Blogspot

Experts' Housing Market Forecasts for the Second Half of the Year

Expert Housing Market Forecasts for the Second Half of the Year | MyKCM

The housing market is at a turning point, and if you’re thinking of buying or selling a home, that may leave you wondering: is it still a good time to buy a home? Should I make a move this year? To help answer those questions, let’s turn to the experts for projections on what the second half of the year holds for residential real estate.

Where Mortgage Rates Will Go Depends on Inflation

While one of the big questions on all buyers’ minds is where will mortgage rates go in the months ahead, no one has a crystal ball to know exactly what’ll happen in the future. What housing market experts know for sure is that the record-low mortgage rates during the pandemic were an outlier, not the norm.

This year, rates have climbed over 2% due to the Federal Reserve’s response to rising inflation. If inflation continues to rise, it’s likely that mortgage rates will respond. Greg McBride, Chief Financial Analyst at Bankrate, explains it:

“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.”

Whether you’re buying your first home or selling your current house to make a move, today’s mortgage rate is an important factor to consider. When rates rise, they impact affordability and your purchasing power. That’s why it’s crucial to work with a team of professionals, so you have expert advice to help you make an informed decision about your best move.

The Supply of Homes for Sale Projected To Continue Increasing

This year, particularly this spring, the number of homes for sale has grown. That’s partly due to more homeowners listing their houses, but also because higher mortgage rates have helped ease the intensity of buyer demand. Moderating buyer demand slows down the pace of home sales, which in turn helps inventory rise.

Experts say that growth will continue. Recently, realtor.com updated their 2022 inventory forecast. In the latest release, they increased their projections for inventory gains dramatically, going from a 0.3% increase at the beginning of the year to a 15.0% jump by the end of

Read more

Will Home Prices Fall in 2022?

Will Home Prices Fall This Year? Here’s What Experts Say | MyKCM
Hi there!  

Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyer, seller, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your homeownership goals.

What’s Happening with Home Prices? 

Home prices have seen 121 consecutive months (ten years!) of year-over-year increases. CoreLogic says:

Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”  And in the Gallatin Valley, prices surged nearly 32% over 2021.  To put those numbers into perspective, our local pre-pandemic prices grew at a rate of about 12% year over year.   

So why are prices climbing so much? It’s because there are more buyers than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory housing market.

Where Do Experts Say Prices Will Go from Here?

Experts say the housing market isn’t set up for a price decline due to the ongoing imbalance between supply and demand. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the rest of 2022 (see graph below):

Will Home Prices Fall This Year? Here’s What Experts Say | MyKCM

While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First American explains it like this:

“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”

What Does That Mean for You?

The biggest takeaway is that the experts aren't projecting home-price depreciation. If you’re a homeowner thinking about selling, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will

Read more

Advantages of Living in a Small Home

While the jury is still out on whether or not Tiny Houses (micro-houses of 500 square feet or less) are here to stay or just a passing fad, Smaller Homes may be just the thing for those looking to live in high-demand areas. Bigger than a Tiny House, small homes range from 1000 - 2000 square feet. Cottages, bungalows, and shotgun houses are all typical smaller homes, and Bozeman and the Gallatin Valley has a wealth of them. To get into 'hot' neighborhoods without getting into really high prices, small homes represent an option for some to live in a great neighborhood. What a small home lacks in space, it makes up for in easy access to amenities and walkable neighborhoods.

According to a recent post in Business Insider, it's not unusual for the value of small homes to rise faster than that of larger homes. In one region of Florida, small homes showed a dramatic growth rate of 19.5% each year (2013-2016), while the area's largest homes appreciated by only 5.1% during the same time period. http://www.businessinsider.com/are-smaller-homes-valuable-2…

A Washinton Post article informs that downsizing to a small home can come with some built-in offbeat perks, including: "You have a bulletproof reason to graciously decline Aunt Laura's offer of her lime-green, fake-leather living room set that might have looked good 40 years ago. You'll have no place to put it..." http://www.washingtonpost.com/…/…/07/08/AR2010070806792.html

If you're looking for your own bulletproof excuses to keep from acquiring more stuff from Aunt Laura, I can help!

Cheers!

Jennifer Walsh REALTOR
570.1653
Let's Get Real! ®
A report by Nerdwallet suggests that smaller homes gain value faster than larger houses.
BUSINESSINSIDER.COM

 

 
Read more

Advantages of Living in a Small House

While the jury is still out on whether or not Tiny Houses -- micro-houses of 500 sq feet or less --  are here to stay or just a passing fad, Smaller Homes may be just the thing for those looking to live in high-demand areas.  Bigger than a Tiny House,  small homes range from 1000 - 2000 square feet.  Cottages, bungalows, and shotgun houses are all typical of the smaller homes that have been prevalent through generations of homeownership in the US.  In many areas including Bozeman and the Gallatin Valley, there is a wealth of them.  To get into 'hot' neighborhoods without getting into the really high prices, small homes represent a real option for some to live in a central location. What a small home lacks in space, it makes up for in easy access to amenities and walkable neighborhoods.  And with ready access to VRBOs and other short-term vacation rentals, a homeowner can get away without having that spare bedroom.  (You can always put up visiting friends and family at a nearby Airbnb.  And why not share meals at nearby restaurants? You know you hate cooking for a crowd!)

     According to a recent post in the finance section of Business Insider, it's not unusual for the value of small homes to rise faster than that of larger homes. In one region of Florida, small homes showed a dramatic growth rate of 19.5% each year (2013-2016), while the area's largest homes appreciated by only 5.1% during the same time period.  http://www.businessinsider.com/are-smaller-homes-valuable-2017-2 . The greater price appreciation of smaller homes is the result of people choosing a cheaper entry point into areas of higher demand, higher prices, and higher taxation.

     In addition to the greater rate of appreciation, the costs for maintaining a smaller house are significantly lower.  According to a recent article on Trulia.com,  the electric bill for a 1000-square-foot home is approximately $200 less per month than the electric bill for a 3000-sq-ft home on average.  Even routine repairs and maintenance are less expensive for a smaller house:  replacing a (smaller)

Read more