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Real
Estate? Buying? Selling? What to do?
Unfortunately, there is no good answer, but
let’s look at some of the facts up to this point:
1)
Interest rates are climbing, in early 2021 30-year
mortgage rates were around 2.7%, but in mid-January the
average Freddie Mac 30-year mortgage rated jumped from
3.22% to 3.45 in just one week
2)
The average price of a home in the Siouxland area was
$185,000 the end of 2020, then climbed to $202,000 by the
end of 2021.
That is a 9.1% increase in home values in just one year.
3)
In late 2021 bank restrictions were removed to allow them
to start the repossession process on homeowners that were
delinquent.
Wells Fargo supposedly delayed that to January of 2022.
Let’s look at some of what the so-called
experts are saying about 2022:
1)
Interest rates will continue to climb through 2022, saying
that they will most likely approach 4% by year’s end.
In fact, a recent announcement projected that the
Feds may raise interest rates as many as 4 times just this
year.
2)
Home prices are predicted to level out as the year
progresses, due primarily to more and more repos start
hitting the real estate market, creating or upping the
housing inventory.
As in any market where inventory increases, buyers
have more choices, which in turn allows greater bargaining
power.
So, what to do?
For Buyers, it appears
that as the year goes on interest rates are likely to
climb. This
means that your purchasing power will decrease with each
bump, forcing you to buy a cheaper home for the same
monthly payment.
For Sellers, home prices will most likely
start to plateau at some time this year, most likely due
to the influx of homes being repossessed.
Therefore, the sooner your home is on the market
the better your odds are of a sale.
Having said all this, every sale is a little
different and unique.
If you would like to talk about what your
possibilities or options are, give me a call.
Let’s talk!
If you would like to have a conversation
Call Lonnie @
712-259-0136
What is this Real Estate Market
going to do?
The one question I get asked is “What is this
Real Estate Market going to do?”
If we only knew the answer to this question, well
let us just say it would make life a little easier when it
comes to buying or selling a home.
The truth is we do not know what the real estate
future holds, but here are a few indicators that may give
us a clue.
Currently home mortgage interest rates are
holding for most 30-year fixed rate loans at just above 3%.
These low interest rate allows most Buyers the
opportunity to purchase a more expensive home than say a
rate of 4% or 5%.
Or Buyers can purchase a less expensive home that
keeps house payments in a more manageable range.
Most importantly lower interest rates helps keep
more potential buyers in the market.
One of the biggest factors that could have a
huge impact on the housing market will be foreclosures.
Some may be aware that since March 2020 there has
been a moratorium on repossessions.
Due to Covid-19 Banks have not been allowed to go
after homeowners in default, at least up until now.
Yes, there were programs put into place to help
these homeowners, but not everyone qualified or never
every applied.
The big question is, “how many homes are there on
the cusp of being repossessed?”
Another factor is depending on where you live, it
may take a few months to more than a year for the bank to
complete the process and put a home on the market.
My opinion is that over the next 6
plus months we will see more homes coming on the market
causing housing inventory to rise, as home prices begin to
level out, or possibly dip slightly.
Should I sell my current home
before buying a new one?
Considering today’s market, the above is a
question I am often asked by many Sellers. There is a real
possibility that they may sell their current home and then
be out on the street with NO HOME!!! Scary!!!
So, what are your options?
First let us answer a few questions.
Do you own your home outright or have more
than 50% equity?
Do you need the cash out of your current home to purchase
your next home?
Are you willing to rent until you find
that next home?
For homeowners that do own there home
outright or have lots of equity you have options.
The short answer is getting a bridge loan.
This is where you borrow against your current home
to purchase the new home.
Once you have made that purchase, sell the current
home and payoff the bridge loan. The biggest potential
drawback can be when the current home does not sell,
potentially forcing you to make double payment until it is
sold.
What about the homeowners with minimal
equity, who cannot qualify for a bridge loan, and/or need
that $10,000 or $20,000 cash out of the sale?
Options may be somewhat limited.
If you must sell to complete the purchase of your
new home. One option is to look for your new home, make an
offer subject to the sale of your current home and hope
the seller is willing to wait for you to sell.
Option two is to sell your home and hope you can
find the right home to purchase in a limited time or rent
until you find your next home.
The above information is intended as a basic
guide to help start the discussions you need to have with
your realtor and lender. If you would like to start that
discussion give Lonnie Hohl a call at 712.259.0136
What’s the first steps to buying a
home?
A question often asked by first time buyers,
but regardless of whether it is your first or 31st
home the question you as the Buyer need to ask is – How
will I pay for this home?
Unless you are blessed to have the cash to buy,
most likely you will need to secure some type of
financing. The
simple answer to the question is get pre-approved.
This is even more important in today’s fast-moving
market than it has ever been.
For the First Time Buyer you especially need
to talk to a local lender.
There are often a variety of First Time Home Buyer
programs available, such as down payment assistance that
you may qualify for.
Often online brokers do not have access to some of
these First Time Buyer programs and could literally cost
you thousands of dollars. Talk to the agent you are
working with, as they should be able to point you in the
right direction.
There are usually several local lenders that are
versed in both state and local First Time Home Buyer
programs.
In today’s real estate market, you need to be
able to show a Seller that your offer is backed by a
lender commitment letter showing your ability to complete
the purchase.
Although cash is king usually less than 10% of all offers
are in fact cash offers. Therefore, Sellers typically must
choose between offers that require financing of some type.
Sellers trend towards choosing the offer with solid
financing in place, that allows for the smoothest closing.
If you have questions about getting started
in the purchase of you next home call Lonnie @
712.259.0136
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