Open House Schedules for the weekend of October 13 and 14!

October 12 2018 Paul Mychalowych Leave a comment Blog / General

OPEN HOUSE
📣 4021 COMMERCE Road, Orchard Lake 48324 with Chris on Sunday 1 PM to 4 PM

http://tours.mixedmediaco.com/83581/4021-commerce-rd-west-bloomfield-township-mi-48324

218010679
Seller will entertain offers between $2,000,000 – $2,350,000. The pictures are good but you need to see this house to experience it. Overlooking the most sought after lake in Michigan, is this Aspen inspired gem. Breathtaking views of the lake from every room, the entire back of the house is glass. Spectacular unconventional design, two grand staircases with wood/iron detailing, and an elevator that goes to all 3 levels. Soaring 2 story Great Room with detailed moldings, floor to ceiling windows. Barrel roof and wood trim detailing in family room and spacious library with gorgeous Brazilian hardwood floors and 3 walls of bay windows. Amazing kitchen with Cherry LaFata cabinets, enormous granite island with second sink, SS top-of-the-line appliances including Thermador 8 burner oven/stove. Grand master suite with his/hers closets, huge bath with euro shower, separate jetted tub, his/hers vanities with space left over for a couch! Two other En-suites with walk-in closets

OPEN HOUSE
📣 3007 N. Vermont Royal Oaks with Chris on Saturday 12 PM to 2 PM and Leslie on Sunday 2 PM to 4 PM

http://nexthomecityrealty.com/listings/0,130184/3007-North-Vermont-Avenue-Royal-Oak-MI-48073/

218075412
Immaculate Royal Oak brick bungalow in popular Red Run Heights neighborhood just blocks away from Red Run Golf Club and Red Run Park. This move-in ready 3 bedrooms home has 2 full baths, all beautifully updated in 2015. Kitchen offers granite counter tops, stainless steel appliances and ceramic floors. Beautiful hardwood floors on main level with a spacious family room that includes a gas fireplace and tons of natural light. Spacious Master bedroom has beautiful master bath and lots of closet space. Large finished basement for additional living space. Fully landscaped fenced in back yard with mature trees and large deck, perfect for outdoor entertaining. Welcome to your new home! Licensed agent must be present at all showings.

OPEN HOUSE
📣 4224 Coastal Parkway, White Lake Township with Paul on Sunday 3 PM to 5 PM

http://nexthomecityrealty.com/listings/0,132920/4224-Coastal-Parkway-White-Lake-Township-MI-48386/

218096091

No need to go any further north, this custom built colonial feels like a vacation destination. Spectacular lake views of quiet, serene Fully’s lake from every room. Soaring great room with 20′ tall windows that offer gorgeous sunset views. Open and airy floor plan creates the perfect entertaining space. Large kitchen with stainless steel appliances, ceramic tile backsplash and large island with seating. Separate breakfast area with sliding glass doors to one of 2 covered decks. First floor master bedroom with lake views and private deck, ensuite with marble bath and his/hers closets. Upstairs boasts beautiful elevated views from the bridge overlooking great room, and two large bedrooms connected by a jack/jill bath. One bedroom also has sliding doors that lead out to a private covered deck. Lower level has a family room with gas fireplace, dining area, library/den, sewing room and huge recreation area with wet bar. All that and still tons of storage room. BATVAI

OPEN HOUSE
📣 102 E Hickory Grove, Bloomfield on Sunday with Paul
12 PM to 2 PM

http://tours.mixedmediaco.com/97431/102-east-hickory-grove-bloomfield-hills-mi-48304

Totally renovated in the last few years. Gorgeous new kitchen with white wood cabinets with soft close doors, quartz countertops and patterned aluminum backsplash. New laminate floor that looks like ceramic tile! Refinished, original wood floors on first floor, new carpet upstairs and in lower level, new Theratru doors and Oxbow windows. Freshly painted in soft, neutral palate. Updated baths. Upstairs bath is a European “wet room” which makes it 100% waterproof! Barrier free shower and euro modern fixtures. Three spacious bedrooms. Lower level is partially finished with small bar area and large rec. room. One car shared garage. Private rear patio. Furnace has had major overhaul, only the body is old. Amazing location!! Close to downtown Birmingham and easy access to I-75 too. Award winning Bloomfield Hills schools.

OPEN HOUSE
📣 807 E Fourteen Mile, Birmingham with Paul on Sunday 10 AM to 12 PM

http://nexthomecityrealty.com/listings/0,130334/807-East-Fourteen-Mile-Road-Birmingham-MI-48009/

218075978
Charming Birmingham ranch with tons of potential! Open and spacious floor plan. Two generous bedrooms and a beautiful tiled bathroom. Kitchen boasts lovely blue tiled accents, and all appliances stay! Back door opens to small deck overlooking the large, grassy yard. Oversized one car garage with tons of storage. Ideal location close to downtown Birmingham with it’s shops, restaurants, markets and activities. Nearby Woodward and access to freeways make your commute quick and easy.

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OPEN HOUSE📣608 Amelia Avenue, Royal Oak with Chris on Saturday 2:30 PM to 4:30 PM
http://nexthomecityrealty.com/listings/0,133437/608-Amelia-Avenue-Royal-Oak-MI-48073/

218100239
Fabulous freshly painted Bi-Level home with tons of updates! Gorgeous new kitchen with neutral granite countertops, ceramic tile floor, glass backsplash and newer Refrigerator. Huge living room and separate family room with beautiful hardwood floors. 3 spacious bedrooms all with original hardwood floors and custom blinds. Spacious, updated bath. Large fenced yard with perennial gardens and new retaining wall around lower patio. Ideal location close to quaint downtown Clawson’s shopping and restaurants, and easy access to malls and expressways. This one won’t last long!

“How’s the Market?” What’s Ahead for Real Estate

October 9 2018 Paul Mychalowych Leave a comment Blog / General

While no one can predict the future with certainty, most experts expect to see modest growth in the U.S. housing market for the remainder of this year and next. Inventory will remain tight, mortgage rates will continue to creep up, and affordability will remain a major issue in many parts of the country.

So what does that mean for home buyers and sellers? To answer that question, we take a closer look at some of the top indicators.

CONTINUED GROWTH IN HOUSING MARKET

There’s good news for homebuyers! In many markets across the country, prices have begun to stabilize after a period of rapid appreciation. Nationwide, home sales experienced a slight decline of 1.6 percent in the second quarter, primarily due to higher mortgage rates and housing prices combined with limited inventory.

However, buyers who have been waiting on the sidelines in anticipation of a big price drop may be disappointed. Demand remains strong across the sector and prices continue to rise. The Case-Shiller U.S. National Home Price Index reported a 6.2 percent annual gain in June, a healthy but sustainable rate of appreciation.¹

In its latest Outlook Report, Freddie Mac forecasts continued growth in the housing market due to a strong economy and low unemployment rate, which dropped to 3.9 percent in July.²

“The housing market hit some speed bumps this summer, with many prospective homebuyers slowed by not enough moderately-priced homes for sale and higher home prices and mortgage rates,” according to Sam Khater, Chief Economist at Freddie Mac. “The good news is, the economy and labor market are very healthy right now, and mortgage rates, after surging earlier this year, have stabilized in recent months. These factors should continue to create solid buyer demand, and ultimately an uptick in sales, in most parts of the country in the months ahead.”³

INVENTORY TO REMAIN TIGHT, NEW CONSTRUCTION MAY HELP

Experts predict that demand for housing will continue to outpace available supply, especially in the entry-level price range.

“Today, even as mortgage rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory accompanying unsustainable home-price increase,” said National Association of Realtors (NAR) Chief Economist Lawrence Yun in a recent release.

“The answer is to encourage builders to increase supply, and there is a good probability for solid home sales growth once the supply issue is addressed,” said Yun. Additional inventory will also help contain rapid home price growth and open up the market to prospective homebuyers who are consequently—and increasingly—being priced out. In the end, slower price growth is healthier price growth.”⁴

With so much demand, why aren’t more builders bringing inventory to the market? According to the National Association of Home Builders, a crackdown on immigration and tariffs on imported lumber have made home construction more difficult and expensive. Those factors—combined with the rising cost of land and increased zoning requirements—have put a damper on the industry overall.⁵

Still, there’s evidence that a modest rise in the rate of new building projects may be on the way. Freddie Mac predicts new housing construction will increase slightly after a stall last quarter.² And a recent report by Freedonia Focus Reports forecasts an annual increase in housing starts of 2.4 percent through 2022, led by an uptick in single-family homes.⁶The boost in inventory should help drive sales growth and relieve some of the pent-up demand in tight markets.

While the current lack of inventory is generally preferred by sellers because it means less competition, a combination of high prices and rising interest rates has narrowed the pool of potential buyers who can afford to enter the market. Sellers should seek out real estate agents who utilize technologically-advanced marketing tactics to reach qualified buyers in their area.

AFFORDABILITY REACHES LOWEST LEVEL IN A DECADE

According to a recent report by Morgan Stanley, Americans are paying the most in monthly mortgage payments relative to their incomes since 2008.⁷ And prices aren’t expected to come down any time soon.

“We believe that the current supply and demand environment will continue to push home prices higher, just at a decelerating pace,” said John Egan, Morgan Stanley’s Co-Head of U.S. Housing Strategy.

Fortunately, economists aren’t concerned about affordability levels triggering another housing crisis, as lending standards are much higher today than they were during the run-up before the recession. According to credit reporting agency TransUnion, the share of homeowners who made mortgage payments more than 60-days past due fell in the second quarter to 1.7 percent, the lowest level since the market crash.⁷

NAR Chief Economist Lawrence Yun agreed with this assessment in a recent statement. “Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher than normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession.”⁴

MORTGAGE RATES EXPECTED TO CONTINUE RISING

The Federal Reserve has taken measures to help keep the housing market—and the overall economy—from overheating. It has raised interest rates twice this year so far, causing mortgage rates to surge in the first half of the year.

Economists predict that the rise in mortgage rates will continue at a more gradual rate through this year and next. The U.S. weekly average mortgage rate rose from 3.99 percent in the first week of January to as high as 4.66 percent in May. Freddy Mac forecasts an average rate of 4.6 percent for 2018 and 5.1 percent in 2019.²

The good news is, mortgage rates still remain near historic lows and a whopping 14 points below the recorded high of 18.63 percent in the early 1980s.⁸ Buyers who have been on the fence may want to act soon to lock in an affordable interest rate … before rates climb higher.

“Some consumers may be thinking that because mortgage rates are higher than they were a year ago, maybe I should just wait until rates fall down again,” said NAR’s Chief Economist Lawrence Yun in a recent speech. “Well, they will be waiting forever.”⁹

WHAT DOES IT ALL MEAN FOR ME?

If you’ve been waiting to buy a home, you may want to act now. A shortage of available homes on the market means prices are likely to keep going up. And a lack of affordable rental inventory means rents are expected to rise, as well.

If you buy now, you will benefit from appreciating property values while locking in an historically-low interest rate on your mortgage. Waiting to buy could mean paying more for your home as prices increase and paying higher interest on your mortgage as rates continue to rise.

And if you’re in the market to sell your home, there’s no need to wait any longer. Prices have begun to stabilize, and rising interest rates could decrease the number of available buyers for your home. Act now to take advantage of this strong seller’s market.

LET’S GET MOVING

While national real estate numbers and predictions can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood.

If you have specific questions or would like more information about where we see real estate headed in our area, let us know! We’re here to help you navigate this changing real estate landscape.
Sources:

S&P Dow Jones Indices Press Release –
https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/766551_cshomeprice-release-0828.pdf?force_download=true
Freddie Mac Outlook Report –
http://www.freddiemac.com/research/forecast/20180827_strong_economic_growth.html
DSNews –
https://dsnews.com/daily-dose/08-28-2018/freddie-weighs-in-on-housing-market
PR Newswire –
https://www.prnewswire.com/news-releases/realtors-chief-economist-reflects-on-past-recession-whats-ahead-for-housing-300702632.html
CNN Money –
https://www.keyt.com/lifestyle/where-is-the-us-housing-market-headed-4-things-you-need-to-know/787471572
PR Newswire –
https://www.prnewswire.com/news-releases/us-housing-starts-to-rise-2-4-yearly-to-2022–300711989.html
Business Insider –
https://www.businessinsider.com/housing-affordability-slowing-market-sales-2018-8
Value Penguin –
https://www.valuepenguin.com/mortgages/historical-mortgage-rates
Times Free Press –
https://www.timesfreepress.com/news/business/aroundregion/story/2018/aug/14/despite-prospects-higher-mortgage-rateshousin/476979/

Buying a Home is Cheaper than Renting in 38 States! [INFOGRAPHIC]

October 9 2018 Paul Mychalowych Leave a comment Blog / General

Some Highlights:
According to a study by GOBankingRates, it is cheaper to buy a home than rent in 38 states across the country.
In six states the difference between buying & renting would account for less than a $50 monthly difference, leaving the choice up to the individual family.
Nationwide, it is now 26.3% cheaper to buy.

2 Factors to Watch in Today’s Real Estate Market Whether Buying or Selling

October 9 2018 Paul Mychalowych Leave a comment Blog / General

When it comes to buying or selling a home there are many factors you should consider. Where you want to live, why you want to buy or sell, and who will help you along your journey are just some of those factors. When it comes to today’s real estate market, though, the top two factors to consider are what’s happening with interest rates & inventory.

Interest Rates
Mortgage interest rates have been on the rise and are now over three-quarters of a percentage point higher than they were at the beginning of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.72% for a 30-year fixed rate mortgage last week.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be over 5% by this time next year.

Inventory
A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 4.3-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 78 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last three months.

The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, in June, July, and August, inventory levels have started to increase as compared to the same time last year.

This is a trend to watch as we move further into the fall and winter months. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line
If you are planning to enter the housing market, either as a buyer or a seller, let’s get together to discuss the changes in mortgage interest rates and inventory and what they could mean for you.

The True Cost of NOT Owning Your Home

October 9 2018 Paul Mychalowych Leave a comment Blog / General

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for the entirety of America’s existence.

Realtor.com reported that:

“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option…as people get more savings in their pockets, buying becomes the better option.”

What proof exists that owning is financially better than renting?
1. In a previous blog, we highlighted the top 5 financial benefits of homeownership:

Homeownership is a form of forced savings.
Homeownership provides tax savings.
Homeownership allows you to lock in your monthly housing cost.
Buying a home is cheaper than renting.
No other investment lets you live inside of it.
2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.

3. Less than a month ago, we explained that a family that purchased an average-priced home at the beginning of 2018 could build more than $49,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!

Bottom Line
Owning your home has many social and financial benefits that cannot be achieved by renting.

Open House schedules this Weekend of October 6 and 7!

October 5 2018 Paul Mychalowych Leave a comment Blog / General

A fresh new listing and 2 more exciting properties OPEN this weekend.

OPEN HOUSE
📣 4021 COMMERCE Road, Orchard Lake 48324 with Chris on Saturday 3 PM to 5 PM and Sunday 12 PM to 2 PM

http://tours.mixedmediaco.com/83581/4021-commerce-rd-west-bloomfield-township-mi-48324

OPEN HOUSE
📣 3007 N. Vermont with Leslie on Saturday 1 PM to 3 PM and Sunday 3 PM to 5 PM

http://nexthomecityrealty.com/listings/0,130184/3007-North-Vermont-Avenue-Royal-Oak-MI-48073/

OPEN HOUSE
📣 4224 Coastal Parkway, White Lake Township with Chris on Saturday 12 PM to 2 PM and Sunday 3 PM to 5 PM

http://nexthomecityrealty.com/listings/0,132920/4224-Coastal-Parkway-White-Lake-Township-MI-48386/

218096091

See you there! For more pictures and details. Here.

The Cost of NOT Paying PMI

October 3 2018 Paul Mychalowych Leave a comment Blog / General

Saving for a down payment is often the biggest hurdle for a first-time homebuyer as median incomes, rents, and home prices all vary depending on where you live.

There is a common misconception among homebuyers that a 20% down payment is required, and it is this limiting belief that often adds months, and sometimes even years, to the home-buying process.

So, if you can purchase a home with less than a 20% down payment… why aren’t more people doing just that?
One Possible Answer: Private Mortgage Insurance (PMI)

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. The monthly cost of your PMI depends on the home’s value, the amount of your down payment, and your credit score.

Below is a table showing the difference in monthly mortgage payment for a $250,000 home with a 3% down payment and PMI vs. a 20% down payment without PMI:

The first thing you see when looking at the table above is no doubt the added $320 a month that you would be spending on your monthly mortgage cost. The second thing that should stand out is that a 20% down payment is $50,000!

If you are buying your first home, $50,000 is a large sum of money that takes discipline and sacrifice to save. Many first-time buyers save for 5-10 years before buying their homes.

To save $50,000 in 10 years, you would need to save about $420 a month. On the other hand, if you save that same $420 a month, you could afford a 3% down payment in less than a year and a half.

In a recent article by My Mortgage Insider, they explain what could happen in the market while you are waiting to save for a higher down payment:

“The time it takes to save a (larger) down payment could mean higher home prices and tougher qualifying down the road. For many buyers, it could prove much cheaper and quicker to opt for the 3% down mortgage immediately.”

The article went on to say,

“Since renters typically devote a higher percentage of their income to housing than homeowners, providing flexible down payment options can help renters with solid earnings purchase a home – and gain a fixed-rate mortgage with principal and interest payments that will not increase over the life of the loan.”

If the prospect of having to pay PMI is holding you back from buying a home today, Freddie Mac has this advice,

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Based on results of the most recent Home Price Expectation Survey, a homeowner who purchased a $250,000 home in January would gain $50,000 in equity over the next five years based on home price appreciation alone (shown below).

Bottom Line
If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family.

Where Are Mortgage Interest Rates Headed In 2019?

October 3 2018 Paul Mychalowych Leave a comment Blog / General

The interest rate you pay on your home mortgage has a direct impact on your monthly payment; the higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily over the course of the next year.

How Will This Impact Your Mortgage Payment?
Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.2% from this time last year and are predicted to be 5.1% higher next year.

If both the predictions of home price and interest rate increases become a reality, families would wind up paying considerably more for their next homes.

Bottom Line
Even a small increase in interest rate can impact your family’s wealth, so don’t wait until next year! Let’s get together to evaluate your ability to purchase your dream home now.

Are Home Prices Softening or Are They Falling?

October 3 2018 Paul Mychalowych Leave a comment Blog / General

We are beginning to see reports that more housing inventory is coming to the market and that buyer demand may not be increasing at the same pace it did earlier this year. The result will be many headlines written to address the impact that these two situations will have on home values.

Many of these headline writers will confuse “softening home prices” with “falling home prices,” but there is a major difference between the two.

The data will begin to show that home values are not appreciating at the same levels as they had over the last several years (softening prices). This does NOT mean that prices are depreciating (falling prices).

Here is an example: Over the last several years, national home values increased by more than 6% annually. If you had a home worth $300,000 at the beginning of the year, it would be worth $318,000 by year’s end. If the appreciation rate “falls” to 4%, that $300,000 house would be worth $312,000 at the end of next year – a $6,000 difference.

The price of the home did not fall. It just didn’t increase at the level it had the previous year.

Appreciation rates are projected to end this year at approximately 5%, and then drop to somewhere between 4-5% next year. This drop in appreciation rate will cause home price increases to soften.

Again, this does not mean that home prices will depreciate, but instead that they will appreciate more slowly.
Bottom Line
Be careful when reading headlines that discuss home values. Some headline writers will be legitimately confused and will use the word falling in place of softening. Others will realize that the headline “Home Prices are Falling!” will get more clicks than “Home Prices are Softening” and will intentionally write the more compelling headline. Read the article. If the word depreciation is not mentioned, home values are not falling.

Should I Buy Now? Or Wait Until Next Year? [INFOGRAPHIC]

October 3 2018 Paul Mychalowych Leave a comment Blog / General

Some Highlights:
The cost of waiting to buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
Freddie Mac predicts interest rates to rise to 5.2% by the third quarter of 2019.
CoreLogic predicts home prices to appreciate by 5.1% over the next 12 months.
If you are ready and willing to buy your dream home, find out if you are able to!

NextHome City Realty

Marketing Fine Homes in the Suburbs of Detroit

Open House Schedules for the weekend of October 13 and 14!

“How’s the Market?” What’s Ahead for Real Estate

Buying a Home is Cheaper than Renting in 38 States! [INFOGRAPHIC]

2 Factors to Watch in Today’s Real Estate Market Whether Buying or Selling

The True Cost of NOT Owning Your Home

Open House schedules this Weekend of October 6 and 7!

The Cost of NOT Paying PMI

Where Are Mortgage Interest Rates Headed In 2019?

Are Home Prices Softening or Are They Falling?

Should I Buy Now? Or Wait Until Next Year? [INFOGRAPHIC]