Don’t Be Scared

There are a LOT of reports in the media of a “housing crisis.” It fills the headlines, but when you read the actual articles there are economists saying any crisis is very unlikely! This isn’t 2008. Now is a perfect time to sell your present home and buy one that fits your current lifestyle better.

Here is a link to find out what your home might bring on the open market. It’s no obligation, just a way to start your thought process!

Home Owners Need Resources

I want to be your “go to” person for anything related to real estate! If you’ve got a question, I have or can find the answer!

Managing an asset worth hundreds of thousands of dollars is a responsibility that requires attention to details such as timely payment of the mortgage, home repairs and maintenance, upkeep, and oversight of financial issues including taxes, insurance, and other things.

Depending on how long you’ve been a homeowner, you may have faced some of the decisions common to homeownership.  Occasionally, there could be something new that you haven’t had to deal with in the past.  This is where having a resource you can rely on becomes valuable.

During the buying or selling process, it is natural to turn to your agent for information and advice but during those periods in between where do you go for counsel?  Sure, you can turn to the Internet but that may not be the best place to get advice for your situation.

We encourage you to think of us as your “source of real estate information”; someone you’re comfortable with asking a question and confident that you’ll get good advice.  We not only want to be there for you when you buy or sell, but all the years in between.

By helping you with the day-to-day decisions of homeownership, we believe we can develop relationships that will lead to future sales when you move again, as well as recommendations to your friends who need the services of a trusted real estate professional.

Whether you simply need the recommendation of a service provider, a trustworthy mortgage professional, an estimate of your current market value, or advice on what kind of improvements are best to consider, we’re happy to share that information with you.

Just a few of the kinds of questions we get almost every week:

  • Can you recommend a good (plumber, painter, handyman, etc.)
  • What is the current value of my home?
  • How do I challenge a property tax assessment?
  • When should a homeowner refinance?
  • How often should we update our personal home inventory?

I want to be your “go to” person for everything to do with real estate.  If you have a real estate question, please call me at (972) 333-8638.  If I don’t have the answer, I’ll find it for you or point you in the right direction.

McKee Smith, REALTOR®, has been selling and buying homes in Dallas and Fort Worth for many years. He knows and understands the intricacies of the DFW housing market. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

High Country by First Texas Homes – first video

High Country is the newest development by First Texas Homes. It is in Burleson, an easy commute to Fort Worth. This development has all the things we have come to expect from First Texas Homes, plus a few new things!

This is the first of at least three videos I’ll be posting about High Country.

As with ANY new home development, please let me come with you on your first visit! Please contact me for more information on High Country by First Texas Homes!

McKee Smith, REALTOR®, has years of experience in the DFW area housing market. He knows the many unique features of Dallas and Fort Worth area home sales. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Securing Your Retirement

Retirees want a safe and secure investment whose income will not be eroded by inflation. Single-family homes meet those requirements.

Social Security was established, on August 14, 1935, to take care of the country’s elderly in their retirement years.  Today, about 65 million or 1/6 of Americans collect benefits and the average monthly retirement amount received in January 2022 was $1,614 per month or about $19,370 per year.

This annual Social Security benefits exceed the 2022 Federal poverty level of $13,590 for individuals and $18, 310 for a family of two but from a practical level, it is nowhere near enough to be comfortable in your “Golden Years.”

Every adult in the workforce, can go to SSA.gov to find out what to expect to receive based on their planned retirement age.  Since it probably won’t be the amount you need to retire comfortably, at least you’ll know how short you’ll be so that you can devise an investment plan.

There’s a quick formula to estimate the investable assets needed by retirement to generate a certain income.  The target annual income is divided by a safe, conservative yield to determine the investable assets needed.

A person wanting $100,000 annual income generated from a 5% investment would need investable assets of $2,000,000.  If a person had $500,000 now, they would need to accumulate $1.5 million more by the time they retire.  A 50-year-old wanting to retire at 65 would need to save about $100,000 a year for 15 years.

If trying to save an extra $100,000 a year seems impossible, consider the leveraged growth available in rental real estate.  The use of borrowed funds can contribute to the yield earned by the investment.  By reinvesting the positive cash flows from the rental to retire the mortgage, the home could be paid for by retirement, providing more cash flow when it is needed the most.

One of the bright spots in investments is rental real estate which is also open to self-directed retirement savings.  Single-family homes offer high loan-to-value mortgages at fixed interest for long terms on appreciating assets with tax advantages and reasonable control.  Price appreciation alone has outpaced inflation for the last fifty years.

Many Americans have participated in Individual Retirement Accounts, SEPs, 401(k)s or other types of retirement that would supplement the Social Security benefits.  Many of these are invested in mutual funds which have lost about 20% in value in 2022.  With inflation at a 40-year high, many retirees and future retirees are concerned about their income from these investments.

Retirees want a safe and secure investment whose income will not be eroded by inflation.  Single-family homes, in predominantly owner-occupied neighborhoods, meet those requirements.  Home prices have experienced double-digit appreciation in the past two years and around 5% for the last five decades.

DecadeHome Prices Average Annual IncreaseConsumer Prices Average Annual Increase
70’s9.9%7.2%
80’s5.5%5.6%
90’s4.1%3.0%
00’s2.3%2.6%
10’s4.9%1.8%
20 + 2112%3%
  Source: NAR & Bureau of Labor Statistics

Increased mortgage rates coupled with rising home prices have sidelined many would-be purchasers who want to be in a home.  Since they cannot buy at this time, the next best alternative is to rent a home.  This has added to the increased demand for single-family homes in good neighborhoods which has resulted in increased rents.  While this isn’t good news for tenants, it is for investors.

Investing in rental real estate could be a way for you to increase your retirement income and grow your net worth while avoiding the volatility of the stock market.  Current homeowners already are aware of the value of homes as well as the maintenance they require.

To get more information about single-family homes for rentals, download our Rental Income Properties guide. You can also schedule a time with me to get answers to any questions you may have and find out about what is available now.

McKee Smith, REALTOR®, has been helping people like you sell and buy homes in the DFW area for many years. He is very knowledgeable about the housing market in Dallas and Fort Worth. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Are Home Prices and Rates Going To Continue To Rise

Make an appointment with your real estate professional to get the facts on what your home is worth, the mortgages available, and the logistics to put it together for your best advantage.

One of the most talked about questions in the real estate market has to do with “Will prices continue to rise now that interest rates have increased dramatically this year?”

It is understandable to think that if the Federal Reserve is using interest rate increases to slow consumer demand, that it would also slow homebuyer demand to moderate prices.  Unfortunately for would-be homebuyers, it isn’t the case.  High inflation, strong economic growth, low unemployment, and increased wage growth have been associated with high home price appreciation.

In a recent newsletter from First American, Chief Economist, Mark Fleming stated that historically, 90% of total inventory is from existing homes and homeowners are not moving as often as in the past.  Prior to 2007, the average tenure was five years.  After the housing crisis, between 2008 and 2016, the length of time spent in a home went to eight years.

Lawrence Yun, Chief Economist with the National Association of REALTORS® when talking about the May 2022 statistics: “Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially … almost doubling … to cool home price appreciation and provide more options for home buyers.”  Median sales price rose to a new high of $403,800, up 10.8% from July 2021, while sales are down 20% year over year and inventory increased slightly to 3.3 months from 2.6 months in July of 2021.

In the beginning of 2022, Fannie Mae, Freddie Mac and NAR predicted home price appreciation would be 7.6%, 6.2%, and 5.1% for the year.  Their revised forecast has been increased to 16%, 12.8%, and 11.5%.  Buyer demand still exceeds inventory levels which is driving prices higher.

While the Fed does not set mortgage rates, it does determine the Fed Funds Rate which is charged by banks to each other for overnight funds.  The increases often affect the U.S. Treasury rates to increase and there is generally a reaction when the 10-year U.S. Treasury Note yields increase for the 30-year mortgage rates to increase also.

The National Association of REALTORS®, on their website, states “The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”  The Index uses the 30-year fixed rate mortgage as provided by Freddie Mac’s Primary Mortgage Market Survey (PMMS).

Mortgage rates have gone up over 2% in the first half of 2022.  That dramatically affects the affordability of the home even if the price didn’t increase, which it did.  A $360,000 mortgage at 3.05% in December 2021 would have a principal and interest payment of $1,528 for 30-years.  At 5.22% as of August 11, 2022, the P&I payment is $1,981 or a difference of $453 dollars or a 30% increase.

As of May 2022, homeowners are now staying in their homes 10.6 years.  Part of the reasons can be contributed to the pandemic, but a large degree is attributed to the lack of inventory.  Existing homeowners can sell their home for premium prices and in unusually short time frames, but the problem is finding a home to replace it.

The demand for housing still exceeds the supply and price are continuing to rise, although, maybe not as the same pace as 2021.  Many economists predicted that price appreciation would slow but CoreLogic reported “Home prices nationwide, including distressed sales, increased year-over-year by 20.9% in April 2022 compared with April 2021.  In the same report, CoreLogic predicted “…home prices are forecast to increase on a year-over-year basis by 5.6% from April 2022 to April 2023.”

Another frequent question homeowners have is whether to wait to see if prices moderate and interest rates decline.  The probability is more likely for prices to continue to increase along with mortgage rates.  The consequences of waiting, in hopes of lower prices and rates, could totally price a person out of the market for the home they want.

Using a $400,000 home that could be purchased today at 5.22% on a 90%, 30-year mortgage, the P&I payments would be $1,981.  If the price appreciated only 5% in the next year and the mortgage rates were to go up by 1%, the payment would increase by $339 a month.  If a person stayed in the home for 7 years, the increased cost would be $28,458 and if they stayed for full term, it would cost them $121,965 more by waiting.

Increases in rates and prices have forced some people out of the market, at least temporarily.  For the fortunate ones, who can still afford to buy, even with the increases, acting now could save them tens of thousands and maybe hundreds of thousands depending on the price of the home.

Make an appointment with your real estate professional to get the facts on what you home is worth, the mortgages available, and the logistics to put it together for your best advantage.

McKee Smith, REALTOR®, has years of experience in the DFW area housing market. He knows the many unique features of Dallas and Fort Worth area home sales. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Now Is Still A Great Time To Buy A Home

The media is exaggerating “doom and gloom” in the market! Here’s a interview with Charles Mentesana on why it is still a good time to buy!

Here are a few highlights:

  • Since you no longer need to offer $50k to $100k over the asking price, you might end up with a lower payment even with higher interest rates.
  • Sellers are making far more concessions than they were just two months ago.
  • Home ownership is a proven way to build wealth.

McKee Smith, REALTOR®, is an experienced real estate agent that specializes in the Dallas and Fort Worth market. He understands the intricacies of the DFW housing market. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Indecision Can Be Expensive

Connect with McKee Smith, REALTOR®, to find out the facts about the market because good information can make a difference in making a good decision.

With all that is going on in the world – a global pandemic, supply chain issues, highest inflation in 40 years, the economic effects of a war in Ukraine – it can be overwhelming to think about when the right time is to buy a home.

On a local level, there is a pent-up demand for homes that has been building for years.  Builders haven’t kept up with the demand for new housing for almost 15 years.  Low inventory, especially in the past three years, has driven up prices nationally in 2021 by 20% and even though, the rapid appreciation seems to be moderating, in June, NAR reported that the median price home was up 13.4% from one year ago.

Then, of course, there are mortgage rates that have gone up by 2% since the beginning of 2022.  Appreciation and rising interest rates are a double whammy for people looking for their first home or to move up. It is completely understandable that many people are faced with so much that they are sitting on the sidelines waiting to see if things will improve.

Let’s look at a hypothetical situation where buyers have the money for a 10% down payment on a $400,000 home but have decided to wait for three years to see if things improve.  They need to park their money somewhere safe so that it will be available when they feel comfortable buying but also earn as much as they can to ward off the effects of historically high inflation.

If they were to put the $40,000 into a certificate of deposit for three years that pays 2%, they would earn $2,448 in interest.  With current inflation at 8.5%, the purchasing power of their down payment would diminish.

A slightly riskier alternative would be to invest it in the stock market or a mutual fund.  Assuming they picked the right stock or fund that earned 7%, their $40,000 would grow to $49,002 in the same three-year period.

The problem is that homes are appreciating much faster and the buyers would either pay more to get the same home or to pay the same price in three years, the home would not have the same amenities.    

If the buyer purchased the home today that appreciates an average of 5% per year, the equity in the home in three years would be $118,000 based on two dynamics: appreciation and amortization.  The wealth position at the end of the three years in the home is almost three times what it would be with the certificate of deposit and over twice as much as the stock investment.

Homes have appreciated more than inflation over the last fifty years.  The average home price appreciation from 1970 to 2020 was 7.16% compared to the average inflation for the same period which was 4.3%.  In 2021, home prices were up close to 21% nationally compared to 7% inflation. 

Connect with your real estate professional to find out the facts about the market, the various mortgages available, what you can expect to buy, and if you have a home, what it will sell for.  Good information can make a difference in making a good decision.  Download my Buyers Guide.

McKee Smith, REALTOR®, is an experienced real estate agent that specializes in the Dallas and Fort Worth market. He understands the intricacies of the DFW housing market. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

David Weekly Homes in Elements 55+ at Viridian

I visited David Weekly Homes in Elements at Viridian. It’s a 55+ community in Arlington. Here is a video with more information!

Here are a few highlights:

  • Lots of floor plans in three lot sizes
  • Over 100 lots are available!
  • Amenities center was voted the “Best in Texas”

McKee Smith, REALTOR®, has years of experience in the DFW area housing market. He knows the many unique features of Dallas and Fort Worth area home sales. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Moving Down In An Up Market

There are options available to coordinate the sale of your home and the purchase of your new one. Ask McKee Smith, REALTOR®, for details.

Selling and buying a lower priced home in an “Up” market can be to your advantage.  The advantage is to maximize the sales price of your existing home and replace it with a less expensive one.

Moving down in an “up” market may be to your advantage in multiple ways.  It is possible that your present home doesn’t meet your current needs like it once did.  Making a move can allow you to “re-balance” the equity in your home to better reach your future goals.

The “up” market maximizes the sales price you can expect to receive, and it will free the equity in your home. A lower priced home will result in reducing your housing costs with lower property taxes, insurance, utilities, and maintenance…while improving your liquidity position.

It is not required to reinvest the proceeds of the sale.  You may decide to get an 80% loan-to-value mortgage on the replacement home to get the best interest rate and avoid private mortgage insurance.  This would allow you to put the excess proceeds into an income producing or growth investment, start a business, fund an education, buy a second home, take a spectacular trip, gift a down payment to a relative, or any other different projects.

The expression “other people’s money” describes borrowing money and using it to invest with the expectations of earning more than the rate you’re paying.  Mortgage interest is one of the most attractive ways to borrow money because it is generally the lowest rate compared to other types of loans while having the option to get a fixed-rate mortgage for up to 30 years.  Most other borrowed funds involve short terms and floating interest rates.

Rental real estate could be a possibility to invest part of the funds.  There is a shortage of available rentals which has caused rents to increase like homes have appreciated.  Single-family homes for rentals provide large loan-to-value mortgages at fixed interest rates for long terms on appreciating assets with defined tax advantages and reasonable control not found in many other investments.  For more information, download our Rental Income Properties Guide.

Homeowners who have owned and occupied their principal residence for two of the last five years are entitled to exclude up to $250,000 of gain for single persons and $500,000 of gain for married persons filing jointly.  For more information, see IRS topic #701.

Contact your real estate professional to find out more information like potential sales price, what net proceeds you can expect to receive on a sale, available replacement homes, and the types of mortgages and rates available.

McKee Smith, REALTOR®, has been selling and buying homes in Dallas and Fort Worth for many years. He knows and understands the intricacies of the DFW housing market. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Green Meadows Development in Celina with Pacesetter Homes

On Aug. 8, 2022, I visited the Pacesetter Homes in the Green Meadows development in Celina, Texas. If you’re looking for a newly built home in a highly rated school district like Celina, you should consider one of these!

This development has some special features for everyone:

  • HOA includes front yard mowing
  • Prices from $550,000 to $700,00
  • In the highly rated Celina ISD
  • Master planned community
  • Incredible amenities including pool with slides, trails, community garden, sports complex, and more
  • 10 minute drive (according to Google maps) to a grocery store
  • Much, much more!

Watch the video to see this great development. For extra fun, count how many times I said “great” in the video!

For more information on the Celina ISD, here is a link to their ranking information on Niche.com.

This video is just a tease of all that is available. Contact me for more information on these or any newly built homes in DFW.