Each quarter, Fannie Mae releases the Home Price Expectations Survey, which asks over a hundred experts economists, real estate professionals, and market strategists what they predict for home prices over the next five years. Their latest forecast shows that prices are expected to keep rising through at least 2028 (see the graph below):
While home prices will vary depending on where you live, this shows that, on a national level, they’re projected to go up every year. The increase might not be as dramatic as it’s been in the past, but the key takeaway here is that they’re still going up, just at a more moderate pace.
Now, while rising prices might seem frustrating, once you own a home, that growth works in your favor. To put it in perspective, here’s a look at how much equity you could gain if you buy now. Using the forecast from the HPES and a typical home’s value, you can see the potential wealth you could build:
For example, if you bought a $450,000 home at the start of this year, based on expert predictions, you could build more than $90,000 in equity over the next five years. That’s a huge boost to your household wealth!
So, if you’re ready and able to buy, and building long-term wealth matters to you, this could be an opportunity worth considering. Now that mortgage rates have come down a bit, it might be the right time to make a move.
If you’re unsure about what’s best for your situation, we’re here to help! Reach out to schedule a complimentary buyer consultation, and we can talk through your options and what makes sense for you in today’s market.
BY KCM CREW | SEPTEMBER 25, 2024
As a buyer, you might be concerned about overpaying, and if you’re thinking about selling, you could be worried about not getting the price you’re aiming for.
Here’s a simple breakdown to help make sense of the current housing market and give you a clearer picture of what’s really happening with prices—whether you’re thinking of buying or selling.
Across the country, home prices are still rising, but the pace of that growth is starting to slow down. In other words, while prices aren’t increasing as quickly as they did in the past few years, they’re still going up. The data from Case-Shiller makes the shift from 2023 to 2024 pretty clear:
But don’t worry—just because you’re hearing about a “cooling” market doesn’t mean home prices are dropping. In fact, all the data shows continued growth, just not at the breakneck speed we saw when prices were skyrocketing a few years ago.
If you’re wondering where prices might go from here, it really comes down to supply and demand—and that’s going to vary based on where you live.
Nationally, the number of homes for sale is slowly increasing, but there still aren’t enough to meet the demand from buyers. That’s keeping prices elevated, though the increase has slowed down. As Danielle Hale, Chief Economist at Realtor.com, puts it:
“Today’s low but quickly improving for-sale inventory has ushered in more market balance than would otherwise be expected. This should help home prices maintain a slower pace of growth.”
Here’s another factor to keep in mind: Experts expect mortgage rates to continue declining, which could bring more buyers back into the market in the coming months. If that happens and demand increases, prices could tick up again.
While national trends give a big-picture view, real estate is always about your local market. What’s happening in your neighborhood could be totally different depending on the supply and demand in your area.
If you’re thinking of buying or selling, or just curious about what your home might be worth, we’re here to help! Reach out to schedule a complimentary buyer consultation, and we’ll guide you through the latest market trends to make sure you’re ready for your next step.
BY KCM CREW | SEPTEMBER 11, 2024
If you’ve been thinking about selling your house and moving up to a bigger or more upgraded home, you’re not alone. According to a recent survey by Inman, the top motivator for today’s homebuyers is the desire for more space or a nicer home (see graph below):
However, like many others, you may have been holding off on making that move due to recent market challenges. It’s understandable—affordability plays a huge role when you’re planning to upgrade, especially if it might mean higher monthly housing costs. But here’s the good news: Now might actually be a great time to take that step. Let’s break down why.
One of the biggest advantages in today’s market is the amount of equity you’ve likely built up in your current home. Despite shifts in the housing market, home prices have risen steadily over the years, allowing homeowners to build significant equity. Selma Hepp, Chief Economist at CoreLogic, explains:
“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.”
What does that mean for you? If you’ve owned your home for a few years, you may have a substantial amount of equity that can be used toward the down payment on your next home. This could help keep your new mortgage more affordable and make upgrading more feasible than you might think. If you’re curious about how much equity you’ve gained, reach out to your real estate agent for a professional equity assessment.
Another reason why now could be a smart time to move: mortgage rates have recently declined. Lower rates can help reduce your future monthly payments and give you more purchasing power. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), notes:
“When mortgage rates fall, the interest portion of monthly payments decreases, which lowers the total payment. This makes it easier for more borrowers to . . . qualify for mortgages that may have been unaffordable at higher rates.”
With rates trending downward, you have more flexibility when looking at homes and may be able to afford a property that was previously out of your budget. Working with a trusted lender can help you figure out the best mortgage plan for your financial situation.
If you’ve been dreaming of upgrading to a bigger or nicer home, now might be the ideal time to make it happen. Your accumulated equity, combined with lower mortgage rates, puts you in a great position to achieve your homeownership goals.
To make the most informed decisions and take advantage of today’s market, reach out to schedule a complimentary consultation. We’re here to guide you through every step of the process and help you find the home that fits your dreams and budget.
October 7, 2024/by KCM CREW
You may have heard some chatter about the economy and even talk of a potential recession. Understandably, that kind of news can get people worried about a housing market crash. If you’re one of those concerned, here’s the good news—there’s no need to panic. The housing market is not set up for a crash right now.
Real estate journalist Michele Lerner puts it simply:
“A housing market crash happens when home values plummet due to a lack of demand for homes or an oversupply.”
With that definition in mind, let’s explore two key reasons why a housing market crash isn’t on the horizon.
One of the main reasons the housing market crashed in 2008 was an oversupply of homes. But today’s story is very different.
A balanced housing market typically has around six months’ worth of supply. More than that means supply is outpacing demand, which can lead to falling prices. Less than that means demand is stronger than supply, which supports price stability or growth. Check out the graph below that uses data from the National Association of Realtors (NAR) to show where things stand now:
The red bar shows there were 13 months of housing supply before the 2008 crash—far too much inventory. In contrast, the blue bar shows we’re currently at just 4.2 months of supply, well below a balanced market. Simply put, there are more buyers than available homes right now. When demand is higher than supply, home prices tend to stay stable or rise, which is the opposite of what happens during a crash.
Of course, inventory levels can vary by region, and some areas might be more balanced than others. But in general, most markets across the country are still facing a shortage of homes. Lawrence Yun, Chief Economist at NAR, explains:
“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”
Unemployment plays a major role in the health of the housing market. When unemployment is high, more people struggle to make their mortgage payments, leading to foreclosures and forced sales. That was a big problem during the 2008 crisis. Today, however, the employment situation is much more stable. Let’s look at another graph that compares unemployment rates:
The red bar shows that during the 2008 financial crisis, unemployment soared to 8.3%. In contrast, today’s unemployment rate (blue bar) is just 4.1%, well below the long-term average of 5.7% (gray bar). With so many people employed, homeowners are in a much better position to make their mortgage payments, which reduces the risk of widespread foreclosures.
Not only are people holding onto their homes, but many are also in a position to buy, which keeps demand—and home prices—strong.
It’s normal to feel concerned when you hear talk of a recession or economic uncertainty, but rest assured, today’s housing market is in much better shape than it was in 2008. As Rick Sharga, Founder and CEO of CJ Patrick Company, says:
“Literally everything is different about today’s housing market dynamics than the conditions that led to the housing crisis.”
From higher demand than supply to low unemployment, these factors are working together to keep the housing market steady and prevent a crash.
The housing market is in a far stronger position than it was in 2008. However, remember that real estate is local, and conditions can vary from one area to another.
If you have questions about your specific market or want to know how these factors are playing out in your area, don’t hesitate to reach out. We’re here to help and provide you with a personalized, complimentary consultation.
October 9, 2024/by KCM CREW
Trying to decide between renting or buying a home? One key factor to consider is how much homeownership can grow your net worth. The difference may surprise you.
Every three years, the Federal Reserve Board releases the Survey of Consumer Finances (SCF), which highlights the wealth gap between homeowners and renters. Spoiler alert: homeowners consistently come out ahead.
On average, a homeowner’s net worth is nearly 40 times higher than a renter’s. In the previous SCF report, homeowners had an average net worth of $255,000 compared to just $6,300 for renters. Fast forward to today, and the gap has widened even further as homeowners continue to see their wealth grow.
Here’s what the SCF says about this remarkable change:
“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”
One major driver of homeowner wealth is equity, which is the difference between your home’s value and what you owe on your mortgage. Equity grows in two ways:
Over the last few years, rising home prices have significantly boosted equity for homeowners. That growth came from a supply-demand imbalance, where there weren’t enough homes available to meet buyer demand.
Even as the housing market shifts, inventory in most areas remains tight, and experts forecast that home prices will continue to rise at a more moderate pace in the coming years. This trend means there’s still potential for equity gains if you buy a home now.
As Ksenia Potapov, Economist at First American, explains:
“Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”
The choice between renting and buying isn’t just about monthly costs—it’s about long-term financial strategy and your personal circumstances. Homeownership has the potential to grow your wealth over time, but it’s not a one-size-fits-all decision.
If you’re unsure what’s best for you, lean on a trusted real estate agent. They’ll help you understand local trends, inventory levels, and price forecasts. And if affordability feels like a hurdle, don’t count yourself out just yet. Many programs exist to help make homeownership more accessible, and a knowledgeable agent or lender can guide you through your options.
If you’re weighing the decision to rent or buy, keep in mind the significant wealth-building opportunities that come with homeownership.
Have questions or want to explore your options? Reach out today to schedule a complimentary consultation. We’ll help you evaluate what works best for your financial goals and personal situation!
November 7, 2024/by KCM CREW
There’s one big mistake you need to avoid when you sell your house this year: setting your price too high. It might seem like overpricing gives you room to negotiate or could really boost your profit, but the reality is it usually backfires.
In fact, Realtor.com says almost 20% of sellers—that’s one in five—have to reduce their price to get their house sold. And you don’t want to be one of them. Here’s why starting too high can lead to trouble and how to avoid it, especially if you’re selling your home in Tacoma, Puyallup, Auburn, Sumner, SeaTac, Des Moines, Burien, Normandy Park, Lake Tapps, or Bonney Lake.
With mortgage rates and home prices where they are right now, buyers in cities like Tacoma, Puyallup, Auburn, and Lake Tapps are already stretching their budgets to make a move. So, when they see a house that’s priced too high, they’re not thinking, “I can negotiate.” They’re more likely to think, “Next,” and skip over your house entirely. An article from the National Association of Realtors (NAR) explains:
“Some sellers are pricing their homes higher than ever just because they can, but this may drive away serious buyers. . .”
And if they skip over your listing, you’ll miss out on the chance to get them through the door. That’s the last thing you want because fewer showings mean fewer chances to receive an offer in areas like Bonney Lake, Sumner, and Normandy Park.
Here’s the other issue. An overpriced house tends to sit on the market longer. And the longer a house lingers, the more buyers start to wonder what’s wrong with it. Is there a problem with the house itself? Are you difficult to work with? Even if the only issue is the price, that extra time creates doubt. As U.S. News says:
“. . . Setting an unrealistically high price with the idea that you can come down later doesn’t work in real estate. . . A home that’s overpriced in the beginning tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it.”
At that point, you’ll have no choice but to lower your price to drum up interest. But that price reduction comes with its own downside: buyers may see it as another red flag, that there’s an issue with the house. This can apply no matter where you’re selling, whether in SeaTac, Des Moines, Burien, or other surrounding areas.
So, what’s the secret to avoiding all these headaches? It’s simple. Work with a local real estate agent who knows the market inside and out in cities like Puyallup, Auburn, and Lake Tapps, and who’s going to be honest with you about how you should price your house.
You don’t want to partner with someone who just agrees to whatever number you throw out there. That’s not an expert who’s going to get you the best results.
You want an agent who recommends a price based on their expertise. The right agent will use real-time data from your local market in places like Bonney Lake, Normandy Park, and Sumner to help you land on a price that makes sense—one that grabs attention, attracts buyers, and still helps you walk away with a great return. Someone who has been there and done that—and done it well. That’s the agent you want to work with.
Remember, if the price isn’t compelling, it’s not selling. Instead of shooting too high and scaring off buyers, work with a local agent who knows how to price it right in areas like Tacoma, Puyallup, and Auburn.
Connect with an agent to make sure your house hits the market with the right price, gets noticed, and gets sold.
January 22, 2025/by KCM CREW
A recent report from Realtor.com says 20% of Americans don’t think homeownership is achievable. Maybe you feel the same way. With inflation driving up day-to-day expenses, saving enough to buy your first home is more of a challenge. But here’s the thing: with the right resources and help, you can still make it happen in places like Tacoma, Puyallup, Auburn, Sumner, SeaTac, Des Moines, Burien, Normandy Park, Lake Tapps, and Bonney Lake.
There are options that can help make buying a home possible today — even if your savings are limited or your credit isn’t perfect. Let’s explore just two solutions that could help get you into your first home, no matter the market.
If your down payment savings and your credit score aren’t where you want them to be, an FHA loan could be your pathway to buying a home. According to the U.S. Department of Housing and Urban Development (HUD) and Bankrate, the big perks of an FHA home loan are:
If you’re looking to buy in areas like Lake Tapps, Bonney Lake, or Des Moines, the first step is to connect with a lender who can help you explore your options and determine if you qualify.
And if you need a more budget-friendly down payment, that’s not your only option. Did you know there are over 2,000 homeownership assistance programs available across the U.S., according to Down Payment Resource? And more than 75% of these programs are designed to help buyers with their down payment. Here’s why these programs could be a game-changer for you in places like Normandy Park, Sumner, and SeaTac:
Rob Chrane, CEO of Down Payment Resource, confirms a little-known fact:
“Some of these programs can be layered. And so, in other words, you may not be limited to just one program.”
If you want to learn more or see what you qualify for in Tacoma, Puyallup, or Auburn, be sure to lean on the pros. A trusted real estate agent and lender can guide you through the process, explain the help that’s out there, and connect you with resources to make buying a home a reality.
If you’re ready to stop wondering if buying a home is possible and start exploring solutions, connect with an expert agent and trusted lender in Tacoma, Puyallup, Auburn, Sumner, SeaTac, Des Moines, Burien, Normandy Park, Lake Tapps, or Bonney Lake.
January 29, 2025/by KCM CREW
You will be strategically positioned for ultimate success in your home selling or buying journey. Let’s connect today!