The Time to Buy is Now.

A top Utah economist predicts Salt Lake County’s real estate markets will see a healthy 2015, even as the U.S. Federal Reserve is signaling a possible hike in interest rates.

Residential sales in the county are projected to rise by 7 percent this year and home prices by 4 percent, says James Wood, director of the University of Utah’s Bureau of Economic and Business Research.

The U. economist and others unveiled forecasts Friday to a gathering of thousands of the state’s real-estate professionals. With the potential of earning nearly $250 million in total sales commissions this year, Realtors welcomed the positive outlook.

‘How can you not help but dance with the way the markets are moving?’ beamed Dave Robison, president of the Salt Lake Board of Realtors, host of Friday’s gathering at Salt Lake City’s Grand America Hotel.

In 2014, Utah’s housing markets lost momentum from their rebound out of the Great Recession, Wood said. A surge in home prices slowed significantly from double-digit levels the year before, leading Salt Lake County’s median home sales price to end 4 percent ahead where it started in January.

Prices even fell in five cities in the county during 2014: South Salt Lake, Holladay, Cottonwood Heights, Murray and Riverton.

Nearly 30 percent of the county’s 11,490 home sales in 2014 were made in Salt Lake City, while half were spread across suburban communities: West Jordan, Sandy, West Valley City, Taylorsville, Draper, Herriman and Riverton.

Remnants of the housing crash ­— underwater home loans, high foreclosure rates and distressed sales — no longer are a major factor holding back real estate markets, Wood said. Strong economic fundamentals are now the primary drivers, with stellar job growth, low unemployment and an expanding national economy propelling Utah home sales.

Household debt remains elevated by historical standards and wages still are sluggish, but measures of consumer confidence are starting to turn.

‘We’re finally getting people back to where they feel a little better about what is going on,’ said David Crowe, chief economist for the National Association of Home Builders.

While interest rates remain at a 44-year low, Wood said, they ‘are very likely to sneak up a bit’ as the Fed eases back on its support of capital markets. While 30-year fixed mortgage rates were at 3.8 percent as of Wednesday, major forecasters are projecting they will rise to between 4.4 percent and 5.4 percent by year’s end.

Even that has an optimistic side, Wood said, because the effects of higher rates are likely to be offset by the easing of lending restrictions, making home loans more available.

tsemerad@sltrib.com

Sourced from: http://www.sltrib.com/news/2121761-155/economists-predict-robust-year-in-salt

March 2015 Newsletter

https://bhhsmarketingresource.com/p/c4d077a502461e86b35289e2f051eda9/950543

Income Increases Boosting Housing Optimism

Income Increases Boosting Housing Optimism

DAILY REAL ESTATE NEWS | WEDNESDAY, FEBRUARY 11, 2015

The number of households saying their income is significantly higher than it was a year ago is on the rise, as is the number expecting their financial situation to continue to move significantly higher over the next year — both reaching all-time survey highs in Fannie Mae’s January 2015 National Housing Survey, a poll of 1,000 Americans’ attitudes toward owning and renting a home.

Twenty-nine percent of households say their income is “significantly higher” now than it was 12 months ago. Also, 48 percent say they expect their personal financial situation to improve over the next year.

The increases in income are translating into higher optimism about the housing market. The number of households who said it was a good time to buy a home rose 3 percentage points in January to 67 percent, according to the survey. Also, the share of households who say they’d rather buy than rent if they were to move rose 5 percentage points to 66 percent, marking the first increase since September 2014, the survey shows. What’s more, 44 percent of households now say it’s a good time to sell, tying an all-time survey high.

“Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting. … Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery.”

Additional findings from Fannie Mae’s January survey include:

• The majority of households believe home prices will rise over the next year, an average of 2.5 percent over the next 12 months.
• 45 percent of respondents say they believe mortgage rates will also rise over the next year, falling by 3 percentage points compared to one month earlier.
• 52 percent of respondents believe home rental prices will rise over the next year — a slight decrease month over month. The average 12-month rental price expectation fell to 3.6 percent.

Source: “Consumers’ Positive Financial Attitudes a Good Sign for Housing,” Fannie Mae (Feb. 9, 2015)

Sourced from: http://realtormag.realtor.org/daily-news/2015/02/11/income-increases-boosting-housing-optimism%23sf7465767

Builders Remain Confident in the 55+ Housing Market

NAHB’s 55+ Housing Market Index (HMI) shows that builders continue to feel positive about the market. The sentiment indices were higher year-over-year for all segments of the 55+market—single-family homes, condominiums and multifamily rental. The single-family index increased six points from the fourth quarter of 2013, to 54—the highest fourth-quarter reading since the inception of the index in 2008 and the 13th consecutive quarter of year over year improvements.

There are separate 55+ HMIs for single-family homes and multifamily condominiums. Each measures builder sentiment based on survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good. The series are not yet long enough to be seasonally adjusted, so results need to be compared year-over-year.

All components of the 55+ single-family HMI posted increases from a year ago: present sales increased five points to 58, expected sales for the next six months rose two points to 64 and traffic of prospective buyers increased six points to 39.

The 55+ multifamily condo HMI posted a five-point gain to a reading of 40, which is also the highest fourth-quarter reading since the inception of the index. All components of the index increased for the fourth quarter: present sales rose five points to 42, expected sales for the next six months climbed five points to 45 and traffic of prospective buyers increased three points to 33.

The strength of the 55+ segment of the housing industry has been fueled in part by rising home values; older homeowners are finding it easier to sell their existing homes at a favorable price, allowing them to rent or buy a new home in a 55+ community.

For more information about NAHB’s 55+ HMI, including the complete history of each index and its components, see www.nahb.org/55HMI.

Sourced from: http://eyeonhousing.org/2015/02/builders-remain-confident-in-the-55-housing-market/

Pending Home Sales Show Modest Gain in November

WASHINGTON (December 31, 2014) — Pending home sales slightly improved in November and are above year-over-year levels for the third straight month, according to the National Association of Realtors®. All major regions except for the Midwest experienced a slight gain in activity in November.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 0.8 percent to 104.8 in November from a slightly downwardly revised 104.0 in October and is now 4.1 percent above November 2013 (100.7) – the highest year-over-year gain since August 2013 (5.6 percent).

Lawrence Yun, NAR chief economist, says signed contracts inched forward in November and have been fairly stable but haven’t broken out even as the economy picked up steam this spring. “The consistent economic growth and steady hiring we’ve seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year’s end,” he said. “With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months.”

Yun also notes that falling gas prices will likely boost consumer confidence and allow prospective buyers the opportunity to save additional money for a downpayment. NAR’s 2014 Profile of Home Buyers and Sellers (released in November) found that the median downpayment ranged from 6 percent for first-time buyers to 13 percent for repeat buyers.

“There’s still misperception out there that a much higher downpayment is needed, while that’s not the reality,” adds Yun.

The PHSI in the Northeast rose 1.4 percent to 89.1 in November, and is now 7.0 percent above a year ago. In the Midwest the index decreased 0.4 percent to 100.0 in November, and is now 0.5 percent below November 2013.

Pending home sales in the South rose 1.3 percent to an index of 119.7 in November, and are 5.1 percent above last November. The index in the West increased 0.4 percent in November to 98.5, and is now 4.9 percent above a year ago.

Total existing-homes sales this year are expected to be around 4.94 million, a decline of 3.0 percent from last year (5.09 million), but are then forecasted to rise to 5.30 million in 2015. The national median existing-home price for all of this year will be close to $208,000, up 5.6 percent from 2013, and is likely to moderate to a pace between 4 and 5 percent next year. Existing-home prices rose 11.4 percent in 2013.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

Sourced from: http://www.realtor.org/news-releases/2014/12/pending-home-sales-show-modest-gain-in-november

Media Contact: Adam DeSanctis / 202-383-1178

Will 2015 Be Better Or Worse For Real Estate?

Whether you’re looking to sell your home or spent the last year waffling between renting or buying, you probably have one question as we head into the new year: Will 2015 be better — or are we headed into another year of the same?

There’s no such thing as a real estate crystal ball, and anyone who claims to have all the answers probably has a hidden agenda. With many factors to consider, let’s take a closer look.

The recovery process — where are we?

Trulia’s Chief Economist Jed Kolko recently came to the conclusion that while none of the five measurements in Trulia’s TRLA -1.84% Housing Barometer are completely back to normal, most are making progress. It’s been three years since prices bottomed out in 2011, and we are still very much in recovery mode with rebound effects slowing; housing prices are no longer significantly undervalued and the investor market is drying up.

As a former broker, I have to agree — the investor well is indeed dry. In the past week alone I’ve received calls from three investor groups inquiring about off-market deals in the Seattle metro area. They complained that rising prices have impacted the number of available opportunities and so they’re looking for additional sources. (Sorry! No deals here.)

The good news is that most of us think things are about to get better. Regardless of the slowing rebound effects, there is optimism in the air. According to the Trulia study, consumers think 2015 will be an improvement over 2014 for all real estate activities, especially for sellers.

The millennial factor
Undoubtedly, the purchasing power of the millennial demographic packs a serious punch. And it seems that home-ownership still plays a key role in the American dream, especially among young adults — an overwhelming 93 percent of young adult renters responded yes when asked if they will be purchasing a home someday.

However, while millennials are willing to purchase a home, they are encountering barriers to executing on their dream. Hurdles such as saving a down payment, qualifying for a mortgage, and cleaning up derogatory credit items are fairly straightforward, but what about market affordability?

Making tough choices

“The number of homes for sale in my market within my price range is discouragingly low,” says Elizabeth Archer of Ukiah, CA. “I am really tired of renting, but I love the area and I’m not willing to look elsewhere. I’m crossing my fingers that some affordable houses will be for sale this spring.”

Archer is experiencing a widespread affordability issue termed the “millennial mismatch.” Millennials can afford markets where they don’t live, but they can’t afford many of the markets where they do live. They find themselves faced with a tough choice: rent for the long term or live in a less-desirable city.

From over 100 major metro cities, there were only two notable exceptions where millennials currently live and also can buy: Oklahoma City, OK, and Baton Rouge, LA. These cities have a high population of millennials and better-than-average affordability.

The bottom line
Although consumers are feeling hopeful, young people are having trouble finding jobs and affordable housing in areas they want to live in. Further hampered by weak construction growth, the housing recovery needs to play nice with the overall economic recovery to make an impactful difference.

Sourced from: http://www.forbes.com/sites/trulia/2014/12/29/will-2015-be-better-or-worse-for-real-estate/

Millenials and Their Affect on the Market Place

Utah likely to become more urban as millennials flock to technology

By TONY SEMERAD | The Salt Lake Tribune

First Published Nov 21 2014 08:29AM    •    Last Updated Nov 21 2014 05:16 pm

File photo by Leah Hogsten | Salt Lake County’s future is likely to generate an increasing demand for high density housing projects, such as the Bud Bailey Apartment Complex at 3970 South Main Street, that are close to mass transit stops, land use planners agreed at a conference Thursday.

Seismic shifts » Apartment boom shows tech-focused generation may not want a house, two cars and a picket fence.

With Utah’s population expected to double by 2050, the folks who build houses, apartments, office buildings and shopping centers along the Wasatch Front are predicting major changes for their industry.

Nine of every 10 Utahns already lives in an urban area. Existing problems with traffic congestion, air pollution and a lack of available land and water may well grow more pronounced.

“These all run counter to our view of what is so special about Utah,” said Andrew Gruber, executive director of Wasatch Front Regional Council, a leading transportation planning agency.

“How we manage these is going to have a huge impact on all of these things in our quality of life,” Gruber told a gathering of Utah real-estate officials Thursday.

But a more fundamental demographic trend is competing for attention right now, judging from talks among Utah members of the Urban Land Institute, an industry group devoted to responsible land use. Behaviors and preferences of the latest generation of 20- and 30-somethings­ — known as millennials — may have even more significant effects on real-estate development than a surge in area residents, experts said.

This new generation has grown up using technology as a social tool, noted Tamara Gaffney, principal analyst for Adobe Digital Index, a digital-marketing arm of software giant Adobe. As millennials mature, Gaffney said, “the need to be connected digitally is going to drive every facet of urban land use.”

Millennials seem to prefer city living, are marrying later and seem reluctant to take on mortgages — factors that have led to declines in home ownership, an upswing in renting and a well-documented construction boom in apartments across the state.

That trend has been pushed further by Baby Boomers as they retire and seek to downsize their housing.

“There is demand for apartments everywhere,’’ said Kenneth Woolley, founder and executive chairman of Extra Space Storage, one of the nation’s largest self-storage companies.

Millennials also prefer more open, more collaborative workspaces and take a more digitally focused approach to shopping. Both are already affecting designs of new office and retail buildings.

Generation members also are less inclined to own automobiles and prefer walking or biking, with broad implications for traffic and growth patterns in Utah.

“Having grown up with a cellphone in their hand at all times,” said Gruber, “members of the millennial generation are very reluctant to put down the cellphone for a 25-, 30- or 45-minute commute.’’

All of this is making long-term directions in real estate difficult to predict.

“Things are changing,’’ said Dejan Eskic, an analyst with the Metropolitan Research Center at the University of Utah. “It’s not going to work out the way it did in the last 60 years.”

Sourced from: http://www.sltrib.com/news/1852219-155/utah-likely-to-become-more-urban

Why You Should Buy Real Estate Now

Housing Forecast: BUY NOW

Now is a good time to look for a home.

The holidays are upon us and good tidings and family gatherings lie before us. Here in Utah, we are coming into the time of the year when our mountains are blanketed by our legendary snow and visitors from around the world come to enjoy. It is also a good time to buy a home…Prices and mortgage rate trends all indicate that there is no benefit to waiting. Here are some reasons why you should think about upgrading your roost now:

Prices are going up…and only up.

According to the latest Home Price Expectation Survey poll, home values are going to appreciate between 11.2% (most conservative estimation) and 27.8% (most idealistic estimation). The market bottomed out over a year ago and will continue to rise. As home values are sure to continue increasing, there is no reason to postpone a home purchase and several reasons to purchase now.

Mortgage Interest Rates are on the Rise

The Mortgage Bankers Association has predicted that, ‘the average rate on a 30-year, fixed rate mortgage will rise slowly to 5.1 percent by the end of 2015 — a full percentage point higher than where it is currently.’ While mortgage rates are projected rise in the very near future, they are very soft at present, meaning…now is better than later for financing a home purchase.

Utah is on the Rise

Utah’s economy is booming. We crunch the numbers. We are confident in saying–Utah is one of the most attractive places to purchase investment real estate. The state was, for the fourth time, named ‘The Best State for Business‘ by Forbes Magazine. With our low unemployment rate, exploding tech industry, and strong pro-business regulations, major companies like eBay, Adobe, Oracle, Goldman Sachs, etc… and skilled employees have been flocking to northern Utah. Utah’s robust economy makes any piece of property in our state an investment property.

Let me help you find your Dream Home. Call me today and let’s start the search!

-Brandi Strong
801-808-1303
brandi@brandistrong.com

Is it worth it to refinance your mortgage?

By ALEX VEIGA The Associated Press
First Published Oct 27 2014 10:45AM    •    Last Updated Oct 31 2014 10:01 am

The interest rate pendulum has swung in favor of homeowners again.

A steady decline in recent weeks brought down the average rate for a 30-year fixed home loan below 4 percent to 3.92 percent late last week, the lowest level in more than a year. As recently as January, the average was 4.53 percent, according to mortgage giant Freddie Mac.

That’s good news for homeowners who are locked in at a higher interest rate and weren’t able to refinance before rates began ticking up last year. The decline in mortgage rates has spurred a surge in mortgage refinancing. Applications reached their highest level since November 2013 last week, according to the Mortgage Bankers Association.

A reduction in your mortgage interest rate can translate into significant savings. The key is ensuring they aren’t outweighed by the charges and fees involved.

“You want to be careful to do the math and be sure you’re coming out ahead,” said Gary Kalman, executive vice president at the Center for Responsible Lending.

Here are some tips to help you determine whether refinancing your mortgage will pay off:

UNDERSTAND THE FEES

Lenders typically charge fees for the mortgage broker’s services, credit reports, a home appraisal and title insurance, among other costs.

To get a sense of the total costs, start with the “good faith estimate.” It’s a form that lenders are required to provide that details the projected costs associated with the loan.

Although certain costs of the loan can’t change, including the origination or broker’s fee, costs such as title fees may change until the loan is locked, meaning the interest rate is set, notes Kurtis Baker, a wealth management advisor at Certified Wealth Management & Investment LLC in Princeton, New Jersey.

The loan officer should also be able to help determine what your total monthly payment would be after the refinancing.

GET A LOW-ENOUGH RATE

The general rule of thumb is that borrowers need to shave at least 1.5 to 2 percentage points from their rate in order for the refinancing costs to be worthwhile.

To qualify for the best rate on a mortgage refinancing, borrowers must have proof of income and have equity in their home. About 20 percent equity is ideal, though some lenders will require as much as 30 percent for jumbo loans, said Greg McBride, chief financial analyst at Bankrate.com.

DO THE MATH

Don’t be fooled into thinking that you’re getting a better deal when it’s simply a new loan with a longer term, warns Timothy Watters, a certified financial planner at Watters Financial Services in Paramus, New Jersey.

To avoid this, tally up how much you’re paying now in principal and interest and multiply it by the number of months left on your loan. Then do the same calculation using the figures under the new loan.

“If there’s a substantial difference, it may be worthwhile to refinance,” said Watters. “If there’s not, it may not at all be worth refinancing.”

Online calculators can help you estimate whether the savings in a refinancing add up in your favor. Try this one from Bankrate:http://www.bankrate.com/calculators/mortgages/refinance-calculator.aspx

DETERMINE WHEN YOU WILL BREAK EVEN

Even if your refinancing will lower your monthly payment, it will take time to recoup your expenses. So think about how long you plan to stay in your home.

For example, refinancing from a 5.5 percent interest rate to 4 percent would save $180 a month on a $200,000 mortgage. But the fees — averaging around $2,500 — mean it would take about 14 months to break even.

To estimate how long it will take for your savings to offset the refinancing costs, divide the estimated costs by the projected annual interest savings.

Remember to factor in loan points, which borrowers can buy to lower their interest rate further. One point equals 1 percent of the loan amount.

As long as that is comfortably shorter than the time you plan to stay in the home, refinancing could be a good choice, Baker said.

The Federal Reserve has a more detailed calculator for determining the break-even point on a mortgage refinancing here:http://www.federalreserve.gov/pubs/refinancings/(hash)breakeven

SHOP AROUND

Get quotes from several banks and ask that they put their offers in writing, including an estimate for the closing cost and any extras, like loan points.

Some lenders will allow you to roll the refinancing fees into your loan, sparing you upfront costs. However, this will increase how much you owe — and pay interest on — for the life of your loan.

Ask that the lender provide you with a comparison of the loan costs paid upfront and rolled into the loan.

Sourced from: http://www.sltrib.com/home/1750219-155/loan-refinancing-mortgage-costs-rate-interest?page=1