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NAR Reports Show Now Is a Great Time to Sell!

We all realize that the best time to sell anything is when demand is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that now continues to be a great time to sell your house.

Let’s look at the data covered by the latest Pending Home Sales Report and Existing Home Sales Report.

THE PENDING HOME SALES REPORT

The report announced that pending home sales (homes going into contract) are up 2.4% over last year, and have increased year-over-year now for 22 of the last 25 consecutive months.

Lawrence Yun, NAR’s Chief Economist, had this to say:

“The one major predicament in the housing market is without a doubt the painfully low levels of housing inventory in much of the country. It’s leading to home prices outpacing wages, properties selling a lot quicker than a year ago and the home search for many prospective buyers being highly competitive and drawn out because of a shortage of listings at affordable prices.”

Takeaway: Demand for housing will continue throughout the end of 2016 and into 2017. The seasonal slowdown often felt in the winter months did not occur last winter and shows no signs of returning this year.

THE EXISTING HOME SALES REPORT

The most important data point revealed in the report was not sales, but was instead the

inventory of homes for sale (supply). The report explained:

  • Total housing inventory rose 1.5% to 2.04 million homes available for sale
  • That represents a 4.5-month supply at the current sales pace
  • Unsold inventory is 6.8% lower than a year ago, marking the 16th consecutive month with year-over-year declines

There were two more interesting comments made by Yun in the report:

“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”

In real estate, there is a guideline that often applies; when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values. As Yun notes, we are, and will remain, in a seller’s market with prices still increasing unless more listings come to the market. 

“There’s hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring. The market fundamentals — primarily consistent job gains and affordable mortgage rates — are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate.”

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Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market. Prices will continue to rise if a ‘sizable’ supply does not enter the market.

Bottom Line

If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers that are still out looking for your house.

If you are ready, feel free to email me and let us get you started in the exciting home buying process.


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4 Ways Mortgage Lenders Can Help You Buy a Home

In the long home-buying journey, lenders are often pegged as the bad guy—the villain who holds the purse strings and decides whether (or not) to loosen ’em up and grant you a mortgage. Then again, a home buyer simply has no choice but to go to one, most especially if he cannot purchase a home in cash. Mortgage requires a lender, it is that simple.

OK. Let’s take a step back. This bad rep is mostly a bad rap. Because the reality is that lenders make homeownership possible for the majority of Americans who do not have the ready cash to buy a home. And even if you’re a less-than-ideal home buyer, because of bad credit or lack of a down payment, they can actually help your loan go through.

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Here are five ways lenders can assist you on the path to homeownership, and some recommendations as to how you can make the most of this relationship.

1. Lenders can get you pre-approved

If you know you’re ready to buy—before you’ve even seen the inside of a single house—it’s wise to head to a lender to get pre-approved for a mortgage, pronto. This means lenders check your financial history and determine how much money they’re willing to loan you to buy a home. “You want to apply before you’re entirely under the gun,” says Steven Bogan, regional managing director for Glendenning Mortgage Corporationin Haddonfield, NJ. “If you wait until you’ve made an offer on a house, you could run into problems.”

Pre-approval is proof to home sellers—and yourself!—that you won’t have problems getting the loan you need, once that special house comes your way. It is best to seek a pre-approval at least a month or two in advance, Bogan says. Requirements for approval in a post-housing bubble world can create headaches even for stellar borrowers.

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But don’t start too early. Pre-approvals are only good for 30 to 60 days, so make sure you’re really ready to hit the pavement and start looking for houses. Still, don’t stress if your pre-approval expires; getting it re-upped isn’t a big deal.

“We usually just need to run your credit again, maybe get an updated pay stub or bank statement, and you’re good to go,” says Bogan.

2. If you can’t get pre-approved, lenders can show you how

So what if you apply for pre-approval and get denied? It hurts, but don’t worry—the pre-approval process isn’t a one-shot deal. Most lenders will be happy to work with you, even if you aren’t pre-approved right off the bat.

“The majority of lenders will give buyers a step-by-step path they need to follow to get up to approval,” says Bogan. And that usually involves boosting your credit score (more on that next).

3. Lenders can help you boost your credit score

One of the most common reasons home buyers don’t get approval is a lousy credit score—the all-important numerical summary of how reliable they’ve been paying off debts, from credit cards to college loans. You want a simple equation? The lower your score, the less likely you are to get a loan. The good news is that you can take action to boost your credit score. A credit repair company will show you the ropes, but will charge for those services.

images-1You’ve actually got a free credit-boosting guide at your disposal: the lenders who just passed you up for a loan. In most cases, they’ll be happy to show you what you need to do to boost your credit score. And while it usually takes a few months for the credit bureaus to record these changes, lenders have another ace up their sleeve: They can do a “rapid re-score” that corrects and updates info on your credit report in a matter of days.

4. Lenders can help atypical borrowers

Many home buyers are employed, earning a regular W-2 income—a generally safe bet for lenders. But If you’re self-employed, a contractor or running your own business, and your income is more prone to valleys and peaks, a good relationship with a lender can help you cut past reservations about your loanworthiness. “Basically, we’re just going to look at the last two years of tax returns, instead of W-2’s and pay stubs,” says Bogan.

However, Bogan does recommend applying even earlier if you’re a non-W-2 wage earner, since there is more paperwork and more of an investigative process into your earnings. And unlike everyone else, you’ll need to consider your timing. “Say, for example, 2016 tax returns are almost due, and it was a great year incomewise. It would probably be in your advantage to wait until after you’ve filed your taxes to apply for a mortgage,” Bogan says.

No matter what your situation, though, to get the best help, you’re actually going to have to call. “You absolutely want to talk with somebody in person,” says Bogan. So skip the online forms, and ask your friends and family (or your Realtor®, if you have one already) to recommend someone you can sit down with to get the process rolling.


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9 Tips For Creating A Family-Friendly Home That Marry Form and Function

Having a kid and trying to make sure you don’t lose your sense of style as the home gets overrun by bouncy chairs and toys? Maybe you’ve been in kidland for several years and are looking to reclaim some of your style. It can be challenging.

“As tricky as it may be to live comfortably in a small one-bedroom or studio, decorating a big family home has its hurdles, too,” said MY DOMAINE. “There are so many questions to ask: What fabrics are kid- and pet-friendly? Which coffee tables won’t take my toddler’s eye out? How can I give myself a little privacy? Once you figure out what works best for your brood, the next big thing to consider is how to do it all in style.”

Here are some tips to help you navigate the space between form and function.

Fight against dirty walls

“There’s no getting around it: Walls take a beating with young ones around,” said HGTV. “Cleats are casually tossed against white baseboards. Bedroom doors become backboards for basketball practice. A fresh expanse of drywall morphs into a blank canvas for that new set of crayons. Sticky fingers trail along hallway walls.”

But that doesn’t mean you can’t have beautiful color. Just make sure you choose paint that is washable and wipeable. Some family-friendly favorites can be found here.

Watch those corners

Sharp corners are the bane of a new parent’s existence. You can mitigate them by using pool noodles or edge guards, but they’re not so stylish. A round coffee table instead of one that’s squared off can be a great addition to your living room, both from a functional and style perspective.

Bring in a little fun

Adding in fun touches keeps your home lively. This chalkboard barn door does the trick, and it comes in a variety of different finishes and textures to match your unique style.

You can have the white couch

We always chuckle when we see home design shows that give a growing family a big white couch. That’s not happening in our house, where materials are chosen expressly for their ability to resist spills and dog hair, and colors chosen to best disguise dirty fingers and puppy stains. But, white can be done. You just need some washable slipcovers, a little diligence, and a good washing machine.

You don’t need a glider chair

It’s one of the first things new parents-to-be think about when preparing for their first child. And a glider chair is a great place to hold, rock, and nurse a baby. But, unless you’re planning on having several children in a row or see the chair melding into your décor beyond the baby stage (especially if you’re intending to put it in the middle of your living room), you might be able to do without – especially if you’re on a budget.

There’s a lot of back and forth about how much of a necessity (or not) a glider is, but if you’re on the fence, don’t want to spend the money, or would rather focus on something that better matches your style and long-term décor needs, you’re justified.

You don’t need duckies and bunnies or baseballs and mitts in the baby’s room

Nor do you need a gender-specific color. Check out the chic HGTV star Jillian Harris created for new baby, Leo.

Don’t go with a cheap rug

You might be worried about wear and tear and stains with kids, but a quality rug may be a better option than something cheap. “Invest in a wool rug,” said The Chriselle Factor. “Wool rugs generally come at a higher price point, but for the family-friendly home, they’re worth every penny. They’re soft underfoot, help break the tumbles and falls of the newly-walking, and they’re much more durable against foot traffic – so more often than not, you’ll be saving in the long run.”

Get creative with storage

Whether your kids are brand-new or heading into their teens, you always need more places to put stuff, and you want them to be as nice to look at as they are useful. If you’re in the market for a new kitchen table, consider a banquet with a lift-top bench or slide-out drawers. They make great places to store kitchen or dining items, bibs and towels, and kids’ art supplies.

Coffee tables with drawers or ottomans you can slide under desks or taller tables are key for families and also make great options for extra seating in a pinch. But when it comes to toy storage, they can start to overrun your house.

One of the keys to a good design scheme is mixing it up with interesting shapes, colors, and textures, so consider this tip from Huffington Post: “Think outside of the box with your storage! Who says toys need to be stored in ugly plastic bins? There are so many gorgeous baskets (or even an unexpected roomy tote) at a range of price points. Storage that doubles as décor also makes cleanup a cinch.”

Keep the big picture in mind

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There are several great tips in this chic living room: Ottomans keep it cushy and can be moved out of the way for floor play. Bookcases stuffed with games and toys put everything your little one wats at arm’s reach and are easy to put back for a tidy space. The concrete table is “perfect for kids’ crafts,” said MY DOMAINE. And bright pops of color and a ship chandelier keep it all interesting.

Make your living space the best place to make memories with your family. You know what they say, “Home is where the heart is.” You can always mix fun with function, just let your creativity and unique personality take the spotlight in your home.


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Taking the Fear out of the Mortgage Process

Have you always wanted to purchase your own home but have had second thoughts that hinder you? There are several instances where home buyers get scared with the process, or some parts of it.

A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need to have saved for a down payment (the average down payment on all loans was 11% last month, with many buyers putting down 3% or less), a stable income and good credit history.

Throughout the entire home buying process, you will interact with many different professionals, all of which perform necessary roles. These professionals are also valuable resources for you.

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Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

  1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score of all closed loans in September was 731, according to Ellie Mae.
  2. Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
  3. Contact a professional – your real estate agent will be able to recommend a loan officer that can help you develop a spending plan, as well as determine how much home you can afford.
  4. Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
  5. Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change), and demonstrates to home sellers that you are serious about buying!

Bottom Line

Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.

If you have ever really decided to go for it and finally get started with home hunting and buying, feel free to give me a call or shoot me an email. I’ll be glad to be part of that journey.


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Buying is Now 37.7% Cheaper Than Renting in the US

If you are one of those people having a hard time choosing whether to rent or buy your home, this latest real estate news might just be the sign you are waiting for.

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The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 17.4% less expensive in Honolulu (HI), all the way up to 53.2% less expensive in Miami & West Palm Beach (FL), and 37.7% nationwide!

Other interesting findings in the report include:

  • Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
  • Home prices would have to appreciate by a range of over 23% in Honolulu (HI), up to over 45% in Ventura County (CA), to reach the tipping point of renting being less expensive than buying.
  • Nationally, rates would have to reach 9.1%, a 145% increase over today’s average of 3.7%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

Get out of the renting rut and start owning the home you have always been dreaming of. Call me for more information about Maui real estate.