REALTOR Archives - Page 18 of 25

How To Prepare To Buy Or Sell A Home This Spring in Knoxville

March 11, 2019 By Troy Stavros

Some Highlights:

In the majority of the country, this past weekend marks the start of Daylight Savings Time as we set our clocks forward an hour on Sunday at 2:00 AM EST.
Whether you plan on buying or selling this spring, these tips could help you ‘spring ahead’ of your competition!
Spring brings two things: more buyers & more sellers! Get prepared now to stand out in the crowd!

Have questions or want to get the process started? Contact me, Troy Stavros with CornerStone Realty Associates at 865-999-0925!

Why an Economic Slowdown Will NOT Crush Real Estate this Time

March 7, 2019 By Troy Stavros

Last week, the National Association for Business Economics released their February 2019 Economic 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 Knoxville 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:

January 1980 to July 1980: Home values rose 4.5%
July 1981 to November 1982: Home values rose 1.9%
July 1990 to March 1991: Home values fell less than 1%
March 2001 to November 2001: Home values rose 4.8%

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.

Bottom Line

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.”

Data Confirms That Now Is a Great Time to Sell Your Home in Knoxville

March 6, 2019 By Troy Stavros

Heading into the spring buying market, there are strong trends starting to emerge.

The inventory of homes for sale has increased on a year-over-year basis for eight months in a row. Home price appreciation has continued to grow, although at a slower rate. The homeownership rate has reached heights last seen in 2014, with millennials and Generation X leading the way!

Let’s dive a little deeper into some of the recent reports that have been released and what they mean for the spring buying season!

1. National Association of Realtor’s Existing Home Sales Report

Sales of existing homes were down for the third consecutive month in January. Some of this can be explained by the natural seasonality that the real estate market experiences every year, and some can be explained even further by a lack of homes available for sale on the market.

Inventory

For the last eight months, nationally, the inventory of homes for sale has been higher when compared to the same month the year before, but what I always try to remind you is that real estate is local. In Knox County the opposite holds true, as inventory is down 10.5% compared to January of last year (we are using January’s numbers to compare directly with the time frame in the stated national report). The challenge in the market is also the mismatch of the type of home that is available for sale. First-time homebuyers looking for a starter home, are often competing with other buyers to stand out, often outbidding each other.

Lawrence Yun, NAR’s Chief Economist, agrees that the market is still experiencing an inventory shortage.

“In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed.”

Home Prices

Nationally, the median home price for homes sold in January was $247,500 ($207,450 in Knox County). This is up 2.8% from January 2018 (up 12.44% in Knox County!) and marks the 83^rd consecutive month of year-over-year gains. The 2.8% growth in home prices represents the smallest year-over-year change since February 2012 but is a welcome change for buyers who had feared being priced out of the market (unfortunately for buyers in Knoxville, but not for sellers, the price appreciation in Knoxville is well outpacing what is happening nationally).

Days on the Market

Properties that sold in January were on the market for an average of 49 days (54 days in Knox County) with 38% of homes on the market for less than a month.

Yun is positive about how today’s market conditions will help buyers this spring,

“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

2. NAR’s Pending Home Sales Report

The national Pending Home Sales Index (PHSI) rose 4.6% to 103.2 in January from 98.7 in December. An index score of 100 is considered normal. All four major regions of the country experienced gains in January, with the largest increase coming in the South.

“The PHSI is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.”

Increases in the PHSI often predict increases in the level of home sales in the coming months, which is great news for the housing market leading in to spring! Yun had this to say,

“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”

Bottom Line

The Knoxville housing market in 2019 will, as always, require homeowners to list their house at the right price, but depending on the price point, there could be lots of buyers interested in the same property which could lead to multiple offers. If interest rates continue to stay low while wages increase, and more inventory comes to market, 2019 could be one of the best years for home sales in recent history.

No Need To Worry.. Home Prices Coming in for a SOFT Landing

March 4, 2019 By Troy Stavros

Home prices have appreciated considerably over the last five years. This has some concerned that we may be in for another dramatic correction. However, recent statistics suggest home values will not crash as they did a decade ago. Instead, this time they will come in for a soft landing.

The previous housing market was fueled by an artificial demand created by mortgage standards that were far too lenient. When this demand was shut off, a flood of inventory came to market. This included heavily discounted distressed properties (foreclosures and short sales).

Today’s market is totally different. Mortgage standards are tighter now than they were prior to the last boom and bust. There is no fear that a rush of foreclosures will hit the market. The Mortgage Bankers’ Association just announced that foreclosures are lower today than at any time since 1996.

Case Shiller looks at the percentage of appreciation as compared to the same month the year prior. Here is a graph of their findings over the last ten months:

As we can see, home price appreciation is softening, as more inventory comes to the market. This shows that real estate prices are not crashing, but merely returning toward historic appreciation numbers, of 3.6% annually.

Bottom Line

Knoxville home prices are leveling off. Long term, that is a good thing for the housing market. Have questions about what your home’s value might be? Want to talk about what buying or selling a home might look like for your specific situation? Call me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today and let’s set up a time to sit down and talk.

Would You Rather Be Paying Off Your Landlord’s Mortgage Or Your Own?

February 8, 2019 By Troy Stavros

There are some people who haven’t purchased homes because they are uncomfortable taking on the obligation of a mortgage. However, everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

With home prices rising, many renters are concerned about their house-buying power. Mike Fratantoni, Chief Economist at MBA, explained:

“The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market.”

As an owner, your mortgage payment is a form of ‘forced savings,’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.

As mentioned before, interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest reportshows that rates across the country were at 4.46% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy. Contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 to start formulating a plan and get you into your dream home!

Time To Squash The 20% Down Payment Myth For Good

February 7, 2019 By Troy Stavros

The largest obstacle renters face when planning to buy a home is saving for a down payment. This challenge is amplified by rising rents, which has eaten into the amount of money renters have leftover for savings each month after paying expenses.

In combination with higher rents, survey after survey has shown that non-homeowners (renters and those living rent-free with family or friends) believe they need to save upwards of 20% for their down payment!

According to the “Barriers to Accessing Homeownership” study commissioned in partnership between the Urban Institute, Down Payment Resource, and Freddie Mac, 39% of non-homeowners and 30% of those who already own a home believe they need more than a 20% down payment.

The percentage of those who are aware of low down payment programs (those under 5%) is surprisingly low at 12% for non-homeowners and 13% for homeowners.

In a recent Convergys Analytics report, they found that 49% of renters believe they need at least a 20% down payment.

The median down payment on loans approved in 2018 was only 5%! Those waiting until they have over 20% may already have enough saved to buy now!

There are over 45 million millennials (33%) who are mortgage ready right now, meaning their income, debt, and credit scores would all allow them to qualify for a mortgage today!

Bottom Line

If your five-year plan includes buying a home, let’s get together to determine what it will take to make that plan a reality. You may be closer to your dream than you realize! Contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 to start formulating a plan and get you into your dream home!