Real Estate Insider Blog

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11
Nov
2015

BUYING A HOME NOW IS A SOLID INVESTMENT

Due to current low interest rates and anticipated appreciation rates for the next few years, homeownership is "one of the last legitimate wealth creation opportunities," according to Tim Rood, chairman of Washington, D.C.-based business advisory firm The Collingwood Group in an interview with Westwood One radio host Dirk Van.

"The leveraged return if you put down 10 percent on a house, the trajectory of appreciation lately is you’re going to get your money back inside of a year and then after that 5 to 10 percent appreciation rates," Rood said. "It's phenomenal."

Many economists and analysts have indicated that first-time buyers, which will largely consist of the millennial demographic, will drive increased home sales and the recovery of the housing market. Many millennials have been slow to enter the housing market, however. Rood said millennials are generally drawn to live in urban areas because of convenience, lifestyle, and walkable amenities, but they are paying 30 to 40 percent more in rents than they would be paying if they owned a home – and a result, they cannot save enough money for a down payment for a house.

"That’s why you see the regulators coming in and saying, 'We’ve got to think creatively about removing economic barriers to homeownership like lower down-payment programs," Rood said.

When Van asked if this was a better time to rent or buy, Rood said that housing inventory is one of the best barometers for health whether...

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02
Nov
2015

DEMAND UP, SUPPLY DOWN, PRICES INCREASING

The National Association of Realtors recently released their latest quarterly report. The report covered three important aspects of the housing market:

  1. Buyer Demand
  2. Supply of Housing Inventory
  3. Single Family Residential Prices

Today, we want to break down the highlights of the report along with several quotes from Lawrence Yun, the Chief Economist at NAR.

Buyer Demand
Total existing-home sales (which include single family and condo) were at an annual rate of 4.97 million in the first quarter of 2015. This represents a number which is 6.2 percent higher than the pace during the first quarter of 2014.

Yun: "Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market."

Supply of Housing Inventory
There were 2 million existing homes available for sale at the end of the first quarter of 2015 which represents a 4.6 months’ supply of inventory which is down from 4.9 months a year ago. A healthy balance of supply between buyers and sellers is 6 to 7 months.

Yun: "With supply remaining tight—especially at the entry-level price range—buyers will need the expertise and local market insight of a Realtor® to help them through each intricate step of the buying process."

Single Family Residential Prices
Home prices accelerated in 148 out of 174 metro areas (85%) during the first quarter of 2015 and the number of areas experiencing double-digit price appreciation...

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