Tami Savage, Realtor

Your Key to a New Lifestyle

This Isn’t a Bubble. It’s Simply Lack of Supply.

By Tami Savage

Are we in a housing bubble? According to NAR Chief Economist Lawrence Yun, this "...is not a bubble. It is simply lack of supply." Source: Axios

Some Highlights

  • In a recent article, Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), discussed the state of today’s housing market.
  • When addressing whether or not today’s high buyer competition and rising home prices are evidence of a housing bubble, Yun said that this “is not a bubble. It is simply lack of supply.”
  • Today’s housing market is healthy, and rising prices are driven by real buyer demand. Let’s connect to talk about the best ways to navigate such an energetic market.

Don’t Be Fooled by Remarkable Real Estate Headlines

By Tami Savage

Don’t Be Fooled by Remarkable Real Estate Headlines

Don’t be impressed by the headlines reporting year-over-year housing numbers for the next several months (data covering March, April, May, and June). The data will most likely show eye-popping one-year increases.

While the year-over-year jumps will certainly be striking, consumers should take these numbers with a grain of salt, as the situation highlights a short-term quirk in the reporting of this data. Essentially, the increases will reflect a combination of two things: sharply lower housing numbers during last year’s virus-related market collapse and the subsequent strong rebound. This will result in what will appear to be unbelievable growth.

Let’s use single-family home sales as an example:

Single-Family sales will show unbelievable increases compared to March, April, May, and June of Last Year. Seasonally adjusted annual rate in millions. Last spring’s buying market was anything but typical. Instead of sales increasing, they fell sharply as a result of stay-at-home orders that virtually shut the real estate industry down. Source: NAR

As the graph reveals, last spring’s buying market was anything but typical. Instead of sales increasing, they fell sharply as a result of stay-at-home orders that virtually shut the real estate industry down.

This spring’s real estate market will bounce back with more normal seasonal sales increases. The percentage increase in sales will be astronomical – not because sales have skyrocketed, but instead because they will be compared to last year’s low numbers.

Bottom Line

There are likely to be some sensational headlines about real estate over the coming months. However, don’t be fooled. The actual story is that the real estate market is finally back to normal.

Planning to Move? You Can Still Secure a Low Mortgage Rate on Your Next Home

By Tami Savage

Planning to Move? You Can Still Secure a Low Mortgage Rate on Your Next Home

This year, mortgage rates have started to slowly climb above recent record-breaking lows. Many homeowners planning to move may feel like they’ve missed the chance to score a great rate on their next mortgage. In reality, there’s still time to secure a rate far below the historic norm. Here’s why.

After creeping up for seven consecutive weeks, average mortgage rates have dropped more recently (See graph below). With rates taking a slight dip over the past two weeks at the same time the inventory of houses for sale is so low, homeowners today are sitting in the optimal seat to sell. What’s the advantage of selling your house now? Securing a low mortgage rate on your next home.

Mortgage Rates based on Freddic Mac 30-Year Fixed Rate was on the rise in Febrary but has started to decline again in April. Source: Freddie Mac

To take advantage of today’s real estate market, experts are encouraging homeowners to act now before interest rates climb. Danielle Hale, Chief Economist at realtor.com, explains:

“…mortgage rates slid for a second week … but we don’t expect rates to stay at this level for too long.”

Hale continues to say:

“For sellers, getting in early optimizes odds of a quick sale at a good price before there’s too much competition, but that means acting now … In this environment, sellers probably really can’t go wrong, and that’s especially true in the nation’s hottest housing markets where homes are selling quickly and getting the greatest number of viewers online.”

Most experts agree that rates will continue to trend upward. Sam Khater, Chief Economist at Freddie Mac, states:

“Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of this year.”

In addition, Freddie Mac recently released their Quarterly Forecast, which notes:

“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.” (See graph below):

Mortgage Rates based on Freddie Mac 30-Year Fixed Rate is projecting the increase to continue to rise in 2022. Source: Freddie Mac

While buyers everywhere want to secure the lowest rate possible, it’s important to remember that today’s rates are still much lower than the historic norm. Odeta Kushi, Deputy Chief Economist at First American, emphasizes:

“While mortgage rates have trended up in recent months, they are still historically low, so relative to one year ago, housing actually is still more affordable and that’s really thanks to this low mortgage rate environment we find ourselves in.”

Bottom Line

If you’re thinking of moving, don’t miss the opportunity to score a great rate on your next home mortgage. Let’s connect today so you can get your house ready to sell and find your dream home while mortgage rates are still low.

Are Forbearances Going to Cause a Market Crash? (April 2021 Housing Market Update)

By Tami Savage

Transcript:

Are forbearances going to cause a market crash?

Hi, I'm Tami Savage with eXp Realty.

As of February 14th, it looks like we're in pretty good shape based on the information from The Mortgage Bankers Association.

84% of people who entered into forbearance are either out of forbearance or working through it to set up repayment plans.

Of that 84%, 50.8% have paid off their mortgage. 33.6% have worked out a repayment plan, which leaves us with 15.6% that are still in trouble.

It's important to understand what's happening with forbearances.

Since May, the numbers have continued to go down.

And as of April 12th, 4.66% of all mortgages are still in forbearance.

We keep hearing all this information in the news about how we're going to crash because the number of forbearances is so high.

But if you look at the real facts, that just isn't true.

In fact, in 2021 the experts are forecasting on average an increase of 5.9% appreciation in home prices for 2021.

Americans' seem to be concerned because of the scary headlines saying the market is going to crash due to home prices increasing so quickly.

However, if we compare the average price in home appreciation from 2002 to 2005 leading up to the 2008 crash, the average annual appreciation was 10.3%.

If you look at now, from 2017 to 2020 the average annual appreciation for home prices is only 6.3% which is drastically less.

It's a very different situation today than back in 2008.

And it's easy to listen to the news, but it seems there is a lot of hype and negativity around what is happening
which is just not based on the actual facts.

I'm Tami Savage with eXp Realty, Your Key to a New Lifestyle.

I'd love to help so don't hesitate to reach out.

Thank you for watching, and make it a great day.

Why This Is a Great Year to Sell Your Vacation Home

By Tami Savage

Why This Is a Great Year to Sell Your Vacation Home

As vaccines are administered and travel resumes, many of us are beginning to plan for those long-awaited vacations we missed out on over the past year. Some households are focusing their efforts on buying a vacation home rather than staying in a hotel, too. The National Association of Home Builders (NAHB) reports:

“Second homes (i.e., homes sold to buyers who are not going to occupy the home year-round, but use it as a vacation home, investment property, etc.) account for 15 percent of new single-family home sales.”

It’s not surprising that there’s an increase in demand for vacation homes. The majority of Americans are realizing they prefer to be around small groups, as shown in a recent survey from The Harris Poll:

“Social distancing taught consumers new things about how they like to socialize; (75%) said, ‘during COVID social distancing I realized I preferred smaller social gatherings at home or at friends’ place.’”

Not only are vacation homes seen as a potentially more pandemic-friendly way to travel and socialize, but they can also serve as an extended home-away-from-home. With more Americans being given the option to continue working remotely or retire earlier than expected, vacation homes can be used year-round. The NAHB explains:

“Remote work arrangements have made it possible for some wealthier Americans to move to alternate locations that are not just small, suburban shifts from within their current metro area.  More fundamentally, second home demand may also be benefitting by an acceleration of retirement plans, as well as stock market gains.”

Bottom Line

The demand for vacation homes has increased and will continue to rise as we head into summer. If you own a house in a destination area and have thought about selling, now is a great time to take advantage of today’s high buyer interest. Let’s connect to discuss your opportunities in our local market.

93% of Americans Believe a Home Is a Better Investment Than Stocks

By Tami Savage

93% of Americans Believe a Home Is a Better Investment Than Stocks

A recent Survey of Consumer Finances study released by the Federal Reserve reveals the net worth of homeowners is forty times greater than that of renters. If you’re wondering if homeownership is a good investment, the study clearly answers that question, and the answer is yes.

Do Americans believe a home is a better investment than stocks?

In a post on the Liberty Street Economics blog, the Federal Reserve Bank of New York notes that 93.3% of Americans believe buying a home is definitely or probably a better investment than buying stocks.

Here’s how the results break down:

Is buying a home or buying stocks the better investment? 93% say buying a home, 6.7% say buying stocks. Source: SCE Housing Survey

The survey also shows a wide range of reasons why Americans feel that way (respondents were able to pick more than one answer):

Reasons why a home is a better investment than stocks: Housing Prices less volatile 55.7%. desired living environment, provides stability 53.9%. tax reasons 47.5%. Saving from rents sufficient to cover costs 43.9%. leverage 43.3%. higher housing returns 38%. commitment device 33.8%. locks in housing costs 28.8%. Source: SCE Housing Survey

Bottom Line

The data show how strongly Americans believe in homeownership as an investment. That belief is warranted. The Liberty Street Economics blog put it best by saying:

“Housing represents the largest asset owned by most households and is a major means of wealth accumulation, particularly for the middle class.”

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