Hale from realtor.com agrees:

Price growth is expected to move back toward a normal range, but this is on top of recent high prices, . . . So prices will [still] hit new highs. . . . The pace of price growth is going to slow notably . . . ”

What Does This Mean for the Housing Market?

While home price appreciation is expected to continue, it isn’t projected to be the record-breaking 18 to almost 20% increase the market saw over the past 12 months. Overall, it’s important to note that price increases won’t be as monumental as they were in 2021 – but they certainly won’t decline anytime soon.

What Does That Mean for You?

With motivated buyers in the market and so few homes available to purchase, the imbalance of supply and demand will continue to put upward pressure on home prices in 2022. And when home price appreciation is in the forecast, that’s a clear indication your investment in homeownership is a sound one.

Bottom Line

It’s important to know that home prices are not projected to decline in the new year. Instead, they’re forecast to rise, just at a more moderate pace. That’s why it’s mission-critical to work with a trusted advisor to make sure you’re up to date on what’s happening with home price appreciation in your market, so you can make an informed decision about your next move.

What Does the Future Hold for Home Prices?

 

 

 

 

 

 

Screen Shot 2021-12-10 at 1.10.04 PM

 

If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising home prices. And while this increase in home values is great news for sellers, you may be wondering what the future holds. Will prices continue to rise with time, or should you expect them to fall?

To answer that question, let’s first understand a few terms you may be hearing right now.

It’s important to note home prices have increased, or appreciated, for 114 straight months. To find out if that trend may continue, look to the experts. Pulsenomics surveyed over 100 economists, investment strategists, and housing market analysts asking for their five-year projections. In terms of what lies ahead, experts say the market may see some slight deceleration, but not depreciation.

Here’s the forecast for the next few years:

 

Screen Shot 2021-12-10 at 1.00.38 PM

 

As the graph above shows, prices are expected to continue to rise, just not at the same pace we’ve seen over the last year. Over 100 experts agree, there is no expectation for price depreciation. As the arrows indicate, each number is an increase, which means prices will rise each year.

Bill McBride, author of the blog Calculated Risk, also expects deceleration, but not depreciation:

“My sense is the Case-Shiller National annual growth rate of 19.7% is probably close to a peak, and that year-over-year price increases will slow later this year.”

Ivy Zelman of Zelman & Associates agrees, saying:

“. . . home price appreciation is on the cusp of flipping to a decelerating trend.”

A recent article from realtor.com indicates you should expect:

“. . . annual price increases will slow to a more normal level, . . .”

What Does This Deceleration Mean for You?

What experts are projecting for the years ahead is more in line with the historical norm for appreciation. According to data from Black Knight, the average annual appreciation from 1995-2020 is 4.1%. As you can see from the chart above, the expert forecasts are closer to that pace, which means you should see appreciation at a level that’s aligned with a more normal year.

If you’re a buyer, don’t expect a sudden or drastic drop in home prices – experts say it won’t happen. Instead, think about your homeownership goals and consider purchasing a home before prices rise further.

If you’re a seller, the continued home price appreciation is good news for the value of your house. Work with an agent to list your house for the right price based on market conditions.

Bottom Line

Experts expect price deceleration, not price depreciation over the coming years. Talk to a local real estate professional to understand what’s happening in the housing market today, where things are headed, and what it means for you.

Does Your House Have What Buyers Want?

Screen Shot 2021-11-03 at 4.00.02 PM

 

 

The rise in remote work is changing what many Americans want in their homes. Many companies are choosing to delay reopening or go remote full-time, and today’s buyers are looking for homes with more space to support their work needs.

As a seller, if you no longer need the extra room you have in your home, rest assured there are buyers who do.

Remote Work Is Here To Stay

Remote work remains a reality for many Americans. A recent poll from Garter, Inc. shows many organizations have not yet returned their offices:

“. . . 66% of organizations are delaying reopening their offices due to new COVID-19 variants.”

And it’s not just companies that are choosing to remain remote for the time being – workers are seeking more flexibility. According to research from PricewaterhouseCoopers, nearly one-fifth of employees want to be fully remote in the future. The study also finds that many people are leaving jobs to seek out remote work opportunities:

“Among employees looking for new jobs, almost one in ten say it’s because they moved away from the office while working remotely and don’t want to go back on-site.”

More Remote Work Means a Greater Need for Home Offices

That’s leading today’s buyers to prioritize finding homes with more space so they can comfortably work from home. The 2021 Home Design Trends Survey from the American Institute of Architects finds that 69% of surveyed individuals still want at least one office at home. However, it also shows that more people are looking for multiple spaces in their home for remote work and virtual meetings (see graph below):

 

Screen Shot 2021-11-03 at 3.58.49 PM

 

What Does This Mean for You?

If your house has extra space that you no longer need, buyers are interested, and now may be the perfect time to sell.

Your trusted real estate advisor can help you highlight many of the most sought-after features in your listing, including home offices. On the other hand, if you have extra room without a purpose, consider staging it as an area where remote work can happen. Your agent can help you with this as well by evaluating and preparing your space for potential buyers. They’ll make recommendations for how to stage the room, where to draw the eye, and what other sellers are doing to make their houses stand out.

Bottom Line

With the continued rise in remote work, more buyers are looking for homes that can support multiple home offices. If you have extra room you’re no longer using, consider selling. Connect with a trusted real estate advisor to discuss the unique features in your house and how you can capitalize on any extra space to appeal to today’s buyers.