Finally, the issue of homeownership has become a platform talking point in this year’s presidential debate. Yesterday, one of the candidates running for President spoke out about the importance of homeownership in America.

Hillary Clinton detailed a new economic agenda yesterday. In announcing her new agenda, she remarked:

“Homeownership is about more than just owning a home. It is about putting roots down in a community with better schools, safer streets and good jobs. And it is about building wealth, as homeowners build equity in their home one mortgage payment at a time…We must make sure that everyone has a fair shot at homeownership.”

This post isn’t political!

It doesn’t matter that it was Clinton who said it first. It doesn’t matter that she is a Democrat.

What matters is that EVERY candidate for our country’s highest office realizes the important role homeownership plays in the development of our nation.

The fact that homeownership was finally brought to the forefront of the debate is great news – no matter which way you lean politically.

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Checkers is a simple game with a simple objective; eliminate the other player’s pieces. Even the process of doing so is simple, jump the other player’s pieces and start a collection. There is very little thought as to a defensive strategy and it is often more reactive than strategic.

Even though the objective of Chess is simply laid out — obtain the other player’s King — the process in which to obtain this goal is much more strategic. Chess requires a greater understanding of the ability of each of the 9 different pieces on the board and a risk assessment that takes longer than a simple scan of the board.

“It’s a game in which the winning strategy is dynamic and requires complex thought across many turns, both for the player and their opponent’s turns.  Chess requires a player to understand the context behind the moves on the board rather than just the risks offered by each individual turn.” – Play Chess Not Checkers by Zach West

You may have heard the saying, “Play Chess, Not Checkers” before, but how does this apply to real estate?

Plan past your next move

So you want to sell your house. You can just put a sign in your front yard and call it a day, right? Wrong! The process of listing your home for sale and what happens next is much more complex than that.

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, and who knows what these actions are to make sure that you acquire your dream?

One example, as we’ve reported before, is the fact that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?

Identify Risks & Defend Against Them

An experienced real estate professional knows the obstacles associated with buying or selling a home and works closely with other professionals to ensure the process is a smooth one.

Practice Makes Perfect

Just like with any skill, practice and experience bring a sense of confidence and expertise. Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Bottom Line

With an experienced Real Estate Professional on your side, even the complex process of buying your next home or selling your house can be strategically navigated.

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Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Put Your Housing Cost to Work For You

Simply put, homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s schedule an appointment to guide you through the process.

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Some Highlights:

• Every agent brings a different set of skills & specialties to their clients.
• It is important to find an agent who you can trust to guide you through the entire process step-by-step.
• Having a conversation about your goals & expectations will not only save you unneeded frustration, but will also make the transaction as smooth as possible.

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Many have questioned the stability of certain sectors of the U.S. Economy, one section in particular is the housing market. Today we would like to share how the experts feel about how we ended 2015 and where they think we are headed in 2016.

How did we do in 2015?

The National Association of Realtors

“Overall, a resilient U.S. economy and very solid job growth in recent years made 2015 a great rebound year for the housing market.

Existing-home sales were at the highest pace (5.26 million) since 2006 (6.48 million) and the Pending Home Sales Index came in at an average of 108.8, the highest annual reading since…you guessed it: 2006 (111.7).”

The National Association of Home Builders

“With the December report on housing starts and permits, preliminary totals for 2015 are now available. Total housing starts at 1.11 million were up 10.8% in 2015 compared to 2014. Single-family starts were up 10.4% to 715,300. All four census regions also experienced increases in single-family starts for 2015.”

What can we expect to start 2016?

Jonathan Smoke, Realtor.com Chief Economist

“All indicators point to this spring being the busiest since 2006…

Demand for for-sale housing will grow and will continue to be dominated by older millennials, aged 25 to 34. This demographic has the potential to claim a third of home sales in 2016 and represent 2 million home purchases.”

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CoreLogic’s latest Equity Report revealed that 256,000 properties regained equity in the third quarter of 2015. This is great news for the country, as 92% of all mortgaged properties are now in a positive equity situation.

Price Appreciation = Good News For Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

“Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market. In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity originations.” 

Anand Nallathambi, President and CEO of CoreLogic, believes this is a great sign for the market in 2016 as well, as he had this to say:

“Homeowner equity is the largest source of wealth for many Americans. The rise in home prices, expected to be at least 5% in 2016, will continue to build wealth and confidence across America. As this process continues, it will provide support for the housing market and the broader economy throughout [the] year.”

This is great news for homeowners! But, do they realize that their equity position has changed?

A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their home as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 8% of homes are in that position (down from 9% in Q2).

The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%), when in actuality, 74% do!

This means that 37% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line

If you are one of the many Americans who are unsure how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2016! Let’s get together to evaluate your situation!

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You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case.

Be careful if the agent you are interviewing begins the interview by:

• Bragging about their success
• Bragging about their company’s success

An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house.

However, you first need to know that they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.

Look for someone with the ‘heart of a teacher,’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home.

Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick someone who truly cares.

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According to the National Association of Realtors’ (NAR) Existing Home Sales Report, homes were on market for an average of 58 days in December. This was slightly longer than the 54 days in November, but still better than the 66 days experienced in December 2014. 

32% of homes across the country were on the market for less than a month!

Colorado, Utah and Delaware led all states as home are selling in 30 days or less on average. The map below was created using results from NAR’s Monthly Realtor Confidence Survey.

Bottom Line

Buyer demand remains strong. The inventory of homes available for sale remains low. If you are thinking about listing your home for sale this year, let’s get together to talk about how you can take advantage of current market conditions!

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Some Highlights:

• For the 4th year in a row the Northeast saw a concentration of High Outbound activity.
• Oregon held on to the top stop of High Inbound states for the 3rd year in a row.
• Much of this Outbound activity can be attributed to Boomers relocating to warmer climates after retiring.

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