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How Rising Prices Will Help You Build Family Wealth In 2018

legacy-rising prices

Over the next five years, home prices are expected to appreciate on average by 3.35% per year and to grow by 24.34% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

So, what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchases and closes on a $250,000 home this month (January). If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

legacy-rising prices graph

Since the experts predict that home prices will increase by 4.2% in 2018, the young homeowners will have gained $10,500 in equity in just one year.

Over a five-year period, their equity will increase by nearly $45,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

What does this mean to you?

Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!

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Double-Digit Growth in the Wild West: Is a Bubble Next?

Row of new houses painted various colors in Seattle WA

Demand is forcing home prices out West to keep ticking up, even though the home-buying and -selling season is winding down, according to the September Zillow® Real Estate Market Report. Appreciation is highest in the San Jose, Calif., and Seattle, Wash., metropolitan areas, where prices have rocketed (in order) 10.3 percent, to a median $1,052,500, and 12.4 percent, to a median $455,800, year-over-year. Appreciation nationally is 6.9 percent, to a median $202,700.

Rents out West are also on a swift upswing. Rents in Riverside, Calif. have climbed 6.0 percent year-over-year—the most of the metro areas in the report—to a median $1,833. Rents in Seattle have gone up 5.5 percent to a median $2,189; rents in Portland, Ore., have increased 4.7 percent to a median $1,863; and rents in Los Angeles, Calif., have risen 4.5 percent to $2,714. Appreciation nationally is 2 percent, to a median $1,430.

“In these West Coast markets, heightened demand is being met with limited supply of homes for sale, which naturally causes prices to rise,” says Dr. Svenja Gudell, chief economist at Zillow. “That limited supply and high demand dynamic is a widespread phenomenon impacting high-growth metros like Seattle, as well as slower-moving markets, like Indianapolis.

“It might be easy to assume another bubble is emerging, with home values growing 10 or 12 percent per year, but don’t worry—the market is reacting to basic economic laws, and is behaving exactly the way we would expect it to given good overall growth, limited supply of homes for sale and decent housing affordability thanks to low mortgage interest rates,” Gudell says.

Nationally, there are now 12 percent fewer homes for sale compared to one year ago, the report shows.

Zillow_Sept_17

 

article written by Suzanne De Vita, RISMedia’s online news editor.

4 Strong Reasons to Buy a Home Now

1. The price is right. The median single-family home price hit its lowest in more than a decade when it reached $154,600 in January, according to the National Association of REALTORS®. That was the lowest since October 2001. During the height of the housing market in July 2006, the median home price for a single-family home was $230,900. 

2. It’s cheaper to buy than rent. In nearly every major metro market, it is cheaper to buy a home than rent. Rents have been on the rise the last few years and are predicted to continue to rise. Meanwhile, home affordability is at record highs, which means that buying a home is more within reach to the median income family. 

3. Inventories of for-sale homes are shrinking. Ned Davis Research estimates that excess inventories of homes to be eliminated by the end of next year. “When excess supply dries up, people start building more new houses, which has the virtuous effect of reducing the unemployment rate and increasing the economy generally,” according to the USA Today article.

4. Mortgage rates are at record lows. Mortgage rates have hovered near record lows for weeks, which has helped pushing housing affordability higher. For example, the average 30-year fixed-rate mortgage, which is the most popular among home buyers, is 3.59 percent, according to Freddie Mac—just above its record low set on July 26 of 3.49 percent average. “It’s conceivable that at some point in the next 30 years, your interest rate would be less than the rate of inflation,” writes Waggoner for USA Today.

Source: “If You Can Pull it Off, a House is a Smart Investment,” USA Today (Aug. 9, 2012) 

Denver-area home prices rising faster than rest of country – Denver Business Journal

Denver-area home prices rising faster than rest of country

The Denver-Aurora metropolitan statistical area (MSA) saw home sales prices rise by 3.6 percent quarter over quarter in June, according to the Truckee, Calif.-based real estate data company. The index showed a 10.2 percent year-over-year increase in prices, ranking metro Denver 13th in the top 50 MSAs.

Metro Denver’s MSA had climb­ed into the top 10 MSAs, to No. 8, as recently as April with a 2.9 percent quarter-over-quarter growth in home sale prices and a 9 percent year-over-year gain.

Denver-area home prices rising faster than rest of country – Denver Business Journal.

Denver home prices predicted to rise 3.3% this year

Colorado Home Prices Predicted to Climb

Veros Real Estate Solutions, a leading private forecaster for the mortgage industry, projects home prices will appreciate in Colorado over the next 12 months. Helping boost this projection is was Freddie Mac reported new record lows for fixed U.S. mortgage rates. The average on the 30-year loan dropped to 3.62 percent- the lowest since long-term mortgages began in the 1950s. This will provide prospective buyers with more incentive to brave a modestly recovering housing market.

Veros predictions bolster a rule of thumb that every housing market is different and is contingent upon its own specific economic factors.  A look at Veros’ forecasts of the top five major U.S. metropolitan housing markets in the coming year:

Strongest:

1.    Phoenix-Mesa-Scottsdale, Ariz., 6.4%

2.    Boise City-Nampa, Idaho, 3.8%

3.    Boulder, Colo., 3.6%

4.    Bismark, N.D., 3.5%

5.    Denver-Aurora, Colo., 3.3%

read the full article here- Colorado Association of Realtors.

10 Metros Where List Prices Are Rising the Most | Realtor Magazine

10 Metros Where List Prices Are Rising the Most | Realtor Magazine.

Boulder/Longmont is #8!

10 Metros Where List Prices Are Rising the Most

Prices of for-sale homes are on the rise in several metro areas. According to Realtor.com, which tracks 146 metro markets, the following areas have seen their median list prices increase the most from March to April:

1. Minneapolis-St. Paul, Minn.-Wis.

Monthly median list price increase: 7.90 percent

Median list price: $199,500

2. Santa Barbara-Santa Maria-Lompoc, Calif.

Monthly median list price increase: 7.07 percent

Median list price: $545,000

3. Detroit

Monthly median list price increase: 4.66 percent

Median list price: $89,900

4. San Francisco

Monthly median list price increase: 4.62 percent

Median list price: $679,000

5. Seattle-Bellevue-Everett, Wash.

Monthly median list price increase: 4.46 percent

Median list price: $328,950

6. Boise City, Idaho

Monthly median list price increase: 4.40 percent

Median list price: $162,374

7. Trenton, N.J.

Monthly median list price increase: 4.26 percent

Median list price: $259,450

8. Boulder-Longmont, Colo.

Monthly median list price increase: 4.20 percent

Median list price: $375,000

9. Orange County, Calif.

Monthly median list price increase: 4.19 percent

Median list price: $448,000

10. Colorado Springs, Colo.

Monthly median list price increase: 4.09 percent

Median list price: $229,000

Fluctuating home prices: What causes this?

Fluctuating home prices: What causes this?

Real estate prices are constantly moving up and down. Almost always, home values appreciate in the long term. But, of course, in real estate there is always a certain amount of risk.

When your property appreciates you have more equity to borrow against, and you’ll create a greater profit when you sell. Property values in the area shift for many different reasons, so how do you know what you’re buying right now won’t depreciate the day after you close? The most important thing is that you select a real estate agent in your area who knows the factors that influence local prices.

Let Legacy Real Estate Group help you with your first home purchase in Longmont Location in a community – Most people want homes in the areas with the easiest access to features, such as our work and schools. So when it comes to retaining their value, these regions often appreciate better than others.

Recent sales – Your real estate agent should provide you with figures on the recent real estate sales in the districts that you’re asking about. You’ll want to know average time on market, selling versus listing price and more.

History of appreciation – In the last 5 to 10 years, have home prices increased or decreased? Does location or affordability affect how desirable the neighborhood is believed to be?

Local economy – Is there a good blend of job types in an area, or does it count on just one industry? Have businesses moved into or away from an area? Are local businesses hiring? Each of these items plays a part.