The 2018 holiday season has officially begun! We hope you are as excited as we are. We’d like to take a moment to express our gratitude to all of you this Thanksgiving. We have met some truly wonderful people, and we’re proud to have helped so many reach their real estate goals over the years.
We wouldn’t be where we are today without all of your support.
Enjoy your Thanksgiving dinner with all of your family and friends— that’s what we plan to do!
In the meantime, please don’t hesitate to reach out to us if you have any real estate questions. We would be happy to help you. Happy Thanksgiving, Jan Leasure
The average mortgage
rate is at a seven-year high. Is this what’s behind the shift we’re seeing in
the market?
The 30-year fixed mortgage rate currently stands at around 4.77%. That's near a seven-year high, and almost 1% higher than just a year ago. This is the result of a steady rise starting last September and ending this May.
What impact is this having on the real estate market? It's certainly true that affordability is down. In fact, one estimate from June found that home affordability is at a 10-year low. This is translating into fewer home sales, fewer viewings, and fewer mortgage applications.
However, I don't believe that the shifts in the mortgage rate is the primary mover of the changes we're seeing in the real estate market. In fact, even at its current level, the mortgage rate is still historically low.
Instead, the big reason for the changes in the real estate market is the ongoing growth in prices. Over the past several years, home prices have gone up at close to twice the rate of inflation, and have far outstripped the growth of incomes.
The price increases, in turn, have been caused by a lack of inventory, which has been shrinking for the past three years. In my opinion, it’s this lack of inventory (and the resulting hike in prices) that explains most of the effects on the real estate market that I listed above.
If you're looking to sell, you should still have no trouble doing so. Demand continues to outstrip supply, and even with dropping affordability, it's very likely that you would find a buyer quickly and at a top price.
If you're looking to buy, the picture is more complex, because it's so hard to predict what the mortgage rate might do in the near term. One thing we do know is that the severe lack of inventory is unlikely to change any time soon.
As always, if you have questions about the (area) real estate market, whether you're buying or selling, you can give me a call or send me an email. I'm here to help.
Do you want to buy a house, but aren’t sure you can cover the down payment? Let’s talk about some down-payment assistance programs that may be able to help.
Down payment assistance can be the difference between saying “yes” or “no” to a first home. If you are interested in buying a home but don’t have cash on hand for a down payment, or if you have a son, daughter or any other friend or family member who would like to purchase a home but doesn’t have cash for a down payment in the state of Illinois, there are several government programs that can assist you in securing a down paymentfor your new dream home.
The First Home Illinois ProgramThis program offers a forgivable loan of $7,500 to buyers who will live in their new home for at least 5 years. This program will discontinue in December 2018, so to take advantage of this down-payment assistance opportunity, your home loan must be originated by December 15, 2018.
Even though this program will be discontinued for much of Illinois past 2018, there are other down-payment assistance programs that will be available moving forward into 2019 and beyond: - A forgivable loan of up to $6,000, with the amount based on the total price of the home, forgivable after 5 years. - A $7,500 deferred program. This loan is repaid through a second mortgage the buyer doesn’t make payments on, but is reimbursed when you sell your home. - A $10,000 no-interest loan repaid through a monthly payment of $83 for 120 months.
This summer might be the last opportunity for you to take advantage of rising home prices and high demand. Here’s why.
Summer is here, which means the high season for real estate. If you've been thinking of selling your home, you might be in for a golden moment.
However, it might not last long. Let me explain why, with a few details of the current real estate market.
Right now, homes are selling in record time. This May, it took just 34 days on average for a home to go under contract, which broke last year's record of 36 days.
Home prices also continue to rise. In fact, they've been rising for six straight years. For the past two years, this growth has been accelerating. As a consequence, 27.6% of the homes sold in May sold above their list price.
All of this is due to a woefully short supply of homes on the market. In fact, the total supply of homes is 5.4% lower this year than it was at the same time last year.
However, the real estate market might be on the cusp of change. Mortgage rates have been rising, and now stand near their highest levels in seven years. As a result, pending home sales were down as of April. A recent Redfin survey also found a drop in customers touring homes for the first time in 27 months.
What's going on? The home price surge might be nearing its end. Overall, home affordability is dropping: Over the past 6 years, there has been a 48% increase in average home prices, while wages increased only 14%.
While some sellers are still managing to sell at higher prices than listed, nearly a quarter of sellers actually had to lower their prices this April.
If you do decide to sell right now, you would have an easy time of it, and you could get top dollar for your home. That's because demand and prices are both still high.
If you decide to wait, things might go south quickly. That’s because the market may be reaching the limits of price growth and may be stalled by higher mortgage rates.
If you want to take advantage of current conditions by buying or selling a home any time in the near future, don’t hesitate to reach out and give me a call or send me an email today. I look forward to hearing from you soon.
Home affordability is shrinking fast. Here’s what you should do to get ahead of the curve.
Home affordability is shrinking rapidly, according to research by Arch Mortgage Insurance. In the first quarter, affordability (defined as the size of the monthly mortgage payment needed to buy a home) dropped by 5%. This was mainly due to the increase in mortgage rates. As a consequence, more people are now stretched and taking on greater debt relative to their income. Other buyers are being pushed out of the market altogether.
That's not all. Affordability is expected to drop an additional 15% to 20% by the end of the year. That's because home prices continue to rise, and the Federal Reserve is expected to ratchet up its reference interest rate, which often leads mortgage rates, three more times this year.
What does this mean for you?
If you're looking to sell, you won't have a hard time finding a buyer. Even with decreasing affordability, demand for homes still far outstrips supply. That means that this spring and summer might see an additional rush on the real estate market. It also means that right now might be a very good time to list your home if you've been thinking about selling for a while.
There’s no need to panic if you’re a homebuyer.
On the other hand, if you are thinking of buying a home, you might think that this news spells doom for you. However, there's no need to panic. While affordability is dropping, it is still well above historic averages (just like current mortgage rates). In fact, Arch Mortgage Insurance estimates that homes are now 15% to 20% more affordable than they have been in the period from 1987 to 2004. When rates go up, it will affect what your monthly payments will be on a new home. From this perspective, it makes sense to move now in case you've been looking to buy before rates rise further.
So what's the next step? If you’re thinking about buying or selling a home, give us a call. We’d be happy to answer any questions you may have. We look forward to hearing from you soon.
The real estate market remains red-hot. In fact, Zillow estimates that homes sold more quickly in 2017 than ever before. And 2018 seems on-pace to beat 2017. However, one segment of the real estate market seems to be lagging.
I’m talking about luxury homes.
Prices in the top 5% of the real estate market increased just 5.1% in 2017, almost 2% lower than the rest of the market. What's going on?
Affordability does not seem to be an issue: more Americans can afford a top-level home than ever before. Instead, it might come down to two other factors.
Demand and supply are more evenly matched at the top of the market.
First, uncertainty surrounding the new tax bill could be affecting luxury homes more strongly, and this might be the reason why some potential buyers are choosing to sit and wait until the details of the tax plan become more clear. Second, there is simply a greater supply of luxury homes compared to other types of homes.
In other words, demand and supply are more evenly matched at the top of the market, while in other segments, demand far outstrips supply.
Ifyou've been thinking about trading up to a luxury home, now might be the perfect time to do so. The red-hot demand for starter and trade-up homes means you could sell your home for top dollar and at record speed. The limited price growth and greater inventory at the luxury end means you could have your pick, and find a special, unique, and customized home that perfectly suits your preferences.
If you have any questions about the current Central Illinois real estate market, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
Before hiring a real estate agent, you need to do some vetting. Here are the questions that we recommend you ask.
Buying or selling a home is a major project. Having a trustworthy agent to guide you through that project can be an invaluable asset. But how can you vet potential real estate agents to see who would be a good fit for you? Here are three important questions you should ask to get started:
1. "How many homes have you sold in the last 12 months?" Many real estate agents will tell you the number of years they have in the business. That's useful, but their recent activity can be more relevant than their total experience. Asking this question can tell you how well they know the market, as well as how successful you can expect them to be in your case.
Bonus Question: You will probably want to ask whether the agent works primarily with buyers or sellers, because many agents specialize to some extent in one or the other.
2. "Can I have the contact info for your last three deals?" Anybody can say they are a marvelously effective real estate agent. But talking to actual past clients can help you decide whether this is true or a bunch of hot air. When you do talk to a real estate agent's previous clients, you don't need to get too fancy to get useful information. Simply ask them to share their experience.
You want to get a sense that this agent is somebody you can trust.
3. "What is your strategy for my specific needs?" As a buyer, you will want the agent to explain how they will search for your new home, how many homes you can expect to see, and how the agent handles multiple offers. As a seller, you will want to know how and where the agent will advertise your home.
So what kinds of answers should you look for to these questions?
Ideally, you will want to get a sense that this agent is somebody you can trust and that you feel comfortable working with.
At the same time, you will want them to be experienced and diligent, as evidenced by recent successful deals and a concrete plan of action for your situation.
If you ever want to know how I measure up on these questions, you can always give me a call at (847) 362-1335. I'd love to hear what your specific situation is and whether I would be a good match to help you in the current Libertyville real estate market.
If you’re buying a home with a mortgage, you absolutely need to get a pre-approval first. Here’s why.
There's no doubt about it. It's a very competitive market today if you are looking to buy a home.
Inventory is near record lows, and more and more homebuyers are entering the market. This means you need every advantage to grab that perfect home when you do find it.
One no-brainer is to get pre-approved for a mortgage. A pre-approval informs you of how much you can borrow and it's something you will need to do at a later point anyway.
A pre-approval can mean the difference between having your offer accepted or having to watch your dream home go to somebody else in a crazy market like this.
In spite of all these good reasons, less than 10% of buyers who got a mortgage get pre-approved by the lender who originated the loan. In other words, you can definitely get a leg up on the competition by starting your home search at the loan office rather than at the open house.
A pre-approval definitely gives you a leg up on the competition.
Here are a few things that you will need:
1. Proof of income. At a minimum, lenders will want to see pay stubs from the past 30 days showing your year-to-date income, two years of federal tax returns, and two years of W2 forms from your employer.
2. Proof of assets. You will need to present statements from your checking, savings, or investment accounts to prove that you have funds for the down payment and closing costs.
3. Good credit. Most lenders reserve the best rates for homebuyers with a credit score of 740 or above. You can still qualify for a mortgage with a lower credit score, but a good lender will also recommend ways that you can improve your credit and qualify for a better loan.
These are the biggest and most common things you will need to get pre-approved, though your lender might want to see some other documents as well.
Once you are pre-approved, the buying process will be faster, more convenient, and less stressful. Most importantly, it will make it more likely that your offer for that perfect home gets accepted.
If you have any questions for me or need any additional assistance, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
Please Vote For Us in the 2018 Readers' Choice Daily Herald
The Diamond Residential Mortgage Libertyville and The Jan Leasure Team are honored to announce that we have been nominated by the 2018 Readers' Choice Daily Herald Awards. In order to vote for us, visit the website here.
Scroll down to “Shopping & Services”.
Click on "Shopping and Services" in the blue box.
Scroll down to “Best Mortgage Lender”.
Then type in: "Diamond Residential Mortgage Corporation North Milwaukee”. Libertyville should pop up. Choose that option.
Submit your email.
You can vote for many different categories AND you can vote once each day!
Voting ends February 24th, 2018.
On April 29th we will find out if we are in the top five and then….. there will be more voting! In the meantime, if you have any real estate or mortgage questions, remember, you can always give us a call. We would be happy to help you!
