Real Life vs. Reality TV: 5 Myths Explained

Real Life vs. Reality TV: 5 Myths Explained | Simplifying The Market

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV ‘show hole’*? We’ve all been there… watching entire seasons of “Love it or List it,” “Fixer Upper,” “House Hunters,” “Flip or Flop,” “Property Brothers,” and so many more, just in one sitting.  

When you’re in the middle of your real estate themed show marathon, you might start to think that everything you see on TV must be how it works in real life, but you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and make a decision to purchase one of them.

Truth: There may be buyers who fall in love and buy the first home they see, but more often than not the process of buying a home means touring more than three homes.

Myth #2: The houses the buyers are touring are still for sale.

Truth: The reality is being staged for TV. Many of the homes being shown are already sold and are off the market.

Myth #3: The buyers haven’t made a purchase decision yet.

Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy.

Myth #4: If you list your home for sale, it will ALWAYS sell at the Open House.

Truth: Of course this would be great! Open Houses are important to guarantee the most exposure to buyers in your area, but are only a PIECE of the overall marketing of your home. Just realize that many homes are sold during regular listing appointments as well. 

Myth #5: Homeowners make a decision about selling their home after a 5-minute conversation.

Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their home and move on with their life/goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee that you can make the home of your dreams a reality!

*Show Hole – A side effect of binge-watching. Symptoms include a sense of emptiness and depression brought on by realizing you just wasted a good portion of your life watching several seasons of a TV show or an entire movie franchise all at once when you could have managed your time better.

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How Do Rising Prices Impact Your Home Equity?

How Do Rising Prices Impact Your Home Equity? | Simplifying The Market

Yesterday, we shared the results of the latest Home Price Expectation Survey by Pulsenomics. One of the big takeaways from the survey is that over the next five years, home prices will appreciate 3.5% per year on average, and cumulatively will grow by around 18%.

So what does this mean for homeowners and their equity position?

For example, let’s assume a young couple purchased and closed on a $250,000 home in January of this year. If we only look at the projected increase in the price of that home, how much equity would they earn over the next 5 years?

How Do Rising Prices Impact Your Home Equity? | Simplifying The Market

Since the experts predict that home prices will increase by 4.5% this year alone, the young homeowners will have gained over $11,000 in equity in just one year.

Over a five-year period, their equity will increase by over $46,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Bottom Line

Not only is homeownership something to be proud of, it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, let’s meet up to find out if you are able to today!

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Where Are Home Prices Headed Over the Next 5 Years?

Where Are Home Prices Headed Over the Next 5 Years? | Simplifying The Market

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.5% over the course of 2016, 3.6% in 2017 and about 3.2% in the next two years, and finally 2.9% in 2020 (as shown below). That means the average annual appreciation will be 3.5% over the next 5 years.

Projected Appreciation | Simplifying The Market

The prediction for cumulative appreciation increased slightly from 24.7% to 26.3% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 11.1%.

Cumulative Price Appreciation | Simplifying The Market

Bottom Line

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

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What States Give You the Most ‘Bang for Your Buck’? [INFOGRAPHIC]

What States Give You the Most ‘Bang for Your Buck’? [INFOGRAPHIC] | Simplifying The Market


Some Highlights:

  • Thinking of moving across the country? How far will your money take you?
  • The majority of states in the Midwest and South offer a lower cost of living compared to Northeast and Western states.
  • The ‘Biggest Bang for your Buck’ comes in Mississippi where, compared to the national average, you can actually purchase $115.34 worth of goods for $100.

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Luxury Home Sales & the Impact of the Stock Market

Luxury Home Sales & the Impact of the Stock Market | Simplifying The Market

In a recent post, CoreLogic looked at the correlation between stocks and the sales of upper-end properties ($1 Million+ sales price). The report revealed:


 “The powerful ‘wealth effects’ generated by the rapid rise in equities between 2009 and 2015 drove a large rise in the sales of homes that sold for $1 million or more.

Historically, sales of homes priced $1 million or more averaged 1.2 percent of all home sales. The spread between high-end sales and equities widened during the housing bubble but then moved more closely in unison. By the time the equity markets had peaked in May 2015, the $1 million or more share of the market had nearly doubled, averaging 2.2 percent for the remainder of the year.”

This makes sense. As people see their wealth increasing, they feel more confident in their purchasing power. And, of course, that would also impact their decisions regarding real estate. The stock market dipped earlier this year and there was quite a bit of anecdotal evidence that the upper-end market was beginning to soften.

As we can see in the chart below, the market is again flourishing. That may rejuvenate the luxury market as we move through the rest of the year.

Luxury Home Sales & the Impact of the Stock Market | Simplifying The Market

As we proceed through 2016 and enter 2017, the strength of the stock market will be a key factor in the strength of the luxury market. If the stock market falters, look for high-end sales to slow. If the market advances, as it has shown signs of doing most recently, the high-end market will advance.

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Real Estate Values Today Compared to Pre-2008 Peak

Real Estate Values Today Compared to Pre-2008 Peak | Simplifying The Market

This housing market has many people talking about home values; where they are and where they are headed. It’s also interesting to look back and see how home prices compare to values prior to the housing crisis.

Every quarter, Freddie Mac releases their House Price Index. The index usually provides monthly home values for:

  • the nation as a whole
  • each of the 50 states
  • 367 metropolitan statistical areas

This quarter, the report also included a look at today’s home values as compared to Pre-2008 values. Here is a graphic that breaks down the numbers on a state-by-state basis:

Real Estate Values Today Compared to Pre-2008 Peak | Simplifying The Market

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Home Sales Up in Every Price Range over $100K!

Homes Sales Up in Every Price Range over $100K! | Simplifying The Market

The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.

Homes priced between $100-250K showed a modest increase at 3.4%. This not only points to the lower inventory of homes available for sale in this price range but also speaks to the overall strength of the housing market.

Sales of homes over $250,000 increased by double digit percentages with sales in the $750,000- $1 million range showing the largest increase, up 16.7%!

As prices in many markets continue to accelerate, it is no surprise to see the percentage of homes in the higher price ranges increasing.

Here is the breakdown:

Homes Sales Up in Every Price Range over $100K! | Simplifying The Market

What does that mean to you if you are selling?

Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit with your agent and see if it is priced appropriately to compete in today’s market.

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Buying Remains 36% Cheaper than Renting!

Buying Remains 36% Cheaper than Renting! | Simplifying The Market

In the latest Rent vs. Buy Report from Trulia, they explained 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 5% less expensive in Orange County (CA) all the way up to 46% in Houston (TX), and 36% Nationwide! 

A recent study by GoBankingRates looked at the cost of renting vs. owing a home at the state level and concluded that in 36 states it is actually ‘a little’ or ‘a lot’ cheaper to own, represented by the two shades of blue in the map below.

Buying Remains 36% Cheaper than Renting! | Simplifying The Market

One of the main reasons that owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that rates fell again last week to 3.43%.

Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.  

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters who would like to evaluate your ability to buy this year, let’s get together and find you your dream home.

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Do You Know the Impact Your Interest Rate Makes? [INFOGRAPHIC]

Do You Know the Impact Your Interest Rate Makes? [INFOGRAPHIC] | Simplifying The Market


Some Highlights:

  • Interest rates have come a long way in the last 30 years.
  • The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford if you plan to stay within a certain budget.
  • Interest rates are at their lowest in years… RIGHT NOW!
  • If buying your first home, or moving up to the home of your dreams is in your future, now may be the time to act!

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Thinking of Selling Your House? Pick the Right Agent!

Thinking of Selling Your House? Pick the Right Agent! | Simplifying The Market

Today, more and more sellers are stepping back, taking a look at the advice real estate professionals give them, and asking themselves whether they can trust that advice. And that is exactly what they should do.

The most important question you can ask when you are choosing a real estate agent is whether you feel you can trust them. You must know that they’re giving you great advice, and that they’re going to be able to help you accomplish your family’s goals. You must trust your listing agent enough to allow them to:

  • Handle the liquidation of possibly the largest asset your family has
  • Help set the market value of that asset (get the price right)
  • Set the timetable for the liquidation of that asset
  • Set a fair fee for the services required to liquidate that asset

All four of these require a tremendous amount of trust. They’re going to sell your prized possession, set its value, set a time schedule as to when your family will be able to move, and determine the fee that you’re going to pay to get those three things accomplished.

You have to trust your agent enough to allow them to help you and your family reach your dreams.

Whether you’re a grandfather up North looking to move to Florida to spend your later years with your grandkids, or a young person who wants to take that job in San Francisco but first has to get your house sold in Chicago, you need an agent you can trust to help you move on with what’s important.

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