Where Are Home Values Headed Over the Next Few Years?

Article Courtesy of Keeping Current Matters/The KCM Blog

There are many questions about where home prices will be next year as well as where they may be headed over the next several years to come. We have gathered the most reliable sources to help answer these questions:

The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter.

Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives.

Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.
Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.

The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.

Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets always.

Here are their projections of prices going forward:

Bottom Line

Every source sees home prices continuing to appreciate – just at lower percentages as we move through the next several years.

Fall Maintenance

Fall is finally here!  And with it comes the need to prepare your home for the colder weather to come.  Here are some suggestions from Michael Lawson of Pillar to Post Home Inspectors.

Seal it up: Caulk and seal around exterior door and window frames. Look for gaps where pipes or wiring enter the home and caulk those as well. Not only does heat escape from these openings, but water can enter and may eventually cause mold problems and even structural damage.

Look up: Check the roof for missing or damaged shingles. Winter weather can cause serious damage to a vulnerable roof, leading to a greater chance of further damage inside the home. Although you should always have a qualified professional inspect and repair the roof, you can do a preliminary survey safely from the ground using binoculars.

Clear it out: Clear gutters and eaves troughs of leaves, sticks, and other debris. Consider installing leaf guards if your gutters can accommodate them – they are real time savers and can prevent damage from clogged gutters. Check the seams between sections of gutter, as well as between the gutter and downspouts, and make any necessary adjustments or repairs.

No hose: Drain garden hoses and store them indoors to protect them from the elements. Shut off outdoor faucets and make sure exterior pipes are drained of water. Faucets and pipes can freeze and burst, causing leaks and potentially serious water damage.

Warm up time: Have the furnace inspected to ensure it’s safe and in good working order. Most utility companies will provide basic inspections at no charge, but there can often be a long waiting list come fall and winter. Replace disposable furnace air filters or clean the permanent type according to the manufacturer’s instructions. Using a clean filter will help the furnace run more efficiently, saving you money and energy.

Light that fire: If you enjoy the crackle of a wood-burning fireplace on a chilly fall evening, have the firebox and chimney professionally cleaned before lighting a fire this season. Creosote, a byproduct of wood burning, can build up to dangerous levels and cause a serious chimney fire if not removed.

Quilts of Valor Ceremony Honors Eight SCCL Veterans

The mission of the Quilts of Valor Foundation is to cover service members and veterans touched by war with comforting and healing Quilts of Valor.

A Quilts of Valor Ceremony honoring eight SCCL Veterans was held at The Lodge on October 20th.  Once again, the Carolina Lakes Quilters and the Honoring Our Veterans group presented SCCL veterans with beautiful handmade quilts in recognition of their service.  To date, the group has given over 60 quilts to SCCL vets, starting with veterans of WW2 and now continuing through the Korean and Vietnam Wars.  Quilts, which can take 200 hours to make, are made by the quilters at their own expense. 

Dispelling the Myth About Home Affordability

Article Courtesy of Keeping Current Matters/The KCM Blog

We have all seen the headlines that report that buying a home is less affordable today than it was at any other time in the last ten years, and those headlines are accurate. But, have you ever wondered why the headlines don’t say the last 25 years, the last 20 years, or even the last 11 years?

The reason is that homes were less affordable 25, 20, or even 11 years ago than they are today.

Obviously, buying a home is more expensive now than during the ten years immediately following one of the worst housing crashes in American history.
Over the past decade, the market was flooded with distressed properties (foreclosures and short sales) that were selling at 10-50% discounts. There were so many distressed properties that the prices of non-distressed properties in the same neighborhoods were lowered and mortgage rates were kept low to help the economy.

Low Prices + Low Mortgage Rates = High Affordability

Prices have since recovered and mortgage rates have increased as the economy has gained strength. This has and will continue to impact housing affordability moving forward.
However, let’s give affordability some historical context. The National Association of Realtors (NAR) issues their Affordability Index each month. According to NAR:

“The Monthly Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent monthly price and income data.”

NAR’s current index stands at 138.8. The index had been higher each of the last ten years, peaking at 197 in 2012 (the higher the index the more affordable houses are).

But, the average index between 1990 and 2007 was just 123 and there were no years with an index above 133. That means that homes are more affordable today than at any time during the eighteen years between 1990 and 2007.

Bottom Line

With home prices continuing to appreciate and mortgage rates increasing, home affordability will likely continue to slide. However, this does not mean that buying a house is not an attainable goal in most markets as it is less expensive today than during the eighteen-year stretch immediately preceding the housing bubble and crash.