Today we are pleased to have the VP of Spanish KCM, Jeymy Gonzalez, as our guest blogger. Jeymy has personal experience with the challenges Hispanics may face during the real estate process and works to assist this community with guidance and education. Enjoy!
A recent Fox News Latino article talks about the healthy growth of Latino-Owned farms. According with the Census of Agriculture “there has been a 21 percent increase in ownership in the last 5 years.” Most of those farms are small or mid-sized with greatest concentrations living in Texas, New Mexico and California.
The Latino-owned farms have become key providers of certain produce. The article mentioned for example; Latinos own two-thirds of the strawberry farms in California.
This increase is the result of the work of Organizations like Rural Coalition that represents small farmers and producers in the U.S. and Mexico, the recruitment efforts to bring in minority and women farmers by the USDA, and large economic forces, as NAFTA, who led new farm owners to work their way up from being laborers.
There is a great opportunity for real estate professionals who focus their business on farms and ranches. The USDA Census of agriculture published a table with the Farms with Hispanic/Latino Principal operator and The KCM Crew put it together on this map for you!
You can help these Latino operators become farm owners & fulfill the American Dream!
Last week, Discover Home Loans released an interesting survey which revealed how prepared home buyers are for the actual mortgage process. The survey reported that 94 percent of prospective buyers believe they are making a good investment decision if they buy a home. The survey also explained that 66 percent of buyers reach out to real estate agents to help determine whether buying a certain home would be a good investment. However, there is less certainty regarding the mortgage process.
Most buyers overwhelmed
The majority of potential buyers are actually overwhelmed with the plethora of information available about the home financing process. Here are some interesting highlights from the report:
- Nearly 66% feel overwhelmed with the amount of information available
- 76% of those under the age of 30 feel overwhelmed
- 76% of first time buyers feel the same way
- 54% of those buyers who have previously owned also were overwhelmed
- 59% of buyers turn to mortgage bankers to help evaluate mortgage terms and comparing offers
- 49% of buyers turn to real estate agents to help evaluate mortgage terms and comparing offers
There is help available…use it!
Cameron Findlay, chief economist at Discover Home Loans, gives great advice:
“The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process. The sheer amount of information can lead to confusion and stress. Those looking to purchase should work closely with their lender and realtor to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances.”
The purchasing of a home can put great pressure on a family. Reach out to the best mortgage and real estate professionals in your market for assistance throughout the process.
KCM founder, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. Enjoy! – The KCM Crew
Yesterday, Zillow announced the acquisition of Trulia. Some industry experts are predicting the end of the real estate business as we know it. They used words like “checkmate” and “kill shot”. Though we agree that aspects of the industry will be forced to evolve perhaps quicker than they had hoped, we believe this will be an evolution…not a revolution. No one needs to die.
Will companies and agents need to massage the way they do business? We think so. Marc Davison, the co-founder of 1000WATT Consulting, put it best when he explained that companies needed to:
“…focus on brand marketing, content marketing, data-driven advertising and other more intelligent means of engaging homebuyers and sellers.”
Sites like Zillow/Trulia give the consumer the dots (data) of real estate. Like Davison, we believe the consumer needs the real estate professional to ‘connect those dots’.
I did not have to go far to find anecdotal evidence proving this hypothesis. I just needed to look at my own family.
Massapequa, New York
Five years ago, my older son and his wife bought their first home. They found that home on Zillow and told their agent, “this is the home we’d like to live in”. The agent helped them decide on a target price. She helped them negotiate that price with the seller. She found the industry professionals they needed and coordinated the inspections, the walk-throughs and the appraisal. She helped them work with an attorney and a mortgage professional.
She was their agent and represented them throughout the entire purchasing process. She made sure that they were confident and comfortable at every stage.
They found the house online; that was the easy part. They needed an agent to help them with the hard part: actually getting the house without headaches or stress. My son and his wife truly believe she was worth every penny of her commission.
South Beach, Miami
Two years ago, my wife and I were thinking about buying a winter residence in South Beach. Every day, my wife searched the listing portals for condos for sale. We got a really good feel for South Beach and even picked out a few buildings we liked. However, even though I have been in the industry for over 30 years, we called a real estate agent who specialized in South Beach.
She explained to us how the fiscal responsibility of each building’s board would impact future “special assessments” (something we hadn’t even considered). She explained how proposed new construction might impact the ocean views of certain properties. She helped us find the perfect spot and guided us through the entire buying process.
The nights my wife and I spend eating dinner on our balcony overlooking the ocean would not have been possible without our agent.
Just this month, my younger son got his dream job; coaching women’s basketball at the collegiate level. It required him to relocate out of state. He needed a twelve month rental. He searched Zillow, Trulia and Craig’s List. He got a feel for the types of units available and the rental costs. But when it came down to it, a local real estate agent named Vic Kress found my son a great place in a sensational building in a perfect location. My son is signing the lease today.
Just the other day, when someone questioned my son on how difficult it was to find a place so far away in such a short period of time, he answered:
“I have a guy down there that is looking out for me.”
That’s what real estate professionals do. They ‘look out for’ their customers and help them through the process.
Technology has definitely given consumers easier access to information about the housing industry.
However, we believe that buyers and sellers need more than just information. They need an analysis of how that information impacts their family. Every family should feel confident when buying or selling a home. Real estate agents must reach out to these families and simply & effectively explain a complex housing market to them.
That is what will guarantee their existence.
Here are four great reasons to consider buying a home today, instead of waiting.
1. Prices Will Continue to Rise
The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 30.8% (most optimistic) and 9.4% (most pessimistic).
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Although the Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage are currently around 4.2%, Freddie Mac is projecting that rates will increase to 5.2% by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
3. Either Way, You are Paying a Mortgage
As a research paper from the Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
4. It’s Time to Move On with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But, what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe it is time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.
Though the housing market is recovering nicely, it is not doing quite as well as some analysts had predicted. There has been no shortage of excuses offered as to why this is: the rise in interest rates, more stringent lending standards, the weather.
However, we feel that there is one factor that is most responsible for curtailing the number of houses sold – the number of houses available for sale!
Inventory Levels are BELOW Historic Norms
In a recent economic forecast, Freddie Mac addressed this exact issue:
“Including newly built homes in the inventory count, the total number of homes offered for sale relative to the number of households in the U.S. has been running at the lowest level in more than 30 years, as shown in the second exhibit. The relatively low for-sale inventory reflects several features of today’s market.”
“A supply-constrained market (holding other factors constant) will result in a decline in the volume of sales and an increase in real transaction prices.”
NAR Report Confirms Inventory Constriction
History shows us that a balanced real estate market requires a six month supply of available housing inventory. The National Association of Realtors released their Existing Homes Sales Report earlier this week. The report revealed that we are still only at a 5.5 month supply of homes for sale. We have not reached the 6 month mark in over two years.
The recent increase in buyers now looking will again put a strain on this number.
While inventory levels remain below historic norms, it will remain a seller’s market. This being the case, if you are considering selling your home, now may be the time to list it for sale.
Billionaire money manager John Paulson was interviewed last week at the Delivering Alpha Conference presented by CNBC and Institutional Investor. He boldly stated:
“I still think, from an individual perspective, the best deal investment you can make is to buy a primary residence that you’re the owner-occupier of.”
Who is John Paulson?
Paulson is the person who, back in 2005 & 2006, made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?
According to Forbes, John Paulson is:
“A multibillionaire hedge fund operator and the investment genius.”
According to the Wall Street Journal, Paulson is:
“A hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.”
Why does he believe homeownership is such a great investment?
Paulson breaks down the math of homeownership as an investment:
“Today financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent. And if you put down, let’s say, 10 percent and the house is up 5 percent, which is the latest data, then you would be up 50 percent on your investment.”
How many are seeing a 50% return on a cash investment right now?
Paulson goes on to compare the long term financial benefits of owning verses renting:
“And you’ve locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed.”
Whenever a billionaire gives investment advice, people usually clamor to hear it. This billionaire gave simple advice – if you don’t yet live in your own home, go buy one.