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Why Homeownership Wins in the Long Run

June 27, 2023 By Tami Savage

Why Homeownership Wins in the Long Run

Today’s higher mortgage rates, inflationary pressures, and concerns about a potential recession have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to think about the long-term benefits of homeownership when making your decision.

Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your own wealth. That may be why, in a recent Fannie Mae survey, 70% of respondents say they believe buying a home is a safe investment.

Here’s a look at how just the home price appreciation piece can really add up over the years.

Home Price Growth over Time

The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends.

Percent Change in Home Prices (Over 5 Years, Q1 2023)

If you look at the percent change in home prices, you can see home prices grew on average by just over 56% nationwide over a five-year period.

Some regions are slightly above or below that average, but overall, home prices gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (see map below):

Percent Change in Home Prices (Since Q1 1991, Q1 2023)

The second map shows, nationwide, home prices appreciated by an average of over 290% over a roughly 30-year span.

 This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. That’s a key factor in why so many homeowners who bought their homes years ago are still happy with their decision.

And while you may have heard talk in late 2022 that home prices would crash, it didn’t happen. Even though home prices have moderated from the record peak we saw during the ‘unicorn’ years, prices are already rebounding in many areas today. That means, in most markets, your home should grow in value over the next year.

The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and deal with annual lease hikes for no long-term financial benefit? Instead, consider buying a home.

Bottom Line

If you’re questioning if it still makes sense to buy a home today, remember the incredible long-term benefits of homeownership. If you’re ready to start the conversation, let’s connect today.

Tagged With: First Time Home Buyers, For Buyers, Pricing, Rent vs Buy

Why the Median Home Price Is Meaningless in Today’s Market

June 20, 2023 By Tami Savage

Why the Median Home Price Is Meaningless in Today’s Market

The National Association of Realtors (NAR) will release its latest Existing Home Sales (EHS) report later this week. This monthly report provides information on the sales volume and price trend for previously owned homes. In the upcoming release, it’ll likely say home prices are down. This may feel a bit confusing, especially if you’ve been following along and seeing the blogs saying that home prices have bottomed out and turned a corner.

So, why will this likely say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each report. NAR reports on the median sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.

The Center for Real Estate Studies at Wichita State University explains median prices like this:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”

Investopedia helps define what a repeat sales approach means:

“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”

The Challenge with the Median Sales Price Today

As the quotes above say, the approaches can tell different stories. That’s why median price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again.

Bill McBride, Author of the Calculated Risk blog, sums the difference up like this:

“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”

To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.

How Median Price Works

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.

That’s why using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But, most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. A greater number of ‘less-expensive’ houses are selling right now for this exact reason, and that’s causing the median price to decline. But that doesn’t mean any single house lost value. 

When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates.

Bottom Line

For a more in-depth understanding of home price trends and reports, let’s connect.

Tagged With: For Buyers, For Sellers, Housing Market Updates, Pricing

How Owning a Home Grows Your Wealth with Time [INFOGRAPHIC]

June 16, 2023 By Tami Savage

How Owning a Home Grows Your Wealth with Time [INFOGRAPHIC]

Some Highlights

  • If you’re thinking of buying a home this year, be sure to factor in the long-term benefits of homeownership.
  • Over time, homeownership allows you to build equity. On average, nationwide home prices appreciated by 290.2% over the last 32 years.
  • That means your net worth can grow significantly in the long term when you own a home. Let’s connect so you can start your homebuying journey today.

Tagged With: First Time Home Buyers, For Buyers, Infographics, Move-Up Buyers, Pricing

Are Home Prices Going Up or Down? That Depends…

June 12, 2023 By Tami Savage

Are Home Prices Going Up or Down? That Depends…

Media coverage about what’s happening with home prices can be confusing. A large part of that is due to the type of data being used and what they’re choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here's an explanation of each. 

Year-over-Year (Y-O-Y):
  • This comparison measures the change in home prices from the same month or quarter in the previous year. For example, if you're comparing Y-O-Y home prices for April 2023, you would compare them to the home prices for April 2022.
  • Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating.
Month-over-Month (M-O-M):
  • This comparison measures the change in home prices from one month to the next. For instance, if you're comparing M-O-M home prices for April 2023, you would compare them to the home prices for March 2023.
  • Meanwhile, M-O-M comparisons analyze changes within a single month, giving a more immediate snapshot of short-term movements and price fluctuations. They are often used to track immediate shifts in demand and supply, seasonal trends, or the impact of specific events on the housing market.

The key difference between Y-O-Y and M-O-M comparisons lies in the time frame being assessed. Both approaches have their own merits and serve different purposes depending on the specific analysis required.

Why Is This Distinction So Important Right Now? 

We’re about to enter a few months when home prices could possibly be lower than they were the same month last year. April, May, and June of 2022 were three of the best months for home prices in the history of the American housing market. Those same months this year might not measure up. That means, the Y-O-Y comparison will probably show values are depreciating. The numbers for April seem to suggest that’s what we’ll see in the months ahead (see graph below):

Comparing Now to Last year's Record #s

That’ll generate troubling headlines that say home values are falling. That’ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that home values are currently cascading downward.

However, on a closer look at M-O-M home prices, we can see prices have actually been appreciating for the last several months. Those M-O-M numbers more accurately reflect what’s truly happening with home values: after several months of depreciation, it appears we’ve hit bottom and are bouncing back.

Here’s an example of M-O-M home price movements for the last 16 months from the CoreLogic Home Price Insights report (see graph below):

Home Prices Appear to have Bottomed Out

Why Does This Matter to You?

So, if you’re hearing negative headlines about home prices, remember they may not be painting the full picture. For the next few months, we’ll be comparing prices to last year’s record peak, and that may make the Y-O-Y comparison feel more negative. But, if we look at the more immediate, M-O-M trends, we can see home prices are actually on the way back up.

There’s an advantage to buying a home now. You’ll buy at a discount from last year’s price and before prices start to pick up even more momentum. It’s called “buying at the bottom,” and that’s a good thing.

Bottom Line

If you have questions about what’s happening with home prices, or if you’re ready to buy before prices climb higher, let’s connect.

Tagged With: First Time Home Buyers, For Buyers, Housing Market Updates, Move-Up Buyers, Pricing

Why You Can’t Compare Now to the ‘Unicorn’ Years of the Housing Market [INFOGRAPHIC]

June 9, 2023 By Tami Savage

Why You Can’t Compare Now to the ‘Unicorn’ Years of the Housing Market [INFOGRAPHIC]

Some Highlights

  • Comparing housing market metrics from one year to another can be challenging in a normal housing market – and the last few years have been anything but normal. In a way, they were ‘unicorn’ years.
  • Expect unsettling housing market headlines this year, mostly due to unfair comparisons with the ‘unicorn’ years.
  • Let’s connect so I can share the data that puts those headlines in the proper perspective.

Tagged With: Demographics, For Buyers, For Sellers, Housing Market Updates, Infographics, Pricing

Oops! Home Prices Didn’t Crash After All

June 5, 2023 By Tami Savage

Oops! Home Prices Didn’t Crash After All

During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts:

Jeremy Siegel, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business:

“I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.”

Mark Zandi, Chief Economist at Moody’s Analytics:

“Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.”

Goldman Sachs: 

“Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.”

The Bad News: It Rattled Consumer Confidence

These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the December Consumer Confidence Survey from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year.

Percent of Americans Each December Who Thought Prices Would  go Down Over the Next 12 Months.

The Good News: Home Prices Never Crashed

However, home prices didn’t come crashing down and seem to be already rebounding from the minimal depreciation experienced over the last several months. 

In a report just released, Goldman Sachs explained:

“The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ”

Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: Case-Shiller and the FHFA. Here are the numbers each reported:

Month over Month - Percent Change in Home Values - Seasonally Adjusted

Home values seem to have turned the corner and are headed back up.

Bottom Line

When the forecasts of significant home price appreciation were made last fall, they were made with megaphones. Mass media outlets, industry newspapers, and podcasts all broadcasted the news of an eminent crash in prices.

Now, forecasters are saying the worst is over and it wasn’t anywhere near as bad as they originally projected. However, they are whispering the news instead of using megaphones. As real estate professionals, it is our responsibility – some may say duty – to correct this narrative in the minds of the American consumer.

Tagged With: For Buyers, For Sellers, Housing Market Updates, Pricing

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Baby Boomers Buying Myths Community Demographics Distressed Properties Downloadable Down Payments First Time Home Buyers Forbearances For Buyers Foreclosures For Sale By Owners For Sellers FSBOs Garden Generation X Generation Z Gen X Gen Z Holidays Home Household Management Housing Market Updates Infographics Interest Rates Interview Investors Lifestyle Luxury Market Millennials Move-Up Buyers moving New Construction Pricing relocation Remodel Rent vs Buy Report Reviews Selling Myths Senior Market Short Sales Tax Refund Veterans Video

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Worried about a housing crash like 2008? New flash Worried about a housing crash like 2008? New flash: We're not on that path! 🏡

𝐋𝐨𝐰 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲: Not enough homes to go around
𝐔𝐧𝐝𝐞𝐫𝐛𝐮𝐢𝐥𝐭: Builders are playing catch-up
𝐅𝐞𝐰𝐞𝐫 𝐅𝐨𝐫𝐞𝐜𝐥𝐨𝐬𝐮𝐫𝐞𝐬: Thanks to tighter lending standards

No crash in sight. Got questions? DM me! 💌

More info? Here's the article: https://tamisavage.com/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon/
📆 Only a Few Days Left in September, Y'all! Tim 📆 Only a Few Days Left in September, Y'all! Time to Spruce Up the Home! 🏡🍂
🔥 Fire Pit Ready: Clean it, check it, stock it. Hello, cozy nights!
🌱 Garden Game: Trim, plant, and mulch. Your garden will thank you!
❄️ Heating 101: Schedule a pro check-up. No one likes a winter surprise.
🚪 Garage Love: A little maintenance goes a long way.
Got questions? DM me, let's make your home fall-fabulous!
🏡 𝐈𝐬 𝐭𝐡𝐞 𝐒𝐤𝐲 𝐅𝐚𝐥𝐥𝐢𝐧𝐠 𝐨𝐧 𝐇𝐨𝐦𝐞 𝐏𝐫𝐢𝐜𝐞𝐬? Nope!
Spring is usually go-time for homebuying, but don't stress if you see prices leveling off. That's the natural cycle, baby!

👋 Questions? DM me, let's make sense of it together!

🔗 https://tamisavage.com/the-return-of-normal-seasonality-for-home-price-appreciation/
🏡 𝐆𝐨𝐭 𝐲𝐨𝐮𝐫 𝐞𝐲𝐞 𝐨𝐧 𝐚 𝐧𝐞𝐰 𝐡𝐨𝐦𝐞 𝐭𝐡𝐢𝐬 𝐟𝐚𝐥𝐥? 🍂
Competition is fierce, but I've got your back! Get pre-approved to stand out from the crowd.

𝐖𝐡𝐲 𝐏𝐫𝐞-𝐀𝐩𝐩𝐫𝐨𝐯𝐚𝐥 𝐌𝐚𝐭𝐭𝐞𝐫𝐬
1️⃣ It sets your budget, so no guesswork.
2️⃣ It tells sellers you mean business.

Ready to make it happen? DM me! 📩

Article: https://tamisavage.com/beginning-with-pre-approval/
🏡 𝐑𝐞𝐦𝐨𝐭𝐞 𝐖𝐨𝐫𝐤 + 𝐇𝐨𝐮𝐬𝐞 𝐇𝐮𝐧𝐭 = 𝐄𝐧𝐝𝐥𝐞𝐬𝐬 𝐏𝐨𝐬𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬! 🏡
Work from your couch? That's great news when you're in the home-buying game! 🛋️💼
Expand your horizons and find a space that not only says 'home' but also screams 'perfect workspace.' 🌠
👇 DM me and let's unlock your dream lifestyle! 🗝️

Full Infographic: https://tamisavage.com/how-remote-work-helps-with-your-house-hunt-infographic/
🏡 𝐘𝐨𝐮𝐫 𝐇𝐨𝐦𝐞, 𝐘𝐨𝐮𝐫 𝐑𝐮𝐥𝐞𝐬! 📜
Owning a home is more than just an investment or dollars & cents; it's a life upgrade!

🎨 𝐅𝐫𝐞𝐞𝐝𝐨𝐦 𝐭𝐨 𝐃𝐞𝐜𝐨𝐫𝐚𝐭𝐞, 𝐂𝐫𝐞𝐚𝐭𝐞, & 𝐌𝐨𝐝𝐢𝐟𝐲 🛠️
You wanna paint that living room lime green? Go for it!
Want a glass front door instead of solid wood? Change it!
Want to knock down a wall or add a home office? You can!

👪 𝐅𝐚𝐦𝐢𝐥𝐲 𝐂𝐨𝐦𝐞𝐬 𝐅𝐢𝐫𝐬𝐭
A home is the perfect place to watch your kids grow and make lasting memories. More importantly, it adds stability!

🏘️ 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲 𝐂𝐨𝐧𝐧𝐞𝐜𝐭𝐢𝐨𝐧
Neighbors aren't just the folks next door; they're your support system.

Ready to make the move and enrich your life? Holler at me anytime! 📲

For more Insights: https://tamisavage.com/the-many-non-financial-benefits-of-homeownership/
💼 𝐑𝐞𝐦𝐨𝐭𝐞 𝐖𝐨𝐫𝐤 = 𝐌𝐨𝐫𝐞 𝐇𝐨𝐦𝐞 𝐎𝐩𝐭𝐢𝐨𝐧𝐬! 🏡 𝐋𝐞𝐭'𝐬 𝐂𝐨𝐧𝐧𝐞𝐜𝐭 𝐭𝐡𝐞 𝐃𝐨𝐭𝐬!

Remote work isn't just about Zoom calls in PJs. It's an opportunity to change your entire home search game!

💡 𝐅𝐥𝐞𝐱𝐢𝐛𝐢𝐥𝐢𝐭𝐲 = 𝐌𝐨𝐫𝐞 𝐎𝐩𝐭𝐢𝐨𝐧𝐬
Think bigger yards, extra rooms, and maybe even a lower cost of living! 🎉

Curious? Call, text, or email me, and let's talk! 📲

👉 Blog Link for all the ins and outs: https://tamisavage.com/remote-work-is-changing-how-some-buyers-search-for-their-dream-homes/

#RemoteWork  #HomeBuying #DreamHome #LocationFlexibility #WorkFromHome #HomeSearch #PropertyHunt #RealEstateMarket #ModernWork #NewNormal #LifestyleUpgrade #realestatenews #realestateexpert #realestateadvice #realestateblog #TamiSavageRealtor #realestate #realtor #realestateagent #cummingga #miltonga #cantonga #alpharettaga #ballgroundga
🏡 Wondering if Now’s the Right Time to Sell? 🏡 Wondering if Now’s the Right Time to Sell? Your Home Equity Might Just Be Your Ace! 🏡

Equity = Your Home's Value - What You Owe. 🤑 And here's the kicker—nearly 70% of homeowners are sitting pretty with significant equity. So if you've been holding off selling due to mortgage rates, this could be your game-changer!

📲 Got questions about your home equity? Don’t hesitate to call, text, or email me anytime!

👉 Want the full scoop? Check out my latest article on how your home equity can offset affordability challenges: https://tamisavage.com/your-home-equity-can-offset-affordability-challenges/
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The Summer Guides for Buying and Selling a Home are Here.

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The Spring Guides for Buying and Selling a Home Are Here
How you price your house will make a big difference to not only your bottom line, but to how quickly it could sell. Let’s connect to figure out the ideal price for your house.
Price Your House Right When You Sell
Getting pre-approved is an important first step toward buying a home. Let’s connect so you have the right tools to buy a home in today’s market.

Data Source:
 • https://www.forbes.com/advisor/mortgages/what-it-takes-to-be-preapproved-for-a-mortgage-and-why-it-matters/
The Importance of Pre-Approval
There are many reasons why it’s easy to fall in love with homeownership. If you’re ready to find the home of your dreams, let’s connect.
Why It's Easy To Fall in Love with Homeownership
You can have the home you want without waiting for the perfect home to come onto the market.

SOURCE for Data in Video: 
 • https://themreport.com/news/data/08-29-2022/homebuyers-compromise
Create Your Perfect Home by Perfecting It After You Purchase
Before buying a home, it’s a good idea to know why homeownership is important to you. Let’s connect to discuss your why and prioritize your next steps.

SOURCE for Data in Video: 
 • https://himaxwell.com/resources/ebooks-white-papers/1h-2022-millennial-genz-borrower-sentiment-report/#downloadnow
Top Reasons Why You May Want To Buy a Home
There’s a lot going on in the housing market right now. 

You can get the latest digital copy from my website post: https://tamisavage.com/the-winter-guides-for-buying-or-selling-a-home-are-here/
The Winter Guides for Buying or Selling a Home Are Here
There’s good reason to make your move right now if you’re ready to sell. Let’s connect to talk about the benefits of selling your house this season.
5 Reasons To Sell Your House This Winter
Rents have risen dramatically for over three decades. Let’s connect so you can have expert advice on your side to help you reach your homeownership goals.

Data Source: 
 • http://www.census.gov/housing/hvs/files/currenthvspress.pdf
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