Should I Buy Now? Or Wait Until Next Year?

Information Courtesy of Keeping Current Matters/The KCM Blog

 

Some Highlights:

• The cost of waiting to buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
• Freddie Mac predicts interest rates to rise to 5.2% by the third quarter of 2019.
• CoreLogic predicts home prices to appreciate by 5.1% over the next 12 months.
• If you are ready and willing to buy your dream home, find out if you are able to!

The Cost of NOT Paying PMI

The following article is especially important for first-time buyers.  If you know someone who is hoping to purchase a home, but is concerned about PMI (Private Mortgage Insurance), please share this article.

Article Courtesy of Keeping Current Matters/The KCM Blog

Saving for a down payment is often the biggest hurdle for a first-time homebuyer as median incomes, rents, and home prices all vary depending on where you live.

There is a common misconception among homebuyers that a 20% down payment is required, and it is this limiting belief that often adds months, and sometimes even years, to the home-buying process.

So, if you can purchase a home with less than a 20% down payment… why aren’t more people doing just that?

One Possible Answer: Private Mortgage Insurance (PMI)
Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. The monthly cost of your PMI depends on the home’s value, the amount of your down payment, and your credit score.

Below is a table showing the difference in monthly mortgage payment for a $250,000 home with a 3% down payment and PMI vs. a 20% down payment without PMI:

The first thing you see when looking at the table above is no doubt the added $320 a month that you would be spending on your monthly mortgage cost. The second thing that should stand out is that a 20% down payment is $50,000!

If you are buying your first home, $50,000 is a large sum of money that takes discipline and sacrifice to save. Many first-time buyers save for 5-10 years before buying their homes.

To save $50,000 in 10 years, you would need to save about $420 a month. On the other hand, if you save that same $420 a month, you could afford a 3% down payment in less than a year and a half.
In a recent article by My Mortgage Insider, they explain what could happen in the market while you are waiting to save for a higher down payment:

“The time it takes to save a (larger) down payment could mean higher home prices and tougher qualifying down the road. For many buyers, it could prove much cheaper and quicker to opt for the 3% down mortgage immediately.”

The article went on to say,

“Since renters typically devote a higher percentage of their income to housing than homeowners, providing flexible down payment options can help renters with solid earnings purchase a home – and gain a fixed-rate mortgage with principal and interest payments that will not increase over the life of the loan.”

If the prospect of having to pay PMI is holding you back from buying a home today, Freddie Mac has this advice,

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Based on results of the most recent Home Price Expectation Survey, a homeowner who purchased a $250,000 home in January would gain $50,000 in equity over the next five years based on home price appreciation alone (shown below).

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, meet with a professional in your area who can explain your market’s conditions and help you make the best decision for you and your family.

How Much Has Your Home Increased in Value?

Article Courtesy of Keeping Current Matters/The KCM Blog

Home values have risen dramatically over the last twelve months. In CoreLogic’s most recent Home Price Index Report, they revealed that national home prices have increased by 6.2% year-over-year.
 
CoreLogic broke down appreciation even further into four price ranges, giving us a more detailed view than if we had simply looked at the year-over-year increases in national median home price.

The chart below shows the four price ranges from the report, as well as each one’s year-over-year growth from July 2017 to July 2018 (the latest data available). 

It is important to pay attention to how prices are changing in your local market. The location of your home is not the only factor which determines how much your home has appreciated over the course of the last year.

Lower-priced homes have appreciated at greater rates than homes at the upper ends of the spectrum due to demand from first-time home buyers and baby boomers looking to downsize.

Bottom Line

If you are planning to list your home for sale in today’s market, find a local agent who can explain exactly what’s going on in your area and your price range.

So, how's the market in Sun City?

I get asked that a lot... and it's often followed by, "I hear things aren't selling."

I make every effort to update the stats for SCCL here at my website every day and encourage you to check them out every now and then, so you can see what our market looks like for yourself.  And, please share the link with others who are interested!  Of course, I'm always here to talk to you about our market, but when you just want to see a quick overview, this is the place to come! 

Be sure to check out the Closed Sales chart for single family homes below to compare this year to the past 3 years.  Now, do you still think homes aren't selling?

Please remember that this information and MUCH MORE can be found by using the tabs at the top of the page!

Below are all the single family homes that have CLOSED here in SCCL since the beginning of June.  Note that while some properties lingered on the market for a very long time, others sold in a very short time.  Why?  Because in our current market, homes that show better and are priced appropriately, sell faster.  

Please note that the last column below shows the ratio of the closing price to the current list price.  The ratio will be different for properties that have had price reductions since the property was first listed.  You can see the additional column showing the ratio of "closing price to original list price" for this year by using the "CURRENTLY ACTIVE/UNDER CONTRACT/SOLD YTD" tab above.   It's an interesting stat to share with your friends.  (Click on the chart to enlarge and use < and > arrows to move from one to another.)

DOM = Days on Market / CDOM = Continuous Days on Market (May be different from DOM.)
BR = Bedrooms
BA = Bathrooms
HLA = Heated Living Area (Square Footage)
Price/SF = Price Per Square Foot
UC Date = Under Contract Date

All that being said, remember that all it takes is for the right person to walk through the door and fall in love with a house.  The right person is out there.  Just try to make your home show well!  Clean, declutter, freshen the paint, declutter, update fixtures and flooring, if necessary... and did I mention declutter?

ANIMAL ADOPTION EVENT

PICK ME! SC

1,500 Adoptions in Just 1 Weekend

For the first time in history, animal shelters and rescues across South Carolina are coming together to hold an awe-inspiring statewide adoption event October 5 – 7, 2018.  This massive lifesaving mission is sponsored by Petco Foundation and is being organized by No Kill South Carolina. Whether you live in the Upstate, the Pee Dee, the Midlands or the Lowcountry, wonderful animals will be available for adoptions and incredible deals are being offered. From the Mountains to the Sea, Won’t You Pick Me SC!
Visit us on Facebook

Lancaster Animal Shelter Supporters (LASS) will be holding an adoption event at the LANCASTER ANIMAL SHELTER on Friday, October 5th, and Saturday, October 6th, from 11:00 to 3:00.  LASS will be paying part of adoption fees to allow pets to be available at a very reduced cost!  All animals have been spayed or neutered.  Please spread the word!! 

Hurricane Florence Will Be Hitting the Carolinas Soon

As we all start to batten down the hatches, please be sure to check on your neighbors and make sure everyone is prepared for whatever Florence may bring us.  If you waited to go out for supplies and discovered that stores were out of water, do what we did years ago - fill containers, fill pots, and fill the bathtub.  You can use that tub water to flush the toilet.  They are saying we could possibly be without power for weeks, so make sure you have flashlights and batteries ready.  Prepare for the worst and hope for the best! 

LANCASTER ANIMAL SHELTER SUPPORTERS FUNDRAISER

TO PURCHASE A MAGNET

CONTACT POOK

Lots Near Power Lines Lose Nearly Half Their Value

Article Courtesy of REALTOR® MAGAZINE
August 22, 2018

 
Study: Lots Near Power Lines Lose Nearly Half Their Value

Lots located next to power lines tend to sell for a whopping 45 percent less than similar lots further away from high-voltage transmission lines, according to a new study in the Journal of Real Estate Research. Lots that are non-adjacent to power lines but are located within 1,000 feet of them often sell at a discount of 18 percent, researchers Chris Mothorpe and David Wyman, the authors of the study, found.

The study focused on the value of vacant land, eliminating other factors that could also influence price, such as home style and square footage. The researchers say land typically represents 20 percent of a home’s overall value. Therefore, the 45 percent decrease in land value would translate to a drop in total property value of around 9 percent, according to the study.

Mothorpe and Wyman, assistant professors at the College of Charleston in Charleston, S.C., culled sales data from 5,455 vacant lots sold between 2000 and 2016 in Pickens County, S.C. A network of high-voltage electrical lines are located in Pickens County from the Oconee Nuclear Station.

Mothorpe says health concerns about being near high-voltage lines are one of the factors likely driving down prices of nearby land. But a solid link between power lines and health issues remains elusive, he adds. Unattractive views of power lines also affects land prices, Mothorpe says, and residents who live near them may hear a humming sound produced by the lines. “My intuition tells me the visual [component] is the largest” factor leading to a decrease in values, Mothorpe told The Wall Street Journal.