Blog :: 2020

3 Reasons to Be Optimistic about Real Estate in 2021

3 Reasons to Be Optimistic about Real Estate in 2021 | MyKCM
 

This year will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.

1. The Economy Is Expected to Continue Improving 

Tim Duy from the University of Oregon puts it this way:

“There is nothing fundamentally ‘broken’ in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter…Don’t let the near-term challenges distract from the economic stage being set for next four years.” 

2. Interest Rates Are Projected to Stay Low 

In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing in 2021.3 Reasons to Be Optimistic about Real Estate in 2021 | MyKCM

3. Future Home Sales Are Forecasted to Grow

While the economy improves and interest rates remain low, homes are also expected to continue appreciating as more people buy in the coming year. Danielle Hale, Chief Economist at realtor.com, says:

“We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”

Bottom Line

Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Let’s connect to take the first step toward your new home today.

North of Boston Real Estate Market December 6-12, 2020

We're taking a look at the north of Boston real estate markets, specifically Middlesex and Essex counties for single-family homes and condominiums during the week of December 6th through the 12th.  Last week, there were 2,150 homes available on the market, an increase of 3% from the week before. New listings decreased by 5.5% with 378 homes coming on the market. 494 homes went pending last week that is an increase of 25% from the week before. Overall, 23% of the market did get absorbed through pending listings which shows it remains a strong seller's market.  Last week was one of the better weeks that we've seen since October. So, if you're still looking for a home now is not the time to put your search on pause. Keep looking- and if you're thinking about selling your home over the next 12 months now is the time to come up with a plan. Sooner very well may be better than later for this upcoming year.  If you're considering a move to the suburbs north of Boston give us a call at 617-275-3379.

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The Holidays Aren't Stopping Homebuyers This Year

The Holidays Arent Stopping Homebuyers This Year | MyKCM
 

Black Friday and Cyber Monday are behind us, yet finding the perfect holiday gifts for friends and family is certainly still top of mind for many right now. This year, there’s another type of buyer that’s very active this holiday season – the homebuyer.

Each month, ShowingTime releases their Showing Index which tracks the average number of appointments received on active U.S. house listings. The most recent index notes:

“The Showing Index reported a 60.9 percent jump in nationwide showing traffic year over year in October, the sixth consecutive month to see an increase over last year.”

Here’s the breakdown of the latest activity by region of the country compared to this time last year:

  • The Northeast increased by 65.5%
  • The West increased by 64.7%
  • The Midwest increased by 55.7%
  • The South increased by 54.7%

Why is the traffic so active?

The health crisis definitely put homebuying plans on pause for many earlier this year. Buyers, however, are in the market and making moves well past the typical busy homebuying seasons of spring and summer.

One of the main reasons buyer traffic has continued to soar in the second half of 2020 is how dramatically mortgage rates have fallen. According to Freddie Mac, the average mortgage rate last December was 3.72%. Today, the rate is a full percentage point lower.

Bottom Line

There are first-time, move-up, and move-down buyers actively looking for the home of their dreams this winter. If you’re thinking of selling your house in 2021, you don’t need to wait until the spring to do it. Your potential buyer is very likely searching for a home in your neighborhood right now.

December 2020 Real Estate Market Update

We're taking a look at the north of Boston real estate market's specifically for Middlesex and Essex counties and comparing November 2020 to November of 2019.  Total inventory, the amount of homes available for sale, went down close to 27%.  Days on market, the time it's taking homes to sell, averaged about 30 days, another decrease of 27%.  The amount of homes sold went up 12%. Median prices went up to $560,000 an increase of 12% from last November. 

This past November was definitely a lot stronger for sellers compared to November of 2019.  If you are considering a move to the suburbs north of Boston contact us!

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The Stevens-Coolidge Place Community Spotlight

We were thrilled to be invited to decorate a tree for The Stevens-Coolidge Place Holiday Stroll & Festive Parade of Trees in North Andover.  The Stevens-Coolidge Place has been a favorite to visit in any season, but the flower gardens are especially beautiful in the spring and summer seasons.  This holiday event is smaller than previous events but still a wonderful way to enjoy the holiday season safely outdoors.  If you visit be sure to bring some canned goods to leave at your favorite tree.  Canned goods will be donated to Neighbors in Need.  Along with this video The Stevens-Coolidge Place will be giving away 2 complementary tickets to a Friday night fire-spinning hike.  

Check out Facebook and Instagram pages for details. 

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Are Home Prices Headed Toward Bubble Territory?

Are Home Prices Headed Toward Bubble Territory? | MyKCM
 

Talk of a housing bubble is beginning to crop up as home prices have appreciated at a rapid pace this year. This is understandable since the appreciation of residential real estate is well above historic annual averages. According to the Federal Housing Finance Agency (FHFA), annual appreciation since 1991 has averaged 3.8%. Here are the latest 2020 appreciation numbers from three reliable sources:

It’s easy to jump to the conclusion that house appreciation is out of control in today’s market. However, we need to put these numbers into context first.

Inflation and the Comeback from the Housing Crash

Following the housing crash, home values depreciated dramatically from 2007-2011. Values are still recovering from that unusually long period of falling prices. We must also realize that normal inflation has had an impact.

Bill McBride, the founder of the well-respected Calculated Risk blog, recently summed it up this way:

“It has been over fourteen years since the bubble peak. In the Case-Shiller release today, the seasonally adjusted National Index, was reported as being 22.2% above the previous bubble peak. However, in real terms (adjusted for inflation), the National index is still about 2% below the bubble peak…As an example, if a house price was $200,000 in January 2000, the price would be close to $291,000 today adjusted for inflation.”

The COVID Impact on Home Prices

The pandemic caused many households to reconsider whether their current home still fulfills their lifestyle. Many homeowners now want larger yards that are both separate and private.

Their needs on the inside of the home have changed too. People now want home offices, gyms, and living rooms well-suited for video conferencing. Barbara Ballinger, a freelance writer and the author of several books on real estate, recently wrote:

“While homeowners continue to want their outdoor spaces that offer a safe retreat, that appeal has shifted into other parts of the home, coupling comfort with function. In other words, homeowners want amenities for work and leisure, and they plan to enjoy them long after the pandemic.”

At the same time, concerns about the pandemic have caused many homeowners to put their plans to sell on hold. Realtor.com just released their November Monthly Housing Market Trends Report. It explains:

“Nationally, the inventory of homes for sale decreased 39.2% over the past year in November…This amounted to 490,000 fewer homes for sale compared to November of last year.”

More people buying and fewer people selling has caused home prices to escalate. However, with a vaccine on the horizon, more homeowners will be putting their houses on the market. This will better balance supply with demand and slow down the rapid appreciation.

That’s why major organizations in the housing industry are calling for much more moderate home appreciation next year. Here are the most recent forecasts for 2021:

This Is Nothing Like 2006 

Finally, let’s put to rest some of the concerns that today’s scenario is anything like what led up to the last housing crash. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains why this is nothing like 2006:

“Such a frenzy of activity, reminiscent of 2006, raises questions about a bubble and the potential for a painful crash. The answer: There’s no comparison. Back in 2006, dubious adjustable-rate mortgages taxed many buyers’ budgets. Some loans didn’t even require income documentation. Today, buyers are taking out 30-year fixed-rate mortgages. Fourteen years ago, there were 3.8 million homes listed for sale, and home builders were putting up about 2 million new units. Now, inventory is only about 1.5 million homes, and home builders are underproducing relative to historical averages.”

Bottom Line

Most aspects of life have been anything but normal in 2020. That includes buying and selling real estate. High demand coupled with restricted supply has caused home prices to appreciate above historic levels. With the end of the health crisis in sight, we will see price appreciation return to more normal levels next year.

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    2020 Toys for Tots Drive

    Photo by Barrett Ward on Unsplash

    We hope you are staying healthy this holiday season! With the challenges facing so many families this year, we anticipate even more families will be in need this season.  If you are able, please consider donating a new unwrapped toy to our annual Marine Toys for Tots Drive. You can drop off toys in the back entrance at our Reading office, 248 Main St.  Or, our Andover office lobby located at 77 Main St.  New unwrapped toys will be picked up in Andover on Thursday December 10th, and Reading on Monday December 14th.  Thank you!

     

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    Is Buying a Home Today a Good Financial Move?

    Is Buying a Home Today a Good Financial Move? | MyKCM
     

    There’s no doubt 2020 has been a challenging year. A global pandemic coupled with an economic recession has caused heartache for many. However, it has also prompted more Americans to reconsider the meaning of “home.” This quest for a place better equipped to fulfill our needs, along with record-low mortgage rates, has skyrocketed the demand for home purchases.

    This increase in demand, on top of the severe shortage of homes for sale, has also caused more bidding wars and thus has home prices appreciating rather dramatically. Some, therefore, have become cautious about buying a home right now.

    The truth of the matter is, even though homes have appreciated by a whopping 6.7% over the last twelve months, the cost to buy a home has actually dropped. This is largely due to mortgage rates falling by a full percentage point.

    Let’s take a look at the monthly mortgage payment on a $300,000 house one year ago, and then compare it with that same home today, after it has appreciated by 6.7% to $320,100:Is Buying a Home Today a Good Financial Move? | MyKCMCompared to this time last year, you’ll actually save $87 dollars a month by purchasing that home today, which equates to over one thousand dollars a year.

    But isn’t the economy still in a recession?

    Yes, it is. That, however, may make it the perfect time to buy your first home or move up to a larger one. Tom Gil, a Harvard trained negotiator and real estate investor, recently explained:

    “When volatile assets are facing recessions, hard assets, such as gold and real estate, thrive. Historically speaking, residential real estate has done better compared to other markets during and after recessions.”

    That thought is substantiated by the fact that homeowners have 40 times the net worth of renters. Odeta Kushi, Deputy Chief Economist for First American Financial Corporation, recently said:

    “Despite the risk of volatility in the housing market, numerous studies have demonstrated that homeownership leads to greater wealth accumulation when compared with renting. Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments, which become a form of forced savings for homeowners.”

    Bottom Line

    With home prices still increasing and mortgage rates perhaps poised to begin rising as well, buying your first home, or moving up to a home that better fits your current needs, likely makes a ton of sense.

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    EasyKnock

     

    Our new normal during this pandemic means that we are all spending a lot more time at home.  It also means that many of us are realizing that our home just doesn’t quite fit our needs anymore.  Its been a seller’s market for some time now and with strong buyer demand it makes sense to take advantage of today’s market.  

    So, do you buy first or sell first?  Contingencies in today’s market simply don’t work.  If you buy first, that could mean taking on two mortgages.  If you sell first, are you willing to rent, or do you have a place to go?  With the time and effort it takes to move, would you want to move twice?  Typically these were the only two options available to homeowners. Now there is a third option.  

    We’ve partnered with a company called EasyKnock.  Through EasyKnock you can unlock the equity of your home, allowing you to put in a competitive offer without the contingency of selling your home first.  EasyKnock will buy your home and allow you to then rent it back.  You can then search for your dream home without worrying about your current value.  When you are ready to sell you can put it on the market to get full value.  Contact us to learn more about how this option might work for you!

     

    North of Boston Real Estate Market November 8-14, 2020

    Here's a look at the real estate market in the suburbs north of Boston specifically Middlesex and Essex counties, for single-family homes and condominiums, during the week of November 8th through the 14th. Not much has changed since the previous week. Last week we had 2,802 homes available on the market just a slight decrease of 2% compared to the week before. We had 531 homes come on the market last week that is a decrease of 7% compared to the week before. 616 homes went pending last week, that is a very slight decrease of 1% compared to the week before. And overall 22% of the market did get absorbed through pending listings which shows it remains a seller's market. That number has been very consistent over the past three weeks.

    If you're currently searching for a home this is not the time to put your search on hold. Although we are seeing a decreasing in the amount of new listings come on every week, interest rates remain very 
    low and competition from other buyers who may decide to put their search on pause during the holiday season, may be low. So keep at it and keep looking. For home sellers out there although the market isn't what it used to be in late summer, the market remains very strong and there is still a lack of inventory. As we mentioned before, we are seeing a decrease in the amount of new listings coming on the market. So although every situation is a little bit different, to discuss timing feel free to give us a call at 617-275-3379.