Archive | Real Estate Updates

How Much “Housing Wealth” Can You Build in a Decade?

How Much “Housing Wealth” Can You Build in a Decade?

Earlier this month, the National Association of Realtors (NAR) released a special study titled Single-Family Home Price Gains by Years of Tenure. The study estimates median home price appreciation over the last 30 years based on the length of homeownership.

Below are three graphs depicting the most important data revealed in the study.

How much have home prices increased?

One of the first measures of the financial benefits of homeownership is the net worth (in the form of equity) an owner can build over time. The study showed the average increase in home values based on how long homeowners stayed in a home.

What was the percentage of appreciation?

Another way to look at this is by the percentage increase in value over time, called appreciation:

Was this appreciation consistent throughout the country?

Today, when we think of markets that have done well over the last decade, we have a tendency to think about San Francisco, San Diego, Seattle, and other West Coast cities. Though it is true the West Region showed the highest price growth over the last three decades, we can see how every region of the country did quite well in ten-year increments:This data validates the claim that homeownership is great for building wealth. The importance of this information was highlighted in the study’s first sentence:

“Homeownership is an important source of wealth creation, enabling current homeowners and succeeding generations to move up the economic ladder.”

Bottom Line

Homeownership has many financial and non-financial benefits. The accumulation of “housing wealth” through increased equity is a major one. If you’re thinking of buying a home for the first time or moving up to your dream home, the sooner you make the move, the sooner your net worth will begin to grow.


Source: Michigan Real Estate Updates

East Grand Rapids Tudor For Sale 5 Bedrooms 4++ Baths 3 stall

East Grand Rapids at its finest. This timeless Tudor presents the pinnacle of custom quality, beauty and craftsmanship. Rare custom features such as the slate roof, solid walnut doors and the hand-cut herringbone end-cut block floor showcase the attention to detail throughout this incredible floor plan. Updated with inviting warm colors that showcase the plaster relief ceilings and highlight special details such as the hand carved stone fireplace, cast cornices, and crown moulding.  Modern luxuries can be found throughout the home.  The master suite features a spacious walk-in master closet, heated tile floors, custom tile shower and jet tub. The well-appointed kitchen lets the light shine with ample cabinets and pull out drawers finished in warm satin white, tile floor with complementing granite countertops, double ovens, cook top, Sub-Zero refrigerator, pantry and additional storage spaces.  The 3 stall garage features epoxy floor and finished walls maximizing the space for best use and organization. True Tudor touches define every inch such as the Four-centred archways and cantilevered second story, exquisite details in the brick and stone, copper gutters, slate patio and decorative garden parapet.  Notice the upper level diamond brick pattern and the complementing diamond window mullions, positioned perfectly to soak in the rising sun.  The half acre lot offers the perfect mix of sun and shade, with outdoor sitting areas offering a relaxing and private backyard experience. Impeccably maintained this home offers the smooth transition of ownership you desire.  

7486 Alaska Ridge – Private Thornapple River – Forest Hills Schools

Forest Hill Schools – Private Thornapple River frontage. This gorgeous Town & Country cedar home is surrounded by the natural beauty of hardwoods. Located on the open 6 mile stretch of the Thornapple River (all sports.) This home offers the best of rustic-lux. With soaring vaulted plank ceilings, stone fireplace, majestic views out every window, and quality finishes throughout every inch breathes the essence of home. The main floor master with luxuriously appointed on-suite, the additional bedrooms, finished garage loft space, and walk-out lower level each offer custom touches combining form, function and fun. Experience the peace of this location while appreciating its easy proximity to everyday amenities such as shopping, dining, entertainment, and more.

Interest Rates Over Time [INFOGRAPHIC]

Interest Rates Over Time [INFOGRAPHIC]

 

Some Highlights:

  • With interest rates hovering at near historic lows, now is a great time to look back at where they’ve been, and how much they’ve changed over time.
  • According to Freddie Mac, mortgage interest rates are currently hovering near a five-decade low.
  • The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year or $7,200 over the life of your loan. Maybe it’s time to lock in now while rates are still low.


Source: Michigan Real Estate Updates

3888 Goodwood Dr Se, Thornapple River Forest Hills Schools

140 Ft of private Thornapple River frontage. Nestled in the cove this 4 bedroom 3.5 bath home gives you all the enjoyment of being on the wide open stretch of the Thornapple River ranked top in the area for water sports, yet the location provide tranquility not found anywhere else on the river. With quality fit and finish throughout this masterfully crafted walkout ranch provides vaulted cathedral ceiling featuring beautiful wood beams, parquet floor, solid wood cabinetry, over 700sqft of Trex composite decking, 2 fireplaces, 2 docks, gorgeous river views, multi-zone heating and cooling, updated mechanicals, gorgeous landscaping, main floor master, main floor laundry, a brilliant floor plan with large spacious rooms, ample storage space, 2 wet bars, attached 3 stall garage and more. 

The #1 Misconception in the Homebuying Process

The #1 Misconception in the Homebuying Process

The #1 Misconception in the Homebuying Process | Simplifying The Market

After over a year of moderating home prices, it appears home value appreciation is about to reaccelerate. Skylar Olsen, Director of Economic Research at Zillow, explained in a recent article:

 “A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it’s set to reverse back.”

CoreLogic, in their January 2020 Market Pulse Report, agrees with Olsen, projecting home value appreciation in all fifty states this year. Here’s the breakdown:

  • 21 states appreciating 5% or more
  • 26 states appreciating between 3-5%
  • Only 3 states appreciating less than 3%

The Misconception

Many believe when real estate values are increasing, owning a home becomes less affordable. That misconception is not necessarily true.

In most cases, homes are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by almost a full percentage point since this time last year.

Another major piece of the equation is a buyer’s income. The median family income has risen by 5% over the last year, contributing to the affordability factor.

Black Knight, in their latest Mortgage Monitor, addressed this exact issue:

 “Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10% over that same span due to falling interest rates…

Put another way, prospective homebuyers can now purchase a $48K more expensive home than a year ago while still paying the same in principal and interest, a 16% increase in buying power.”

Bottom Line

If you’re thinking about purchasing a home, realize that homes are still affordable even though prices are increasing. As the Black Knight report concluded:

“Even with home price growth accelerating, today’s low-interest-rate environment has made home affordability the best it’s been since early 2018.”


Source: Michigan Real Estate Updates

How the Housing Market Benefits with Uncertainty in the World

 

How the Housing Market Benefits with Uncertainty in the World

How the Housing Market Benefits with Uncertainty in the World | Simplifying The Market

It’s hard to listen to today’s news without hearing about the uncertainty surrounding global markets, the spread of the coronavirus, and tensions in the Middle East, just to name a few. These concerns have caused some to question their investment plans going forward.

As an example, in Vanguard’s Global Outlook for 2020, the fund explains,

“Slowing global growth and elevated uncertainty create a fragile backdrop for markets in 2020 and beyond.”

Is there a silver lining to this cloud of doubt?

Some worry this could cause concern for the U.S. housing market. The uncertainty, however, may actually mean good news for real estate.

Mark Fleming, Chief Economist at First American, discussed the situation in a recent report,

“Global events and uncertainty…impact the U.S. economy, and more specifically, the U.S. housing market…U.S. bonds, backed by the full faith and credit of the U.S. government, are widely considered the safest investments in the world. When global investors sense increased uncertainty, there is a ‘flight to safety’ in U.S. Treasury bonds, which causes their price to go up, and their yield to go down.”

Last week, in a HousingWire article, Kathleen Howley reaffirmed Fleming’s point,

“The death toll from the coronavirus already has passed Severe Acute Respiratory Syndrome, or SARS, that bruised the world’s economy in 2003…That’s making investors around the world anxious, and when they get anxious, they tend to sell off stocks and seek the safe haven of U.S. bonds. An increase in competition for bonds means investors, including the people who buy mortgage-backed bonds, have to take lower yields. That translates into lower mortgage rates.”

The yield from treasury bonds is the rate investors receive when they purchase the bond. Historically, when the treasury rate moves up or down, the 30-year mortgage rate follows. Here’s a powerful graph showing the relationship between the two over the last 48 years:Popular Perspective Delivers Gift to U.S. Housing Market | Simplifying The MarketHow might concerns about global challenges impact the housing market in 2020? Fleming explains,

“Even a small change in the 10-year Treasury due to increased uncertainty, let’s say a slight drop to 1.6 percent, would imply a 30-year, fixed mortgage rate as low as 3.3 percent. Assuming no change in household income, that would mean a house-buying power gain of $21,000, a five percent increase.”

Bottom Line

For a multitude of reasons, 2020 could be a challenging year. It seems, however, real estate will do just fine. As Fleming concluded in his report:

“Amid uncertainty, the house-buying power of U.S. consumers can benefit significantly.”


Source: Michigan Real Estate Updates

Community or Age in Place? 

Community or Age in Place?

The Many Benefits of Aging in a Community | Simplifying The Market

There’s comfort in being around people who share common interests, goals, and challenges. That comfort in a community doesn’t wane with age – it actually deepens. Whether it’s proudly talking about grandchildren or lamenting the fact that our eyes aren’t as good as they used to be, it helps to be around people who not only understand what we’re saying but actually feel the same joys and concerns as well.

That’s why many boomers are deciding to move into an active adult community. In the latest 55places National Housing Survey, they were described by one out of three seniors as an “outgoing, social community of likeminded people.”

Bill Ness, Chief Executive Officer and Founder of 55places.com, explains:

“Baby boomers are now reaching the age when moving to an active adult community is the ideal opportunity for them…Many boomers now want to downsize, experience a maintenance-free lifestyle, and pursue more social opportunities. It’s exciting that there are so many choices for baby boomers.”

There’s still a desire, however, among many seniors to “age-in-place.” According to the Senior Resource Guide, aging-in-place means:

“…that you will be remaining in your own home for the later years of your life; not moving into a smaller home, assisted living, or a retirement community etcetera.”

The challenge is, many seniors live in suburban or rural areas, and that often necessitates driving significant distances to see friends or attend other social engagements. A recent report from the Joint Center for Housing Studies of Harvard University (JCHS) titled Housing America’s Older Adults addressed this exact concern:

“The growing concentration of older households in outlying communities presents major challenges for residents and service providers alike. Single-family homes make up most of the housing stock in low-density areas, and residents typically need to be able to drive to do errands, see doctors, and socialize.”

The Kiplinger report also chimed in on this subject:

“While most seniors say they want to age in place, a much smaller percentage of them actually manage to accomplish it, studies show. Transportation is often a problem; when you can no longer drive, you can’t get to medical appointments or to other outings.”

Driving may not be a challenge right now, but think about what it may be like to drive 10, 20, or 30 years down the road.

There are also health challenges brought on by a possible lack of socialization when living at home versus a community of seniors. Sarah J. Stevenson is an author who writes about seniors. In a recent blog post for A Place for Mom, she explains:

“Social contacts tend to decrease as we age for reasons such as retirement, the death of friends and family, or lack of mobility.”

Thankfully, research from the same article suggests if you’re spending time with others in a community, thus reducing the impact of loneliness and isolation, there’s less of a risk of developing high blood pressure, obesity, heart disease, a weakened immune system, depression, anxiety, cognitive decline, Alzheimer’s disease, and early death.

Though the familiarity of our current home may bring a feeling of warmth, comfort, and convenience, it’s important to understand that staying there may mean missing out on crucial socialization opportunities. Living with adult children, joining a retirement community, or moving to an assisted living facility can help us continue to be with people we enjoy every day.

Bottom Line

“Aging-in-place” definitely has its advantages, but it could mean getting “stuck-in-place” too. There are many health benefits derived from socialization with a community of people that shares common interests. It’s important to take the need for human interaction into consideration when making a decision about where to spend the later years in life.

If you or someone you know is interested in learning more about options, reach out and we can talk.

MESSAGE JOHN

Source: Michigan Real Estate Updates

Georgetown Township 3 Bedroom house for sale

1641 Rosewood, Jenison MI 49428

Move right in! This excellent 3 bedroom ranch features 2 stall attached garage, finished basement, 2 fireplaces, large 14 x 28 deck with hot tub, fenced in back yard and many nice updates including new carpeting, painting, wet bar and more. Located just down the street from Rosewood Park, with sidewalks and easy road access to several local places including schools, grocery stores, restaurants and more.

Rosewood Park – A short walk on the sidewalk just a few doors down the street.