Ten years ago, the housing market began it's downward spiral. The question has been raised if we couldn't be looking at a re-occurence, however there are some big differences between 2008 and 2018...

Housing Market: Another Gigantic Difference Between 2008 and 2018

Some are attempting to compare the current housing market to the market leading up to the “boom and bust” that we experienced a decade ago. They look at price appreciation and conclude that we are on a similar trajectory, speeding toward another housing crisis.
However, there is a major difference between the two markets. Last decade, while demand was being artificially created by extremely loose lending standards, a tremendous amount of inventory was coming to the market to satisfy that demand. Below is a graph of the inventory of homes available for sale leading up to the 2008 crash.


A normal market should have approximately 6 months supply of housing inventory. As we can see, that number jumped to over 11 months supply leading up to the housing crisis. When questionable mortgage practices ceased, and demand dried up, there was a glut of inventory on the market which caused prices to drop as there was too much supply and not enough demand.

Today is radically different!

There are those who believe that low mortgage rates have created an artificial demand in the current market. They fear that if mortgage rates continue to rise, some of the current demand will dry up (which is a possibility).
However, if we look at supply again, we can see that the current supply of homes is well below the norm of 6 months.

Bottom Line

We will not have a glut of inventory like we did back in 2008 and home values won’t come tumbling down. Instead, if demand weakens, we will return to a normal market (approximately a 6-month supply) with historic levels of appreciation (3.6% annually).

It's hard to sell your home, if you don't make it easily accessible to buyers. Don't make that mistake!

Access is an Important Factor in Getting Your House SOLD!

So, you’ve decided to sell your house. You’ve hired a real estate professional to help you with the entire process, and they have asked you what level of access you want to provide to potential buyers.

There are four elements to a quality listing. At the top of the list is Access, followed by Condition, Financing, and Price. There are many levels of access that you can provide to your agent so that he or she can show your home.

Here are five levels of access that you can give to buyers, along with a brief description:

1. Lockbox on the Door – this allows buyers the ability to see the home as soon as they are aware of the listing, or at their convenience.
2. Providing a Key to the Home – although the buyer’s agent may need to stop by an office to pick up the key, there is little delay in being able to show the home.
3. Open Access with a Phone Call – the seller allows showings with just a phone call’s notice.
4. By Appointment Only (example: 48-Hour Notice) – Many buyers who are relocating for a new career or promotion start working in that area prior to purchasing their home. They often like to take advantage of free time during business hours (such as their lunch break) to view potential homes. Because of this, they may not be able to plan their availability far in advance or may be unable to wait 48 hours to see the house.
5. Limited Access (example: the home is only available on Mondays or Tuesdays at 2pm or for only a couple of hours a day) – This is the most difficult way to be able to show your house to potential buyers.

In a competitive marketplace, access can make or break your ability to get the price you are looking for, or even sell your house at all.

Is a new home one of your 2018 goals? Let's make it a reality!

3 Tips for Making Your Dream Home a Reality [INFOGRAPHIC]

Some Highlights:

• Realtor.com shared their “5 Habits to Start Now If You Hope to Buy a Home.”
• Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking a lot about it.
• Living within a budget will not only help you save money for down payments but will help you pay down other debts that might be holding you back.

Need a reason to use a Realtor to buy or sell your home? Here are 5...

Buying or Selling in 2018? 5 Reasons to Resolve to Hire a Pro [INFOGRAPHIC]

Some Highlights:

• As we usher in the new year, one thing is for certain… if you plan to buy or sell a house this year, you need a real estate professional on your team!
• There are many benefits to using a local professional!
• Pick a professional who knows your local market and can help you achieve your dreams!

Multi-generational home buyers are increasing in number. What does that mean for the housing market?

Multigenerational Households May Be the Answer to Price Increases

Multigenerational homes are coming back in a big way! In the 1950s, about 21%, or 32.2 million Americans shared a roof with their grown children or parents. According to an article by Realtor.com,“Nearly 1 in 5 Americans is now living in a multigenerational household – a household with two or more adult generations, or grandparents living with grandchildren – a level that hasn’t been seen in the U.S. since 1950.”

Another report that proves this point is the National Association of Realtors’ (NAR) 2017 Profile of Home Buyers and Sellers which states that 13% of home buyers purchased multigenerational homes last year. The top 3 reasons for purchasing this type of home were:

1. To take care of aging parents (22%, up from 19% last year)
2. Cost savings (17%)
3. Children over the age of 18 moving back home (16%, up from 14% last year)

Valerie Sheets, Spokesperson for Lennar, points out that,

“Everyone is looking for the perfect home for any number of family situations, such as families who opt to take care of aging parents or grandparents at home, or millennials looking to live with their parents while they attend school or save for a down payment.”

For a long time, nuclear families (a couple and their dependent children) became the accepted norm, but John Graham, co-author of “Together Again: A Creative Guide to Successful Multigenerational Living,” says, “We’re getting back to the way human beings have always lived in – extended families.”

This shift can be attributed to several social changes over the decades. Growing racial and ethnic diversity in the U.S. population helps explain some of the rise in multigenerational living; “Data suggest that multigenerational living is more prevalent among Asian (28%), Hispanic (25%), and African-American (25%) families, while U.S. whites have fewer multigenerational homes (15%).”

Additionally, women are a bit more likely to live in multigenerational conditions than are their male counterparts (12% vs. 10%, respectively). Last but not least, basic economics.

Valerie Sheets brings to light the fact that home prices have been skyrocketing in recent years. She says that, “As home prices increase, more families tend to opt for living together.”

Bottom Line 

Multigenerational households are making a comeback. While it is a shift from the more common nuclear home, these households might be the answer that many families are looking for as home prices continue to rise in response to a lack of housing inventory.

Do natural disasters, such as hurricanes and wildfires, impact the national housing market?

It is too soon to tell yet, however here is the latest update...

http://terriandkieronteam.housingtrendsenewsletter.com/

1601 Wilton Court, Green Oaks IL 60048

Looking for some inspiration?  Look no further than inside this fabulously updated Green Oaks colonial.  Tucked on a wooded cul-de-sac lot abutting the nature preserve, this beautiful home has been lovingly updated and remodeled throughout.  Gleaming hardwood floors, gourmet kitchen, luxury bathrooms, expanded laundry, finished basement.  So great, it sold quickly! 

To see interior photos, click on house picture below

Thinking of selling your home this spring?

Housing inventory remains low in most markets. Get a jump start on competing sellers by beating them to the market. Not sure what your home is worth? Call me and we will run through the numbers! 

 
If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:
“While feedback from REALTORS® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”
The latest Existing Home Sales Report shows that there is currently a 5.1-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below November 2014 numbers.
The chart below details the year-over-year inventory shortages experienced in 2015:

Anything less than a six-month supply is considered a “Seller’s Market”.

Bottom Line

Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy now!

Renting? As you head into 2016, you may want to reconsider...

Below are quotes from experts as well as industry reports & articles that cover the residential rental market in the U.S.

The experts…

Zillow Chief Economist Svenja Gudell:

"Make no mistake: Despite this recent slowdown in rental appreciation, the rental affordability crisis we've been enduring for the past few years shows no signs of easing, especially as income growth remains weak. It will take a lot more supply, and a lot more renters-turned-homeowners, to fully reverse this.”

Lawrence Yun, Chief Economist of the National Association of Realtors

“Rents and home prices are expected to exceed income growth into next year because of the insufficient creation of new home construction and the detrimental impact its inadequacy continues to have on housing costs in several markets.”

David Brickman, Executive Vice President of Freddie Mac Multifamily

"We know rents are rising faster than incomes, and now we have data to show that many renters don't have enough to pay all their debts each month, which is forcing them to make tradeoffs, such as cutting spending on other items.”

The reports and articles…

Zillow's 2016 Housing Market Predictions

“Rising rents won't let up in 2016, and will continue to set new records. The next year will bring the least affordable median rents ever.”

2015 rent.com Rental Market Report

“68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%”

CNBC

“The primary reasons cited for the latest rises were increasing demand and low inventory. Vacancy rates for rental housing nationally dropped to a 20-year low of 6.8 percent in the second quarter…Rents and occupancies are currently hovering at historic highs as supply isn't keeping up with demand.”

 Bottom Line

If you are one of the many renters debating a home purchase, meet with a real estate professional in your area who can show you your options, before your rent goes up!

Existing home sales are up almost 4%...

http://goo.gl/WlxEAg

Some Highlights:

• The annual adjusted sales are currently at a 5.36 million pace.
• 14,684 homes sell every day in the United States.
• October marked the 44th consecutive month of price gains.

What is your reason for being a homeowner?

The most recent Housing Pulse Survey released by the National Association of Realtors revealed that the two major reasons Americans prefer owning their own home instead of renting are:

1. They want the opportunity to build equity.
2. They want a stable and safe environment.

Building Equity

In a recent article, John Taylor, CEO of the National Community Reinvestment Coalition, explained that those who lack the opportunity to become homeowners have a weakened ability to reinvest their wealth:

“We traditionally have been huge supporters of homeownership. We see it as a way to provide stability for households but also as an asset-building strategy. If you continue to be a renter, locked out of the homeownership arena, increasingly those things are further and further out of reach. They’re joined at the hip. They perpetuate each other.”

Family Stability

Does owning your home really create a more stable environment for your family?
A survey of property managers conducted by rent.com last month disclosed two reasons tenants should feel less stable with their housing situation:

• 68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%.
• 53% of property managers said that they were more likely to bring in a new tenant at a higher rate than negotiate and renew a lease with a current tenant they already know.

We can see from these survey results that renting will provide anything but a stable environment in the near future.

Bottom Line

Homeowners enjoy a more stable environment and at the same time are  given the opportunity to build their family’s net worth.

Spooked out by the home buying process? I can make it a lot less scary!

Some Highlights:

• 36% of Americans think they need a 20% down payment to buy a home. 44% of Millennials who purchased a home this year have put down less than 10%.
• 71% of loan applications were approved last month
• The average credit score of approved loans was 723 in September (the lowest recorded score since Ellie Mae began tracking in August 2011).

Want to build your family wealth? Build your home equity...

With residential real estate values rising quite substantially in most parts of the country over the last few years, many homeowners are seeing a major increase in their family’s wealth as equity continues to build in their house.
A recent study by the Joint Center of Housing Studies at Harvard University revealed that home equity grew nicely last year and has grown dramatically over the last five years…

Buyers looking today may not see the same build-up in equity but could still do quite well.
Let’s assume you went into contract in the next six weeks and closed on a $250,000 home in January. If we take the house value projections from the last Home Price Expectation Survey, here is how your equity would grow over the next four years:

Bottom Line

Homeownership has historically been a great way for the average American family to build wealth over time.

Is it better to buy or rent?

According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index homeownership is a better way to produce greater wealth, on average, than renting.
The BH&J Index is a quarterly report that attempts to answer the question:

Is it better to rent or buy a home in today’s housing market?

The index examines that entire US housing market and then isolates 23 major markets for comparison. The researchers at use a “’horse race’ comparison between an individual that is buying a home and an individual that rents a similar quality home and reinvests all monies otherwise invested in homeownership.”
Ken Johnson, Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states: "The U.S. as a whole is still in clear buy territory. The cities of Cincinnati, Chicago, Cleveland, and New York City are deep into buy territory."
Miami and Portland had been inching closer toward renting being the better option but have "pulled back from the edge." Johnson goes on to say, “that's a good sign for home pricing as it suggests prices are going to level off in these metro areas."

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

263 Aspen Pointe, Vernon Hills IL 60061

Newer maintenance-free living in Vernon Hills!  Great location is close to water park, restaurants, entertainment, major roads, schools & parks.  Island kitchen features granite counters, stainless steel appliances.  Great room with wall of sliders.  Master suite has large walk-in Elfa organized closet & spa-like bath with separate tub & shower.  Two secondary bedrooms, hall bath, den & in unit laundry room.  Two car attached garage.  $318,000 263aspenpointedr.tkmomteam.com

Click on photo below for interior pictures

Ever wonder what the true cost of waiting to buy a home is?

Have you every asked yourself "what if I wait to buy?"  Keeping Current Matters helps answer that question for you.  Read their article below:

First-time homebuyers are flocking to the housing market in greater numbers than any time in the last few years. Renters who are ready and willing to buy are now realizing that they are also able to as well. Many first-time buyers are Millennials (born between 1981 – 1997).
If you are one of the many in this generation who sees your friends and family diving head first into the real estate market, and wonder if now is the time for you to do the same, keep reading!
The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
Let’s look at an example of what the experts are predicting for the upcoming year, and what that really would mean for you. Let’s say you’re 30 and your dream house costs $250,000 today. Right now mortgage interest rates are at or about 4%.

Your monthly mortgage payment (principal & interest only) would be $1,193.54.

But you’re busy, you like your apartment, and moving is such a hassle. You decide to wait until next year to buy. CoreLogic predicts that home prices will appreciate by 5.1% in the next 12 months; this means that same house you loved now costs, $262,750.
Freddie Mac predicts that over this same period of time, interest rates will be a full point higher at 5.0%. Your new payment per month is now $1,410.50.

The difference in payment is $216.96 PER MONTH!

That’s basically like taking $8 and tossing it out the window EVERY DAY!
Or you could look at it this way:

• That’s your morning coffee everyday on the way to work (average $2) with $10 left for lunch!
• There goes Friday Sushi Night! ($50 x 4)
• Stressed Out? How about a few deep tissue massages with tip!
• Need a new car? You could get a brand new car for $217 a month.

Let’s look at that number annually! Over the course of your new mortgage at 5.0%, your annual additional cost would be $2,603.52!
Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining. We could come up with 100’s of ways to spend $2,603, and we’re sure you could too!
Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $78,105.60, all because when you were 30 you thought moving in 2015 was such a hassle or loved your apartment too much to leave yet.
Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready. But if they showed you that you could save $78,000 you’d at least listen to what they had to say.
They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…

7592 Bittersweet Drive, Gurnee IL 60031

Stately brick face exterior enhances this fabulous custom built Bittersweet Woods beauty!  Backs to the Bittersweet Golf Course wetland preserve.

Home Values Compared to the Peak of 2006-2007

There is no doubt that the housing market has recovered from the meltdown that occurred just a few short years ago. However, in some states home values still have not returned to the prices we saw in 2006 and 2007. Here is a breakdown showing where current prices are in each state as compared to peak prices.

 

Will low mortgage rates soon be a thing of the past...

Wonderful Wadsworth custom home on wooded acre

Mature trees from this custom built 3 bedroom home, tucked in the heart of Wadsworth.  Beautiful river rock stone fireplace highlights the great room.  The remodeled kitchen boasts an abundance of cabinets with pull-out shelving, a built-in refrigerator, and stainless steel appliances.  Soaring vaulted ceilings and a gas fireplace add to the ambiance of the master suite, complete with a large walk-in closet and spacious spa-like bath with whirlpool tub, separate shower & double sinks.  Don't miss the expansion of living space in the finished basement.  Entertaining is easy with the large bar.  The spacious family room is spacious enough to allow for a game table, and the bathroom also offers a salon sink for at-home haircuts.  Take a look!

Click here for additional photos