Northeast Florida Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

May 21, 2021

4 Major Reasons Households in Forbearance Won’t Lose Their Homes to Foreclosure

Waiting to cash in on a market crash and foreclosures? Think again. - May 21, 2021

 Shannon Macourek

4 Major Reasons Households in Forbearance Won’t Lose Their Homes to Foreclosure | MyKCM

There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially be millions of foreclosures ready to hit the market. However, there are four reasons that won’t happen.

1. Almost 50% Leave Forbearance Already Caught Up on Payments

According to the Mortgage Bankers Association (MBA), data through March 28 show that 48.9% of homeowners who have already left the program were current on their mortgage payments when they exited.

  • 26.6% made their monthly payments during their forbearance period
  • 14.7% brought past due payments current
  • 7.6% paid off their loan in full

This doesn’t mean that the over two million still in the plan will exit exactly the same way. It does, however, give us some insight into the possibilities.

2. The Banks Don’t Want the Houses Back

Banks have learned lessons from the crash of 2008. Lending institutions don’t want the headaches of managing foreclosed properties. This time, they’re working with homeowners to help them stay in their homes.

As an example, about 50% of all mortgages are backed by the Federal Housing Finance Agency (FHFA). In 2008, the FHFA offered 208,000 homeowners some form of Home Retention Action, which are options offered to a borrower who has the financial ability to enter a workout option and wants to stay in their home. Home retention options include temporary forbearances, repayment plans, loan modifications, or partial loan deferrals. These helped delinquent borrowers stay in their homes. Over the past year, the FHFA has offered that same protection to over one million homeowners.

Today, almost all lending institutions are working with their borrowers. The report from the MBA reveals that of those homeowners who have left forbearance,

  • 35.5% have worked out a repayment plan with their lender
  • 26.5% were granted a loan deferral where a borrower does not have to pay the lender interest or principal on a loan for an agreed-to period of time
  • 9% were given a loan modification

3. There Is No Political Will to Foreclose on These Households

The government also seems determined not to let individuals or families lose their homes. Bloomberg recently reported:

“Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said. The Consumer Financial Protection Bureau (CFPB) warning is tied to forbearance relief that’s allowed millions of borrowers to delay their mortgage payments due to the pandemic…mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.”

The CFPB is proposing a new set of guidelines to ensure people will be able to retain their homes. Here are the major points in the proposal:

  • The proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021.
  • The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application.
  • The proposal rule wants temporary changes to certain required servicer communications to make sure borrowers receive key information about their options at the appropriate time.

A final decision is yet to be made, and some do question whether the CFPB has the power to delay foreclosures. The entire report can be found hereProtections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X.

4. If All Else Fails, Homeowners Will Sell Their Homes Before a Foreclosure

Homeowners have record levels of equity today. According to the latest CoreLogic Home Equity Report, the average equity of mortgaged homes is currently $204,000. In addition, 38% of homes do not have a mortgage, so the level of equity available to today’s homeowners is significant.

Just like the banks, homeowners learned a lesson from the housing crash too.

“In the same way that grandparents and great grandparents were shaped by the Great Depression, much of the public today remembers the 2006 mortgage meltdown and the foreclosures, unemployment, and bank failures it created. No one with any sense wants to repeat that experience...and it may explain why so much real estate equity remains mortgage-free.”

What does that mean to the forbearance situation? According to Black Knight:

“Just one in ten homeowners in forbearance has less than 10% equity in their home, typically the minimum necessary to be able to sell through traditional real estate channels to avoid foreclosure.”

Bottom Line

The reports of massive foreclosures about to come to the market are highly exaggerated. As Ivy Zelman, Chief Executive Officer of Zelman & Associates with roughly 30 years of experience covering housing and housing-related industries, recently proclaimed:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

  

May 18, 2021

Is Home Price Appreciation Accelerating Again?

At the beginning of 2021, real estate experts forecasted more inventory to level out the market, but that's not the case in the NE Florida area - May 18, 2021 at 9:00AM

 Shannon Macourek

Is Home Price Appreciation Accelerating Again? | MyKCM

At the beginning of the year, industry forecasts called for home price appreciation to slow to about half of the double-digit increase we saw last year. The thinking was that inventory would increase from record-low levels and put an end to the bidding wars that have driven home prices up over the past twelve months. However, that increase in inventory has yet to materialize. The National Association of Realtors (NAR) reports that there are currently 410,000 fewer single-family homes available for sale than there were at this time last year.

This has forced those who made appreciation forecasts this past January to amend those projections. The Mortgage Bankers AssociationFannie MaeFreddie Mac, the National Association of Realtors, and Zelman & Associates have all adjusted their numbers upward after reviewing first quarter housing data. Here are their original forecasts and their newly updated projections:Is Home Price Appreciation Accelerating Again? | MyKCMEven with the increases, the updated projections still don’t reach the above 10% appreciation levels of 2020. However, a jump in the average projection from 5.3% to 7.7% after just one quarter is substantial. Demand will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.

Bottom Line

Entering 2021, there was some speculation that we might see price appreciation slow dramatically this year. Today, experts believe that won’t be the case. Home values will remain strong throughout the year.

 

May 14, 2021

3 Graphs Showing Why You Should Sell Your House Now (2021)

Historically low inventory, frequent bidding wars, and low days on market are the perfect storm for Sellers. If you're thinking about selling, now is the time - May 14, 2021 at 7:18PM

 Shannon Macourek

3 Graphs Showing Why You Should Sell Your House Now | MyKCM

There’s no doubt that 2021 is the year of the seller when it comes to the housing market. If you’re a homeowner thinking of moving to better suit your changing needs, now is the perfect time to do so. Low mortgage rates are in your favor when you’re ready to purchase your dream home, and high buyer demand may give you the leverage you need to negotiate the best contract terms on the sale of your house. Here’s a look at what’s driving this sellers’ advantage and why there’s so much opportunity for homeowners who are ready to move this season.

1. Historically Low Inventory

The National Association of Realtors (NAR) explains:

 “Total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February's inventory . . . Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February's 2.0-month supply and down from the 3.3-month supply recorded in March 2020.”

Even with a slight rise in the number of houses for sale this spring, inventory remains near an all-time low (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMHigh buyer interest is creating a major imbalance between supply and demand, but as the small uptick in inventory shows, sellers are beginning to reenter the market. Selling your house now enables you to take advantage of buyer demand and get the most attention for your house – before more listings come to the market later this year.

2. Frequent Bidding Wars

As a result of the supply and demand imbalance, homebuyers are entering bidding wars at an accelerating rate. NAR reports the average number of bids received on the most recently closed sales is 4.8 offers. This number has doubled since the first quarter of 2020 (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMAs buyers face increasingly tough competition while searching for homes to purchase, they’re more likely to be flexible and generous in their negotiations. This gives a seller the opportunity to choose the best buyer for their needs and be selective about things like time to close, contingencies, renovations, and more. Working with your trusted agent is the best way to determine how to navigate the negotiation process when selling your house.

3. Days on the Market

In today’s market, sellers aren’t waiting very long to find a buyer for their house, either. NAR reports:

Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. 83% of the homes sold in March 2021 were on the market for less than a month.” (See graph below):

3 Graphs Showing Why You Should Sell Your House Now | MyKCMNAR Chief Economist Lawrence Yun explains:

"The sales for March would have been measurably higher, had there been more inventory…Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”

Bottom Line

If you’re thinking about moving, these three graphs clearly show that it’s a great time to sell your house. Let’s connect today so you can learn more about the opportunities in our local area.

 

Posted in Seller, Selling Myths
May 11, 2021

Should I Buy Now or Wait?

Interest rates aren't waiting, why should you? - May 11, 2021 at 7:06PM

Buying Myths, First-time HomebuyersFor BuyersInfographicsInterest RatesMove-Up BuyersPricing

 Shannon Macourek

Should I Buy Now or Wait? [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re thinking that waiting a year or two to purchase a home might mean you’ll save some money, think again.
  • Mortgage interest rates are currently very low, but experts across the board are forecasting increases in both home prices and interest rates.
  • Buying a home now means you’ll spend less in the long run. Let’s connect to put your homebuying plans in motion before home prices and mortgage rates climb even higher.

 

July 31, 2017

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