During the last several years, most areas have experienced strong price appreciation which has increased home equity levels dramatically.  As the number of “cash-out” refinances begins to approach numbers last seen before the crash, some experts are afraid that homeowners may be repeating last decade’s mistake.

However, when you look closer at the numbers you’ll find that homeowners are being much more responsible with their equity compared to 2008.

When home values began to surge last decade, homeowners started using their home equity as personal ATM’s.  Homeowners would refinance their homes and convert their equity into instant cash by way of “cash-out” refinances.  Because homes were going up in value so rapidly, many homeowners tapped into their equity multiple times.  

This practice left many homeowners with little-or-no equity in their home.  As home prices started to fall, many homeowners found their homes in a negative equity situation (where the mortgage amount was greater than the value of the house).  When some of these homeowners saw that there was no equity left in their homes, they just stopped paying their mortgages altogether.

Banks eventually foreclosed on those homes and the foreclosures drove prices down even further and put more homes into a negative equity situation.  This vicious cycle continued, leading to the worst housing crash in decades.

Once again, homeowner are seeing their home equity grow.  Right now, over 48% of all single family homes in the country have over 50% equity.  This is causing some families to tap into their equity.  However, this time around, homeowners are not making the same irresponsible decisions.  According to the latest information from Freddie Mac, the total home equity being “cashed out” is only a fraction of what it was leading up to the crash.  Here are the numbers:

So as you can see, the recklessness that accompanied the build-up in home equity prior to the last crash in 2008, does not exist today.  This makes the real estate market much more secure that the one we had heading into 2008.

Now, if you would like to get an idea of how much equity you have in your home, feel free to reach out to me.

When buying a home, you need to save for closing costs in addition to saving for your down payment. On Rosso on Real Estate 008, I review what closing costs include and how to get help with paying them if necessary.

On Rosso's Home Front 005 - I share how homeownership is an important piece of the American Dream for X, Y and Z generations. 

Every home seller I meet with wants to get the highest price possible when selling their house.  But how can you ensure that you receive maximum value for your house?  Here are two tips to making sure you get the highest price possible for your home.

First, Price Your Home at or a Slightly Below the Current Market Value.  This may seem counter intuitive.  However, let’s look at this concept for a moment.  Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation.  In actuality, this just dramatically lessons the demand for your house (see the chart below)

Instead of the seller trying to “win” the negotiation with one buyer, they should price it so that demand for the home is maximized.  By doing this, the seller will not be fighting with a buyer over the price, but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice: “Aim to price your property at or just slightly below the going rate.  Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly under priced, especially in areas with low inventory.”

Second, Use a Real Estate Professional  This too may seem counter intuitive.  The seller may think they would net more money if they didn’t have to pay a real estate commission.  With that being said, studies have shown that homes typically sell for more money when handled by a real estate professional. 

These studies have shown that the median selling price for all For Sale By Owner homes was $185,000 last year.  When the buyer knew the seller in For Sale By Owner sales, the number sinks to the median selling price of $163,800.  However, homes that were sold with the assistance of an agent had a median selling price of $245,000 – nearly $60,000 more for the typical home sale.

So as you can see, pricing your house at or slightly below the current market value and hiring a professional, will help you ensure that you maximize the price you get for your house.  Now if you would like to discuss these tips and others to help you maximize the price you can get for your home, feel free to reach out to me.

Every year, at this time, I come across many homeowners who decide to wait until after the holidays to list their homes for sale. Well, I happen to think very differently. I think the holidays are a great time to be on the market…especially this year. On Rosso on Real Estate 007, I share with you eleven great reason not to wait until after the holidays to list your home.

Purchasing New Construction is a wonderful experience but it can come with it's own set of hassles. On Rosso's Home Front 004, I share with you 5 Tips for Building a New Home.

We all want a place to call home, a place that gives us a sense of security, a piece of the American Dream.  Currently, we are seeing a major interest from females who want to achieve this dream and the numbers continue to prove it.

This year, for the second year in a row, single female buyers accounted for 18% of all buyers.  Last year, 60% of millennial women listed as the primary borrowers on mortgages were single.

According to the 2018 Home Buyer and Seller Generational Trends Report by the National Association of Realtors, one in five home buyers in the U.S. were single females, most of them part of the baby boomer generation, as you can see in the graph below:

This does not come as a surprise since 50.8% of the U.S. population is female and 15.6% of them are 65 years and over, according to the Census Bureau.

When you look into it, there are several reasons for this demographics’ booming interest in home ownership:

• The Divorce Rate, especially what is known as “Gray Divorce”:  The divorce rate has doubled for those ages 50 and over and tripled for those ages 65 and over.
• Average Life Expectancy:  For women it’s 81, four years longer than men.
• To Build Home Equity: Women want to build equity through their home.
• To escape rising rents
• Looking for a “fresh start”

Now, whether you are a millennial who wants to buy a starter home, a billionaire looking for that luxury home you’ve always wanted, or maybe even someone who just went through a gray divorce, let’s get together to help you create your real estate portfolio so that you can start investing your money in real estate today! 

Homeowners who sold their homes in the third quarter this year have benefited greatly!  On Rosso on Real Estate 006, I talk about the returns home sellers are getting when they sell in today's market...the best since 2007. 

Wishing you a Happy Thanksgiving as I count my blessings

On Rosso's Home Front 003, I share the the top 3 benefits of homeownship that the buyers and sellers I have worked with for the last 30 years are always the most grateful for.