What truly causes a housing bubble and the inevitable crash? For the best explanation, let’s go to a person who correctly called the last housing bubble – a year before it happened.
“A bubble requires both overvaluation based on fundamentals and speculation. It is natural to focus on an asset’s fundamental value, but the real key for detecting a bubble is speculation…Speculation tends to chase appreciating assets, and then speculation begets more speculation, until finally, for some reason that will become obvious to all in hindsight, the ‘bubble’ bursts.
I have taken to calling the housing market a ‘bubble’.”
– Bill McBride of Calculated Risk calling the bubble back in April 2005
Where do we stand today regarding speculation?There are two measurements that are used to determine the speculation in a housing market:
“There is currently some flipping activity, but this is more the normal type of flipping (buy, improve and then sell). Back in 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation.”
What are the experts saying about speculation in today’s market?DSNews recently ran an article which asked two economists to compare the speculation in today’s market to that in 2005-2007. Here is what they said:
Dr. Eddie Seiler, Chief Housing Economistat Summit Consulting:“The speculative ‘flipping mania’ of 2006 is absent from most metro areas.”
Tian Liu, Chief Economist of Genworth Mortgage Insurance: “The nature of housing demand is different as well, with more potential homeowners and far fewer speculators in the housing market compared to the 2005-2007 period.”
And what does McBride, who called the last housing bubble, think about today’s real estate market?Sixty days ago, he explained:
“In 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation. And even more dangerous during the bubble was the excessive use of leverage (all those poor-quality loans). Currently lending standards are decent, and loan quality is excellent…
I wouldn’t call house prices a bubble – and I don’t expect house prices to decline nationally like during the bust.”
Bottom LineSpeculation is a major element of the housing bubble formula. Right now, there are not elevated percentages of investors and house flippers. Therefore, there is not an elevated rate of speculation.
In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Here are the top five reasons:
1. Exposure to Prospective Buyers
Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you? Not only that, but agents pre-screen candidates prior to them coming into your house or scheduling an appointment! Safety anyone??
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
4. FSBOing Has Become More And More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.5. You Net More Money When Using an AgentMany homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more, by not listing with an agent. One of the main reasons for the price difference at the time of sale is:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
If more buyers see a home, the greater the chances are that there could be a bidding war for the property. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6% this year.
Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?
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.
The National Association of Realtors (NAR) recently released their 2017 Profile of Home Buyers and Sellers in which they surveyed recent home buyers and sellers about their experiences. An entire section of the profile is dedicated to buyers’ experiences with their real estate agents.
If you are looking to buy in 2018, here are the top 5 benefits of using a real estate agent when buying your dream home as cited by recent buyers:
1. Helped the buyer understand the process – 60%If you are new to the home buying process, an experienced real estate professional can explain exactly what to expect during the entire transaction so you aren’t caught off guard.
2. Pointed out unnoticed features/faults with the property – 56%Whether it’s pointing out possible uses for an extra bedroom/office, or using their trained eye to see potentially disastrous hazards that may be hiding out of site, your agent is there to protect your interests and make sure your home buying experience is a good one.
3. Negotiated better sales contract terms – 47%When it comes to negotiating the complex terms of your contract and coming to an agreement with the seller, it never hurts to have someone who has been there before on your side. If earlier in your search you found a couple of less than desirable features on the home you are going to purchase, your agent can make sure that contingencies are in place for you to pay the best price. Their analysis of comparable properties in the area will also help to make sure that your dream home is priced properly for the market.
4. Provided a better list of service providers – 46%Real estate agents are titans of networking. Many have a list of preferred providers who they have worked with in the past and who they trust to work as a part of your team to make your dream come true. This can include mortgage professionals (listed as the #8 reason to use an agent at 22%), home inspectors, plumbers, contractors, painters, landscapers, home stagers, and so many more!
5. Improved the buyer’s knowledge of search areas – 44%Local real estate professionals are often members of community organizations and are usually well versed in their area’s history. Their ties to the community make them a great resource whether you plan to relocate to a new area or across town.
Bottom LineIf your plans for 2018 include purchasing your dream home, let’s get together to discuss your options and to help you make the most powerful and confident decisions for you and your family.
Happy Independence Day to everyone! Looking for fireworks 💥 displays in and around Jax tonight and tomorrow? 👇🏼then look 👀 no further! Be safe! Have fun! ...and most importantly be patient and kind!
by: Action News Jax Updated: Jun 30, 2017 - 5:08 PM
Action News Jax viewer photo
The Fourth of July is just around the corner and there are plenty of places in the Jacksonville area, Northeast Florida and Southeast Georgia to watch fireworks displays.
Here are the times and places where you can watch fireworks across the area:
Beachgoers warned to stay out of water in St. Simons Island
Monday, July 3: World Golf Village
World Golf Village will feature fireworks over the lake around 9:30 p.m.
Tickets are not required to view the free firework shows.
Parking is $10 per vehicle.
The City of Jacksonville's annual 4th of July Fireworks Celebration will take place over the downtown riverfront beginning at 9:45 p.m.
This year, fireworks will be launched from a barge on the St. Johns River between the Hyatt Regency Jacksonville Riverfront and DoubleTree by Hilton Jacksonville Riverfront hotels. The fireworks display can be viewed from both the north and south river banks in Downtown Jacksonville, Brooklyn and under the Fuller Warren Bridge where the Riverside Arts Market is held.
The eastern most northbound lane on the Acosta Bridge will close at noon on July 4. The Acosta and Main Street Bridges will fully close at 9:15 p.m. and reopen by 11 p.m. All other downtown bridges will remain open during the fireworks display. For more information, visit the city's website.
Enjoy an evening of fireworks presented by the City of Jacksonville Beach at the Jacksonville Beach Pier at 9 p.m. on the Fourth of July.
This is a large event and pedestrian and vehicular traffic are expected to be heavy. Due to this, certain travel routes will be limited or blocked entirely to aid in the consistent flow of traffic after 5:00 p.m., the Jacksonville Beach Police said.
SR A1A will have some turning lanes blocked to aid in the Northern and Southern flow of traffic. Beach Blvd. will have limitations at different intersections to aid in the westerly flow of traffic.
The main travel route for northbound and southbound traffic along the three beach communities will be SR A1A. A secondary route will be Penman Road to Florida, and then to Mayport Road. The main travel routes westbound will be J. Turner Butler Blvd., Beach Blvd. and Atlantic Blvd. A secondary route for westbound traffic will be Wonderwood Drive. More information can be found by clicking here.
Join the Town of Orange Park and Moosehaven on the Fourth of July as they celebrate America with the American Pride Fourth of July event. The event includes vendors, crafts, food and a fireworks display over the St. Johns River.
Gates open at 2 p.m. and fireworks start at 9:20 p.m.For more information, visit the Town of Orange Park's website and Moosehaven's website.
There will be an array of activities in downtown Fernandina Beach on the Fourth of July from 6 to 10 p.m. There will be live music, a patriotic pet contest and a fireworks display, which starts at 9:15 p.m. For more information on the patriotic celebrations, visit the city's website.
"Fireworks Over The Matanzas," a 20-minute aerial display of pyrotechnics high over Matanzas Bay, begins at 9:30 p.m. on the Fourth of July. The fireworks, which can be seen over the bayfront between the Castillo de San Marcos National Monument and the Bridge of Lions, are set to a soundtrack of patriotic music.
For more information about the Nation's Oldest City festivities, click here. For more information about road closures, where to park and shuttles from Anastasia Island, click here.
The City of Palatka will host its annual Independence Day/4th of July Fireworks Display on July 4th at Riverfront Park. Music, the Kids Fun Zone, vendors and other activities begin at 5:00 p.m. and Fireworks begin at 9:00 p.m. or dusk. For more information, visit the City of Palatka's website.
Jekyll Island will host a full day of family-friendly events to celebrate Independence Day. Events begin at 9 a.m. July 4th with an old-fashioned parade and finish that evening with an oceanfront fireworks show that will begin at approximately 9 p.m.
Arrive early to claim your spot on the miles of wide beach on Jekyll. Fireworks are best viewed from between the Holiday Inn Resort and south to the Days Inn on the island’s oceanfront side. For more information on the day's events, visit JekyllIsland.com.
As part of its 2017 Independence Day festival, St. Marys will hold a fireworks display over the St. Marys River at 9:30 p.m. Other activities include a fun run, arts & crafts vendors, entertainment throughout the day. For more information and a schedule of the day's events, visit the Kiwanis Club of St. Marys website.
A free fireworks show will be held at Mary Ross Waterfront Park in the heart of Historic Downtown Brunswick. The fireworks over the waters of the East River and Oglethorpe Bay start about 9 p.m. and last 30 minutes. For more information about free games and free watermelon, visit goldenisles.com.
St. Simons Island
The St. Simons Island Annual Sunshine Festival culminates with a fireworks display on the Fourth of July at 9 p.m. at oceanfront Neptune Park. For more information on the Sunshine Festival and the fireworks, visit goldenisles.com.
Did we miss a fireworks display? Email the information to firstname.lastname@example.org.
© 2017 Cox Media Group.
Tired of your kitchen? Obviously one way of rejuvenating the room would be to take it down to the studs and start over. But introducing a new look and feel doesn't have to mean a comprehensive (read: pricey) overhaul. In fact, with a combination of much more modest measures like hardware replacement and cabinet refacing, it's often possible to achieve similarly dramatic results for a whole lot less.
By Donna Boyle Schwartz
Hang on a second: Before you decide to take on the hassle and expense of a full-fledged kitchen renovation, consider that a variety of cheaper, easier alternatives can deliver a similarly dramatic transformation, especially in combination. For instance, homeowners typically treat details like cabinet hardware as trivial—as “an afterthought,” according to Jim Eldredge, a product manager with Sears Home Services. But in the kitchen, he says, seemingly unimportant components “can make a surprisingly big impact on the overall room design.” That said, replacing your cabinet hardware isn’t magic; it can’t make timeworn cabinets look new again. If your kitchen has seen better days, take the time to look closely at the condition of both the cabinet boxes and the cabinet doors. So long as the boxes remain in decent condition, you can actually leave them intact and only reface or replace the cabinet doors. Especially when paired with new hardware, updated cabinet fronts can totally remake the look of your kitchen in short order and typically on a small budget.
Whether you decide to install new cabinet doors or simply refinish the existing ones, Eldredge cautions that when it comes to selecting cabinet hardware, it’s a mistake to “focus on aesthetics alone.” To prove satisfactory over the long term, new hardware must do more than merely look good. There are a key practical considerations to keep in mind. Want to learn more about high-impact, low-budget kitchen upgrades?
Imagine sitting in a room with 108 millionaires and being able to pick their brains for three days.
What would you ask them?
What would you hope to learn?
This is the exact situation I found myself in last weekend, and the event completely changed my life, as I hope the lessons I learned, and communicate below, will change yours.
I recently joined this small, millionaire-only men's group (called GoBundance) in an effort to level-up my relationships and associate with people smarter and more successful than me.
There is a well-known (and anonymous) quote that goes, “If you're the smartest person in the room, you're in the wrong room." This event was the "smarter room" I chose to place myself in.
Here's what I learned.
1. Don’t Be the Smartest Guy in the Room
Owning a home doesn’t need to be as costly as it does. We all know that if you own a home, all of the costs from the mortgage, utilities, maintenance, and upkeep add up and are expensive.
Just to make your life easier, I’ve made one fascinating collection of amazing and useful energy saving tips that will save you money.
Besides that all of these tips are free or cheap. They won’t cost you a lot, but they will make a big difference. Most of them don’t take a lot of time, and you don’t have to be a home-improvement expert.
Here are 15 of the best energy saving tips that will make your energy bills shrink.
1. Automate your thermostat
or use a post-it noteIn my first home, I would manually turn up the thermostat as I walked out the door to work, and I would manually adjust it down when I came home in the evening.
Last year I replaced all of the thermostats in my house with the Nest learning thermostat. It learns your schedule to keep your home comfortable when you are home. Nests’ are pricey, but according to the Nest website:
Some energy companies send you a $249 Nest Thermostat at no cost when you sign up for certain plans. Others give you an instant $100 rebate – no paperwork necessary. Even more energy companies offer traditional mail-in rebates
I wish I had known about this before buying mine. Oh well, my mistake for you to learn. Check with your utility provider to see what might be available in your area.
Set your thermostat as high as you feel comfortable – try 78ºF or higher when you’re at home, and 85ºF when you’re away.
If you can’t get a free or discounted smart thermostat from your utility provider, you can go the manual route like I used to. Go get a sticky note, and put it on the door you take to leave your home. Write a reminder to change the thermostat as you walk out the door. Simple and free.
Savings: $173 year (average for a programmed thermostat)
Cost: $0 – $250 per thermostat
2. Give your air conditioner some fresh air
Have you ever tried running really fast with a rag over your mouth? I haven’t either, but that’s what most people are expecting their AC units to do.
Many AC units are surrounded by shrubbery that can restrict the airflow needed to make the systems run optimally. Take a few minutes today or this weekend and look around your AC’s outdoor unit:
Time: 20 minutes
3. Block out the sun
All of those windows in your home are the largest source of heat flowing inside during hot summer days.
Closing the blinds and/or curtains blocks the sun from coming inside in the first place and will help prevent it from heating up, reducing the need for the AC to cool it down. Blocking the sun is especially important on the western and southern facing windows that receive the most direct sunlight.
Savings: $15-$35 / year
4. Use fans
A ceiling fan can make your room feel up to 7 degrees cooler. Fans will allow you to turn your AC up a couple extra degrees, saving even more money.
Savings: $35-$53 / year
Cost: FREE (assuming you have ceiling fans)
5. Shower power
Do you take a hot shower in the summer steaming up the bathroom mirrors? If so you’re adding heat back into your home that needs to cool.
Take a quicker shower. And take a warm shower instead of a burning hot one. Using less hot water will also save energy.
Savings: $50 / year
Time: 10 minutes
6. Replace air filters
Replace your HVAC filters at least every 6 months, preferably every 3. Clogged, dirty filters block airflow and reduce your system’s efficiency. In the worst case scenario, a wrongly sized filter or dirty filter can cause your system to burn out, requiring replacement.
Never use a higher rated MERV filter than the one you replace, unless a licensed professional tells you otherwise. The MERV rating is listed on the filter, and it will be something like 8, 11, 13, 15, or more. The higher the rating the more dust the filter collects, but the harder the system has to work. Using a higher rated filter for a system not designed to handle it is bad news.
Savings: 5% – 15% / year on energy
Time: 10 minutes
The 2016 Virginia residential real estate market outperformed its prior year performance, with nearly $38 billion in sales, according to a sales report released Tuesday by the Virginia REALTORS association (formerly known as the Virginia Association of Realtors).
Key measures, including total number of sales, value of all transactions, and median sales price, rose from their 2015 benchmarks. Altogether, the sum of all transactions was 8 percent higher than in 2015, which had a transaction value of $35 billion.
The fourth quarter also saw a bump in activity with 26,308 residential transactions closed, a 6.8 percent increase compared to the 24,639 units sold in the last three months of 2015. The value of those transactions totaled $8.5 billion, an increase of 8.9 percent from 2015’s fourth quarter volume of $7.8 billion.
“The fourth quarter sealed a year of impressive strength in Virginia’s housing market,” Claire Forcier-Rowe, president of Virginia REALTORS, said in a statement. “For buyers and sellers, 2016 was a year of opportunity. Particularly as inventory constraints eased in the last half of the year, we saw surges in activity and price. Buyers have been able to take advantage of low rates, even as they rose in the last quarter, and invested confidently at the end of the year.”
The rise in fourth quarter 2016 sales pace was propelled by a surge in November sales, usually a lull month in market activity. Virginia Realtors credited loosened inventory and a swell in consumer confidence following the federal elections —combined with a sense of urgency regarding interest rate movement — for escalating sales.
The trade group said that each quarter of 2016 outperformed its prior year benchmark, just as each quarter of 2015 outperformed those of 2014.
The aggregate median sales price for the fourth quarter was $265,000, an increase of 3.9 percent from the fourth quarter of 2015 ($255,175). Year-over-year median sales price increased in all regions, with the exception of the Southwest region, where price declined moderately.
Compared to the fourth quarter of last year, 2016 fourth quarter home sales increased in all price bands except the lowest under $100,000), where low levels of inventory affect the number of sales possible. Sales increased especially in the $300,000 to $500,000 range.
The average number of days on the market dropped to an average of 69 for the 2016 fourth quarter, 10.4 percent lower than last year’s fourth quarter average (77 days).
The Virginia Home Sales Report is published by the Virginia REALTORS association. Current and past reports are available to members, media, and real estate related-industries through the organization’s website.
Of all the things that cause us stress and anxiety — a heavy workload, financial woes and a cluttered home, to name a few — commuting to work is one of the most universally loathed. And it’s not just an unpleasant experience: Long commutes have been linked to a number of negative health outcomes, including high stress levels, poor sleep, unhealthy weight, and even a shorter life. A 2011 Swedish study also found that couples where one partner commutes for at least 45 to work each day have a 40 percent higher chance of getting divorced.
“Commuting is ... a mundane task about as pleasurable as assembling flat-pack furniture or getting your license renewed, and you have to do it every day,” Annie Lowrey wrote in a Slate article, “Your Commute Is Killing You,” after the Swedish study was published. “If you are commuting, you are not spending quality time with your loved ones. You are not exercising, doing challenging work, petting your dog, or playing with your kids (or your Wii).”
But your commute doesn’t have to be the bane of your existence — this time slot when you’re free to not do anything (except get yourself from point A to point B) can actually be one of the most relaxing parts of your day. Reframing the way you view the trip and trying some healthy tips can turn your commute from a twice-daily source of stress into a peaceful time to yourself between the demands of work and home. Scroll through the list below for six ways to de-stress (and maybe even enjoy) your commute.
You’ve probably overheard homeowners boast that they nabbed a “great interest rate” on their mortgage. But what is interest, exactly?
Essentially, interest is an extra fee you pay your lender for loaning you the money you need to buy a home. Lenders, after all, don’t just fork over their money out of the goodness of their hearts.
“They want to be compensated for putting money in your pocket,” says Jack Guttentag, author of “The Mortgage Encyclopedia.” Since mortgage lenders are providing cash upfront to make homeownership possible, they require you to repay the debt plus interest.
Now, if you’ve got a lot of dough lying around and want to pay for the whole house upfront with an all-cash offer, you can avoid paying interest. But let’s face it, most of us aren’t living in this dreamy scenario, which makes home loans and interest par for the course—so it pays, literally, to know how it all works.
How interest rates on home loans workWhen you get a mortgage, your interest payment is calculated as a percentage of the total loan amount. For example, say you get a 30-year $200,000 loan with a 4% interest rate. Over 30 years, you would end up paying back not only that $200,000, but an extra $143,739 in interest.
Please, Mr. PostmanSend me news, tips, and promos from realtor.com® and Move.
Sign UpMonth to month in the above scenario, your mortgage payments would amount to about $955 per month. Part of that monthly payment would go toward paying back what you borrowed (an amount known as your principal), and the rest goes toward interest.
The exact proportion varies month to month—early on, homeowners typically pay more interest and less principal—but that composition changes as the loan matures. For instance, in your very first month for the above scenario, you’d pay $288 to your principal and $676 to interest. By your last check to your lender 30 years later, you’d pay $951 toward principal and $3 toward interest (check out realtor.com®‘s mortgage calculator to punch in your own numbers).
So what does this payment schedule mean for homeowners? It means it will take time for you to build equity in your home, since you’re largely paying interest during the early years. Yet there’s an upside to this reality: Interest on a home loan is deductible on your taxes, so early on you will get a big tax break that dwindles as your equity rises.
Why interest rates fluctuateFluctuations are based on several factors.
“During a period of slack economic activity, [the Federal Reserve] will provide more funding and interest rates will go down,” says Guttentag. Conversely, “when the economy heats up and there’s a fear of inflation, [the Fed] will restrict funding and interest rates will go up.”
These financial shifts could be stressful if they affected your monthly mortgage payments, but luckily when you get a home loan, there’s a way to shield yourself from this roller coaster by getting a fixed-rate mortgage, which locks in your rate at whatever level it is at the time you apply. It remains the same over the life of your loan (typically 30 years). Or else, if you don’t mind the market’s ups and downs, you can opt for an adjustable-rate mortgage.
How to get a low-interest loanNot everyone who applies for a home loan gets the same interest rate. It varies widely depending on a variety of factors.
Probably the biggest variable is you: Interest rates for home loans vary depending on the borrower’s credit score. Good credit leads to lower interest rates, which is why it’s important to know your credit score and keep it stellar.
Your interest rate can also vary based the type of loan you get: 15-year loans, for example, typically offer lower interest rates than 30-year loans. ARMs have lower interest rates than fixed-rate mortgages (at least at first).
The bottom line: Paying interest may be a reality to homeownership, but how much interest you pay runs a wide gamut, so make sure you grasp the basics before you apply.