Len and Leslie Marma | Marshfield Real Estate, Scituate Real Estate, Pembroke Real Estate

KCM Crew, May 6th, 2019

Your Fabulous New Dream Home is Now Available |MyKCM

Over the last several years, many “baby boomers” have undergone a metamorphosis. Their children have finally moved out and they can now dream about their own future. For many, a change in lifestyle might necessitate a change in the type of home they live in.

That two-story, four-bedroom colonial with three bathrooms no longer fits the bill. Taxes are too high. Utilities are too expensive. Cleaning and repair are too difficult. When they decide to travel to be with friends and family, locking up the house is too time-consuming and worrisome.

Instead, a nice ranch home with 2-3 bedrooms and two baths might better fulfill their new needs and lifestyle. The challenge many “boomers” have faced when trying to downsize to the perfect new home has been a lack of inventory.

The average number of years a family stays in their home has increased by fifty percent since 2008, causing fewer houses to come to the market. During the same time, new home builders were concentrating most of their efforts on large, luxury, expensive houses.

However, that is starting to change.

According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 692,000 units in March. The great news is that more of those homes were sold at the lower end of the price range.

In a press release last week, the National Association of Home Builders (NAHB) explained that:

“The median sales price was $302,700, with strong gains in homes sold at lower price points. The median price of a new home sale a year earlier was $335,400.”

NAHB Chief Economist Robert Dietz offered further detail:

“We saw a large gain at lower price points where demand is strong. In March of 2019, 50% of new home sales were priced below $300,000, compared to 39% in March of 2018.”

Bottom Line

If you are a “boomer” thinking of selling your old house in order to buy a new home that better fits your current lifestyle, now may be the perfect time!

The Washington Post, May 1st, 2019

A fully underwritten loan is the gold standard, but a financial statement showing your income and your sources for the deposit and down payment can strengthen your offer. (Ted Shaffrey/AP)
April 9

There’s good news and bad news for springtime home shoppers — and sellers — this year.

The good news: Mortgage rates recently dipped, making housing payments a little more affordable. More good news: The number of single-family homes for sale in the Washington region rose by 5.6 percent in February compared with February 2018, according to data from Bright MLS.

Now for the bad news for sellers: The number of homes that sold in the region declined by 5.7 percent in February compared with February 2018, which represents the seventh consecutive month of fewer sales. That slower pace of sales may mean that buyers have a little more time to look for properties. Sellers who are aware of the slowdown but still want to sell and move on may be a little more willing to negotiate, too.

But the reasons for the slowdown in sales are not so great for buyers: Years of limited numbers of homes for sale which, even with the recent increase in listings, still won’t meet buyer demand. And high housing prices reduce affordability for many prospective buyers.

The median sales price rose 4.2 percent in the metro area in February 2019 compared with February 2018 to $427,000. But in the competitive housing market in the District, prices rose by 10.6 percent in February compared with the previous year to $589,000.

The D.C. region remains tipped in favor of sellers, but each local market varies in the number of homes for sale and the number of buyers looking in that area. While the number of detached single-family homes for sale increased, the number of townhouses for sale declined by 2.2 percent and the number of condos for sale declined by 21 percent when comparing February 2019 with February 2018. In many cases, townhouses and condos offer a more affordable alternative to a detached house, so buyers looking for those property types will still likely face competition even as overall listings increase.

Depending on the neighborhood, price range and property type you’re looking at, you may have a little breathing room this spring to take your time to find your ideal home. But when you do find it, you need to be prepared to make an offer quickly. To get ready:

 Get a fully documented preapproval for a mortgage: While a quick consultation with a lender can give you an idea of your price range, to be certain that you’ll have your financing when you need it, you should request a loan preapproval. You can work with your chosen lender and provide full documentation of your income, assets and all other required paperwork to start the loan process.

The final loan approval will be contingent upon an appraisal once you have a signed purchase agreement, but you’ll have the credit qualification part of the approval in place. That can make a huge difference if you end up competing with other buyers for the home you want.

 Prepare a financial statement for the sellers: Besides price, the most important thing for sellers is to feel confident that the buyers will be able to complete the sale. Sellers worry they might take their home off the market and then be forced to relist it after a failed contract. A fully underwritten loan is the gold standard, but a financial statement showing your income and your sources for the deposit and down payment can strengthen your offer.

 Work with an experienced real estate agent: A well-connected agent with local market knowledge can help you find neighborhoods and homes that you might miss on your own. A great agent can also help you recognize good value or overpriced properties.

 Round up your offer: That sounds counter-intuitive for a buyer looking for the best deal, but if you offer $400,000 rather than $399,999, it’s more enticing to a seller as it just sounds like you are offering so much more.

Expect to spend a lot of time looking for properties online and in person this spring. The more you see, the more you’ll understand what your budget can buy and which features are the most important to you.

Jon Coile, chairman of Rockville-based multiple-listing service Bright MLS (formerly MRIS), writes occasional commentary on the Washington area housing market.

Shortage of homes crimps market, says NAR’s Yun

houses neighborhood

Existing home sales slid 4.9% in March after jumping the most in almost four years in February, according to the National Association of Realtors.

Sales of existing single-family homes, condominiums and co-ops fell to 5.21 million at a seasonally adjusted annualized pace, the Realtors group said. The median home price rose 3.8% from a year ago to $259,400.


A dearth of supply is keeping home sales in check, said NAR Chief Economist Lawrence Yun. Measured as the number of months it would take to sell off the existing stock, there was a 3.9-month inventory of homes for sale in March. Economists consider a six-month supply to be a balanced market.

“Further increases in inventory are highly desirable to keep home prices in check,” Yun said in the report.

Properties stayed on the market an average of 36 days in March, down from 44 days in February. About 47% of homes stayed on the market for less than a month, according to the report.

First-time buyers comprised 33% of sales in March, up from 32% in February and 30% in March 2018.

Broken out by region, sales fell 2.9% in the Northeast and dropped 7.9% in the Midwest. In the South, sales decreased 3.4% and in the West sales fell 6%, according to the NAR report.

“The numbers that came out today make sense in terms of overall fundamentals in the housing market – it was the previous three months of numbers that were crazy,” said Joshua Shapiro, chief economist at consulting firm Maria Fiorini Ramirez in New York. “We had two months of overly weak numbers followed by February’s overly strong numbers.”

Some of the prior gyrations could have been caused by unexpected factors such as the government shutdown, Shapiro said. That might have caused January numbers to be weaker as some government-backed mortgages couldn’t get approved, followed by a “make up” in February, he said.

“By definition, when you have seasonally adjusted numbers, you are only adjusted for things that occur regularly,” Shapiro said.

Fannie Mae, the largest mortgage-finance company, forecasts U.S. home sales in 2019 will match last year’s 5.34 million, even with lower mortgage rates. For all of 2019, the rate for a 30-year fixed mortgage probably will average 4.2%, down from last year’s 4.5%, Fannie Mae said in its April forecast. Home prices probably will increase 4.6% this year, a slower pace than last year’s 5.7% gain, Fannie Mae said.

The average rate for a 30-year fixed mortgage was 4.17% last week, about a third of a percentage point below the 4.47 percent a year earlier, according to Freddie Mac. The rate probably will average 4.2% for the current quarter, rising to 4.4% by the end of the year, according to a Mortgage Bankers Association forecast.

Instead, the slowing economy will trample homebuyer confidence and home-price growth will fall

aerial neighborhood houses

Mortgage rates have dropped significantly as of late, with the 30-year fixed coming in at an average of 4.08% this week.

The development has spurred activity in purchase mortgage applications as homebuyers act now to take advantage of the low rates while they’re here.


But analysts at Capital Economics warn against getting too excited about the possibility that low rates will heat up the housing market.  

“Mortgage interest rates have dropped sharply since the end of last year, and the 30-year fixed rate is set to fall to 4.2% by the end of 2019,” analysts wrote. “But that won’t spur a significant rise in housing market activity.”


Blame the slowing economy.

“That will hit homebuyer confidence, and with inventory levels still low that implies existing home sales will do no more than tread water over the next year or so,” the analysts wrote.

Tempered housing demand will cause home prices to continue to slow, the group said.

Price growth slowed to 5% in 2018, and Capital Economics predicts it will land around 2% by year’s end and close out 2020 at 0%.

But things will look up from there.

“An improving economy, coupled with low interest rates, will lead to a resumption in growth 2021, and we expect a rise of around 3%.”

The group also predicts that mortgage rates will end up around 4.2% by late 2019.

But as the economy’s slowdown begins to right itself in 2020, mortgage rates will again creep upward, the analysists predicted, with the 30-year fixed landing around 4.7% at the end of 2021.

But while the housing market won’t exactly see the flurry of activity some had hoped for, Capital Economics said that new home sales will find some support this year in the shift toward building cheaper starter homes, which are currently in short supply.

“Lower lumber prices will support a shift to cheaper homes and, alongside upbeat homebuilder sentiment and the relatively bright outlook for new home sales,” the group wrote, “that should enable a decent rise in single-family housing starts over the next couple of years.”

KCM Crew, April 24th, 2019

New Study Reveals One Surprising Reason for the Inventory Shortage | MyKCM

There has been a great amount written on millennials and their impact on the housing market. However, the headlines often contradict each other. Some claim this generation is becoming the largest share of first-time home buyers, while others claim millennials don’t want to own a home, blaming them for the dip in homeownership rate.

While it is true that millennials have achieved milestones like getting married, having kids, and buying homes later in life than their parents and grandparents did, they are not solely to blame for today’s housing market trends.

Freddie Mac’s Insight Report explored the impact of the Silent and Baby Boomer Generations on the housing market.

If millennials are unable to find a home to buy at a young age like their predecessors, then who is living in those homes?

The answer: Seniors born after 1931 are staying in their homes longer than previous generations, instead choosing to “age in place.”

Freddie Mac found that,

“this trend accounts for about 1.6 million houses held back from the market through 2018, representing about one year’s typical supply of new construction, or more than half of the current shortfall of 2.5 million housing units estimated in December’s Insight.

Older Americans prefer to age in place because they are satisfied with their communities, their homes, and their quality of life.”

According to the National Association of Realtors, inventory of homes for sale is currently at a 3.5-month supply, which means that nationally we are in a seller’s market. A ‘normal’ housing market requires 6-7 months inventory, a level we have not achieved since August 2012.

“The most important fundamental in today’s housing market is the lack of houses for sale. This shortage has been identified as an important barrier to young adults buying their first homes.”