Charlotte’s Real Estate Market Is Still Going Strong Into The New Year

It might be cold outside, but Charlotte’s residential real estate market is red-hot
heading into 2020.

Although December closings are not yet tabulated, the number of Charlotte home sales increased 3.7% in the first 11 months of 2019 (or by nearly 700 closings) compared to 2018.

The real story, however, was that the market gained strength in the second half of the
year even as fewer homes for sale were added to the market. Home sales increased just 1.5% in the first six months of the year compared to the first six months of 2018, but
rose 8.7% from July to November. The market shift coincided with Amazon’s new distribution facility in West Charlotte, the revitalization of FreeMore West, and announcements by Sun Trust and BB&T to merge and move the headquarters of the combined companies to Charlotte (June 12) and Lowe’s announcement that it was relocating its tech hub to South End (June 27).

And just this week, the news that we are the 30th team for Major League Soccer, playing at Bank of America stadium, with plans to rebuild and revitalize the old Eastland Mall site, which will have an incredible impact on home values along the entire east Charlotte corridor.

Another anomaly for Charlotte’s real estate market in 2019 is that it is bucking the trend of most U.S. cities, which saw housing inventory increases from the previous year. Five
hundred and fifty more homes for sale in Charlotte hit the market in 2019, but the city’s inventory of available houses still fell 5.7%. Charlotte home buyers essentially absorbed
every new listing that came on the market in 2019, plus another 333 that were already on the market (which is a total absorption rate of 106%). It wasn’t surprising, considering Charlotte is among the hottest growth cities in the country with and estimated 44,000+ new residents added in 2019.

Sufficient housing inventory continues to be the issue that keeps most Realtors ® up at night. Charlotte had just a three months’ supply of inventory at the end of
2019. The National Association of Realtors says a housing market in balance
between supply and demand should have a six months’ supply of homes on the
market. As housing inventory declined, there was increased upward pressure on
home prices. For the year, the average home sales price in the Charlotte market area
rose 6.9% in 2019 to $270,000. Still, the average home sales price is just 27.5% more than it was in 2008 (a total average annual increase of 2.5%).

Charlotte’s housing inventory needs to exponentially grow to meet current and future growth and demand. The area desperately needs more single family new construction, yet permits are expected to finish the year down 3%. More investor flips in up-and-coming neighborhoods would help, since very few first time home buyers are comfortable taking on renovations, nor do they have the equity (or extra cash) to do them.

In a December article in the Charlotte Business Journal, Charlotte was named the fourth most active city for investor buyers of residential homes- and with 7% of Mecklenburg County’s homes currently unoccupied, opportunities abound. Investors know that real estate is a proven way to build wealth, through gains in appreciation and equity- and in tax breaks and write offs. Perhaps it is time to consider adding rental real estate to your investment portfolio?

Contact us and we’ll guide you in making the best real estate decisions in the new year to help YOU build your nest egg!

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These 9 American cities will become unaffordable by 2025

A new GoBankingRates report identified American cities in which the average home value would rise above the national median —$231,000 and growing

BYVERONIKA BONDARENKO

Charlotte, Spokane and Grand Prairie are all at risk of going the way of Seattle and San Francisco and becoming unaffordable in less than five years.

A new GoBankingRates report identified American cities in which the average home value would rise above the national median — at the moment, $231,000 and growing by 2.8 percent per year.

While the economy and market fluctuations could change the outlook in the future, a clear picture is emerging. By 2025, it’s not just San Francisco, New York and San Jose that will have home prices disproportionate with the rest of the country and the average worker’s salary. The spikes are set to occur in Florida, the Midwest and Texas.

“While the idea of affordable housing in an urban center isn’t implausible for plenty of Americans living in the Midwest and South, that’s also rapidly changing in some areas,” reads the report.

Here are the top American cities that are likely to become unaffordable in less than five years:

Charlotte, North Carolina

The largest city in North Carolina, Charlotte has been seeing rapid job growth and large numbers of people moving to its center for economic opportunities. As housing supply has struggled to meet the increased demand, prices are only expected to rise in the coming years and decades.

“Joining Concord, Charlotte is also seeing housing prices on the rise,” the report states. “However, this North Carolina city has a lot less time than its suburb before becoming unaffordable.”

• When: 2020
• 2019 home value: $230,300
• Projected 2020 home value: $239,780.42
• One-year projected growth rate: 4.12 percent

Spokane, Washington

Four hours east of Seattle, Spokane is a small mountain city known for its outdoor lifestyle. Like many towns in Washington state, it’s seen housing values rise rapidly over the past decade even if, not being within easy driving distance of Seattle, it was not part of the Amazon boom that drew hordes of tech workers to western Washington.

“This Washington city represents one of the few places in the study that are outside of the South,” reads the report. “It’s remote relative to the other cities on the list — Spokane […] is the only featured city near the Pacific coast.”

• When: 2020
• 2019 home value: $221,600
• Projected 2020 home value: $238,336.99
• One-year projected growth rate: 7.57 percent

St. Petersburg, Florida

While St. Petersburg, Florida has long been a popular vacation destination, its strong job market attracts residents from other parts of Florida. GoBankingRates predicts home values in the city will grow by 5.09 percent in the next year alone.

“Sitting just south of Clearwater, St. Petersburg offers warm weather and a great location on Florida’s Gulf Coast and the Tampa Bay,” reads the report.

• When: 2020
• 2019 home value: $226,800
• Projected 2020 home value: $238,336.99
• One-year projected growth rate: 5.09 percent

Irving, Texas

Unlike major Texas metropolises like Fort Worth, Dallas and Austin, Irving has been considered a more affordable place to live — a fact that, due to the jobs created by its proximity to the Dallas-Fort Worth airport, is likely to change for the worse in the coming years.

“Irving is one of four Texas cities that are on their way to losing affordability,” reads the report. “It has a population of just under 60,000 and sits directly adjacent to the Dallas-Fort Worth International Airport, completing the triangle of cities clustered between Fort Worth and Dallas with rapidly rising home values.”

• When: 2021
• 2019 home value: $223,700
• Projected 2021 home value: $246,457
• One-year projected growth rate: 4.96 percent

Port St. Lucie, Florida

Nestled along the coast in between Orlando and Miami, Port St. Lucie is a sleepy city known for its beaches. Over the last few years, it has been gaining attention as a vacation destination — and, as a result, attracting more permanent homebuyers and snowbirds alike.

“Between the ocean and nearby Lake Okeechobee, those spiking home values could be a result of water sports fans flocking to this affordable option for freshwater and saltwater activities alike,” reads the report.

• When: 2021
• 2019 home value: $227,400
• Projected 2021 home value: $246,261.12
• One-year projected growth rate: 4.06 percent

Lawrenceville, Georgia

Considered a suburb 30 miles outside of Atlanta, Lawrenceville has home values that are below the national median. GoBankingRates predicts that this will change in no small part due to the jobs created by the local economy and airport.

“With a population approaching 45,000, this Atlanta suburb is home to the Gwinnett County Airport,” reads the report.

• When: 2021
• 2019 home value: $225,100
• Projected 2021 home value: $245,205.51
• One-year projected growth rate: 4.37 percent

Rochester, Minnesota

Located 90 miles outside of Minneapolis, Minnesota’s Rochester regularly makes lists of the best places to live in the country — it’s small, has a strong job market and developed infrastructure.

“However, the town has a major claim to fame: it’s home to the legendary Mayo Clinic,” reads the report.

• When: 2021
• 2019 home value: $228,500
• Projected 2021 home value: $244,466.11
• One-year projected growth rate: 3.43 percent

Grand Prairie, Texas

Another city within the Dallas-Fort Worth area, Grand Prairie ha been seeing its home prices rise as Texas lures in newcomers from all over due to its current job boom.

“The Dallas-Fort Worth area is clearly seeing home prices on the rise,” reads the report.

• When: 2023
• 2019 home value: $214,900
• Projected 2023 home value: $263,209.76
• One-year projected growth rate: 5.2 percent

Kissimmee, Florida

Considered a suburb of the larger Orlando, Kissimmee is a popular Airbnb choice for Disney World visitors looking to save some money — this location is a major reason for the housing boom expected to take place in the next five years.

“Since Kissimmee sits just south of Orlando, residents can likely expect the local economy to benefit from Disney World,” reads the report.

• When: 2023
• 2019 home value: $221,300
• Projected 2023 home value: $258,388.64
• One-year projected growth rate: 3.95 percent

CORRECTION: A previous version of this article claimed that Spokane, Washington had 45,000 residents which is what was written in the GoBankingRates report. Spokane actually has over 200,000 residents. The article has been updated to reflect this fact.

Email Veronika Bondarenko

via Why Home Prices Keep Rising, And Are We Headed For Another Recession?

Why Home Prices Keep Rising, And Are We Headed For Another Recession?

Here’s information from the latest National Association of Realtors study about the current housing market’s ‘state of affairs’:

Second Quarter 2019 Single Family Metro Market Prices

August 8, 2019

By: Michael Hyman

The National Association of REALTORS® reported that quarterly home prices increased again this past quarter. Prices continued to rise, with 91% of the markets showing home price appreciation. Single-family home price growth is steady, median family incomes are rising modestly, inventory levels are low and affordability has been declining. Knowing the mortgage rates and the qualifying incomes for down payments will help potential homeowners figure out what metro areas are affordable for them. Here is a look at the metro areas with the strongest price growth in the second quarter 2019, as well as a look at the yearly change in median existing single-family home prices for the top five highest and lowest growth metro areas of the second quarter 2019.

These are the top five single-family metro areas with the highest home price appreciation:

These are the bottom five single-family metro areas that had a decline in home price appreciation:

These are the most expensive metro areas for the second quarter 2019:

These are the least expensive metro areas for the second quarter 2019:

Qualifying Income Based on Sales Price of Existing Single family Homes for Metropolitan Areas by Region:

For the US, at the 5% down-payment threshold, the qualifying income amount for the second quarter of 2019 was $62,192. At the 10% down-payment mark, the qualifying income was $58,918, and with a 20% down-payment, the income required to qualify for a mortgage was $52,372. The West led all regions with the highest qualifying income while the Midwest had the lowest income for 5%, 10% and 20% down payments on a single-family home.

Michael Hyman

Research Data Specialist

Michael Hyman is a Research Data Specialist for the National Association of REALTORS®.

 

So…. what’s happening with interest rates this week? Check out this  weeks ‘Markets In A Minute”: https://sf3.tomnx.com/landingpage/?token=Y6N80qHby

 

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via How To Boost Your Credit Score Before Buying A Home

How To Boost Your Credit Score Before Buying A Home

 

So, you think that you might be ready to consider purchasing a home? Have you found yourself daydreaming about floor plans and home décor, going to Open Houses or reading Pottery Barn magazines and dog-earing the pages of the ideas of things that you like for your new home? Maybe you envision an outdoor retreat where you can enjoy fun-filled evenings and afternoons with your children, family, or friends. Or maybe you envision a playroom for your children, or a well-organized home office where you can get stuff done. Regardless of what the exact picture of home looks like for you, there is no doubt that home ownership can be a great goal to work toward. But of course, the process doesn’t really begin with choosing your favorite features or picking out paint samples — it typically begins with your credit score.

Credit scores play an important role in the journey to home ownership, and if you are worried that your credit score could derail your financial goals, here’s some good news: There are often ways to improve them and bump them up to assure that, not only do you qualify for a home purchase, but that you get the best rate when doing so. Here are a few suggestions on how to boost your credit score, keeping in mind that everyone’s unique financial situation is different (and that not everyone will see the same results).

Start With Your Three Credit Reports

Did you know that your credit report is available from three different credit bureaus? You should check your credit reports from Equifax, TransUnion, and Experian regularly — and especially when a new mortgage application is on the horizon. Just like you keep an eye on your bank account and credit cards for fraud or mistakes, you should check your credit reports across the three bureaus for the same reasons. There is a fourth credit bureau that most people have never heard of (Innovis), but the top three are the ones that you need to check, because these “tri-merge scores” are used by lenders to qualify you for a loan.

The credit bureaus work hard to make sure that the information on your credit reports is accurate and error-free. The Fair Credit Reporting Act (FRCA) requires them to do so, but the credit bureaus each maintain somewhere around 220 million consumer credit files so the sheer volume of credit files does leave some room for error (and despite everyone’s best efforts, credit reporting mistakes and fraud do happen).

Thankfully, checking your credit is free and easy. You can claim a free copy of your three credit reports once every 12 months from AnnualCreditReport.com. Once you download your reports, look them over very carefully for mistakes. If you discover incorrect information, the FCRA gives you the right to dispute items with the credit bureaus. If you do succeed in getting a negative, erroneous item removed from your reports, it could be reflected positively in your credit score, but that takes time.

Photo by rawpixel.com on Pexels.com

Photo by Pixabay on Pexels.com

Pay Down Credit Card Debt

One of the most promising potential ways to improve your credit score— not to mention your financial safety net or ability to save up — is to pay down debt. FICO credit scoring models are designed to closely evaluate the debt-to-credit limit usage on your credit card accounts (aka your revolving utilization ratio). In fact, a substantial 30% of your FICO® score is largely based upon revolving utilization.

Studies show that consumers who utilize higher percentages of their available credit card limits generally represent a bigger credit risk to lenders. As a result, higher revolving utilization typically correlates with a lower credit score. When you pay down balances on your credit cards, however, you will be utilizing less of your available credit — and your credit score could improve once those new, lower balances appear on your credit report. Now, be careful that you don’t make the mistake that many people do, by paying OFF long standing debt (in good standing). This long term debt (like a credit card that you have had for 5 to 10 years, with an account in good standing) shows a great past history that you have been a good credit risk in the past, and most likely, in the future. Creditors like to see these long standing accounts if they have a positive past history to tell them. Just pay them down, and any cards that are newer, or unnecessary (department store cards) can be siphoned off. And, if you have any unpaid collections, charge offs or medical debts, those should be the first things you clear off your deck. Check into paying down your student loans, too- unless they have very low rates that are less than your other debts. The real key here is to pay DOWN you balances, not to unnecessarily lower your score by removing your good credit payment history.

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Plan Ahead

When it comes to your credit score and credit reports, things generally take time. If you paid off your credit cards today, it could take as long as a 60 to 90 days before you see it updated on your credit report. Make sure to check back in with the three credit bureaus in a month, and then again, in 60 days, to make sure that the information that was disputed has been successfully removed from all three credit reporting bureau files.

If you disputed a credit reporting error today, it could be 60 to days (or more) before the credit bureaus can complete an investigation. So, the sooner you start, the better off and more prepared that you will be. If you plan to apply for a mortgage, it’s a great idea to get a jump start on checking and potentially repairing your credit as soon as you can- before it impacts or derails the purchase of your ‘dream house’.

If you need additional assistance, your trusted Realtor can lead you to a lender who can do a credit inquiry for you at no charge, and give you some additional ideas on how to reduce your debt the right way, to get you on the road to home ownership- then we will get you fully Pre-Approved, and ready to put an offer on the home of your dreams!

Here’s a great reference if you need some assistance fixing issues found on your credit reports or building up your credit score (Brad can assist nationwide):

Brad Bennett

Crown Family Trust
Credit, Finance, Security & Privacy Solutions

Cell: 704-560-2167
Email: crownfamilytrust@consultant.com

Have any further questions about building your credit or the path to home ownership? Contact us, below:

 

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Can Millenials Afford To Buy A Home?

Do 46 Million Millennials Know They Are Mortgage Ready?

 

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”,meaning they meet the qualifications to be approved for a mortgage today!

• a FICO Score ≥ 620
• a Back-End Debt to Income Ratio ≤ 25%
• no Foreclosures or Bankruptcies in the last 7 years
• no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line

If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, contact me (or a local real estate professional) who can help guide you on your path to homeownership.

via What Credit Score Do You Need To Buy A House?

What Credit Score Do You Need To Buy A House?

Unsure about your credit score? Read on!

 

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

• 16% Very Poor (300-579)
• 18% Fair (580-669)
• 21% Good (670-739)
• 25% Very Good (740-799)
• 20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

“Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640. Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:As you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

“Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.

Bottom Line

At least 84% of Americans have a score that would allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, give me a call, and we will have your credit score professionally checked with all FOUR credit bureaus, and then formulate a plan to help you become a happy home owner!

 

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Why An Economic Slowdown Will NOT Crush Real Estate This Time

Last week, the National Association for Business Economics released their February 2019 Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future: “While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.” Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years: The Pulsenomics Survey of Market Analysts The Wall Street Journal Survey of Economists The Duke University Survey of American CFOs That raises the question: Will the real estate market be impacted like it was during the last recession? A recession does not equal a housing crisis. According to the dictionary definition, a recession is: “A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.” During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted: January 1980 to July 1980: Home values rose 4.5% July 1981 to November 1982: Home values rose 1.9% July 1990 to March 1991: Home values fell less than 1% March 2001 to November 2001: Home values rose 4.8% Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained: “There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.” The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward. Bottom Line If there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted: “An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.” Contact us if you have any questions about the housing market: Name(required) Email(required) Website Comment(required) Submit Δ