 With all the headlines circulating about home prices and rising mortgage rates, you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11th consecutive year, consistently beating other investment types like gold, stocks, and bonds (see graph below):  If you’re thinking about purchasing a home, let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision. Why Do Americans Still Feel So Positive About the Value of Investing in a Home? Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes: “. . . homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.” That’s because owning a home grows your net worth over time as your home appreciates in value and as you pay down your mortgage. And, since building that wealth takes time, it may make sense to start as soon as you can. If you wait to buy and keep renting, you’ll miss out on those monthly housing payments going toward your home equity. Bottom Line Buying a home is a powerful decision. So, it’s no wonder so many people view real estate as the best long-term investment. If you’re ready to start on your own journey toward homeownership, let’s connect today.  Some Highlights
Welcome home to Maple Street! 417 Maple Street is a brick single-family home on an oversized 40 × 100 lot. The home is in need of updating but has enormous potential. You could renovate and expand on the existing structure or tear it down and build the home of your dreams. The oversized lot is also perfect for a new condo or rental project, with its approximately 9,000 square feet of buildable space. There is also potential to subdivide the lot and build two separate homes. The possibilities are endless. 417 Maple is located just a few blocks north of SUNY Downstate Medical Center. It’s located about a mile directly east of Prospect Park. The Sterling Street subway station less than a quarter mile away (2, 5 trains), making it a quick commute to Manhattan from this location. The lot also includes two detached garages. The property will be sold “as is” with no contingencies or repairs. The home is currently occupied. It will be delivered at the closing with the tenant in place. Consult with a local architect about possible uses. 417 Maple Street, Brooklyn, NY 11225 Asking Price: $1,675,000 Listed by Colin O'Leary Phone: 646-300-2012 Welcome home to The Rockefeller Apartments! Penthouse D is a stunning one-bedroom/one-bathroom unit featuring marble finishes and a large wrap-around terrace. The elegant living room space is the centerpiece of this beautiful apartment. The bedroom features a solarium and custom closet space. The southwestern facing unit receives ample sunlight in the daytime. You can watch the sunset from its western facing kitchen window. Enjoy your evenings and weekends on its beautiful wrap-around terrace. It’s the perfect apartment for hosting your family and friends. The Rockefeller Apartments is one of NYC’s most iconic residences. The landmarked art deco building was constructed in the mid-1930s by Nelson Rockefeller and renowned architect Wallace K. Harrison. The building features a full-time door attendant, a courtyard, a laundry room, a resident manager, and maintenance staff. A storage unit in the basement is included in the sale. 24 W. 55th Street, #PHD, New York, NY 10019 Asking Price: $1,200,000 Listed by Colin O'Leary & Beth Davis Phone: 646-300-2012  Colin R. O'Leary and The Big City Team  The recent changes in home prices are top of mind for many as the housing market begins gearing up for spring. It can be hard to navigate misleading headlines and confusing data, so here’s what you should know about today’s home prices. Local price trends still vary by market. But looking at national data, Nataliya Polkovnichenko, Ph.D., Supervisory Economist at the Federal Housing Finance Agency (FHFA), explains: “U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.” Month-over-month home price changes can be seen in the chart below. The data also shows that price depreciation peaked around August. Since then, any depreciation has been even milder. In other words, today’s home prices aren’t in a freefall.  What Does This Mean for You? If you currently own your house, you may be concerned about even the smallest decline in prices. But keep in mind how much home values grew over the last few years. Compared to that growth, any declines we’re seeing nationally are likely to be minimal. Selma Hepp, Chief Economist at CoreLogic, shares: “. . . while prices continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring’s peak.” It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the home prices in your area if you’re planning to make a move this spring. Bottom Line To understand what’s going on with home prices in our market and how they could impact your goals, let’s connect today.   The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply: “Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy.” Let’s break down these two big issues in today’s housing market. Rate-Locked Homeowners According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):  But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked. When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens. The Fear of Not Finding Something To Buy The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns. What Does This Mean for You? These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage. Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to ATTOM: “. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.” This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down. Bottom Line Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to the market.  |
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Berkshire Hathaway Home Services Fillmore Real Estate: © 2023 An independently operated subsidiary of HomeServices of America, Inc., a Berkshire Hathaway affiliate, and a franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.® Equal Housing Opportunity. Information not verified or guaranteed. If your home is currently listed with a Broker, this is not intended as a solicitation. Copyright © 2023 The Big City Team at Berkshire Hathaway HomeServices Fillmore Real Estate, All rights reserved
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