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Archive for January, 2017

What Do You Need to Qualify for a Mortgage?

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Fannie Mae’s “What Do Consumers Know About The Mortgage Qualification Criteria?” study revealed that Americans are quite misinformed about what is really required to qualify for a mortgage when purchasing a home.

To help correct these misunderstandings, let’s take a look at the survey results compared to the latest Ellie Mae Origination Insight Report, which focuses on recently approved loans.

Survey Results vs. What’s Really Required

    • 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.
    • Many Americans believe a ‘good’ credit score is 780 or higher. 53.9% of approved mortgages had a credit score of 600-749.
    • 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.
    • Many believe that they need at least 20% down to buy their dream home. New programs actually let buyers put down as little as 3%.

You Can Save for a Down Payment Faster Than You Think

In a study conducted by Builder.com, researchers determined that nationwide, it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage of income a renter spends on housing in each state, and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in North Carolina are able to save for a down payment the quickest in just under 7.32 years.

What if we changed that percentage? What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states. In North Carolina, you could save up a down payment in just 2.19 years. Suddenly, owning a home isn’t a far off dream – it’s a reality that’s just down the road.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. It doesn’t matter if you’ve just started to save for a down payment, or have been putting away money for years – you may be closer to your dream home than you think! To find out how close, contact Coastal Realty Connections today. We’ll make sure you find the best home at the best price sooner rather than later.

Baby Boomers Are Finding Freedom in Retirement

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Within the next five years, Baby Boomers are projected to have the largest household growth of any other generation during that same time period, according to the Joint Center for Housing Studies (JCHS) at Harvard University. Let’s take a look at why…

In a recent Merrill Lynch study, “Home in Retirement: More Freedom, New Choices,” nearly 6,000 adults, ages 21 and older, were surveyed about housing.

Crossing the “Freedom Threshold”

Throughout our lives, there are often responsibilities that dictate where we live. Whether being in the best school district for our children, being close to our jobs, or some other factor is preventing a move, the study found that there is a substantial shift that takes place at age 61.

The study refers to this change as “Crossing the Freedom Threshold” – when where you live is no longer determined by responsibilities, but rather a freedom to live wherever you would like.

As one participant in the study stated: “In retirement, you have the chance to live anywhere you want. Or you can just stay where you are. There hasn’t been another time in life when we’ve had that kind of freedom.”

On the Move

According to the study, “an estimated 4.2 million retirees moved into a new home last year alone.” Two-thirds of retirees say that they are likely to move at least once during retirement.

The top reason cited for relocation was “wanting to be closer to family” at 29%, while a close second was “wanting to reduce home expenses.” See the chart below for the top 6 reasons broken down.

Not Every Baby Boomer Downsizes

There is a common misconception that as retirees find themselves with fewer children at home, they will instantly desire a smaller home to maintain. While that may be the case for half of those surveyed, the study found that three in ten decide to actually upsize to a larger home.

Some choose to buy a home in a desirable destination with extra space for large family vacations, reunions, extended visits, or to allow other family members to move in with them.

“Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations.”

Bottom Line

If your housing needs have changed or are about to change, let’s get together to discuss the options available to you now. Contact Coastal Realty Connections and embrace the next phase of your life!

The Benefits of Working with a Real Estate Agent

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Many people wonder whether they should hire a real estate agent to assist them in buying their dream home or if they should first try to do it on their own. In today’s market, the answer is clear: you need an experienced professional!

You Need an Expert Guide if You Are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift out the homes that do not fit within the parameters of your “dream home.”

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money, not cost you money. If you’re ready to begin the home buying journey, don’t embark on this difficult path alone! Contact Coastal Realty Connections and find a real estate agent that will guide you, fight for you, and serve you well. You won’t regret it!

The Great News About Rising Home Prices

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Recently there has been a lot of talk about home prices and if they are accelerating too quickly. In some areas of the country, seller supply (that is, the number of homes for sale) cannot keep up with the number of buyers out looking for a home. This has caused prices to rise.

At Coastal Realty Connections, we believe in silver linings. The great news about rising pricesis that according to CoreLogic’s latest US Economic Outlook, the average American household gained over $11,000 in equity over the course of the last year, largely due to home value increases.

The map below was created from CoreLogic’s report and shows the average equity gain per mortgaged home over the past year.

For those who are worried that we are doomed to repeat 2006 all over again, it is important to note that homeowners are investing their new found equity in their homes and themselves, not in depreciating assets.

The added equity is helping families put their children through college, and even invest in starting small businesses, allowing them to pay off their mortgage sooner or move up to the home that will better suit their needs now.

Bottom Line

CoreLogic predicts that home prices will appreciate by another 5% by this time next year. If you’re a homeowner looking to take advantage of your home equity by moving up to your dream home, contact Coastal Realty Connections today to discuss your options!

Buying a Home: Wants vs. Needs

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In this day and age of being able to shop for anything anywhere, the best way to start is to understand the difference between wants vs. needs. This will help you figure out what’s really important to you as you begin your search for the perfect home.

If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale with rose-colored glasses.

Do you really need that farmhouse sink in the kitchen in order to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the man cave of your dreams be a future renovation project instead of a make or break now? These questions will help you figure out the difference between wants vs. needs.

The first step in your home buying process should be to get pre-approved for your mortgage. This allows you to know your budget before you fall in love with a home that is way outside of it.

The next step is to list all the features of a home that you would like, and to qualify them as follows:

    • ‘Must Haves’ – if this property does not have these items, then it shouldn’t even be considered. (ex: distance from work or family, number of bedrooms/bathrooms)
    • ‘Should Haves’ – if the property hits all of the must haves and some of the should haves, it stays in contention, but does not need to have all of these features.
    • ‘Absolute Wish List’ – if we find a property in our budget that has all of the ‘must haves,’ most of the ‘should haves,’ and ANY of these, it’s the winner!

Bottom Line

Having this list flushed out before starting your search will save you time and frustration, while also letting your agent know what features are most important to you before starting to show you houses in your desired area. In other words, an experienced real estate agent should absolutely be on your ‘must have’ list. Luckily, finding one is easy – simply contact Coastal Realty Connections to get started!

The Time To Sell Your Home Is Now. Here’s Why

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Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still around 4%.

What does this mean for sellers? That waiting to make the move while mortgage rates are increasing just doesn’t make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs.

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 increase by at least half a point by this time next year.

Act now to get the most house for your hard-earned money. Contact Coastal Realty Connections now, before prices rise even higher!

Lack of Listings Slowing Down the Housing Market

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The housing crisis is finally in the rearview mirror as the real estate market moves down the road to a complete recovery. Home values are up. Home sales are up. Distressed sales (foreclosures and short sales) have fallen dramatically. This will be the year that the housing market again races forward.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout the winter, supply is not keeping up. Here are the thoughts of a few industry experts on the subject:

Mark Fleming, PhD. Chief Economist at First American:

“Extremely limited supply is stopping the market from reaching its full potential, counteracting positive increases in market fundamentals, such as employment and wages.”

Jonathan Smoke, Chief Economist at realtor.com:

“Overall, the fundamental trends we have been seeing all year remain solidly in place as we enter the traditionally slower sales season, and pent-up demand remains substantial as buyers seek to get a home under contract while rates remain so low.”

Lawrence Yun, Chief Economist at NAR:

“Healthy labor markets in most of the country should be creating a sustained demand for home purchases. However, there’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold… 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.”

Supply and Demand

The price of any item is determined by the supply of that item, as well as the market demand. The National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their Realtors Confidence Index. Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).

Buyer Demand



The map above was created after asking the question: “How would your rate buyer traffic in your area?” The darker the blue, the more buyers are looking for homes in that area. As you can see, four states came in with a weak demand level.

Seller Supply

The Index also asked: “How would you rate seller traffic in your area?” As you can see from the map above, the majority of the country has weak Seller Traffic, meaning there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes.

Bottom line?

There is a clear demand for homes, but the surplus isn’t there. Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet the buyer demand, prices will continue to increase.

This means home prices are more competitive than ever, and that the best time to put your home on the market is right now. To take advantage of this moment in time, contact Coastal Realty Connection today. Your net worth will thank you!

Home Prices Are Rising in 2017

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Every quarter, the Federal Housing Finance Agency (FHFA) reports on the year-over-year changes in home prices. This is an excellent tool that helps many potential homebuyers and sellers decide when to put their home on the market, and when to buy the home of their dreams. If you’re thinking of buying a home, you may want to do it sooner rather than later. As you’ll see from the graph below, home prices are up year-over-year in every region.

Looking at the breakdown by state, you can see that each state is appreciating at a different rate. This is important to know if you are planning on relocating to a different area of the country. In North Carolina, home prices are currently up 6.3%, with no signs of slowing down any time soon. Waiting to move may end up costing you more!

Ready to buy a home before your priced out of your dream neighborhood? Contact Coastal Realty Connections today, before it’s too late!

Consider Cost, Not Just Price

Sellers are most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long term cost’ of the home.

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and Freddie Mac all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of the impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.2% predicted by CoreLogic over the next twelve months:

The Bottom Line

Buy now – you can’t afford not to. The first step to getting your dream home is to get the ball rolling by contacting Coastal Realty Connections today. Your future is waiting!

Buying vs. Renting: Which Is Cheaper?

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Good news for potential homebuyers!

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. This includes many cities in North Carolina, including Wilmington!

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.

You CAN Afford a Home

Many people put off buying a home because they think they’ll save money by renting, or that they don’t have enough saved up for a down payment. For many people, however, buying is actually cheaper, even in the short term. This chart shows the advantage of buying over renting quite nicely.

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, let’s get together to find your dream home. Contact Coastal Realty Connection and let’s get started!

5 Reasons to Sell Your House This Winter

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When you’re ready to move, you don’t always have the luxury of waiting. Maybe you have a great job offer that starts in two weeks, or perhaps you simply want to start the next phase of your life ASAP. If opportunity comes knocking during the winter months, you might be worried that it’s not “prime time” to sell your home. We’re here to tell you to stop worrying – the winter is actually a great time for real estate! Here are five reasons why selling your home in the winter simply makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and they’re in the market right now! More often than not, multiple buyers are competing with each other to buy a home. Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply that is needed for a normal housing market. This means, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory could be coming to market soon.
There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market this winter.

Also, as builders regain confidence in the market, new construction of single-family homes is projected to continue to increase reaching historic levels in 2017.
The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

Fannie Mae anticipates an acceleration in home sales that will surpass 2007’s pace. As the market continues to strengthen, banks will be inundated with loan inquiries causing closing-time lines to lengthen. Selling now will make the process quicker & simpler.

4. There Will Never Be a Better Time to Move Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 5.2% over the next year, according to CoreLogic. If you are moving to a higher- priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate around 4% right now. Rates are projected to increase in the next 12 months.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. The time has come for you and your family to move on and start living the life you desire. That is what is truly important, and what should drive all your real estate decisions.

Are you ready to put your sell your home this winter? If so, contact Coastal Realty Connections and let’s get started!