How Current Interest Rates Can Have a High Impact on Your Purchasing Power

How Current Interest Rates Can Have a High Impact on Your Purchasing Power

How Current Interest Rates Can Have a High Impact on Your Purchasing Power | MyKCM

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.61%, which is still near record lows in comparison to recent history!

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a home within the national median price range while keeping your principal and interest payments between $1,850-$1,900 a month.

How Current Interest Rates Can Have a High Impact on Your Purchasing Power | MyKCM

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Act now to get the most house for your hard-earned money.  If you are looking to sell your home, give San Ramon Real Estate expert Jason Kerner a call at 925-400-7007 or KernerHomes.  

You DO NOT Need 20% Down to Buy Your Home NOW!

You DO NOT Need 20% Down to Buy Your Home NOW!

You DO NOT Need 20% Down to Buy Your Home NOW! | MyKCM

The Aspiring Home Buyers Profile from the National Association of Realtors(NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that the main reason why non-homeowners do not own their own homes is that they believe that they cannot afford them.

This brings us to two major misconceptions that we want to address today.

1. Down Payment

A recent survey by Laurel Road, the National Online Lender and FDIC-Insured Bank, revealed that consumers overestimate the down payment funds needed to qualify for a home loan.

According to the survey, 53% of Americans who plan to buy or have already bought a home admit to their concerns about their ability to afford a home in the current market. In addition, 46% are currently unfamiliar with alternative down payment options, and 46% of millennials do not feel confident that they could currently afford a 20% down payment.

What these people don’t realize, however, is that there are many loans written with down payments of 3% or less.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO®Scores

An Ipsos survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.

The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724. The chart below shows the distribution of FICO® Scores for all loans approved in May.

You DO NOT Need 20% Down to Buy Your Home NOW! | MyKCM

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but you are not sure if you are ‘able’ to, let’s sit down to help you understand your true options today.  As your San Ramon Realtor Expert, I am always available to discuss your personal situation.  Give me a call at 925-400-7007 or KernerHomes.

San Ramon Summer Fun

San Ramon Summer Fun is here!  San Ramon hosts a lot of summer fun events.  If you are looking for a few fun summer entertainment ideas with the kids, here are a couple of the upcoming activities you might want to check out:

Forest Home Farms- Just Keep Mooooving and Victorian Lawn Games

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June 23, Forest Home Farms is hosting a free event called Just Keep Mooooving.  The event is free and runs from 11am- 2pm.  The event teaches the importance of cows contribution to farm life.  They will also offer instruction on how to milk cows and make butter.

June 30, Forest Home Farms is hosting Victorian Lawn Games from 11am- 2pm.  Come to learn a few outdoor lawn games that the Victorian’s enjoyed during those historic days that pre-date cellphones.  They also offer free lemonade making lessons.  Let your youth experience homemade lemonade that does not come from a can or plastic cup.

For more information, go to Forest Homes Farm Summer Fun Events

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Family Camp Out

Saturday to Sunday, June 23-24 is the great outdoor adventure called Family Camp Out.  Registration for this event is required.  Go to Family Camp Out to sign up.  Fees are $21 per resident. Check-in is Saturday from 3pm-5pm and activities begin at 4pm.

The event takes place at our beautiful Rancho Community Park.  Camp out under the stars while enjoying all types of games like crafts, star gazing with the Mt. Diablo Astronomy Society and enjoy a Ranger-led camp fire program.  BBQ dinner, water bottle and light breakfast are included.  You will need to bring all your own camping gear for the event.  What a wonderful way to spend the weekend with the kids!

 

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Outdoor Movies in the Park- SING

Friday, June 29 at 8:30pm, the City of San Ramon is hosting the family-friendly moving SING at the Central Park Amphitheater.   Bring the whole family for this fun-filled movie!   For more details about the movie and event, go to Summer Outdoor Movies.  The movie is expected to run for 1 hour, 48 minutes and is rated PG.

If you are looking to buy or sell a home in the fabulous city of San Ramon, give me a call.  As your San Ramon Real Estate expert, I am always available to discuss your individual needs.  You may reach me at 925-400-7007 or KernerHomes.  Make it a great day!

 

 

How a Lack of Inventory Impacts the Housing Market

How A Lack of Inventory Impacts the Housing Market

How A Lack of Inventory Impacts the Housing Market | MyKCM

The housing crisis is finally in the rear-view mirror as the real estate market moves down the road to a complete recovery. Home values are up, home sales are up, and distressed sales (foreclosures and short sales) have fallen to their lowest points in years. The market will continue to strengthen in 2018.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. Buyer demand naturally increases during the summer months, but supply is not keeping up.

Here are the thoughts of a few industry experts on the subject:

Lawrence Yun, Chief Economist at National Association of Realtors

“The worsening inventory crunch through the first three months of the year inflicted even more upward pressure on home prices in a majority of markets. Following the same trend over the last couple of years, a strengthening job market and income gains are not being met by meaningful sales gains because of unrelenting supply and affordability headwinds.”

Sam Khater, Chief Economist for Freddie Mac

“As we head into late spring, the demand for purchase credit remains rock solid, which should set us up for another robust summer home sales season. While this year’s high rates – up 50 basic points from a year ago – have put pressure on the budgets of some home shoppers, weak inventory levels are what’s keeping the housing market from a stronger sales pace.”

Javier Vivas, Director of Economic Research for Realtor.com

“The dynamics of increased competition and buyer frustration are unlikely to change…In fact, the direction of the trend is pointing to a growing mismatch between the pool of prospective buyers and existing inventory.”

Bottom Line

If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.

If you are looking to buy or sell a home, contact San Ramon Realtor Jason Kerner at http://www.KernerHomes.com or 925-400-7007.

Parents Say Kids’ Opinions Matter Big When Buying a Home

Parents Say Kids’ Opinions Matter Big When Buying a Home

Parents Say Kids’ Opinions Matter Big When Buying a Home | MyKCM

A recent survey conducted by Harris Poll and released by SunTrust Mortgage found that “55% of homeowners with a child under the age of 18 at the time when they purchased their home said that the opinion of their offspring played a major role in their home buying decision.”

When the results were broken down by the parent’s age, millennials (those 18-36) led the way with 74% of homeowners saying that their child’s opinion was a factor in choosing which home to buy. Eighty-three percent of renters believe that their child’s opinion would be a deciding factor when looking to purchase a home.

So what features in a home are most important to kids?

Parents Say Kids’ Opinions Matter Big When Buying a Home | MyKCM

Coming in at 57%, it should come as no surprise that gaining their own bedrooms was the top most-desirable feature of any home for kids, followed by a large back yard to play in at 34%.

Todd Chamberlain, Head of Mortgage Banking at SunTrust explained the reasoning behind the survey,

“As a parent of two kids, I know from experience that including children in the home buying process is not only fun for the whole family, but also educational for our homebuyers of tomorrow.”

Bottom Line

If you’re thinking about selling your home this year, make sure to highlight all the kid-friendly features your home has to offer so that you can sway the real decision makers.  To discuss your personal situation and needs, contact San Ramon Real Estate Expert Jason Kerner at 925-400-7007 or http://www.KernerHomes.com

Did Tax Reform Kill the Luxury Market?

Did Tax Reform Kill the Luxury Market? NOT SO FAR!

Did Tax Reform Kill the Luxury Market? NOT SO FAR! | MyKCM

The new tax code limits the deduction of state and local property taxes, as well as income or sales taxes, to a total of $10,000. When the tax reform legislation was put into law at the beginning of the year, some experts felt that it could have a negative impact on the luxury housing market.

Capital Economics:

“The impact on expensive homes could be detrimental, with a limit on the MID raising taxes for those that itemize.”

Mark Zandi of Moody’s Analytics:

“The impact on house prices is much greater for higher-priced homes, especially in parts of the country where incomes are higher and there are thus a disproportionate number of itemizers, and where homeowners have big mortgages and property tax bills.”

The National Association of Realtors (NAR) predicted price declines in “high cost, higher tax areas” because of the tax changes. They forecasted a depreciation of 6.2% in New Jersey and 4.8% in Washington D.C. and New York.

What has actually happened?

Here are a few metrics to consider before we write-off the luxury market:

1. According to NAR’s latest Existing Home Sales Report, here is the percent change in sales from last year:

  • Homes sales between $500,000 – $750,000 are up 11.9%
  • Homes sales between $750,000 – $1M are up 16.8%
  • Homes sales over $1,000,000 are up 26.7%

2. In a report from Trulia, it was revealed that searches for “premium” homes as a percentage of all searches increased from 38.4% in the fourth quarter of 2017 to 41.4% in the first quarter of 2018.

3. According to an article from Bloomberg:

“Median home values nationally rose 8 percent in March compared with a year earlier, while neighborhoods of San Francisco and San Jose, California, have increased more than 25 percent.

Prices in affluent areas in Delaware and New York, such as the Hamptons, also surged more than 20 percent.”

Bottom Line

Aaron Terrazas, Zillow’s Senior Economist, probably summed up real estate’s luxury market the best:

“We are seeing the opposite of what was expected. We have certainly not seen the doomsday predictions play out.”

Thinking of Buying or Selling a Home?

If you are thinking about buying or selling a home, give San Ramon Realtor Jason Kerner a call at 925-400-7007 or KernerHomes.com.  Put Jason’s 16 years of experience to work for you.

4 Reasons Why Summer Is a Great Time to Buy a Home

4 Reasons Why Summer Is a Great Time to Buy a Home!

4 Reasons Why Summer Is a Great Time to Buy a Home! | MyKCM

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights reports that home prices have appreciated by 7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have increased by half a percentage point already in 2018 to around 4.5%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage –either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.  As your San Ramon Realtor expert, I am happy to help answer any questions about your individual situation.  Let’s put my 16 years of experience to work for you.  925-400-7007 or http://www.KernerHomes.com

Millennials are Skipping Starter Homes for Their Dream Homes

Millennials Are Skipping Starter Homes for Their Dream Homes

Millennials Are Skipping Starter Homes for Their Dream Homes | MyKCM

A new trend has begun to emerge. With home prices skyrocketing in the starter home category, many first-time homebuyers are skipping the traditional starter homes and moving right into their dream homes.

What’s a Starter Home?

According to the National Association of Realtors (NAR), simply put, a starter home is a one or two-bedroom home (sometimes even a small, three bedroom). “Prices vary widely by market but starters on average cost $150,000 to $250,000 while trade-up and premium homes cost upwards of $300,000.”

Finding Their Forever Homes Now

A recent CNBC article revealed that there are many factors that delayed older millennials (ages 25-35) from buying a home earlier in their lives. The aftereffects of the Great Recession teaming up with larger education costs forced many to either remain living in their parent’s homes or to rent.

With the economy continuing to improve, many millennials have been able to break into better-paying jobs which has helped spur down payment savings. As the dream of homeownership comes closer to reality, many millennials are saving for their forever homes.

According to the latest statistics from NAR, 30% of millennials bought homes for $300,000 or more this year (up from 14% in 2013). Diane Swonk, Chief Economist at Grant Thornton weighed in saying, “They rented for longer. Now they’re going to where they want to stay.”

More and more millennials are settling down, getting married, and starting families, which is a huge factor driving them to look for larger homes.

Increased competition in the starter home market has also been a driving force in waiting to afford their dream homes. Inventory in the starter home market is down 14.2% from last year, according to research from Trulia. This has driven prices up and has led to bidding wars.

Many first-time buyers who were originally looking for starter homes are realizing that for just a little bit more of an investment, they could afford trade-up or premium homes instead.

Bottom Line

If you plan on purchasing your first home this year, let’s get together to determine how much house you can afford. You may be pleasantly surprised.  As your local San Ramon Realtor, I am available to answer all your questions.  Give me a call at 925-400-7007 or KernerHomes.

Luxury Home. Now’s the Time!

Dreaming of a Luxury Home? Now’s the Time!

Dreaming of a Luxury Home? Now's the Time! | MyKCM

If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! Recently, the Institute for Luxury Home Marketing released its Luxury Market Report which showed that in today’s premium home market, buyers are in control.

The inventory of homes for sale in the luxury market far exceeds the number of people searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer or can be found at a discount.

Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call their house their new home.

The sale of your starter or trade-up house will help you come up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

But not all who are buying luxury properties have a home to sell first.

A recent Bloomberg article gave some insight into what many millennials are choosing to do:

“A new generation of affluent homebuyers powered by a surge in inherited wealth is driving the luxury-home market, demanding larger spaces and fancier finishes, according to a report heralding ‘the rise of the new aristocracy.’”

Bottom Line

The best time to sell anything is when demand is high, and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.  Give San Ramon Realtor Jason Kerner a call at 925-400-7007 or www.KernerHomes.com

18 - Living Room

1087 Murrieta Blvd Livermore Condo

1087 Murrieta Blvd Livermore Condo

Kitchen with Bar Seating
Kitchen with Bar Seating

Charming one bedroom condo with open concept floor plan and spectacular pool views from the private patio.  The formal living room and dining room have large windows and updated crown molding. The kitchen offers beautiful pool views and bar seating access.  Unit #242 is ideally located close to the condo entrance.  For photographs and more information, go to 1087Murrieta.com  or contact East Bay Realtor Jason Kerner at 925-400-7007 for a private tour. 

The HOAs include access to the pool, spa, gym, laundry room, parking, and gated access. Ideally located, this condo is just minutes from downtown Livermore restaurants, shopping, highway 580, Centennial Park, Mocho Park and Hansen Park.

If you are interested in buying or selling your home, contact East Bay Realtor Jason Kerner at 925-400-7007 or go to www.KernerHomes.com.  Make it a great day!