What Does the 2017 Real Estate Market Look Like?

Today, I’m explaining what influence Trump will have on the real estate market and going over my 2017 predictions.

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With the election over, I’m going to answer a couple questions about the future of the market. The first question is, “What kind of influence will the new president-elect have on the real estate market?” I’m also going to talk about my real estate market predictions for 2017.

So, what influence will the new President-elect have on the real estate market?

If there is anything we know about Donald Trump, it’s that he has a weird hairdo, he sends out horrible tweets at three in the morning, and he really knows real estate. If there is a silver lining at all, it’s that he is a real estate mogul. He is very good at predicting real estate markets and he understands our industry like nobody we have seen in office before.

He is going to put a $550 billion infrastructure and transportation plan into effect that will boost jobs and wages. This will allow people to purchase more homes. According to an article in The Wall Street Journal, only 63% of people own homes, which is the lowest in history since the United States started tracking that statistic back in 1963.

He will also implement a lot of tax code changes, which are expected to be the largest tax code changes a President has introduced since Ronald Reagan. He is going to offer a $30,000 tax exemption to married couples, which will make the tax reduction for mortgage loan interest less lucrative. This means there will be less incentive to buy.

Next year is going to be a fantastic year for real estate.

So, the tax code changes are going to be a wash for real estate, but the infrastructure and transportation plan should give people more of their bottom line income to spend.

Now, for my market predictions for 2017. Next year is going to be a fantastic year for real estate.

The real estate market in the United States is predictable and it goes in a cycle. If you look at the chart, you can see there are peak and valleys, and then a crash, and this repeats. Almost like clockwork, every 18 years there is a cycle that is repeated.

There is a recovery phase which we have already experienced, then there’s expansion, which I believe we are about a quarter of the way into. We do not have hyper supply; in fact, one of the big things driving prices is the lack of supply, and we have interest rates going up a bit, which will ward off inflation.

The next crash in the market isn’t predicted to happen until 2024. That means the market has a lot of room to run. Sellers should be confident in selling, and buyers should be confident in buying. The rates are going to be fantastic for both.

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If you have any other questions about real estate, feel free to reach out to me by giving me a call or sending me an email. I would be happy to help you!

Have You Seen Our Brand-New App?

We’ve got a few quick updates for you today about the technology we use and how it helps you in your home search.

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I’ve got two quick updates for you today about some of the new technology we are using in our business.

The first is our new iPhone and iPad app with Keller Williams. It’s much better than what you’ll find on Zillow and Trulia. You can search for nearby homes, nearby rentals, and more. You can see what open houses are going on this weekend, where all the homes are located, and even use a mortgage calculator to estimate your monthly payment. Type http://app.kw.com/KW2Q08TPW into your iPhone browser to download app for free.

Secondly, we had some problems with our home value tool, so we installed a new one! All you have to do is enter your address and a few details and it will provide you with a quick evaluation. If you want a more in-depth evaluation, we can help with that, too.

If you have any questions for us or are looking to buy or sell in the area, give us a call or send us an email. We look forward to hearing from you.

What You Need to Know About the Lending Process

Are you curious about when to get pre-approved or what might happen to interest rates after the election? Baret Kechian has all the answers and more.

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Today I’m joined by Baret Kechian, one of the best lenders in the country, to answer some questions you might have about the lending process if you’re thinking about buying a home.

When should you get pre-approved?

The best time for that is usually around three months before you start looking at houses. That way, if there is something amiss regarding your credit, you can address that problem and remove it before it’s time to buy.

Why use a smaller lender like Mortgage Master over a bigger firm like Wells Fargo or Bank of America?

The main benefit is that a lender like Mortgage Master has a lot more flexibility and a lot more products than a bank. If there is a program that comes into play or a situation that arises that requires something out of the norm, Mortgage Master would be better-equipped to take care of it.

They also know the local market well and their appraisers are well-versed with condos and other properties, so they’re better at evaluating those properties correctly. Condos are probably the biggest thing that would cause a problem with a loan in this market, so the fact that they are experts on them and have access to their information earlier than a bank would is a major advantage.

In terms of underwriting and acquiring a mortgage, how important is the down payment?

As one of the three major phases of the whole lending process (the other two being income and credit), it’s critical. A lot of people assume that they need 20% down to buy a property, but for anyone buying in the $400,000 to $500,000 range, that’s not the case. You can buy with as little as 5% down and still get great mortgages with reasonable PMI rates. You can even utilize a lender-paid PMI program that gets built into the interest rate.

Don’t assume you need 20% down to buy a property.

A 5% or 10% loan gets underwritten the same way as long as you cover the PMI cost. Some folks fall into the trap of waiting for that magical 20% number when they should have been buying a home earlier and building equity. On some of the larger loans, such as $1 million or $1.5 million, it’s more critical to have 20% down because that will give you more options.

After the election, what will happen with interest rates?

The reason interest rates are staying as low as they are right now is because of the uncertainty surrounding the election. From where they are, though, there’s only one place they can go, and that’s up. If you’re a buyer, you should consider that in making your decision. After the election, rates shouldn’t skyrocket, but there should be some kind of upward trickle effect once it’s determined who will take office. You could see some rates going up as much as .25% or .5%, so if you’re a buyer, taking advantage of where things stand right now is crucial. The numbers are so good, borrowing money at these rates is almost cheaper than renting.

If you want to get in touch with Baret to know more about the lending process, you can call his office at (201) 796-6441 or email him at baret@mortgagemaster.com.

If you have any other questions, feel free to give me a call or send me an email. I look forward to hearing from you!