Jan. 31, 2023

Lower Mortgage Rates Are Bringing Buyers Back to the Market

Lower Mortgage Rates Are Bringing Buyers Back to the Market | MyKCM

As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.

Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.

So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.

Mike Fratantoni, SVP and Chief Economist, MBA:

Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

Thomas LaSalvia, Senior Economist, Moody’s Analytics:

"We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit."

Sam Khater, Chief Economist, Freddie Mac:

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”

Bottom Line

If you’ve been thinking about making a move, now’s the time to get your house ready to sell. Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.  Call or text 843-424-6900.

Jan. 30, 2023

Why It Makes Sense To Move Before Spring

Why It Makes Sense To Move Before Spring | MyKCM

Spring is usually the busiest season in the housing market. Many buyers wait until then to make their move, believing it’s the best time to find a home. However, that isn’t always the case when you factor in the competition you could face with other buyers at that time of year. If you’re ready to buy a home, here’s why it makes sense to move before the spring market picks up.

Spring Should Bring a Wave of Buyers to the Market

In most years, the housing market goes through predictable seasonal trends in activity. Winter is typically a quiet point in the year, while spring sees a surge of buyers begin their search. And experts project that this year will be no exception.

Right now, buyer demand is low due to a combination of normal seasonal trends and a reaction to last year’s rise in mortgage rates. But rates have started to come down since last November, which has more and more potential buyers planning to jump into the market. That means right now is a sweet spot if you’re in a good position to buy, before more buyers reappear. Affordability is beginning to improve, but demand is still low — for now. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), shares:

“. . . expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”

If you’re ready to buy a home, right now is the best time to do so before your competition grows and more buyers enter the market.

Today’s Sellers Are Motivated

Low demand from buyers often means sellers are more motivated to work with you, and that can set you up to buy a home on your terms. In fact, sellers have been more willing to negotiate this winter because there are fewer buyers in the market. According to a recent article from Forbes:

“. . . sellers gave concessions to buyers in 41.9% of home sales in the fourth quarter of last year.”

But keep in mind, the advantages buyers have this winter won’t last forever. The competition you face could be greater if you wait until spring to make a move, and increased buyer demand means sellers will have less motivation to negotiate with you. Be sure to work with a trusted real estate professional to learn what you can expect in your local market right now.

Bottom Line

If you’re in a good position to make a move, it may make sense to move before spring. Working with your team of expert real estate advisors is the best way to learn about the current market and what it means for you. Let’s connect today to determine the best plan to achieve your homebuying goals.  Text or call 843-424-6900.

Posted in General, Home Buyers
Jan. 18, 2023

Think Twice Before Waiting for 3% Mortgage Rates

Think Twice Before Waiting for 3% Mortgage Rates | MyKCM

Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.

Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Macshares:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.

While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrateexplains:

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.

It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.

Bottom Line

The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today’s rates impact your goals, and let’s connect to explore your options in our area.  Call or text me at 843-424-6900.

Posted in General, Home Buyers
Jan. 18, 2023

Have Home Values Hit Bottom?

Have Home Values Hit Bottom? | MyKCM

Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?

Let’s take a look at the latest data from several reputable industry sources (see chart below):

Have Home Values Hit Bottom? | MyKCM

The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to come out.

Let’s focus in on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.

While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us. As the numbers for November and December are released, data will be able to further validate this national trend.

Bottom Line

Home prices month-over-month have depreciated for the past four months on record, but there’s a strong case to be made that the worst may be behind us. If you have questions about what’s happening with home prices in our local market, let’s connect.  Call or text me at 843-424-6900.

Jan. 11, 2023

Today’s Housing Market Is Nothing Like 15 Years Ago

Today’s Housing Market Is Nothing Like 15 Years Ago

Today’s Housing Market Is Nothing Like 15 Years Ago | MyKCM

There’s no doubt today’s housing market is very different than the frenzied one from the past couple of years. In the second half of 2022, there was a dramatic shift in real estate, and it caused many people to make comparisons to the 2008 housing crisis. While there may be a few similarities, when looking at key variables now compared to the last housing cycle, there are significant differences.

In the latest Real Estate Forecast Summit, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), drew the comparisons below between today’s housing market and the previous cycle:

Todays Real Estate Market

Looking at the facts, it’s clear: today is very different than the housing market of 15 years ago.

There’s Opportunity in Real Estate Today

And in today’s market, with inventory rising and less competition from other buyers, there’s opportunity right now. According to David Stevens, former Assistant Secretary of Housing:

“So be advised…this may be the one and only window for the next few years to get into a buyer’s market. And remember…as the Federal Reserve data shows…home prices only go up and always recover from recessions no matter how mild or severe. Long term homeowners should view this market…right now…as a unique buying opportunity.”

Bottom Line

Today’s housing market is nothing like the real estate market 15 years ago. If you’re a buyer right now, this may be the chance you’ve been waiting for.

Posted in General
Feb. 13, 2019

New Rule Should Give Homeowners More Options for Flood Insurance

Starting July 2019, this new rule will require lenders to accept private policies rather than just government ones.

Five different regulatory agencies: the Federal Reserve Board, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency jointly issued a new rule this week that should make it easier for property owners to get flood insurance by requiring mortgage lenders to accept some private policies, rather than only government ones.

Basically, the new ruling sets a minimum bar for private insurance policies; if the policies meet those requirements, lenders who require flood insurance will have to accept them.

In the past, homeowners in flood-prone areas have been able to take advantage of the National Flood Insurance Program, which is designed to provide affordable protection against water-related destruction. Lenders who required flood insurance in order to get a mortgage had to accept policies from the National Flood Insurance Program.

But the program has limitations. For example, it only insures homes up to $250,000. For commercial properties, the limit is $500,000.

Because of these limitations, lawmakers in 2012 passed a bill they hoped would spur on the private flood insurance market. The expectation was that new private insurers would get into the game and consumers would have better and more comprehensive options.

Tuesday's rule is a result of that 2012 bill. It works by requiring lenders to accept private flood policies that meet certain criteria, such as coming from a state-licensed issuer and being at least as broad as a policy from the government program.

Private flood insurance is not new and some lenders already accept those policies. However, before this new rule, lenders could choose to accept those policies or not. It was up to their discretion.

The rule eliminates that discretion as long as the private policies meet the minimum criteria. In other words, in certain cases, lenders no longer have the option to reject a policy.

This should be beneficial, especially to the coastal markets we serve in the Myrtle Beach, Ocean Isle, and Charleston areas.

 

Feb. 6, 2019

Walking Around Barefoot Landing with a Beer....

Not sure we ever thought about it to any great extent, but yeah, it could be fun.

boat in front of Lulus Barefoot Landing

Photo Barefoot Landing

There are a number of cities around the country with designated entertainment areas that allow you to walk around with a beer. North Myrtle Beach officials are now moving forward on their own proposed law that would allow the same. 

Burroughs and Chapin Co. requested the city allow beer and wine to be publicly consumed on parts of Barefoot Landing, which they own. City Council members passed the first reading of the proposed ordinance on Monday, February 4. 

If it's approved, the new ordinance would establish a festival zone which would allow shopping and entertainment destinations of 10 or more acres to apply for a special designation to permit public alcohol use. The ordinance would require beer and wine be consumed in a clear plastic cup, while prohibiting other alcoholic beverages within the festival zone, in accordance with state law.

The rules regarding public consumption of alcohol / open container vary state by state and municipality by municipality. In South Carolina, public drinking is prohibited statewide. In Georgia, public drinking is allowed in the city of Savannah. Other cities throughout the state also have variances. For instance, within the 80-acre area of downtown Dalton, Georgia, city law allows possession and consumption on the street of one alcoholic beverage in an open paper or plastic cup of no more than 16 ounces between 12:30 p.m. and midnight.

While we're waiting for the final outcome from North Myrtle Beach, here's a little map from Huff Post to keep you on the straight and narrow.

map of the unites states

Jan. 31, 2019

Myrtle Beach Polar Plunge for Special Olympics

This Saturday, February 2, 2019, the SC Law Enforcement Torch Run and Polar Plunge SC host the 14th Annual Polar Plunge and Plunge Party at Sands Ocean Club in Myrtle Beach to raise money for the South Carolina Special Olympics. The Myrtle Beach Polar Plunge is part of the South Carolina Law Enforcement Torch Run and 100% of the funds raised directly benefit athlete programs around our state. 

Special Olympics South Carolina provides year-round sports training and competition for more than 29,000 children and adults with intellectual disabilities.

If you're ready to take the plunge, you can register as an individual or form a team. Each plunger must raise a minimum of $50. Plungers will receive a T-shirt. If you just want to watch the fun, The Plunge Party includes fun for all ages including music, games, food, and shopping plunge merchandise.

Schedule of Events:

10:00 AM – Registration and Plunge Kick-off – Music, Games

Plunge Party – 10 AM – 3 PM

11:00 AM – Early Plunge (for those folks who just can’t wait or who need to leave early)

11:15 AM – Plunge Store Opens

11:30 AM – Food Venues Open

12:15 AM – Special Plunge Photo Shoot

12:45 PM – Announcements of Fundraising Winners:

Individuals

Teams

Schools

1:30 PM – Plunge Preparation on the Beach

2:00 PM – It’s Plunge Time!

The Plunge Party includes fun for all ages – for plungers and spectators alike! Enjoy music, games, food, and shopping plunge merchandise.

Contact Marcus Rhodes at marcusrhodes@live.com or 843-446-5820. 

Sands Ocean Club | 9550 Shore Drive | Myrtle Beach, SC 29572

Jan. 17, 2019

Remodeling Projects that Give You Top Return on Your Investment

Some remodeling projects are all about making yourself happy...which is great. But if you're looking for projects that are financially savvy, you're going to want to look at the ROI (return on investment.)  According to data from the National Association of REALTORS "The Remodeling Impact Report," these projects will give you the best return on your money in terms of adding value to your home.

1. New Roof: Average return on investment: 109%

2. Hardwood Floors: Average return on investment: 91%

3. New Garage Doors: Average return on investment: 87%

4. Better Insulation: Average return on investment: 76%

5. New Siding: Average return on investment: 75%

Jan. 9, 2019

Starting off 2019 with Long Term Real Estate Investments

The real estate market is always changing. What may have worked 20, 15 or even 5 years ago, may not work now or in this new year. Real estate investors who stay rigid and play by old rules may be outpaced by their more flexible, informed and relevant industry counterparts.  As we head iinto a new year, now is an excellent time to set intentions and take initiative for future growth and stability. 

As a headline, "Real Estate Investing" sounds like an expensive venture costing hundreds of thousands of dollars in initial investment.  Fortunately, you don't need six figures in the bank to be a real estate investor today. It really starts with a solid financial plan.

Many people who have reached financial independence have done so investing in real estate (it's one of the most common ways to become a millionaire). This might seem like an impossible achievement if you're only looking at the end result, but by starting out with small steps and keeping dedicated, you can achieve impressive results.  

Consider your potential for higher returns compared to other asset classes; such as investing in the stock market - Real estate has had an average annual return of 11.42% since 1970...meanwhile S&P500 had an average annual return of 10.31%. Plus you have direct control over the assets and decision making processes that can affect their growth in value. 

Forbes asked 14 members of their Real Estate Council to give insight on what every real estate investor should consider moving into 2019 and we thought we'd share them here to help give you some insight as you go forward:

1. Pay Attention To Your Future Market Value

"The market is always changing. What we're seeing is that an increase in interest rates is affecting some price points more than others. If your FMV is falling in a range that is affected, allow yourself a 10% contingency in your spread for strategic pricing or underpricing, and give yourself enough margin to work with the offers that actually come in. Look at the renovation game as a quantity game." 

- Courtney Poulos, ACME Real Estate

2. Carefully Study The Market Data

"The first key to success for investors in 2019 is the same as it is in any year: Make sure you understand your market. This requires a lot of work, spending many hours studying data. That data will tell you the story you need for the upcoming year. Becoming an expert on inventory, neighborhoods, city trends, interest rates, construction costs and market needs allows for great decision making." 

- Brian Lawton, Property Revival Realty

3. Say "Thank You"

"Say 'thank you' to your clients, vendors, suppliers, team members boss and so on. Remember that you didn't do it all by yourself. This is not a definitive list: Feel free to add to it as you see fit." 

- Michael J. Polk, Polk Properties / Matrix Properties

4. Reserve A Financial Cushion

"Every investor should make strides to have several months of reserves in a separate bank account held for unforeseen maintenance issues or an unexpected vacancy. They should also save additional funds to buy another investment property." 

- Tanya Delahoz, Dwell Summit

5. Get A Handle On Taxes

"Talk to your CPA about maximizing deductions and write-offs by contributing to self-directed retirement accounts, restructuring portfolios, reinvesting gains, prepaying expenses, donating to charity, gifting inheritance money to heirs early and launching new business units. If you can save double digits on taxes, you automatically build in more profit to your investments." 

- Kent Clothier, Real EstateWorldwide

6. Treat Market Slowdown As An Opportunity

"The market may be cooling off. Let all the other investors hide while you pick up the opportunities that didn't make sense a year ago. Get yourself ready to jump on the deals that fall into your zone. Values may level off or decline a bit. Rents should stay strong. This means there will be opportunities for buy and hold real estate investments. Don't listen to the noise about the market." 

- Noel Christopher, Renters Warehouse

7. Consider Rental Properties For Income

"Flipping properties doesn't go as smoothly as it looks on TV. With younger generations staying in the rental market longer, it would be beneficial to investors to consider investing in properties that profit from rentals rather than the traditional flip sale." 

- Beatrice de Jong, Open Listings (YC W15)

8. Learn About Opportunity Zones

"Real estate investors should learn as much as possible about newly passed Opportunity Zones. Congress has potentially provided investors with a once-in-a-lifetime possibility. Opportunity Zones are a community development program to encourage investment in low-income communities. They provide a major tax incentive for investors to reinvest their unrealized gains into funds that are dedicated to investing in these areas." 

- Hunter Perry, Compass

9. Apply For A Contractor's License

"One method a real estate investor can use to increase profits is cutting out the middleman by obtaining a contractor's license. When you must hire a general contractor to pull permits and manage a job, it can be challenging to make money on rehab projects for income property or resale. It also makes it more expensive to get maintenance and improvements done on a rental property." 

- Joe Houghton, RE/MAX Results/The Minnesota Property Group Team

10. Focus On The First-Time Homebuyer

"Interest rates are steadily rising, and with the stabilization of the realestate market, many buyers who already own a property have a lower likelihood of moving up. On the other hand, the first-time homebuyer still wants to own property, and with FHA financing and lower down payment requirements, first-time homebuyers are more likely to continue their pursuit of real estate. Flip a starter home!" 

- Mor Zucker, Team Denver Homes - Kentwood Real Estate

11. Make Sure You've Double-Checked The Details

"Have a clear and concise plan going into the new year of what type of investments you will be making in 2019. This will help you plan out your capital reserves, cash flow and marketing for the coming year. Also ensure you have all the right team members on your team, in the right seats, so their focus is enhanced and efficiency is improved going into the new year." 

- Ali Jamal, Stablegold Hospitality LLC

12. Set Up A Self-Directed IRA

"A good chunk of many people's wealth is in their IRA, and many people don't realize that you can convert that IRA into what is called a "self-directed IRA," or "checkbook IRA."  By getting it all set upnow, you will be ready to take advantage of opportunities as they present themselves in 2019." 

- Holly Williams, MQ Ventures, LLC

13. Assess Your Equity 

"Changes to your real estate portfolio don't happen overnight, so it's time to determine if it's time to sell, buy more or transition into other sectors. Here is how you evaluate this situation. Ask yourself, 

'If I had this cash (current equity) in hand, would I make this purchase now based on the expected rate of return?' Just reverse the scenario, and you'll know what to do!" 

- Justin A Core, Core Group Real Estate, LLC

 

In the Myrtle Beach real estate market, there is a unique opportunity for investment in vacation homes and other short-term rentals as well as traditional property investment routes. If you're interested in starting...or expanding...your real estate investment portfolio, let's talk: Jeff Casterline 843.424.6900