August 22, 2022

What Would a Recession Mean for the Housing Market?

by Robert Wagner

According to a recent survey from the Wall Street Journal, the percentage of economists who believe we’ll see a recession in the next 12 months is growing. When surveyed in July 2021, only 12% of economists consulted thought there’d be a recession by now. But this July, when polled, 49% believe we will see a recession in the coming 12 months.

And as more recession talk fills the air, one concern many people have is: should I delay my homeownership plans if there’s a recession?

Here’s a look at historical data to show what happened in real estate during previous recessions to help prove why you shouldn’t be afraid of what a recession would mean for the housing market today.

A Recession Doesn’t Mean Falling Home Prices

To show that home prices don’t fall every time there’s a recession, it helps to turn to historical data. As the graph below illustrates, looking at the recessions going all the way back to 1980, home prices appreciated in four of the last six recessions. So, historically, when the economy slows down, it doesn’t mean home values will fall.

What Would a Recession Mean for the Housing Market? | MyKCM

Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession would repeat what happened then. But this housing market isn’t about to crash. The fundamentals are very different today than they were in 2008. So, don’t assume we’re heading down the same path.

A Recession Means Falling Mortgage Rates

Research also helps paint the picture of how a recession could impact the cost of financing a home. As the chart below shows, historically, each time the economy slowed down, mortgage rates decreased.

What Would a Recession Mean for the Housing Market? | MyKCM

Fortune explains that mortgage rates typically fall during an economic slowdown:

“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”

And while history doesn’t always repeat itself, we can learn from and find comfort in the historical data.

Bottom Line

There’s no doubt everyone remembers what happened in the housing market in 2008. But you don’t need to fear the word recession if you’re planning to buy or sell a home. According to historical data, in most recessions, home price gains have stayed strong, and mortgage rates have declined.

If you’re thinking about buying or selling a home, let’s connect so you have expert advice on what’s happening in the housing market and what that means for your homeownership goals.

Remember, I help DFW residents alleviate the stress of buying/selling for the best possible price in the least amount of time and I would love to serve you.

August 19, 2022

Is the Shifting Market a Challenge or an Opportunity for Homebuyers?

by Robert Wagner

If you tried to buy a home during the pandemic, you know the limited supply of homes for sale was a considerable challenge. It created intense bidding wars which drove home prices up as buyers competed with one another to be the winning offer.

But what was once your greatest challenge may now be your greatest opportunity. Today, data shows buyer demand is moderating in the wake of higher mortgage rates. Here are a few reasons why this shift in the housing market is good news for your homebuying plans.

The Challenge

There were many reasons for the limited number of homes on the market during the pandemic, including a history of underbuilding new homes since the market crash in 2008. As the graph below shows, housing supply is well below what the market has seen for most of the past 10 years (see graph below):

Is the Shifting Market a Challenge or an Opportunity for Homebuyers? | MyKCM

The Opportunity

But that graph also shows a trend back up in the right direction this year. That’s because moderating demand is slowing the pace of home sales and that’s one of the reasons housing supply is finally able to grow. For you, that means you’ll have more options to choose from, so it shouldn’t be as difficult to find your next home as it has been recently.

And having more options may also lead to less intense bidding wars. Data from the Realtors Confidence Index from the National Association of Realtors (NAR) shows this trend has already begun. In their recent reports, bidding wars are easing month-over-month (see graph below):

Is the Shifting Market a Challenge or an Opportunity for Homebuyers? | MyKCM

If you’ve been outbid before or you’ve struggled to find a home that meets your needs, breathe a welcome sigh of relief. The big takeaway here is you have more options and less competition today.

Just remember, while easing, data shows multiple-offer scenarios are still happening – they’re just not as intense as they were over the past year. You should still lean on me to guide you through the process and help you make your strongest offer up front.

Bottom Line

If you’re still looking to make a move, it may be time to pick your home search back up today. Let’s connect to kick off the homebuying process.

August 18, 2022

Planning To Retire? Your Equity Can Help You Reach Your Goal.

by Robert Wagner

Whether you’ve just retired or you’re thinking about retirement, you may be considering your options and trying to picture a whole new stage of your life. And you’re not alone. Research from the Retirement Industry Trust Association (RITA) shows 10,000 Baby Boomers reach the typical retirement age (65) every day, and only 47% of the people in that generation have already retired.

If this sounds like you, one thing worth considering is whether or not your current home will suit your new lifestyle. If your home doesn’t have the features or benefits you’re looking for, the good news is, you may be in a better position to move than you realize.

That’s because, if you already own a home, you’ve likely built-up significant equity, and that can help you fuel your next move. According to the National Association of Realtors (NAR):

“A homeowner who purchased a typical home five years ago would have gained $125,300 from just price appreciation alone.”

In fact, over the last twelve months, CoreLogic reports the average homeowner in the United States gained roughly $64,000 in equity due to home price appreciation.

You can use your equity to help you achieve your homeownership goals. Whether you want to downsize, move closer to loved ones, or buy a home in a dream destination, your equity can help get you there. It may be some (if not all) of what you’d need as your down payment on a home that better fits your changing needs.

To find out how much equity to have in your home, reach out today.

Bottom Line

Retirement is a big step and so is buying or selling a home. As you move into this new phase of life, let’s connect so you have an expert to guide you through the process as you sell your current home and give you expert advice as you buy one that’ll better suit your needs.

Tips • Tips • Tips • Tips • Tips • Tips • August 17, 2022

Selling Your House? Your Asking Price Matters More Now Than Ever

by Robert Wagner

There’s no doubt about the fact that the housing market is slowing from the frenzy we saw over the past two years. But what does that mean for you if you’re thinking of selling your house?

While home prices are still appreciating in most markets and experts say that will continue, they’re climbing at a slower pace because rising mortgage rates are creating less buyer demand. Because of this, there are more homes on the market. And in a shift like this one, the way you price your home matters more than ever.

Why Today’s Housing Market Is Different

During the pandemic, sellers could price their homes higher because demand was so high, and supply was so low. This year, things are shifting, and that means your approach to pricing your house needs to shift too.

Because we’re seeing less buyer demand, sellers have to recognize this is a different market than it was during the pandemic. Here’s what’s at stake if you don’t.

Why Pricing Your House at Market Value Matters

The price you set for your house sends a message to potential buyers. If you price it too high, you run the risk of deterring buyers.

When that happens, you may have to lower the price to try to reignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder what that means about the home or if in fact it’s still overpriced. Some sellers aren’t adjusting their expectations to today’s market, and realtor.com explains the impact that’s having:

“. . . the share of listings with a price cut was nearly double its year ago level even as it remains well below pre-pandemic levels.”

To avoid the headache of having to lower your price, you’ll want to price it right from the onset. A real estate advisor knows how to determine that perfect asking price. To find the right price, they balance the value of homes in your neighborhood, current market trends and buyer demand, the condition of your house, and more.

Not to mention, pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. This helps lead to stronger offers and a greater likelihood it’ll sell quickly.

Why You Still Have an Opportunity When You Sell Today

Rest assured, it’s still a sellers’ market, and you’ll still get great benefits if you plan accordingly and work with an agent to set your price at the current market value. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

Mike Simonsen, the Founder and CEO of Altos Research, also notes:

“We can see that demand is still there for the homes that are priced properly.”

Bottom Line

Homes priced right are selling quickly in today’s real estate market. Let’s connect to make sure you price your house based on current market conditions so you can maximize your sales potential and minimize your hassle in a shifting market.

I help DFW residents alleviate the stress of buying/selling for the best possible price in the least amount of time and would love to serve you.

Tips • August 10, 2022

Why It’s Still a Sellers’ Market

by Robert Wagner

As there’s more and more talk about the real estate market cooling off from the peak frenzy it saw during the pandemic, you may be questioning what that means for your plans to sell your house. If you’re thinking of making a move, you should know the market is still anything but normal.

Even though the supply of homes for sale has been growing this year, there’s still a shortage of homes on the market. And that means conditions continue to favor sellers today. That’s because the level of inventory of homes for sale can help determine if buyers or sellers are in the driver’s seat. Think of it like this:

A buyers’ market is when there are more homes for sale than buyers looking to buy. When that happens, buyers have the negotiation power because sellers are more willing to compromise so they can sell their house.
In a sellers’ market, it’s just the opposite. There are too few homes available for the number of buyers in the market and that gives the seller all the leverage. In that situation, buyers will do what they can to compete for the limited number of homes for sale.
A neutral market is when supply is balanced and there are enough homes to meet buyer demand at the current sales pace.

And for the past two years, we’ve been in a red-hot sellers’ market because inventory has been near record lows. The blue section of this graph highlights just how far below a neutral market inventory still is today.

Why It’s Still a Sellers’ Market | MyKCM

What Does This Mean for You?

Ed Pinto, Director of the American Enterprise Institute’s Housing Center, gives a perfect summary of what’s happening in today’s market, saying:

“Overall, the best summary is that we’ll move from a gangbuster sellers’ market to a modest sellers’ market.”

Conditions are still in your favor even though the market is cooling. If you work with an agent to price your house at market value, you’ll find success when you sell your house today. While buyer demand is softening due to higher mortgage rates, homes that are priced right are still selling fast. That means your window of opportunity to list your house hasn’t closed.

Bottom Line

Today’s housing market still favors sellers. If you’re ready to sell your house, let’s connect so you can start making your moves.

Tips • Tips • Tips • Tips • Tips • Tips • August 9, 2022

Avoid These Homebuyer Turnoffs

by Robert Wagner

May 13, 2022

Reasons to review your insurance coverage

by Robert Wagner

I was sitting in a meeting recently and someone mentioned it was important to take an annual look at insurance coverage as we have seen record inflation and increases in home value. So I dug a little deeper and thought it would be a great resource to my clients to provide these tips as well.

1. Adapt to Life Changes

There are a lot of things that can happen in a year that can affect your insurance costs, coverage options, and limitations. Examples include:

Marriage
Divorce
Children leaving home/empty nest/child goes to college
starting new career
launching a new business
becoming a parent or adopting a child
bringing elderly parents into your home
Death in your immediate family
Paying off your mortgage

You might experience substantial changes in your coverage needs and your annual premiums due to each of these things. If a major event has altered your life, chances are your insurance coverage needs will change as well.

Reviewing your insurance policies yearly allows you to assess how these changes affect your coverage needs and to make any necessary adjustments.

2. Ensuring adequate coverage

Your insurance needs will change as your life changes. This means that what worked last year may not work this year, depending on your needs, priorities, and comfort zone.

Reviewing your policies annually also keeps you on top of what your coverages cover, as well as where gaps might exist that you can fill with supplemental coverage. Especially with today’s market value of your home increasing by 15-20% year over year.

Minimum insurance coverages can change, which is another reason it’s important to talk with your independent insurance agent about your policies.

3. Buying and selling property and possessions

Additionally, if you buy or sell a home, vacation property, automobile, RV, or move, it makes sense to determine the role it plays in your overall net worth and adjust liability protection for you and your family accordingly.

Your liability may increase if you own more than one house. Increasing your “net worth” will make you more visible to targets.

4. Home Renovations or Additions

Home additions and remodeling can change the overall value of your home as well as the costs of repairing your home after a covered event. It is also very likely to change the amount of insurance you need to have on your home to ensure it is adequately protected.

You’ve made a substantial investment of time, energy, money, and probably a few tears into transforming your home. Insurance allows you to protect that investment. But only if you have the right types of coverage and the right amount of coverage to make it happen.

5. Use discounts to your advantage

Discounts are offered by many insurance providers for a variety of reasons. You can lower your insurance premiums by choosing a newer vehicle with advanced safety features.

The installation of a new alarm system or updating the wiring in your home may result in a discount on your home insurance.

Additionally, affinity and group discounts are available.

You can save a lot by bundling policies.

You should also have access to an insurance broker who can get rates from a variety of insurance providers.

If you are interested in getting an annual insurance quote, please contact me today.

Robert L. Wagner, REALTOR
Century 21 Judge Fite Company
RLWRealEstate.com

Real Estate Reflections • Uncategorized • Uncategorized • April 1, 2022

A Homeowner’s Net Worth is 40x Greater Than A Renter’s

by Robert Wagner

One of the best ways to build your family’s financial future is through homeownership. Recent data from the Federal Reserve indicates the net worth of a homeowner is actually over 40 times greater than that of a renter. Maybe it’s time to start thinking about buying a home, especially when they’re so affordable in today’s market.

A Homeowner’s Net Worth Is 40x Greater Than a Renter’s | MyKCM

Every three years the Survey of Consumer Finances shows the breakdown of how owning a home helps build financial security. In the graph below, we see that the average net worth of homeowners continues to grow, while the net worth of renters tends to hold fairly steady and be significantly lower than that of homeowners. The gap between owning and renting just keeps getting wider over time, making homeownership more and more desirable for those who are ready.

Owning a home is a great way to build family wealth.

A Homeowner’s Net Worth Is 40x Greater Than a Renter’s | MyKCM

For many families, homeownership serves as a form of ‘forced savings.’ Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity you have in your home (See chart below):The impact of home equity is part of why Gallup reports that Americans picked real estate as the best long-term investment for the seventh year in a row. According to this year’s survey, 35% of Americans chose real estate over stocks, savings accounts, gold, and bonds.

Today, there are great opportunities available for those planning to buy a home. The housing market has made a full recovery, and all-time low interest rates are giving homebuyers a big boost in purchasing power. If you’re ready, buying a home this fall can set you up to increase your net worth and create a safety net for your family’s future.

Bottom Line

To learn how you can use your monthly housing cost to build your family’s net worth, let’s connect so you have a trusted professional to guide you through the home buying process.

I help DFW residents alleviate the stress of buying / selling for the best possible price in the least amount of time. Contact me today so I can assist you! 817.791.0631 or email robertwagner@judgefite.com

What Would a Recession Mean for the Housing Market?

A Recession Doesn’t Mean Falling Home Prices

A Recession Means Falling Mortgage Rates

Bottom Line

Is the Shifting Market a Challenge or an Opportunity for Homebuyers?

The Challenge

The Opportunity

Bottom Line

Planning To Retire? Your Equity Can Help You Reach Your Goal.

Bottom Line

Selling Your House? Your Asking Price Matters More Now Than Ever

Why Today’s Housing Market Is Different

Why Pricing Your House at Market Value Matters

Why You Still Have an Opportunity When You Sell Today

Bottom Line

Why It’s Still a Sellers’ Market

What Does This Mean for You?

Bottom Line

Avoid These Homebuyer Turnoffs

Reasons to review your insurance coverage

1. Adapt to Life Changes

2. Ensuring adequate coverage

3. Buying and selling property and possessions

4. Home Renovations or Additions

5. Use discounts to your advantage

A Homeowner’s Net Worth is 40x Greater Than A Renter’s

Bottom Line

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