Call or text me for a copy of the virtual tour!
$225,000 – Updated!
Call or text me for a copy of the virtual tour!
$225,000 – Updated!
Last week, the National Association for Business Economics released their February 2019Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future:
“While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.”
Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years:
That raises the question: Will the real estate market be impacted like it was during the last recession?
A recession does not equal a housing crisis. According to the dictionary definition, a recession is:
“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”
During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted:
Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained:
“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.”
The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward.
If there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted:
“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”
Over the course of the last thirty years, a shift has happened. An entire generation has been raised to believe that a college education is their key to unlocking opportunities that were not available to their parent’s or grandparent’s generations.
Due to this, student loan debt has soared to $1.5 trillion and represents the largest category of debt, surpassing credit card and auto loan debt in 2010 and never looking back. As more and more Americans continue their education amongst rising tuition costs, this number will no doubt increase.
Many housing experts have blamed student loans for a drop in the homeownership rate for young families, and to an extent, they’ve been right. Increased debt at the time of graduation has no doubt limited young people from being able to afford a home at the same rate as their parents or grandparents did at the same age.
In a recent Forbes article, the author explained that “in just the class of 2017, the average student has about $40,000 in debt — almost enough for a 20% down payment on a median-priced home.”
The Federal Reserve set out to determine exactly how much impact student loan debt has had on the homeownership rate of those 18-34 (millennials). Their results found that,
“Every $1,000 in student loan debt delays homeownership by about 2.5 months, but it doesn’t prevent homeownership entirely.
In fact, by the time college grads reach their 30s, those with student loan debt have a homeownership rate nearly identical to those who didn’t take out loans.” (emphasis added)
In the Wall Street Journal’s coverage of the Fed report, they found that recent graduates prioritize paying off their student loans over saving for a down payment, despite their desire to be a homeowner. Many with debt want to “get that monkey off (their) back (before they) make any new investments.”
This has just delayed the wave of young home buyers from hitting the market. But as Danielle Hale, the Chief Economist at realtor.com warns,
“2020 will be peak millennial, the year when the largest number of millennials will turn 30.”
By age 30, those who attained a bachelor’s degree right after high school will be one or two years away from paying off their loans and will have been in their career long enough to earn a higher salary.
In the long run, research shows that attaining a bachelor’s degree or more actually increases the chances that someone will become a homeowner.
If you are one of the many millennials who has prioritized paying down your student loans over saving for a down payment, you’re not alone. Even if you are a couple years away from paying off your loans, let’s get together to help you determine if waiting really is the best decision for you!
Whether you are a rookie homebuyer or have gone through the process many times, having a local real estate expert who is well versed in the neighborhood you are looking to move to, as well as the trends of that area, should be your goal while home shopping.
One great example of an agent who is in your corner and is always looking out for your best interests is one of the main characters on ABC’s Modern Family, Phil Dunphy.
For those who aren’t familiar with the character, Phil is a REALTOR® with a huge heart who always strives to do his best for his family and his clients.
In one episode, he even shared an oath that he created and holds himself accountable to:
“On my honor, I promise to aid in man’s quest for shelter, to recognize I’m not just in the business of houses — I’m in the business of dreams in the shape of houses. To disclose all illegal additions, shoddy construction, murders, and ghosts. And to put my clients’ needs before my own.”
While this might seem silly, as it was definitely written with humor in mind, the themes of helping someone achieve the American Dream and putting a client’s needs above his own are not to be taken lightly.
When you make the decision to enter the housing market, as either a buyer or a seller, make sure you look for an agent who exemplifies these values and will help you through every step of the process. I believe I AM that agent. Call me at 407-925-7721.
For anyone considering buying a studio…they can look just as cute as any full-sized home. Plus, with rising cost of real estate, they are affordable. Here’s one example.
According to a new study from Lending Tree, Americans who have filed for bankruptcy may be able to rebuild enough credit to qualify for a home loan in as little as 2-3 years.
This is in stark contrast to the belief that many have that they need to wait 7-10 years for their bankruptcies to clear from their credit reports before attempting to apply for either a mortgage or a personal or auto loan.
The study analyzed over one million loan applications for mortgages, personal, and auto loans and compared borrowers who had a bankruptcy on their credit report vs. those who did not to find out the “Cost of Bankruptcy.”
The study found that 43.2% of Americans who filed bankruptcy were able to repair their credit back to a 640 FICO® Score in less than a year. The percentage of those who achieved a 640 FICO® Score increased to nearly 75% after 5 years. The full breakdown of the findings was used to create the chart below.
Americans who were able to repair their credit scores to a range of 720-739 within three years of filing were able to obtain the same financing options as those who had never filed bankruptcy.
According to Ellie Mae’s latest Origination Insights Report, 53.5% of those who were approved for a home loan had FICO® Scores between 600-749 last month. This is great news for Americans who are looking to re-enter the housing market.
Raj Patel, Lending Tree’s Director of Credit Restoration & Debt-Related Services had this to say:
“People may think that filing a bankruptcy would put you out of the loan market for seven to ten years, but this study shows that it is possible to rebuild your credit to a good credit quality.”
“LendingTree’s research found that very few bankruptcy filers have a harder time [obtaining a mortgage] than those who have not filed for bankruptcy.”
If you are one of the millions of Americans who has filed for bankruptcy and think that you have to wait 7-10 years to make your dream of returning to homeownership a reality, let’s get together to find out if you qualify now.