Waiting To Buy a Home Could Cost You [INFOGRAPHIC]

Infographic Courtesy of Keeping Current Matters

 

Some Highlights:

• If you’re thinking of buying a home but wondering if waiting a few years will save you in the long run, think again.
• The longer the wait, the more you’ll pay, especially when mortgage rates and home prices rise. Even the slightest change in the mortgage rate can have a big impact on your buying power no matter your price point.
• Don’t assume waiting will save you money. Connect with your trusted real estate professional to set the ball into motion today while mortgage rates are hovering near historic lows.

 

Pop Quiz: Can You Define These Key Terms in Today’s Housing Market? [INFOGRAPHIC]

Infographic Courtesy of Keeping Current Matters/The KCM Blog

 

 

Some Highlights

• The language of buying and selling a home may sound scary at first, but knowing how key terms relate to today’s market can help you. For example, current low mortgage rates and higher wages positively impact affordability for buyers, while home price appreciation continues to grow home equity, which sellers can use to fuel a move up.
• Terms like appraisal (what lenders rely on to validate a home’s value) and contingencies (which buyers can minimize to make their offer stand out) directly impact the transaction.
• You don’t need to be fluent in the language of the market to buy or sell. Instead, connect with your trusted real estate advisor so they can help you translate the process.

 

3 Charts That Show This Isn’t a Housing Bubble

 Article Courtesy of Keeping Current Matters/The KCM Blog

With home prices continuing to deliver double-digit increases, some are concerned we’re in a housing bubble like the one in 2006. However, a closer look at the market data indicates this is nothing like 2006 for three major reasons.

1. The housing market isn’t driven by risky mortgage loans.

Back in 2006, nearly everyone could qualify for a loan. The Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130. As an example of the difference between today and 2006, let’s look at the volume of mortgages that originated when a buyer had less than a 620 credit score.

 

Dr. Frank Nothaft, Chief Economist for CoreLogic, reiterates this point:

“There are marked differences in today’s run up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”

2. Homeowners aren’t using their homes as ATMs this time.

During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).

Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over $8 billion.

Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is half of what it was in 2006.

 

  

3. This time, it’s simply a matter of supply and demand.

FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months.

Builders also overbuilt during the bubble but pulled back significantly over the next decade. Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Mac, explains that pullback is the major factor in the lack of available inventory today:

“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”

Here’s a chart that quantifies Khater’s remarks:

 Today, there are simply not enough homes to keep up with current demand.

Bottom Line

This market is nothing like the run-up to 2006. Bill McBride, the author of the prestigious Calculated Risk blog, predicted the last housing bubble and crash. This is what he has to say about today’s housing market:

“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while because Millennials need houses. Prices will keep rising for a while because inventory is so low.”

 

JULY Mid-Month Update

Information Current as of 7/15/2021

 Use tabs above for regular updates.

 

 Charts below are not interactive.

Contact me if you would like to receive interactive MLS updates. 

 

The red boxes in the charts below show DOM (Days on Market)
and the ratio of Closed Price to List Price for the current month.
In July, every property that CLOSED, closed at or above list price.

 

Click on charts to enlarge.

 

SCCL - Single Family Residences

 

SCCL - Carriage Homes and Villas

TreeTops 

DDP = Due Diligence Period
UCS = Under Contract Show / UCNS = Under Contract No Show
DOM = Days on Market
BR = Bedrooms
BA = Bathrooms
HLA = Heated Living Area (Square Footage)
Price/SF = Price Per Square Foot
UC Date = Under Contract Date

What Does the recent ASSESSSMENT NOTICE mean?

By South Carolina law,  the county is required to reassess properties every 5 years. Those living in Lancaster Country should have received (or will be receiving soon) their new property assessment.  The assessment is based on general property values, not on a specific property.  Though, if you feel your property assessment (fair market value) isn't correct, you can file a written objection by 10/06/2021 (or whatever date you see on your assessment notice).   

 

WILL TAXES INCREASE DUE TO THE REASSESSENT?

According to the county's website, some property owner’s will notice a decrease in taxes, some will stay the same and some will increase. Reassessment was not created to raise taxes. It is intended to distribute the taxes collected more fairly among all property owners. Because there has been five years since the last reassessment, of which those values were based on sales from 2014and 2015, property values are likely to increase. Because of increase in values during reassessment, state law requires that local government reduce the millage rate to what is called a “rollback millage.”  (Millage rates are the tax rates used to calculate local property taxes. For more information on millage rates, click HERE.)  

 

DETERMINING YOUR TAX BILL

At the bottom of the Assessment Notice that you received is a general formula for determining your tax bill.  I would suggest ignoring that formula (as it doesn't calculate credits or fees) and using the county's Real Estate Estimate Calculator (see the paragraph below).

 

To calculate your estimated property tax bill based on the new assessment, click HERE to access the county auditor's page and click on Real Estate Calculator (left sidebar) to download their spreadsheet.  The only information you need to put in (at the top left of the calculator) is your Estimated Value of Property (which is the "Total Taxable Value" on your assessment notice).  The rest will auto-calculate for you.  Below is an image of the spreadsheet with my notes written in blue and items you can ignore crossed out in red.  Click on the image to enlarge.  Please note, if you are not able to input your information in the form, it may be due to issues with your version of EXCEL.  Interestingly, I am able to do it on one of my computers, but not the other. 

Note that if your SC home is not your primary residence (or if this is a rental property) you will need to look at the 6% County Tax Formula rather than the 4% County Tax Formula.  The 4% rate is only for primary residences.

 

For more information about SC Property taxes, be sure to check out my recent blog posting:

SC Real Estate Property Taxes

 

 

ADDITIONAL INFORMATION ABOUT THE 5 YEAR ASSESSMENT

Click HERE for a link to information from the Lancaster County website.   Here are some highlights taken directly from the website:

• Limits in a Reassessment Year Section 12-37-3140(B) of the S.C. Code of Laws limits reassessment increases in value to 15% within a five (5) year period.  However, under section 12-37-3130(1) additions and improvements are exempt from the 15% cap and will be added at the current market value. Some common additions and improvements are: 

1. New construction. 
2. Reconstruction. 
3. Major additions to the boundaries of the property or a structure on the property. 
4. Remodeling. 
5. Renovation and rehabilitation including installation. 
Additions or improvements do not include minor construction or ongoing maintenance and repair of existing structures.

 

In other words, if you have made improvements to your property, you can be reassessed at the time the improvements are completed and the assessment isn't limited to the 15% cap.  

 

To calculate the percent of increase on your Assessment Notice, subtract the previous assessed value (See next paragraph to see how to find that information.) from the new assessed value, divide that difference by the previous assessed value and multiply by 100.
 

To look up your previous property taxes, click HERE.  Click on ACCEPT at the bottom of the page, then put your name or property address in the search box.  Then click on VIEW next to the latest entry (at the top of the list).  Click on VIEW AND PRINT THE BILL at the top of the page.  Note that this information doesn't show the new assessment amount.

 

FEATURED LISTING

7111 SHENANDOAH DRIVE

This beautiful Crestwood Meadow home sits on a quiet corner lot with a backyard tastefully landscaped for privacy. It is a welcoming retreat both inside and out! Bright sunroom is perfect flex space waiting for your personal touch. Kitchen features generous cabinetry with roll-out shelves, granite counters, island, pantry, designer light fixture and custom backsplash, and dining area with open views of main living areas. Large separate DR features wainscoting & tray ceiling. Office/flex space w/French doors. Owner's suite has renovated bathroom w/new tile, vanity, and door-free marble-tiled walk-in shower. Paver patio with a sitting wall and retractable awning is a perfect place to relax.  This very special home has custom ceiling fans and lighting, surround sound in FR, surge protector, and irrigation system. This is one you won't want to miss! Come and enjoy all the beautiful amenities & diverse activities this premier 55+ adult community has to offer!

 Click below to see photos.

VIRTUAL TOUR

If you or someone you know is interested in this beautiful property, please contact me.

A Look at Home Price Appreciation Through 2025

 Article Courtesy of Keeping Current Matters/The KCM Blog

Home prices have increased significantly over the last year, which in turn has grown the net worth of homeowners. Appreciation and home equity are directly linked – as the value of a home increases, so does a homeowner’s equity. And with these recent gains, homeowners are witnessing their financial stability and well-being grow to record levels.

In more good news for homeowners, the most recent Home Price Expectations Survey – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists – forecasts home prices will continue appreciating over the next five years, adding to the record amount of equity homeowners have already gained over the past year. Below are the expected year-over-year rates of home price appreciation from the report:

 

What Does This Mean for Homeowners?

Home prices are climbing today, and the data in the survey indicates they’ll continue to increase, but at rates that approach a more normal pace. Even still, the amount of household wealth a homeowner stands to earn going forward is substantial. This truly becomes clear when we consider a scenario using a median-priced home purchased in January of 2021 and the projected rate of appreciation on that home over the next five years. As the graph below illustrates, a homeowner could increase their net worth by a significant amount – over $93,000 dollars by 2026.

 

 

Home Price Appreciation and Home Equity

CoreLogic recently released their quarterly Homeowner Equity Insights Report, which tracks the year-over-year increases in equity. It shows an average annual gain of $33,400 per borrower over the past 12 months. In the report, Dr. Frank Nothaft, Chief Economist for CoreLogic, further explains:

“Double-digit home price growth in the past year has bolstered home equity to a record amount. The national CoreLogic Home Price Index recorded an 11.4% rise in the year through March 2021, leading to a $216,000 increase in the average amount of equity held by homeowners with a mortgage.”

The expected, sustained growth of home prices means homeowners can continue to build on the past year’s record levels of home equity – and their financial prosperity. It also presents today’s homeowners with a unique opportunity: using their growing equity for a home upgrade. With so few homes available to purchase and strong buyer demand, there may not be a better time to sell your current house and move into one that better meets your needs.

Bottom Line

Home prices are expected to continue appreciating over the next five years, and the associated equity gains are the quickest way homeowners can build household wealth. If you’re a current homeowner who’s ready to take advantage of your built-up equity, contact a local real estate advisor to discuss your options.

Great Spaces: Largest Privately-Owned Property in Sedona Sells for Over $14M

Be sure to follow the link below to read this interesting RisMedia housecall article:  

http://blog.rismedia.com/2021/great-spaces-sedona/#close

Photo courtesy of RisMedia

As a former resident of the beautiful state of Arizona, this sale of a magnificent estate in Sedona caught my attention. According to this article, "The estate, which had been on the market since 2006, was originally built for the famous Wrigley family and was later sold to Ingrid Hills and her family, heirs to the Hills Bros. Coffee fortune." It sits on a combined 173 acres and sold for $14,750,000.

So, what would your dream home look like and where would it be?  Add a comment below.

Home Builders Ramp Up Construction Based on Demand

Article Courtesy of Keeping Current Matters/The KCM Blog

If you’re thinking of buying a home, there really is no time like the present. With today’s low mortgage rates, you have a great opportunity to get more home for your money. The challenge is inventory. Like you, many buyers want to capitalize on these market conditions, and it’s leading to more buyer competition and bidding wars.

If you’re having a hard time finding a home to buy, it may be time to talk to your trusted real estate advisor about a newly built home. Early indicators show new-home construction is beginning to ramp up. While new homes alone won’t be able to fix all of the inventory challenges, this does mean you’ll soon have more options as you search for a home. As a buyer, a newly built home may be exactly what you’re looking for – it’s brand new, and with builder customization options, it’s uniquely yours from the ground up.

Here’s what industry experts are saying about new homes coming to market:

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says recent research could indicate upward momentum when it comes to new home construction. Evangelou refers to the volume of new homes where construction began during a set period, known in the industry as housing starts.

According to that research, housing starts reached their highest level since 2006 in March of this year – an encouraging sign for the industry. While they dipped slightly in April, Evangelou reiterates that the level of housing construction is heading in a positive direction compared to recent years:

“…we are currently building 24% more homes than we typically have built in April in the last couple of decades. Thus, housing construction is trending upward with housing starts likely to reach 1.6 million for all of 2021 and rise further to 1.7 million in 2022.”

As new data pours in, it further confirms this trend. According to the latest Monthly New Residential Construction report from the U.S. Census Bureau, housing starts increased even more in May, which continues the ongoing upward trend (see graph below) and indicates that ground is being broken on even more new homes.

 

Robert Dietz, Chief Economist and Senior Vice President of Economics and Housing Policy for the National Association of Home Builders (NAHB), singles out another encouraging sign:

“It is also worth noting that the number of single-family homes permitted but not started construction continued to increase in May, rising to 142,000 units.”

This insight that there’s also an uptick in single-family homes permitted serves as an additional sign that more new homes lie ahead. It’s important to realize that the construction doesn’t have to start on these homes before you may be able to purchase one. According to the Monthly New Residential Sales report from the U.S. Census Bureau, many new homes are selling before construction even begins (see graph below):

 

 

These signs are all good news for housing inventory. And as the recent challenges of rising lumber prices and dwindling lumber supply begin to improve, builders will be able to increase their production even more in the months ahead.

Bottom Line

While the inventory challenges we’re facing today won’t be solved overnight, the increase in new-home construction means you may have more options than you thought. Work with your real estate agent to learn more about finding your dream home and to discover newly built homes available in your area.

 

HAPPY INDEPENDENCE DAY

 

 
What It Means to Be an American
Author Unknown

 To believe in the promise

of a better tomorrow,
and stand united in our efforts
to give a peaceful nation
to our children...

To honor each other's differences
and cherish the richness of our history,
even as it continues to unfold
from sea to shining sea...

To love deeply
our friends and family, day by day,
and never take for granted
the privilege of calling ourselves American.

Wishing you all a safe and healthy 4th of July!

 The Declaration of Independence

In Congress, July 4, 1776

The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security...  CLICK ON LINK ABOVE FOR ENTIRE DOCUMENT

 

Helen Adams Realty - Your SCCL Neighborhood Update 7/2/21

Be sure to click on the link below to check out this awesome Neighborhood Update for Sun City Carolina Lakes.  

 

If you'd like to receive your own Neighborhood Updates, contact me and I'll set it up for you.  

 

Also, let me know if you'd like a daily MLS update for SCCL or other communities!

 

Helen Adams Realty - Your Neighborhood Update