Renters: It is about to Get A Lot Worse

I know it may seem like 2015 is the year we keep harping on Renter's about buying a home.  It's only because the rental market is such a large segment of the Real Estate market, and the cost of rent keeps going up and up and up.

We often promote homeownership over renting when a family is ready, willing and able to purchase. There are both financial and non-financial benefits to owning a home of your own. Based on the headlines below, many news outlets agreed with us after they reviewed a recent report from the Harvard Joint Center for Housing Studies andEnterprise Community Partners.

The study states that the number of households spending 50% or more of their income on rent is expected to rise by over ten percent in the next decade. They concluded:

“Overall, this white paper projects a fairly bleak picture of severe renter burdens across the US for the coming decade.”

What do other experts think of the report? You can tell by the headlines they chose to introduce their stories:

“Renters, get ready to take it on the chin” - CNBC

“The Rent Crisis Is About to Get a Lot Worse” - Bloomberg Business

“Renters Will Continue to Struggle for the Next Decade” - World Street Journal

“Why the renting crisis could be about to get a lot worse” - Fortune Magazine

“Soaring rents are a problem that will only get worse” - Business Insider

“High rents are here to stay” - The Real Deal

Bottom Line

If you are thinking about buying a home and are financially positioned to do so, now may be better than later.  Let The J Team Fort Lauderdale help you with all of your Real Estate needs!  We can help consult you into qualifying to buy a home now rather than later, there are many solutions to help you buy a home from 3% down, student loan debt forgiveness, Credit Repair.  Contact The J Team Fort Lauderdale and schedule your homebuyer's consultation today! 954-235-3589

Search Fort Lauderdale Homes for Sale online at http://JTeamFL.com

Thinking of Selling? 5 Reasons You Shouldn’t For Sale By Owner

In today's market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house.
• The appraiser if there is a question of value

 2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Contact The J Team Fort Lauderdale and schedule your home seller's consultation today! 954-235-3589

Find out what your Fort Lauderdale Home is worth at http://Sell.JTeamFL.com

Existing Home Sales Slow Amongst Tight Inventory

Here is a look at the National Real Estate look for All of the United States.  This is just a glimpse, every state, neighborhood and even street may show a different story.  Always contact a local realtor to find out whats really happening in your neighborhood.

Some Highlights:

• Existing Home Sales slowed down slightly in August but remained 6.2% higher than August 2014.

• Inventory levels remain below the 6 months necessary for a normal market at a 5.2-month supply.

• First Time Buyers rebounded in August to make up 32% of sales, matching a 2015 high.

Want to find out whats happening in the Real Estate Market in Fort Lauderdale?  Contact The J Team Fort Lauderdale and schedule your Real Estate consultation today!  954-235-3589

For the latest homes for sale visit our website at http://JTeamFL.com search all of the Fort Lauderdale Homes currently on the market.

By 2025, 13M will pay 50% of income for housing...

Great article posted by Florida Association of Realtors.  Showcasing where Rent is going and how the income required to pay for rent is increasing at an alarming rate.

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CAMBRIDGE, Mass. – Sept. 22, 2015 – The number of households spending more than 50 percent of their income on rent is expected to rise at least 11 percent – from 11.8 million to 13.1 million – by 2025, according to new research by Harvard University's Joint Center for Housing Studies (JCHS) and Enterprise Community Partners Inc. (Enterprise).

The study, Projecting Trends in Severely Cost-Burdened Renters: 2015-2025, says the U.S. will have a growing renter affordability crisis, with the largest increases expected among older adults, Hispanics and single-person households.

According to the study authors, a rental crisis will occur even if current income trends and rent trends turn more favorable because a variety of demographic forces – including the rapid growth of minority and senior populations – will continue to exert pressure on the number of severely cost-burdened renters.

"Our analysis shows that even in the unlikely event that income growth greatly outpaces rent gains, the number of severely cost-burdened renters will remain near current record levels," says Christopher Herbert, managing director of Harvard's Joint Center for Housing Studies. "Given these data, it is critical for policymakers at all levels of government to prioritize the preservation and development of affordable rental housing as there are simply not enough quality, affordable rental units to provide housing for the millions of households paying over half their income in rental costs."

Trends projected in the report for 2015-2025

• The number of severely burdened households aged 65-74 will rise 42.1%
• The number of severely burdened households aged 75 and older will rise by 38.9%
• The number of Hispanic households with severe renter burdens will increase 27.3%
• The number of severely burdened single-person households will jump by 12.0%

The Harvard study suggests that the U.S. already has problems housing all its lower-income renters.

"At last measure, 11.2 million extremely low-income households competed for 7.3 million homes affordable to them – a 3.9 million home shortfall," say study authors. "Just over a quarter of eligible very low-income households received rental assistance, leaving 7.7 million unassisted very low-income renters with worst case housing needs in 2013 according to HUD. "Meanwhile, the private sector is unable to supply new homes at rents low enough to reach low-income renters: The median rent of a newly constructed apartment of $1,290 was equal to about half the median renter's monthly household income."

© 2015 Florida Realtors®  

These numbers are alarming, and will prevent people from buying homes because they won't be able to save up money to purchase a home.  Don't let this happen to you, do what's best for you and your family!  Contact The J Team Fort Lauderdale at 954-235-3589 and schedule a homebuyer's consultation today!

Curious what's on the market now?  Search Fort Lauderdale Homes for Sale at http://JteamFL.com

Is Qualifying for a Mortgage Getting Easier?

There has been a lot of talk about how difficult it is to get a home mortgage in today’s lending environment. However, three recent reports have revealed that lending standards are beginning to ease. This is great news for both first time buyers and current homeowners looking to move or buy a second vacation/retirement home. Let’s look at the three reports:

The MBA’s Mortgage Credit Availability Index

This index, issued by the Mortgage Bankers’ Association, measures the availability of credit available in the home mortgage market. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. We can see that the index has been increasing nicely this year:

Fannie Mae’s latest Mortgage Lender Sentiment Survey

This survey revealed that more lenders report that mortgage lending standards across all loan types are easing. The survey asked senior mortgage executives whether their company’s credit standards have eased, tightened, or remained essentially unchanged during the prior three months. The gap between lenders reporting easing as opposed to tightening over the prior three months jumped to approximately 20%. This represented a new survey high of "net easing." In addition, the share of lenders who expect their organizations to ease credit standards over the next three months also ticked up this quarter.

Doug Duncan, senior vice president and chief economist at Fannie Mae, addressed this easing of standards:

"For the first time in seven quarters, we see a pronounced increase in the share of lenders, particularly medium- and larger-sized lenders, reporting on net an easing of credit standards … This is a significant result in light of public discourse on credit availability and standards … Overall, we expect that lenders' tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion."

Ellie Mae’s latest Origination Insights Report

The easing of credit standards is also confirmed in this report which showed that the average FICO score on a closed loan fell to its lowest point in well over a year. Here is a chart of average FICO scores on closed loans so far in 2015:

Just keep an eye on interest rates…

Although this is all great news, there was one challenge in the recently released data.Ellie Mae reported that the average interest rate on closed loans is beginning to inch upward:

What this means to you…

If you are a first time buyer or a current homeowner thinking of moving up to a bigger home or buying a vacation home, now may be the time to act. Mortgage lending standards are beginning to ease and interest rates are beginning to inch up.

Contact The J Team Fort Lauderdale today and schedule your Home Buyer's Consultation at 954-235-3589!  Let us help you understand the local market, connect with a mortgage professional and have a plan to purchase a home.

Search Fort Lauderdale Homes for sale online at http://JTeamFL.com

Buying A Home Is Better Way to Produce Wealth Than Renting

According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Indexhomeownership is a better way to produce greater wealth, on average, than renting.

The BH&J Index is a quarterly report that attempts to answer the question:

Is it better to rent or buy a home in today’s housing market?

The index examines that entire US housing market and then isolates 23 major markets for comparison. The researchers at use a “’horse race’ comparison between an individual that is buying a home and an individual that rents a similar quality home and reinvests all monies otherwise invested in homeownership.”

Ken Johnson, Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states: "The U.S. as a whole is still in clear buy territory. The cities of Cincinnati, Chicago, Cleveland, and New York City are deep into buy territory."

Miami and Portland had been inching closer toward renting being the better option but have "pulled back from the edge." Johnson goes on to say, “that's a good sign for home pricing as it suggests prices are going to level off in these metro areas."

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

Rent keeps going up year after year, even though the average income has not raised much.  It's more affordable to buy than rent.

Do you know what happens to your purchase power when Interest rates go up even just 1%?  Your buying power goes down 10%...Meaning if you are approved to purchase a $200,000 house today at today's rates...when they go up 1% you can only afford $180,000....The problem with this is home values continue to rise, so you will end up in another neighborhood than you hoped.  

Don't Hesitate contact The J Team Fort Lauderdale today and schedule your home buyer's consultation at 954-235-3589!  Let us help you create a plan to purchase a home with tips on how to improve credit scores, reduce student loan payments and even student loan forgiveness!  There are so many solutions out there, we can help you find a solution that works to help you buy a home!

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3 Graphs That Scream List Your House Today!

In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will surely rise.

SUPPLY

The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.8-month supply. This is significantly lower than the 6 months inventory necessary for a normal market.

DEMAND

Every month NAR reports on the amount of buyers that are actually out in the market looking for homes, or foot traffic. As seen in the graph below, buyer demand this year has significantly surpassed the levels reached in 2014.

Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream home (if they even are able to find a home they wish to purchase).

Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.

HOME EQUITY

Many homeowners underestimate the amount of equity they currently have in their home. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their home. In reality 69% of homeowners actually do!

Many homeowners who are undervaluing their home equity may feel trapped in their current home, which may be contributing to the lack of inventory in the market.

Bottom Line

If you are debating selling your home this year, meet with a local real estate professional that can evaluate the equity you have in your home and the opportunities available in your market.

Contact The J Team Fort Lauderdale today at 954-235-3589 and schedule your Home Seller's Consultation!  We will inform you of recent sales in the neighborhood, come up with strategies to sell your home for top dollar and in the shortest amount of time.

Find out what your Fort Lauderdale Home is Worth online at http://Sell.JTeamFL.com

Selling Your Home? Price It Right From the Start!

In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

There is no “later.”

Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.

John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”

Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.

Don’t build “negotiation room” into the price.

Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.

Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!

One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.

A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.

Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right

Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home.

You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.

The J Team Fort Lauderdale studies the National and Local Markets!  We have statistics to show you and help you price it to a point that will sell for Top Dollar and in the shortest amount of time.  Schedule your Homesellers Consultation with The J Team Fort Lauderdale today! 954-235-3589

Find out what your Fort Lauderdale Home is worth http://Sell.JTeamFL.com

Credit Score Requirements LOWER As Interest Rates CREEP UP!

Thinking of buying a home?  now is a great time to buy before interest rates go up!  Not to mention that the Credit Requirements are lowering.  Also if you live in Florida there are Grants available to first time homebuyers!

Some Highlights:

• The average 30-year rate for all loans closed in August eclipsed 4.3% for the first time since October 2014.
• The average FICO score for all closed loans in August reached a new yearly low at 724 (the lowest since February 2014!)
• The average down payment of FHA loans closed was just 4%!

Contact The J Team Fort Lauderdale and take advantage of the Low interest rates before they spike!  Schedule a home buyers consultation today at 954-235-3589.

Search Fort Lauderdale Homes for Sale online at http://JTeamFL.com

Fannie Mae Introduces Home Purchase Sentiment Index

Earlier this month, Fannie Mae’s Economic & Strategic Research Group announced the launch of their Home Purchase Sentiment Index (HPSI). The index will distill results fromFannie Mae’s consumer-focused National Housing Survey into a single, monthly, predictive indicator. According to Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, the goal for the new index is simple:

“The Fannie Mae Home Purchase Sentiment Index provides the market a single number to track consumer attitudes focused on the housing market. Utilizing our National Housing Survey, the only consumer sentiment survey of its kind focused on housing, the HPSI will offer insights regarding current and future-looking housing market outcomes and will complement existing data sources to inform housing-related analysis.”

Here is a graph of the findings of the HPSI from May 2011 until the current index. A higher number reflects a more positive sentiment from the consumer.

According to consumer sentiment, the housing market has made great strides over the last four years.

Contact The J Team Fort Lauderdale at 954-235-3589 and schedule your homebuyers consultation today!

Search Fort Lauderdale Homes for Sale online at http://JTeamFL.com

The Cost of Waiting to Buy a Home

The National Association of Realtors (NAR) recently released their July edition of theHousing Affordability Index. The index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data.

NAR looks at the monthly mortgage payment (principal & interest) which is determined by the median sales price and mortgage interest rate at the time. With that information, NAR calculates the income necessary for a family to qualify for that mortgage amount (based on a 25% qualifying ratio for monthly housing expense to gross monthly income and a 20% down payment).

Here is a graph of the income needed to buy a median priced home in the country over the last several years:

And the income requirement has accelerated even more dramatically this year as prices have risen:

Bottom Line

Some buyers may be waiting to save up a larger down payment. Others may be waiting for a promotion and more money. Just realize that, while you are waiting, the requirements are also changing.

Contact The J Team Fort Lauderdale today at 954-235-3589 and schedule your Real Estate home buyers consultation.  

Search Fort Lauderdale Homes for sale online now at http://JTeamFL.com