Hillsboro Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

May 28, 2019

2 Things You Need to Know to Properly Price Your Home

 

 



In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly.

In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal.

Every month, the Home Price Perception Index (HPPI)measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

Over the last five months, the gap between the homeowner’s opinion and the bank’s appraisal has widened to -0.78%. This is important for homeowners to note, as even a 0.78% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home).

The chart below illustrates the changes in home price estimates over the last 12 months.

2 Things You Need to Know to Properly Price Your Home | MyKCM

While the appraisal gap widens, another trend is also becoming more common. 

According to realtor.com“the share of homes which had their prices cut increased by 2% compared to last year”. Thirty-seven out of the 50 largest US housing markets saw an increase in overall price reductions.

In today’s market, you need an expert agent who can help price your house right from the start. Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the house. In reality, nothing is wrong- the price was just too high!

Bottom Line 

If you are planning on selling your house in today’s market, let’s get together to set your listing price properly from the start!

May 27, 2019

All Gave Some. Some Gave All

All Gave Some. Some Gave All. | MyKCM

We remember, today and always.

Posted in Community Events
May 25, 2019

The Impact Staging Your Home Has On Your Sale Price [INFOGRAPHIC]

The Impact Staging Your Home Has On Your Sale Price [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The National Association of Realtors surveyed their members & released the findings of their Profile of Home Staging.
  • 62% of seller’s agents say that staging a home decreases the amount of time a home spends on the market.
  • 50% of staged homes saw a 1-10% increase in dollar-value offers from buyers.
  • 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
  • The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.
May 20, 2019

Starting the Search for Your Dream Home? Here Are 5 Tips!

Starting the Search for Your Dream Home? Here Are 5 Tips! | MyKCM

In today’s real estate market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

This step will also help you narrow your search based on your budget and won’t leave you disappointed if the home you tour, and love, ends up being outside your budget!

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now?

Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.

3. Research and Choose a Neighborhood You Want to Live In

Every neighborhood has its own charm. Before you commit to a home based solely on the house itself, the article suggests test-driving the area. Make sure that the area meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that would best serve those needs. Just because you’ve narrowed your search to a zip code, doesn’t mean that you need to tour every listing in that zip code.

An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy to document what you love and don’t love about each property you visit.

Making notes on the listing sheet as you tour the property will also help you remember what the photos mean, or what you were feeling while touring the home.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.

Posted in Reasons to Buy
May 15, 2019

The Cost of Renting vs. Buying This Spring [INFOGRAPHIC]

The Cost of Renting vs. Buying This Spring [INFOGRAPHIC] | MyKCM

 

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (27.7%) vs. the percentage needed to buy a median-priced home (17.5%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!
Posted in Reasons to Buy
May 14, 2019

New Research Shows Housing Is Affordable For First-Time Buyers

New Research Shows Housing Is Affordable For First-Time Buyers | MyKCM

Home prices have been on the rise for the last seven years, leading many housing market analysts to conclude that first-time homebuyers are being shut out of the market due to affordability concerns.

The National Association of Realtors (NAR) reports on the percentage of First-Time Home Buyers (FTHB) on a monthly and yearly basis. Their latest report shows that FTHB’s made up 33% of buyers in March, which matches their reported share in 2018.

NAR uses survey data from their members to come up with this statistic, so their results do not include every transaction completed. Rather, they only the transactions reported by members who complete the survey.

The other entity that reports on FTHB share is the American Enterprise Institute (AEI). The AEI uses data from mortgage applications that define an FTHB as “any borrower who did not have a mortgage for the preceding three years.”

This means the AEI measurement also includes former homeowners who transitioned out of a home they previously owned and re-entered the market after at least 3 years. The latest FTHB share data from AEI shows that first-time buyers made up 57.5% of all mortgages in August 2018. NAR’s data shows a 31% share for the same time period.

New research from the New York Federal Reserve shows that these traditional reports on FTHB share have been unable to give an accurate depiction of this group’s involvement in the market.

The NY Fed was able to take consumer credit data and identify when a mortgage payment entered a consumer’s credit report to determine when a first-time home purchase was made. Using this data, they were able to show that AEI’s reported FTHB share was consistently 10% higher. The NAR reports were right on par with their findings until 2010, when NAR’s share dropped to the 11% gap seen today.

So, what does this all mean?

First-time home buyers have not disappeared from the market as many analysts had believed. Buying a home is very much a part of the American Dream for younger generations, just like it had been for their parents and grandparents.

This also means that rising prices have not scared buyers away from the market. Many first-time buyers are making sacrifices to save their down payment and make their dream a reality.

Bottom Line

If you are one of the many renters who is scrolling through listings on your phone every night dreaming of buying your own home, there are opportunities in every market to make that dream a reality!

 

Posted in Market Updates
April 25, 2019

Renters Paying Substantially More While Owning Costs Less

Renters Paying Substantially More While Owning Costs Less | MyKCM

In a recent Insights BlogCoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.

“CoreLogic’s national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period.”

Renters Paying Substantially More While Owning Costs Less | MyKCM

Why the difference between the costs of renting versus owning?

It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogic explained:

“It’s mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.

The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018.”

Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.

According to the Economists’ Outlook Blog, NAR’s February 2019 Housing Affordability Index showed that the “percentage of income needed” to pay the typical mortgage has decreased the last three months.

  • November - 17.3%
  • December - 16.9%
  • January - 16.2%
  • February – 15.9%

Bottom Line

What does this all mean to the current housing market? We think First American said it best in a post last week:

“The mortgage rate-driven affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we’re in for a great spring home-buying season.”

Posted in Reasons to Buy
April 23, 2019

With Inventory Low: Will Your Dream Home Need Some TLC?

With Inventory Low: Will Your Dream Home Need Some TLC? | MyKCM

According to a new survey from Move.com, the wave of first-time homebuyers hitting the market this summer has resulted in an interesting statistic. Nearly 60% of buyers searching for a home this spring are willing to consider buying a fixer-upper, with 95% believing that the projects needed will increase their new home’s value!

Realtor.com’s Chief Economist, Danielle Hale, pointed to low-inventory at the entry-level price range for the increase in willingness to renovate.

"The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating. 

Replete with inspiration at their fingertips - like Pinterest, Instagram, and various home renovation TV shows - some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget."

Just over half of all respondents who said they would be willing to buy a home in need of some TLC, would also spend more $20,000 to make the home fit their needs.

The most common ‘expected’ renovation is a kitchen remodel which can run anywhere from $22,000 for a minor remodel to $66,000 for a major remodel.

This isn’t a new trend by any means. According to the Joint Center for Housing Studies at Harvard University, home improvement project spending reached a new high in 2018.

“Americans spent $336.9 billion on remodeling projects, up 7.4% from the $313.6 billion a year earlier.”

Home renovation television shows have given many buyers hope that they could renovate a home they can afford into their dream home!

Bottom Line

If you are one of the many Americans considering buying a home this spring, let’s get together to help you find a house with the potential to be your dream home!

 

April 18, 2019

Buyer Demand Surging as Spring Market Begins

Buyer Demand Surging as Spring Market Begins | MyKCM

Last fall, some predicted that the 2019 residential real estate market would be a disaster. There was even belief we might experience a housing crash like the one that occurred during the last decade.

However, according to two separate reports*, buyer demand dramatically increased over the last three months, leading into this spring buyers’ market (the March data is not yet available).

Both the ShowingTime Showing Index and the National Association of REALTORS Buyer Traffic Index show that buyer demand has increased in each of the last three months.

Buyer Demand Surging as Spring Market Begins | MyKCM

Why the increase in demand? Increased buying power.

According to the National Association of Realtors’ Economists’ Outlook Blog, purchasing a home has become more affordable, which has led to increased demand.

“Due to the combination of falling home prices and mortgage rates, the income needed to make an affordable mortgage payment (mortgage no more than 25% of income) on a median-priced home with 10% down payment and 30-year fixed rate mortgage decreased from $60,425 in June 2018 to $53,783 as of February 2019, and the difference of $6,642 represents a gain in buying power because one can afford a home purchase at a lower level of income.”

Bottom Line 

It appears the spring buyers’ market is going to be much stronger than many had projected. Whether you are selling or buying, this is important news.

 

*The methodology behind the indices:

The ShowingTime Showing Index

“The ShowingTime Showing Index® tracks the average number of buyer showings on active residential properties on a monthly basis, a highly reliable leading indicator of current and future demand trends.”

The National Association of REALTORS® Buyer Traffic Index

“In a monthly survey of REALTORS®, NAR asks respondents ‘Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?’ NAR compiles the responses into an index, where an index above 50 indicates that more respondents reported “stronger” traffic than “weaker” traffic.”

April 15, 2019

3 Questions You Need To Ask Before Buying A Home



If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following three questions to help determine if now is a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a study by realtor.com found that “73% said buying in a good school district was “important” in their search.

This report supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. The actual reasons are:

  • A good place to raise children and provide them with a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in February (the latest data available) was $249,500. This is up 3.6% from last year. The increase also marks the 84th consecutive month with year-over-year gains.

Looking at home prices year over year, CoreLogic is forecasting an increase of 4.6%. In other words, a home that costs you $250,000 today will cost you an additional $11,500 if you wait until next year to buy it.

What does that mean to you?

Simply put, with prices increasing, it may cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

Freddie MacFannie Maethe Mortgage Bankers Associationand NAR have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:

3 Questions You Need To Ask Before Buying A Home | MyKCM

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

Posted in Reasons to Buy