KCM Quick Tips
A Free Monthly Strategy Guide from Keeping Current Matters
1. Realize Rents Are Soaring Last week, Trulia released their Winter 2012 Rent vs. Buy Index. In the index, they report that:
"After years of home price declines and tightening rental markets, home ownership is now more affordable than renting in all but two of the 100 largest metros - even in expensive real estate markets such as New York, Los Angeles and Boston."
2. Discuss Both the Visible AND Shadow Inventory in Your Market Though housing inventory in many markets is decreasing, we must realize that there is a shadow inventory of distressed properties about to come to market. For more information on this, you can view a replay of our webinar on the subject by clicking here.
3. Explain That the Price Is the Same But the Cost Is Not
Advise your buyers to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming you are not an all-cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost.
4. Keep Your Eye on Mortgage Rates
Recently, there are more people talking about the possibility that mortgage rates could begin to increase. Dan Green of The Daily Market Reports recently stated:
"The Fed sees growth coming faster than originally expected. There's suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out. With no stimulus, mortgage rates rise."
Lawrence Yun, Chief Economist for the National Association of Realtors, recently wrote:
"Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent average rate in the past five months on a 30-year fixed mortgage, the new rates will soon be in the range of 4.3 to 4.6 percent."
5. Maintain the Momentum
There is a momentum building in the industry right now. It is up to us to keep that momentum going. How do we suggest you do that? Here's one example:
Open Houses are starting to really fill-up. Agents are reporting that they are seeing more multiple offers. If you had 12 families at your Open House and two get into a bidding war for the house, you may find yourself spending all your time completing the deal. We must remember the other 10 families. We must try our best to help EVERY family. That is the surest way to bring the market back as quickly as possible.