The Great News About Rising Prices for Homeowners

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Recently there has been a lot of talk about home prices and if they are accelerating too quickly. As we mentioned before, in some areas of the country, seller supply (homes for sale) cannot keep up with the number of buyers out looking for a home, which has caused prices to rise.

The great news about rising prices, however, is that according to CoreLogic’s US Economic Outlook, the average American household gained over $11,000 in equity over the course of the last year, largely due to home value increases.

The map below was created using the same report from CoreLogic and shows the average equity gain per mortgaged home from June 2015 to June 2016 (the latest data available).

The Great News About Rising Prices for Homeowners | MyKCM

For those who are worried that we are doomed to repeat 2006 all over again, it is important to note that homeowners are investing their new-found equity in their homes and themselves, not in depreciating assets.

The added equity is helping families put their children through college, invest in starting small businesses, allowing them to pay off their mortgage sooner or move up to the home that will better suit their needs now.

Bottom Line

CoreLogic predicts that home prices will appreciate by another 5% by this time next year. If you are a homeowner looking to take advantage of your home equity by moving up to your dream home, let’s get together to discuss your options! You can reach me at 407-925-7721 Cell or Text.

Fiddler on the Roof

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“I’d build a big tall house with rooms by the dozen right in the middle of the town.” Fiddler on the Roof.

My Dad always sang an old hymn that stated “I’ve got a mansion…just over the hilltop, in that bright land where, we’ll never grow old.”

Either way you look at it, Dad and Tevye had it right. The concept of homeownership and owning a home is so large a part of the way we think. It is a sign of wealth and not ridiculous wealth…just comfortable wealth. It is the fact that we own something of our own. We have a home. Our home. It’s our mansion.

What a delicious thought.

#home #homes #realestate #mansion #ownership #rich #wealth

Appraisers & Homeowners Don’t See Eye-To-Eye on Values

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In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the selling price when performing the appraisal for the bank.

Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.

Appraisers & Homeowners Don't See Eye-To-Eye on Values | MyKCM

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this, and any other obstacle that may arise.

Doors

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Doors say more about our home than you might think. A pretty front door is like lipstick on a woman. It’s just the right touch to finish off your “look.”

These are three doors on a country stone house that I saw in North Carolina. Don’t know why they installed three doors right next to each other but they must have a strong desire to welcome a lot of guests to this home. It’s rather charming.

Something tells me whether you choose door number 1, 2, or 3…you are going to be glad you knocked.

Homeowners like property value boost from trees

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GAINESVILLE, Fla. – Aug. 29, 2016 – If a city plants trees near a residential area, most homeowners value the likely subsequent boost to their property values, a new University of Florida Institute of Food and Agricultural Sciences study shows.

And they’re willing to pay an average of $7 more per month in taxes for public trees planted in their city.

In the UF/IFAS study, 1,052 surveyed Florida homeowners said they would like the trees on their land to provide shade and to be healthy, but they would prefer an increase of $1,600 in their home’s value.

Residents were separated into two surveys. One asked them to consider a hypothetical home improvement project to better the trees on their property, while the other asked a similar referendum question regarding a city program that would increase their utility tax to increase urban forests in public areas near their homes. There were 526 responses to each survey.

Given a range of paying between $1 and $10 more per month in city utility taxes, survey respondents said they want trees in their cities, but they are only willing to pay up to $7 more per month, said Jose Soto, a postdoctoral researcher in the UF/IFAS School of Forest Resources and Conservation.

“Our findings indicate that participants find it useful to invest in urban forest infrastructure and are also willing to pay for the benefits of having more trees near their homes,” Soto said.

Damian Adams, a UF/IFAS associate professor of forest resources and conservation and an Extension specialist, said the study’s findings are consistent with basic economic theory. All things considered, people want more value for their property, and more trees can add money to their home’s appraisal.

“Basically people are driven, at least in part, by economic values associated with planting trees, but they appear to be more sensitive to the property value effects of planting trees than other factors,” Adams said. “They are clearly concerned about tree shade too, which can lower energy bills and hence reduce costs. But tree shade also increases outdoor enjoyment and aesthetic benefits, which just makes people happy, and that’s worth something.”

It is important to note that while Florida homeowners are willing to pay more for public trees, some Florida programs give trees away for free and some actually plant trees near homes – for example, in Tampa, Soto said.

Tampa has a program called “Tree-mendous Tampa,” in which the city plants free trees in public rights-of-way. You can find more information on that program online. Other cities, such as Portland, Oregon, compensate residents for planting trees, Soto said.

Soto and Adams presented their findings this month at the 2016 Agricultural & Applied Economics Association Annual meeting in Boston.

Copyright © 2016 News Leader, Community Newspapers, Inc., Brad Buck. All rights reserved.

Where Are Home Prices Headed Over the Next 5 Years?

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Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.5% over the course of 2016, 3.6% in 2017 and about 3.2% in the next two years, and finally 2.9% in 2020 (as shown below). That means the average annual appreciation will be 3.5% over the next 5 years.

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The prediction for cumulative appreciation increased slightly from 24.7% to 26.3% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 11.1%.

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Bottom Line

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.