 Over the last two years, the rate of home prices appreciated at a dramatic pace. While that led to incredible equity gains for homeowners, it’s also caused some buyers to wonder if home prices will fall. It’s important to know the housing market isn’t a bubble about to burst, and home price growth is supported by strong market fundamentals. To understand why price declines are unlikely, it’s important to explore what caused home prices to rise so much recently, and where experts say home prices are headed. Here’s what you need to know. Home Prices Rose Significantly in Recent YearsThe graph below uses the latest data from CoreLogic to illustrate the rise in home prices over the past year and a half. The gray bars represent the dramatic increase in the rate of home price appreciation in 2021. The blue bars show home prices are still rising in 2022, but not as quickly:  You might be asking: why did home prices climb so much last year? It’s because there were more buyers than there were homes for sale. That imbalance put upward pressure on home prices because demand was extremely high, and supply was record low.
Where Experts Say Prices Will Go from HereWhile housing inventory is increasing and buyer demand is softening today, there’s still a shortage of homes available for sale. That’s why the market is seeing ongoing price appreciation. Mark Fleming, Chief Economist at First American, explains it like this: “. . .we’re still well below normal levels of inventory and that’s why even with the pullback in demand, we still see house prices appreciating. While there is more inventory, it’s still not enough.” As a result, experts are projecting a more moderate rate of home price appreciation this year, which means home prices will continue rising, but at a slower pace. That doesn’t mean prices are going to fall. As Selma Hepp, Deputy Chief Economist at CoreLogic, says: “The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.” In other words, even with higher mortgage rates, moderating buyer demand, and more homes for sale, experts say home price appreciation will slow, but prices won't decline. If you’re planning to buy a home, that means you shouldn’t wait for home prices to drop to make your purchase. Instead, buying today means you can get ahead of future price increases, and benefit from the rise in prices in the form of home equity. Bottom Line: Home prices skyrocketed in recent years because there was more demand than supply. As the market shifts, experts aren’t forecasting a drop in prices, just a slowdown in the rate of price growth. To understand what’s happening with home prices in our area, let’s connect today. ***As seen in Keeping Current Matters online Publication.
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According to a recent survey, more and more Americans are concerned about a possible recession. Those concerns were validated when the Federal Reserve met and confirmed they were strongly committed to bringing down inflation. And, in order to do so, they’d use their tools and influence to slow down the economy. All of this brings up many fears and questions around how it might affect our lives, our jobs, and business overall. And one concern many Americans have is: how will this affect the housing market? We know how economic slowdowns have impacted home prices in the past, but how could this next slowdown affect real estate and the cost of financing a home? According to Mortgage Specialists: “Throughout history, during a recessionary period, interest rates go up at the beginning of the recession. But in order to come out of a recession, interest rates are lowered to stimulate the economy moving forward.” Here’s the data to back that up. If you look back at each recession going all the way to the early 1980s, here’s what happened to mortgage rates during those times (see chart below):  As the chart shows, historically, each time the economy slowed down, mortgage rates decreased. Fortune.com helps explain the trend like this: “Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.” And while history doesn’t always repeat itself, we can learn from it. While an economic slowdown needs to happen to help taper inflation, it hasn’t always been a bad thing for the housing market. Typically, it has meant that the cost to finance a home has gone down, and that’s a good thing. Bottom Line Concerns of a recession are rising. As the economy slows down, history tells us this would likely mean lower mortgage rates for those looking to refinance or buy a home. While no one knows exactly what the future holds, you can make the right decision for you by working with a trusted real estate professional to get expert advice on what’s happening in the housing market and what that means for your homeownership goals. ** As seen in the Keeping Current Matters publication for July 2022. « How Your Equity Can Grow over Time The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein. When you hear the discussions on buyer's market or seller's market, what people are traditionally referring to is a time on market versus inventory equation. 6 months of inventory would be considered a level market. Meaning if we continued to sell at the current rate that we are selling today, if we divided that with the number of homes available, we'd get through all the homes for sale in 6 months. Currently the inventory is such that we are a long way from a level market. We also measure against price points, as typically there are more buyers approved for loans in a lower price bracket than say a Des Moines metro $750K+ price bracket. That being said, in today's market even within the higher Des Moines price points, the inventory is within a seller's market territory, below the 6 months threshold. What does this mean for you as a Des Moines resident looking to make a move, whether upsizing, downsizing or first time buying? It means you need a full time Realtor, to have your best interests in mind. Buyers, we need to stay on top of new listings and understanding things like for sale by owner, variable rate commissions and the nuances that can make the sellers select you as the next owner of their home. Surprisingly, it's not always about the offer price only. And Sellers... we need a game plan for your transition with terms such as home of choice, subject to proceeds and bridge loan, being very important as you decide to transition. We also need to run through scenarios for navigating contingencies and multiple offers to come out with the best possible result for your family. Give us a shout, we can educate on these things and more and come up with a game plan to partner with you to make sure the rollercoaster ride of this market is one that you can ride safely and with a smile on your face at the end!   Many consumers are wondering what will happen with home values over the next few years. Some are concerned that the recent run-up in home prices will lead to a situation similar to the housing crash 15 years ago.
However, experts say the market is totally different today. For example, Odeta Kushi, Deputy Chief Economist at First American, tweeted just last week on this issue: “. . . We do need price appreciation to slow today (it’s not sustainable over the long run) but high price growth today is supported by fundamentals- short supply, lower rates & demographic demand. And we are in a much different & safer space: better credit quality, low DTI [Debt-To-Income] & tons of equity. Hence, a crash in prices is very unlikely.” Price appreciation will slow from the double-digit levels the market has seen over the last two years. However, experts believe home values will not depreciate (where a home would lose value). To this point, Pulsenomics just released the latest Home Price Expectation Survey – a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. It forecasts home prices will continue appreciating over the next five years. Below are the expected year-over-year rates of home price appreciation based on the average of all 100+ projections:
What Does This Mean for You as a Buyer? With a limited supply of homes available for sale and both prices and mortgage rates increasing, it can be a challenging market to navigate as a buyer. But buying a home sooner rather than later does have its benefits. If you wait to buy, you’ll pay more in the future. However, if you buy now, you’ll actually be in the position to make future price increases work for you. Once you buy, those rising home prices will help you build your home’s value, and by extension, your own household wealth through home equity. As an example, let’s assume you purchased a $360,000 home in January of this year (the median price according to the National Association of Realtors rounded up to the nearest $10K). If you factor in the forecast for appreciation from the Home Price Expectation Survey, you could accumulate over $96,000 in household wealth over the next five years (see graph below): Bottom Line If you’re trying to decide whether to buy now or wait, the key is knowing what’s expected to happen with home prices. Experts say prices will continue to climb in the years ahead, just at a slower pace. So, if you’re ready to buy, doing so now may be your best bet for your wallet. It’ll also give you the chance to use the future home price appreciation to build your own net worth through rising equity. If you want to get started, let’s connect today. Abbey@c21sre.com, #515-333-3492 As seen In Keeping Current Matters April 2022.  When it comes to buying a home, it can feel a bit intimidating to know how much you need to save and where to find that information. One of the services I pride myself on is providing clients with information so that they feel educated and empowered in making real estate decisions for their family. But you should know, you’re not expected to have all the answers yourself. I hope that I can be your trusted professional that can help you understand your finances and what you’ll need to budget for throughout the process. To get you started, here are a few things experts say you should plan for along the way.
 Whether you are actively thinking about buying or selling a home right now or not, chances are you've been engaged in conversations about the Des Moines real estate market. Record low inventory in combination with record low rates make for great headlines nationwide and Des Moines is right in line with those reports. So, where do we go from here in 2022? What can we expect? Is it a good time to buy? To sell? Here is a bit more info from a trusted real estate source Keeping Current Matters that may help provide some clarity on what is projected: ++++ Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn’t happened. The major price indices are all revealing ongoing double-digit price appreciation. Here’s a look at their reports on year-over-year price appreciation for December: Federal Housing Finance Agency (FHFA): 17.6% S&P Case-Shiller: 18.8% CoreLogic: 18.5% To show that they’re not seeing signs of softening, here’s a graph that gives the progression of all three indices for each month of 2021.  As the graph above reveals, last year, home price appreciation accelerated dramatically from January to July according to all three indices. Then, it began to decelerate in August when prices appreciated at a slower pace, but it didn’t decline. Many thought that would be the beginning of a rapid slowdown in the level of home price appreciation, but as the data shows, that wasn’t the case. Instead, prices began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December.
To clarify, deceleration is not the same as depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month. Deceleration means home values continue to rise but at a slower pace of year-over-year appreciation. Depreciation means prices drop below current values. No one is forecasting that to happen. In fact, the FHFA revealed that price appreciation accelerated in December in six of the nine regions it tracks. Case Shiller showed that appreciation accelerated in 15 of the 20 metros they report on. As Selma Hepp, Deputy Chief Economist at CoreLogic, explains: “After some signs of slowing home price growth . . . monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel.” What Does This Mean for You? Whether you’re a first-time purchaser or someone looking to sell your current house and buy a home that better fits your needs, waiting to decide what to do will cost you in two ways: Mortgage rates are forecast to rise this year. Home prices should continue to appreciate at double-digit levels for some time. If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your monthly mortgage payment. Bottom Line Maybe the best thing to do is listen to the advice of Len Kiefer, Deputy Chief Economist at Freddie Mac: “If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices - well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”  Hello my Des Moines Metro friends! The media is talking about it, neighbors are talking about it and we're talking about it. Mortgage Rates. Common sense tells us that historic lows must go up eventually. But when and how much is the question... ++++++++++++ Mortgage rates have increased significantly since the beginning of the year. Each Thursday, Freddie Mac releases its Primary Mortgage Market Survey. According to the latest survey, the average 30-year fixed-rate mortgage has risen from 3.22% at the start of the year to 3.55% as of last week. This is important to note because any increase in mortgage rates changes what a purchaser can afford. To give you an idea of how rising mortgage rates impact your purchasing power, see the table --->>  How Can You Know Where Mortgage Rates Are Headed? While it’s always difficult to know exactly where mortgage rates will go, a great indicator of where they may head is by looking at the 50-year history of the 10-year treasury yield, and then following its path. Understanding the mechanics of the treasury yield isn’t as important as knowing that there’s a correlation between how it moves and how mortgage rates follow. Here’s a graph showing that relationship over the last 50 years, see more --->>  This correlation has continued into the new year. The treasury yield has started to climb, and that’s driven rates up. As of last Thursday, the treasury yield was 1.81%. That’s 1.74% below the mortgage rate reported the same day (3.55%) and is very close to the average spread we see between the two numbers (average spread is 1.7). Where Will the Treasury Yield Head in the Future? With this information in mind, a 10-year treasury-yield forecast would be a good indicator of where mortgage rates may be headed. The Wall Street Journal just surveyed a panel of over 75 academic, business, and financial economists asking them to forecast the treasury yield over the next few years. The consensus was that experts project the treasury yield will climb to 2.84% by the end of 2024. Based on the 50-year history of following this yield, that would likely put mortgage rates at about 4.5% in three years. While the correlation between the 30-year fixed mortgage rate and the 10-year treasury yield is clear in the data shown above for the past 50 years, it shouldn’t be used as an exact indicator. They’re both hard to forecast, especially in this unprecedented economic time driven by a global pandemic. Yet understanding the relationship can help you get an idea of where rates may be going. It appears, based on the information we have now, that mortgage rates will continue to rise over the next few years. If that’s the case, your best bet may be to purchase a home sooner rather than later, if you’re able. Bottom Line Forecasting mortgage rates is very difficult. As Mark Fleming, Chief Economist at First American, once said: “You know, the fallacy of economic forecasting is don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.” However, if you’re either a first-time homebuyer or a current homeowner thinking of moving into a home that better fits your changing needs, understanding what’s happening with the 10-year treasury yield and mortgage rates can help you make an informed decision on the timing of your purchase. As seen in Keeping Current Matters Publication. 2/2/22  Hi everyone,
Historic low inventory means we need more homes to sell... so that you can move! :-) If you are on the fence about selling, let's chat, let's look at your equity, let's look at your absorption analysis for the market and let's find you a buy up home! ++++++ Keeping Current Matters.com Info.++++++++++ If you’re thinking about selling your house in 2022, you truly have a once-in-a-lifetime opportunity at your fingertips. When selling anything, you always hope for strong demand for the item coupled with a limited supply. That maximizes 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.” Demand isn’t expected to weaken this year, either. 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 LimitedThe 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. Today’s buyers know they need to be flexible negotiators that make very competitive offers, so here are a few areas that could tip in your favor when your house goes on the market:
If you’re thinking of selling your Iowa house this year, now is the optimal time to list it. Let’s connect to discuss how you can put your house on the market today. From: Keeping Current Matters, Inc. © 2018 | 7204 Glen Forest Drive Suite 204 Richmond, VA 23226 | 631-787-6200 Happy New Year my friends! 2022. Wow, that sounds like a good one to me. Whether it is cliche or not, I love the idea of a fresh new 364 days of dreaming and doing. If one of your resolutions is to buy or sell a home/investment in 2022, I'm here to help you check that resolution off your list in 2022! When life gets crazy, home is always home, and if you don't love yours, let's change that in 2022. Cheers to that and cheers to a wonderful new year waiting to be explored. Happy New Year!  From Keeping Current Matters national publication.
 I've built my business by referral. What that means is I treat my clients how I would like to be treated, keep their best interests in mind when going through the home buying and selling process and enjoy the relationship well after the home is bought or sold. And you know what? Good people know other good people! That is why I love working by referral. My business has evolved over the years. I used to have a holiday party at my home for my clients the first few years. I figured that I'd been in all of their homes, they should come to mine. But then the business grew. And I started having my client appreciation holiday party in my Century 21 office space. We had snacks and drinks and pie. Lots of pie. Then 2020 hit and we decided we appreciated my clients even more with their kind hearted referrals. Despite covid, we still wanted to see them. So we created the 1st annual A|R Real Estate Holiday Client Appreciation Drive Thru Pie Palooza. How's that for a name? The premise: I appreciate you and want to recognize that. Whether you bought your house 10 years ago or this year. Whether you've never bought or sold a home with my assistance but referred loved ones to me. So... you choose a pie and order online at www.pickmypie.com. French silk is my personal favorite, but apple is available as well. Then on the day of the event, you swing through the Century 21 SRE parking lot, show me pics of your sweet family, throw them in the car with you, bring the new puppy, pick up one for your parents that sold their house last year and couldn't make it through or just take a moment to make us a part of your holiday season. I'll meet you at your car with the help of my sweet daughters (Who are also involved in this event from start to finish by being the cover models on the invite to the pie sticker to the pie delivery and thank you.). My girls or my parents (truly a family affair for me!) will get your order and give you the pie and I get to catch up and hear about all the cool changes you've made to the home since you bought it. I love seeing everyone and saying Hi. This year, over about a three hour timeframe, 126 pie loving peeps rolled through the Century 21 parking lot. Holiday smiles, cheer and laughter were in abundance. And I loved every minute of it. :-) Cheers to lovely clients, working by referral for a blessed business and all those new faces I'll get to meet in the coming year! Cheers!
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AuthorI find joy in helping home buyers and sellers achieve their real estate goals, by equipping them with information to make empowered decisions on their real estate journey. Archives
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