Your Charlotte Real Estate Blog 

Jan. 21, 2022

Mortgage Rates Climbing, Now’s the Time To Buy

With Mortgage Rates Climbing, Now’s the Time To Act

With Mortgage Rates Climbing, Now’s the Time To Act | MyKCM

Last week, the average 30-year fixed mortgage rate from Freddie Mac jumped from 3.22% to 3.45%. That’s the highest point it’s been in almost two years. If you’re thinking about buying a home, this news may have come as a bit of a shock. But the truth is, it wasn’t entirely unexpected. Experts have been calling for rates to rise in their 2022 projections, and the forecast is now becoming a reality. Here’s a look at the projections from Freddie Mac for this year:

  • Q1 2022: 3.4%
  • Q2 2022: 3.5%
  • Q3 2022: 3.6%
  • Q4 2022: 3.7%

As the numbers show, this jump in rates is in line with the expectations from Freddie Mac. And what they also indicate is that mortgage rates are projected to continue climbing throughout the year. But should you be worried about rising mortgage rates? What does that really mean for you?

As rates increase even modestly, they impact your monthly mortgage payment and overall affordability. If you’re looking to buy a home, rising mortgage rates should be an incentive to act sooner rather than later.

The good news is, even though rates are climbing, they’re still worth taking advantage of. Historical data shows that today’s rate, even at 3.45%, is still well below the average for each of the last five decades (see chart below):

With Mortgage Rates Climbing, Now’s the Time To Act | MyKCM

That means you still have a great opportunity to buy now with a rate that’s better than what your loved ones may have paid in decades past. If you buy a home while rates are in the mid-3s, your monthly mortgage payment will be locked in at that rate for the life of your loan. As you can see from the chart above, a lot can change in that time frame. Buying now is a great way to protect yourself from rising costs and future rate increases while also securing your payment amount for the long term.

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

Mortgage rates surged in the second week of the new year. The 30-year fixed mortgage rate rose to 3.45% from 3.22% the previous week. If inflation continues to grow at the current pace, rates will move up even faster in the following months.”

Bottom Line

Mortgage rates are increasing, and they’re forecast to be even higher by the end of 2022. If you’re planning to buy this year, acting soon may be your most affordable option. Let’s connect to start the homebuying process today.

Jan. 17, 2022

The Best Time to Sell Your Home

When Is the Right Time To Sell [INFOGRAPHIC]

When Is the Right Time To Sell [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re trying to decide when to list your house, the time is now. There are plenty of buyers eagerly waiting for your home to hit the market.
  • The latest data indicates home showings are rising. There are more buyers than homes for sale right now. That means you’ll likely receive multiple offers, and your home won’t be on the market long.
  • Today’s market favors sellers. If you’re ready to move, let’s meet to discuss the benefits you can expect when you sell this season.
Posted in Home Selling
Jan. 17, 2022

Housing Market Updates Charlotte NC and SC Housing News

Posted in Market Updates
Dec. 29, 2021

Key Things To Avoid After Applying for a Mortgage

Key Things To Avoid After Applying for a Mortgage

Key Things To Avoid After Applying for a Mortgage | MyKCM

Once you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting to start thinking about moving in and decorating your new place, but before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.

Here’s a list of things you shouldn’t do after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process.

1. Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender.

Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

2. Don’t Make Any Large Purchases Like a New Car or Furniture for Your Home.

New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Since higher ratios make for riskier loans, qualified borrowers may end up no longer qualifying for their mortgage.

3. Don’t Co-Sign Other Loans for Anyone.

When you co-sign, you’re obligated. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

4. Don’t Change Bank Accounts.

Remember, lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.

5. Don’t Apply for New Credit.

It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores can determine your interest rate and possibly even your eligibility for approval.

6. Don’t Close Any Credit Accounts.

Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

Dec. 28, 2021

The Average Homeowner Equity Gains in 2021

The Average Homeowner Gained $56,700 in Equity over the Past Year

The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM

When you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non-financial benefits, like the security or stability a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters.

For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. That’s exactly what’s happening today. There aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost.

Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:

Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.

To find out just how much rising home values have impacted equity, we turn to the latest Homeowner Equity Insights from CoreLogic. According to that report, the average homeowner’s equity has grown by $56,700 over the last 12 months.

Curious how your state stacks up? Check out the map below to find out the average equity gain for your area.The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM

How Rising Equity Impacts You

If you’re already a homeowner, equity not only builds your wealth, it also opens doors for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, especially if you’ve decided your needs have changed and you’re looking for something new.

If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth and gives you peace of mind that your investment is a wise one, not just from a lifestyle perspective, but from a financial one too.

Bottom Line

Whether you’re a current homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. If this inspires you to make a move, let’s connect to explore your options and find out what steps you need to take next.

Posted in Market Updates
Nov. 30, 2021

A Wave of Foreclosures --Not Any Time Soon!

Why a Wave of Foreclosures Is Not on the Way

Why a Wave of Foreclosures Is Not on the Way | MyKCM

With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won’t happen.

There are fewer homeowners in trouble this time

After the last housing crash, about 9.3 million households lost their homes to a foreclosure, short sale, or because they simply gave it back to the bank.

As stay-at-home orders were issued early last year, the fear was the pandemic would impact the housing industry in a similar way. Many projected up to 30% of all mortgage holders would enter the forbearance program. In reality, only 8.5% actually did, and that number is now down to 2.2%.

As of last Friday, the total number of mortgages still in forbearance stood at  1,221,000. That’s far fewer than the 9.3 million households that lost their homes just over a decade ago.

Most of the mortgages in forbearance have enough equity to sell their homes

Due to rapidly rising home prices over the last two years, of the 1.22 million homeowners currently in forbearance, 93% have at least 10% equity in their homes. This 10% equity is important because it enables homeowners to sell their homes and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.

The remaining 7% might not have the option to sell, but if the entire 7% of those 1.22 million homes went into foreclosure, that would total about 85,400 mortgages. To give that number context, here are the annual foreclosure numbers for the three years leading up to the pandemic:

  • 2017: 314,220
  • 2018: 279,040
  • 2019: 277,520

The probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures that impacted the housing crash 15 years ago. It’s actually less than one-third of any of the three years prior to the pandemic.

The current market can absorb listings coming to the market

When foreclosures hit the market back in 2008, there was an oversupply of houses for sale. It’s exactly the opposite today. In 2008, there was over a nine-month supply of listings on the market. Today, that number is less than a three-month supply. Here’s a graph showing the difference between the two markets.Why a Wave of Foreclosures Is Not on the Way | MyKCM

Bottom Line

The data indicates why Ivy Zelman, founder of the major housing market analytical firm Zelman and Associates, was on point when she stated:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

Posted in Market Updates
Nov. 26, 2021

The Path to Buying Your Home

Your Journey to Homeownership 

Your Journey to Homeownership [INFOGRAPHIC] | MyKCM

Some Highlights

  • When it comes to buying a home, there are a number of key milestones along the way.
  • The process includes everything from building your team and understanding your finances to going house hunting, making an offer, and more.
  • When you’re ready to start your journey, let’s connect so you have trusted guidance at every milestone in the process.
Posted in Home Buying Tips
Nov. 24, 2021

Home Sellers Bidding Wars Continue

Sellers:  In the Carolina's, you are still likely to be in a bidding war this winter.

Sellers: You’ll Likely Get Multiple Strong Offers This Season | MyKCM

Are you thinking about selling your house right now, but you’re not sure you’ll have the time to do so as the holidays draw near? If so, consider this: even as the holiday season approaches, there are plenty of buyers out there, and they really want your house. Here’s why selling this winter is a win for you.

Today’s buyers are still dealing with a limited number of homes for sale. Thanks to continued low inventory, those buyers are competing with one another for their dream home. And when that happens, if your house is one of the few on the market, it will rise to the top of the pool – and it will be worth it.

According to the latest data from the National Association of Realtors (NAR), the average seller received 3.7 offers on their house in September. For a view into what’s happening at the state level, take a look at the map below:Sellers: You’ll Likely Get Multiple Strong Offers This Season | MyKCMNationwide, the average seller today is getting nearly four offers. That number is significant because it means you’ll likely have multiple offers to pick from if you sell your house this season. To put things into perspective, no matter where your state falls, remember that you really only need one good offer to close the deal.

Any offer you receive will likely be from a highly motivated buyer who’s doing everything they can to beat the competition. The stakes for buyers are high. They’ve been looking for a house and they want to lock in their dream home before prices and mortgage rates rise further next year. Chances are, they’ll get creative with the terms of their offer, which could include waiving contingencies and offering over the asking price – both of which are great news for you.

If you’re on the fence about when to sell, remember your house is a hot commodity this season. As other sellers take a break for the holidays with plans to re-list their homes in the new year, you can put your house in front of motivated buyers by making your move today. That means your house will be the center of attention, and likely the center of a bidding war too.

Bottom Line

Selling now gives you even more opportunity to win big as buyers compete for your house in today’s market.

Posted in Home Selling
Nov. 22, 2021

Charlotte Market 2021 - Prepare for Bidding Wars

1. First - Hire a Realtor - Let them be your guide

Home Buyer Charlotte NC

Meet with a Realtor that is actively involved in the market. 

Things have drastically changed, and using someone that is a part-time agent will not be a good navigator in this lightening fast market.

The pandemic has changed business models and in doing so, have been offering a lot of work-from-home opportunities.

The domino effect is that our housing needs have changed and many are now using their homes to account for business, school, and family being home 24/7.

The need for home offices, quiet space for home schooling and tweaking our outdoor living spaces as well as the option to live in a new city, all circle back to the pandemic.

Charlotte is high on the list of relocation destinations - for its location, international airport, good weather, and lower taxes. 

Coupled with low interest rates, this rise in home buyers has caused our dwindling housing supply to be in a crisis mode. With lumber prices up, even new home sales have been unable to keep up with demand.

2. Understand the Market

As of May 2021, the Wall Street Journal noted that the overall U.S. listing inventory was down by 4 million homes. The current Charlotte market has been averaging a one-month supply of listings, where a 5 to 6-month supply is what a normal market would be like.

Charlotte home prices tend to run about 5.5% year over year. In the past year, prices have risen by 12.5%. It does not appear to be a bubble; it appears to be a price adjustment to the Charlotte market. 

Hesitating on a purchase, due to the competition or thinking the price will go down may end up pricing you out of a neighborhood that you can afford now. 

Case in point, neighborhoods that sold between $400,000 and $500,000 in the fall of 2020, now have starting prices of $500,000, and with competitive bidding being the new norm, any existing inventory that sells, will continue to drive those prices up.

So, the question is, can you afford to wait? 

The good side of this equation is that the lower interest rates (hovering around 3%) can be locked in for a 30 year loan - which is a win for any buyer in any market.

If you were thinking that a new home is what you want, things have also changed dramatically on that scene.  We have many home builders that are limiting each of their communities to lottery bids and then submitting just 4 new home contracts per month. This is due to quality control,  the rising costs of materials, namely lumber (up 24%), drywall (up 7%), steel (up 18%), copper (up 27%) and contractors tapped out with more than they can handle.

CNBC (5/2021) said the rise in lumber prices has added an additional $35,872 onto the price of an average single-family home.

Again, can you afford to wait?

3. The News

If you have tried to find the home of your dreams, and it sold before you could see it...that reflects what you are seeing, hearing and/or reading in the news. 

The reality is that the housing shortage is a national issue - one that has some long legs on it. We will likely be in this type of market for at least the next 2 to 3 years. For Charlotte area real estate, it has been a seller's market for about 5 years now. 

Following the law of supply and demand, the low supply of housing and the high demand from buyers will keep home prices on the rise.

Some buyers may initially think their agents just want the sale.

The more you are involved in the home buying process, the more you’ll listen to the advice of your Realtor...as aggressive and uncomfortable as that advice may be, the market and the process have both changed, yesterday's norms, no longer apply. 

4. Does the Highest Price automatically win?

Price is important, but there are other things — like a flexible closing date  — waiving contingencies, and first and foremost, being prepared from the start.

5. Cash or Carry

If you are buying your home with cash, you will need to show "proof of funds". 

If you will be carrying a loan, you will want your mortgage lender to be local. You will want your appraiser to be local - they know the local market.

As for your lender, they should be available to answer the phone and text back to you within a few hours. Written loan approvals need to be done within 14 days to compete with cash.

6. Time is of the Essence

signing online documents to buy a home A year or two ago, your agent may have placed a "Time is of the Essence" clause on your offer to purchase, trying to speed the homeowner into making a quick decision.

If the home you are bidding on just came on the market, it is likely already receiving multiple bids.

Knowing it is a new listing and the market is sizzling hot, the best thing you can do is put your "highest and best" offer in from the start. 

The seller's agent can send a notice out to all agents, stating that "highest and best" bids will need to be in by a certain time and date. This is usually just 2 to 3 days from the home becoming active.

That being said, the homeowner can also just accept an offer and cancel all incoming showings. 

A call out for "Highest and Best" is a courtesy to the Buyer's Agents and their clients.

Some offers are too hard to say no to. You may not get a second chance to adjust your bid.

7. Jump!

As a home buyer, you will fast come to realize that the competition is more intense over some homes than others.

You have no time to dawdle when it comes to viewing a home.

You need a buyer's agent that is dedicated to you so they can get that appointment scheduled and/or run out and video the home if you are out of town.

The home may only be on the market for two days before the seller's agent calls for 'highest and best' bids to be given. Which means, you lost the opportunity. 

Those that have lost 5-6-7 bids, are on the hunt and they have a new objective...it's to win the bid, before they get outpriced by the market itself.

8. How to Sweeten the Offer

In this competitive market, the days of a 1 percent fee to cover the earnest money deposit and the due diligence fee are over.

In North Carolina, the Due Diligence fee is ruling the day.

In the Charlotte market, we're seeing Due Diligence fees range anywhere from $10,000 to $30,000 (on a $500,000 home) and even as much as $100,000 on higher priced homes. 

The Due Diligence fee comes back to you on the day of closing and can be applied to the home purchase. It's back to being your money. However, if you walk from the contract, the due diligence fee is then the seller's to keep. 

9. The Listing Price is the Opening Bid

My, how things have changed.

Your Realtor (buyer's agent) will have all the tools, software and stats to help you gauge where to place your bid and how to structure your offer to put you in the winner's seat. 

10. As-Is and Home Inspections

In North Carolina, the Offer to Purchase states that the seller is selling the home AS-IS.

This does not mean you should waive your right of a home inspection.

It does mean that the homeowner doesn't have to fix anything. But, as the home buyer, you can still ask that they fix (or offset the cost of repair financially) by using the Due Diligence Repair Request. 

The suggestion would be to request repairs that are a safety issue, such as structural, electrical, plumbing, radon, or mold. 

Again, they can say no... but, they can also agree to do the repairs. 

11. What's a good deal look like?

A “good deal” is getting the house.

As a home buyer, you are not in charge. You are at the mercy of the market and the mercy of your finances. Over 67% of homes are going into a bidding war.

Shopping for a lower priced home allows you to stay in your budget.

It will also afford you the ability to get in the bidding war and win the bid. 

12. Top Tips

Hire a great buyer's agent (preferably a Realtor, as they are obligated to a Code of Ethics).

Be financially prepared.

It is a very tense market for all involved.

Be quick and then be patient. 

The seller has a stacked deck - navigate the market accordingly.

Posted in How To Tips
Nov. 22, 2021

Home Sales About To Surge? We May See a Winter Like Never Before.

Home Sales About To Surge? We May See a Winter Like Never Before.

Home Sales About To Surge? We May See a Winter Like Never Before. | MyKCM

Like most industries, residential real estate has a seasonality to it. For example, toy stores sell more toys in October, November, and December than they do in any other three-month span throughout the year. More cars are sold in the U.S. during the second quarter (April, May, and June) than in any other quarter of the year.

Real estate is very similar. The number of homes sold in the spring is almost always much greater than at any other time of the year. It’s even labeled as the spring buying season. Historically, the number of buyers and listings for sale significantly increase in the spring and remains strong throughout the summer. Once fall sets in, the number of buyers and sellers typically drops off.

Last year, however, that seasonality didn’t happen. The outbreak of the virus and subsequent slowing of the economy limited sales during the spring market. These sales were pushed back later in the year, and last fall and winter saw a dramatic increase in home sales over previous years. The only thing that held the market back was the extremely limited supply of homes for sale.

What About This Winter?

Some experts thought we’d return to the industry’s normal seasonality this winter with both the number of purchasers and houses available for sale falling off. However, data now shows that neither of those situations will likely occur. Buyer demand is still extremely strong, and it appears we may soon see a somewhat uncharacteristic increase in the number of homes coming to the market.

Buyer Demand Remains Strong

The latest Showing Index from ShowingTime, which tracks the average number of monthly showings on available homes, indicates buyer activity was slightly lower than at the same time last year but much higher than any of the three previous years (see chart below):Home Sales About To Surge? We May See a Winter Like Never Before. | MyKCMreport from realtor.com confirms buying activity remains strong in the existing home sales market:

“New housing data shows 2021's feverish home sales pace broke a yearly record in October, . . . with last month marking the eighth straight month of buyers snatching up homes more quickly than the fastest pace in previous years. . . .”

Buyer activity for newly constructed homes is also very strong. Ali Wolf, Chief Economist for Zondarecently reported that Stuart Miller, the Executive Chairman of Lennar, one of the nation’s largest home builders, said this about demand:

“There is still a great deal of demand at our sales centers with people lining up and not enough supply.”

The only question heading into this winter is whether the number of listings available could come close to meeting this buyer demand. We may have just received the answer to that question.

Sellers Are About To List – Right Now

Instead of waiting for the normal spring buying market, new research indicates that homeowners thinking about selling are about to put their homes on the market this winter.

Speaking to the release of a report on this recent research, George Ratiu, Manager of Economic Research for realtor.com, said:

“The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter.

Here are some highlights in the report:

Of homeowners planning to enter the market in the next year:

  • 65% - Have just listed (19%) or plan to list this winter
  • 93% - Have already taken steps toward listing their home, including working with an agent (28%)
  • 36% - Have researched the value of their home and others in their neighborhood
  • 36% - Have started making repairs or decluttering

The report also discusses the reasons sellers want to move:

  • 33% - Have realized they want different home features
  • 37% - Say their home no longer meets their family's needs
  • 32% - Want to move closer to friends and family
  • 23% - Are looking for a home office

Data shows buyer demand remains unusually strong going into this winter. Research indicates the supply of inventory is about to increase. This could be a winter real estate market like never before.

Bottom Line

If you’re thinking of buying or selling, now is the time to have a heart-to-heart conversation with your real estate professional, as things are about to change in an unexpected way.

Posted in Market Updates