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By marylourea32039196, Feb 18 2018 04:23AM

Home prices are set to soar in 2018

1:25 PM ET Tue, 2 Jan 2018 | 00:51

Diana Olick | @DianaOlick

Published 9:59 AM ET Tue, 2 Jan 2018 Updated 3:08 PM ET Tue, 2 Jan 2018

The temperature may be frigid across much of the nation, yet home prices are sizzling and sellers are in the hot seat.

Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic.

That is the third straight month at that pace, far higher than the price gains in the first half of 2017. Low supply and high demand are fueling the spurt and neither of those is expected to ease up anytime soon.

Supply is actually falling even more now, and a strengthening economy is pushing demand. This will have potential buyers out early this year, trying to get a jump on the spring market.

"Rising home prices are good news for home sellers, but add to the challenges that home buyers face," said Frank Nothaft, chief economist at CoreLogic, in the report. Nothaft said the limited supply is the worst at the lower end, and will hit the growing number of first-time buyers hardest.

Half the homes are overvalued

The largest metropolitan areas are seeing the biggest gains.

In the nation's top 50 markets, half of the housing stock is now considered overvalued, based on market fundamentals, like income and employment. CoreLogic defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level.

Las Vegas led the November report as not only being overvalued, but showing a double-digit annual price gain of 11 percent.

Real estate trends for 2018: What to expect from the housing market Real estate trends for 2018: What to expect from the housing market

7:05 AM ET Wed, 27 Dec 2017 | 01:17

San Francisco was not far behind at 9 percent, and Denver came in third at 8 percent.

Las Vegas and Denver are both considered overvalued, but San Francisco is not, as incomes in the tech capital far exceed the national level.

Of the nation's 10 major markets with the biggest price gains, seven are overvalued. These include Washington, D.C., Houston and Miami. Boston and Chicago are still seeing price gains but are considered at value.

Without a significant jump in home construction, prices will remain high and likely move higher. Mortgage rates could also move slightly higher, and new tax policy limiting mortgage and property tax deductions, is hitting homeowners in some states hard.

All will combine to make housing less and less affordable in the new year.

WATCH: As housing affordability weakens, more buyers left in cold

By marylourea32039196, Oct 10 2016 12:00PM

How the Seasons Could Impact Your Home Sale

Written by Ilyce Glink on January 26, 2016 in Real Estate

When the weather in much of the country turns colder, people increasingly choose indoor activities. Weather affects activity on the housing market as well. Demand for houses often conforms to business-driven “on” or “off” seasons, so the sale of your home is affected both by nature and what we do during each season.

Which season is the best for selling a home? Homes sell in all seasons, but you may need to adjust your strategy in order to maximize the salability of your home.

Whether you’re listing in spring, summer, fall, or winter might affect not only how you price your home but also how quickly it sells.

According to the Adam DeSanctis, a spokesperson for the National Association of Realtors (NAR), real estate sales generally increase slowly during the spring and early summer months, followed by a gradual dip in sales from the fall into winter. But overall, sales remain at a fairly constant level, he notes.

In October, 2014, existing home sales were at an annualized rate of 5.16 million. That dipped to 4.95 million in November, rose slightly to 5.07 in December, before dropping down in January and February 2015, DeSanctis says. Over the past 12 months, annualized existing home sales were the highest in March (5.21 million), May (5.32 million), June (5.48 million), July (5.58 million), August (5.3 million), September (5.55) million, and October (5.36 million), reflecting both a stronger year, and seasonal sales trends.

“Sales generally peak around June and July with activity dominated by families with children, who time their purchase based on school-year considerations,” DeSanctis says. Families begin shopping in spring, which is why that is considered to be the prime home buying season. Seasonal patterns vary somewhat, depending on climate and location, but peak shopping typically starts around mid-February and goes through about mid-June, with closings occurring in June through October.

Traffic is then lower in the fall, with higher levels of singles and couples without children as a market share, which also causes the median price to decline each fall. “When the holiday season begins, home shopping drops to annual lows—generally between Thanksgiving and New Year’s Day,” DeSanctis adds. “That causes January and February to be the slowest months of the year for sales closings.”

Following is a season-by-season breakdown …

Spring and summer are the best seasons to sell a house

Like many activities, buying a home becomes much more attractive once the weather improves. In fact, spring is the peak season for home sales, so that buyers who purchase in spring can move during the summer months and be ready for the start of school in fall.

It helps, too, that spring is far removed from the often-expensive holiday season, and that home buyers may have recently received a large tax refund to help with a down payment or closing costs.

If you’re selling, be prepared for stiffer competition. According to the National Association of Realtors, the number of homes listed for sale (also known as the “inventory”) tends to be the highest in April and May, the height of the spring selling season.

Fall may be a little slow

“Parents with school-age children usually don’t want to switch school districts mid-year, and so fall can be a little slower for sales,” says Payman Emamian, a real estate agent with the John Aaroe Group in Pasadena, Calif.

Better weather is a major reason people are more likely to purchase in spring and summer, but schools are another reason for shopping during the warmer months. Locations where weather isn’t much of a factor, such as Los Angeles and San Diego, still see spikes in sales and prices in spring and summer because of the school year.

“People want to be sure they’re in the right school district for the new school year,” says Emamian. “It’s a big deal for a lot of people. They want to be set in their lives when the school year comes.”

Be prepared for winter: It could be a great time to sell

The reasons for a slowdown in locations with harsh winters are obvious, notes Emamian. Cold, sometimes treacherous, weather means fewer people are out looking for homes.

Not only are there fewer homes on the market during this time, according to NAR data, but Emamian noted that it can take buyers longer to decide on a home during the winter even with slightly lower prices.

That said, serious buyers are shopping for more than holiday gifts, according to DeSanctis. The sales price of existing homes peaked in December 2014, before dropping down a bit in the spring and rising again in April and May 2015, according to the NAR sales report.

Winter is a great time for singles and couples without children to begin shopping for a home, adds DeSanctis. “Sellers who’ve been out the market for a while may be more willing to negotiate price after the beginning of the year, and there is less competition from other buyers, although fewer homes available for sale.”

So, what’s a seller to do to combat seasonal slumps?

Price your home appropriately for the season

You’ll want to price your home to make people interested in looking at it, whatever the weather or season. Serious sellers should price their homes competitively in the winter, as serious buyers will be looking to take advantage of the lower number of buyers and will want to transact, says DeSanctis.

Listing your house at a slightly lower price is one way to sell it faster during the bad-weather portions of the year. In places known as “vacation hot spots,” the off season could bring bargain hunters. For example, you might want to consider selling your ski home before or during ski season to maximize price and the number of buyers.

“Prices definitely drop during inclement weather, [so] that’s the only way to motivate [prospective buyers],” Emamian says. “You may be the only one who sells during that time, and it will be because you sold it at the right price.”

Take photos of the home at its peak

Prospective buyers like to see lots of digital photos of the interior and exterior of your home. Many of the best home photos are taken in spring and summer, when the plants are at their greenest, flowers are blooming, and the sun is out. You should make sure you take plenty of photos when your home looks its best even if you don’t plan on selling soon.

Keep your home in excellent condition—no matter what the season

There are ways to make a home look more inviting, even if the trees are bare and everything is covered in snow.

In winter, clear away snow and ice from walkways and stairways, and clean the windows to add appeal.

In spring, get your yard in shape by removing winter debris and planting flowers, unclutter closets and box up winter clothes, and add bright colors to your home’s staging with fresh flowers or throw pillows to bring the spring indoors.

In summer, highlight your outdoor areas, keep flowers watered, and make sure the air conditioning is working overtime to keep prospective buyers cool.

In fall, rake leaves to keep the lawn looking good, replace dying summer blooms with colorful fall plants, and keep outside lights in working condition to help illuminate the earlier nightfall.

By marylourea32039196, Sep 26 2016 11:00AM

How to Bid for a Home in a Competitive Market

Written by Equifax Reporter on December 23, 2015 in Real Estate

Buying a home in a competitive market can be difficult. Inventory is low in hot sellers’ markets, attracting numerous buyers to the same handful of homes, and some buyers will pull out all the stops to get their offers accepted.

Popular homes can launch bidding wars between buyers. In addition, investors sometimes steal the show with all-cash offers, which appeal to sellers because they avoid the potential of the buyer running into financing hurdles at closing. Such scenarios greatly benefit sellers’ payouts and challenge buyers’ budgets.

Earlier this year, Zillow ranked the top 10 sellers’ and buyers’ markets, indicating the best areas for negotiating home price. Sellers have the upper hand in home sale negotiations along the West Coast and in Denver, Dallas, Nashville, and Boston. If you’re looking to buy in these locations, expect to have little negotiating power because homes move quickly and often sell above asking price.

Although much of the nation’s home values are leveling off after the recession, home values are still increasing in some top markets such as Denver, San Francisco, and Miami. Buyers shopping for deals may find better luck in less pricey or less competitive markets such as Philadelphia and Chicago.

Competitive markets can be especially intimidating for first-time buyers unaccustomed to the speed at which they must make such long-lasting and expensive decisions . Here are three considerations to keep in mind for buyers bidding on homes in competitive markets.

1. Price offers fairly for the market.

To feel confident about your offering price, understand the market in which you’re shopping. Local real estate agents are experts in their neighborhoods and can help clients gain perspective on property values by providing sale prices from comparable properties “comps” or nearby homes with similar features. Once you understand the going rate for homes, you can narrow your search to fit your budget and expectations.

Local agents often won’t tell you the exact price you should offer, but they can suggest ways to make a competitive offer and avoid wasted time. Typically, a low offer won’t appeal to sellers in a competitive market. On the other hand, you may regret an overpriced offer after purchase or run the risk of having a lender reject financing if the price is too far above the home’s appraised value .

2. Limit contingencies to close quickly.

You’ll need to move quickly in a sellers’ market , so beat the competition by structuring your offer to close fast. Part of a purchase offer can include financing contingencies to ensure you can secure a loan , inspection contingencies to confirm the home is in good condition, and appraisal contingencies to guarantee the purchase price is near market value .

Contingencies can be risky for sellers because each may increase the potential of losing the buyer. Either set a brief window for your appraisal and home inspection or waive them. To mitigate the risk of skipping a home inspection, consider hiring an inspector to visit during an open house, and then make your offer knowing the home’s condition without the need for the contingency.

3. Increase earnest money deposits.

As part of a home purchase offer, the buyer typically puts down 1 to 5 percent of the sale price of the home as earnest money. When the seller accepts the buyer’s offer, the earnest money is held in an escrow account or by the title company until closing. At closing, the money is applied toward the down payment. If the deal falls through, contingencies usually state that the cash is refundable to the buyer.

Serious buyers can appeal to sellers by offering at least 3 percent of the home’s sale price in earnest money. The extra upfront cash shows the seller that the buyer is financially ready to buy.

If you’re hoping to buy in a competitive market, it’s best to present the strongest offer possible. These three suggestions may help move the process along more quickly—and successfully.

By marylourea32039196, Sep 19 2016 11:00AM

How Refinancing Your Mortgage Impacts Your Credit Score

Written by Ilyce Glink on March 23, 2016 in Real Estate

Refinancing your mortgage can be a way to change your loan terms. If you refinance, you may be able to get a better interest rate or shorten the length of your loan, which can potentially save you money over time. With mortgage interest rates hovering below 4 percent, your savings from refinancing may be significant—especially if you took out a mortgage in the early-2000s, when interest rates for a 30-year fixed-rate mortgage averaged between 6 and 7 percent.

However, along with the benefits, keep in mind that a mortgage refinance could also impact your credit score.

“For nearly everyone who finances the purchase of a home, a mortgage is the single largest amount of money they will borrow in their lifetime,” says Bruce McClary, vice president of public relations at the National Foundation for Credit Counseling (NFCC). The scale of a mortgage commitment in comparison to other accounts means that it can have a larger impact on your credit score, he says.

Here are three things you should know about the refinancing process.

1. A refinance will appear on your credit report as a new loan.

When you refinance your mortgage, you’re essentially paying off the old loan in full and opening a new loan. Because your credit score reflects both how long different accounts have been established and also the most recent activity on an account, refinancing—and closing an older account—can have an impact on it.

The length of your credit history makes up 5 to 7 percent of your credit score, and older accounts show your ability to make payments consistently.

2. Multiple credit inquiries could impact your credit report.

You may want to shop around with several different lenders to find the best loan terms when you are refinancing. However, remember that when a potential lender with whom you’ve applied for a loan reviews your credit history, it results in a “hard inquiry” on your credit report. Hard inquiries remain on your credit report for 24 months and can have an impact on your credit score, depending on your credit history and borrowing habits. New credit accounts for 10 to 12 percent of your credit score.

To help minimize the number of hard inquiries on your credit report, start by researching lenders and rates online and then make a list of the ones with which you will apply.

Before you start shopping, it may be worth your time to pull a copy of your credit report to get a sense of how you’ll look to new lenders. You are entitled to one free credit report annually from each of the three credit reporting agencies (CRAs) through , but you can also purchase your credit report and credit score from Equifax. Review all the information on your credit report for accuracy before you began applying for a refinance.

3. Skipping mortgage payments during the refinance process could damage your credit score.

Refinancing your mortgage may take longer than you expect, so don’t count on it closing by a certain month. Some borrowers have gotten into trouble by skipping a mortgage payment when they (incorrectly) assumed their refinance would go through. A missed or late payment could impact your credit score.

“The best way to avoid this is to stay in constant communication with the lender to confirm the payment schedule, and set reminders for yourself to avoid missing important due dates,” says McClary.

Instead, make your regular mortgage payments as usual until your refinance is closed. Payment history accounts for 35 percent of your credit score, and missed payments will remain on your credit report for seven years and 180 days from the date of first delinquency.

Even after your refinance is complete, it may take several months for it to appear on your credit report, McClary says. If it doesn’t appear, make sure your lender is reporting your payments to the CRAs.

Refinancing may have some impact on your credit score, but how you handle the new loan will be more important in the long term.

Ilyce Glink is the managing editor of the Equifax Finance Blog and CEO of Think Glink Media. She is a best-selling author, real estate columnist, and web series host. Follow her on Twitter: @Glink.

By marylourea32039196, Sep 12 2016 11:00AM

Buying Rental Property: Costs to Consider

Written by Equifax Reporter on June 27, 2016 in Real Estate

If you have the financial means, buying rental property may sound like an easy way to make extra income: purchase a house, rent it out, and relax as the profits roll in each month. Unfortunately, many would-be investors go into the home rental process without preparing a budget or fully understanding all the costs involved.

“The novice investor thinks that [managing rental property] is very easy,” says Neil Uttamsingh, a real estate agent with RE/MAX and author of the blog “The reality is it takes a lot of dedication.”

For example, you’ll have to decide whether you’ll serve as the landlord or point of contact for your rental property. Then, you’ll have to decide who will take care of repairs, how to deal with tenants, and how you’ll cover costs when the property is empty.

The answers to many of these questions will come from experience, but others can be identified and planned for in advance. Knowing the full costs of owning and managing a rental property before you buy may give you a better shot at a successful investment.

Rental Property: Basic Costs

When choosing your rental property, you’ll want to be sure to spend plenty of time evaluating the options available. Even if you’re tempted to splurge on what may seem like the most attractive space for renters in the hopes of making up the costs later, think twice about going too far outside of your budget.

“[Property is] the most expensive part of it,” says Lucas Hall, founder of Landlordology.

And a larger sales price doesn’t just mean a larger mortgage payment each month. You may pay higher closing costs as well as higher property taxes, property insurance premiums, and maintenance costs.

Until this property is paid off, you’ll be responsible for these payments, potentially on top of the mortgage for your own home.

In addition to the mortgage, there are also standard real estate property taxes and insurance premiums to consider. Your tenants may pay their own renter’s insurance, but as the property holder you may also need to obtain dwelling or landlord’s insurance to protect you in the case of fire, vandalism, or other problems.

Then there are the costs to get the property ready for move-in, what Hall calls ‘tenant-proofing’.

“You fix everything in the house so that you don’t have to maintain it over a short period,” he says, in addition to setting up any utilities not paid for by the tenants, including standard services like water and garbage removal.

The goal is to have as many of these costs as possible recouped by the rent you collect each month. But you should add up all of the basic expenses mortgage, insurance, real estate property taxes and maintenance costs first, so you know what your liability is. As the property owner, you will be responsible for any costs that go unaccounted for at the end of each month.

And don’t forget income taxes. In most cases, any money you earn as rent (beyond your expenses) will need to be reported as income.

Rental Property: Lesser-known costs

When it comes to rental property, there are always extra expenses that crop up you might not have planned on paying. The largest unaccounted for costs are generally result from surprise repairs, whether you handle the maintenance yourself or hire a handyman or outside company. Some months there may not be many issues but there’s always the chance that the water heater will break down, the pipes will freeze and burst, or the toilet will back up.

“All of those things will eventually break and you need to be prepared to put a new one in,” Hall says.

You also should take your renters into consideration. You might think you’ll have an easy time filling your unit, but what happens when the house or apartment stays empty for a month or more?

Vacancies may be difficult to avoid because you aren’t looking for just anyone to fill the empty space. You’re searching for good, reliable tenants who will pay their rent on time every month. Unfortunately, this search can take time and just because your building is empty doesn’t mean your expenses stop.

“The owner has to pay those costs of operating the property,” Uttamsingh says. “That sneaks up on people.”

While you’re planning your budget, you may consider setting aside enough money to cover the property expenses for one to two months on your own in the event finding a tenant proves difficult.

Without a tenant you might also have to pay for ads or listings to find a renter or to perform a credit check on a promising applicant.

“For a first-time landlord, they probably won’t expect how much work has to go into quality tenant screening,” Hall says.

Is owning a rental property right for you?

Ultimately, buying a rental property means devoting a lot of time, money, as well as choosing the right house, finding reliable tenants, and ensuring your bills get paid on time. If you are unable to make that commitment or to develop and manage a budget, owning rental property may not be for you.

“I think people have unrealistic expectations,” Uttamsingh says. “They want to buy a property and do no work and become rich.”

However, a little effort can pay off immensely. If you put in the time to find reliable tenants and you are responsible managing the rental property, many of these costs may be lowered. A happy tenant can stay in the same property for years, meaning you won’t need to repeat a long search or cover expenses during a vacancy.

“Then you’re taking your vacancy costs to zero,” Uttamsingh says. If tenants are reliable, you also may not have issues with missing rent, further reducing your operating costs.

Insurance and tax expenses won’t go away, but over time your mortgage should.

When in doubt, plan for the worst, hope for the best, but always stay aware of your financial commitments. Understanding the costs involved in owning and maintaining a rental property is the first step to seeing your rental venture succeed.

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