Listing Courtesy of RE/MAX REALTY GROUP REHOBOTH
Given that the experts have often been as wrong as they were right about predicting at least one real estate trend for 2015 (mortgage interest rates), it’s fair to ask why it’s worthwhile to consult them regarding the coming year. Fair enough. The answer is twofold.
First off, for anyone who will be buying or selling a Lewes home in the coming year, much could ride on the wider market factors that influence buyer and seller attitudes.
The other part of the answer is because it’s fun. Trying to take a peek into the future gathers a crowd every time: just tune into any cable TV news or feature show and start counting the experts prognosticating. Besides, it’s even more fun, later, to ridicule the experts who were way off.
But putting together a roundup of real estate predictions for 2016 involves some hard virtual pick-and-shovel work. To begin with, you have to eliminate all the real estate predictions for 2016 that emerged more than a month ago. A month may not seem like such a long time, but in the real estate prediction business, it can turn into too long (especially if what you predicted for 2016 is already heading in the wrong direction). At this juncture, that hasn’t befallen any of these prominent national real estate prediction sources Lewes readers can note:
The researchers and prognosticators behind these projections seem to be in lock-step, at least as we launch into the new year. Whether or not you will be entering the town real estate any time soon, it’s certainly good news that the serious folks who forecast future trends agree that conditions look to be settled, stable and hospitable in the coming year.
There is one thing I know you can count on: I’ll be standing by throughout 2016, ready to assist with all your Lewes real estate needs! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.
Diana Olick is a well-known industry writer. Anyone with an interest in Delaware real estate can usually find something of value when she comes up with a new entry in her CNBC column (the one with the pun-worthy title, “Realty Check”). This month she commented on the rising housing market across the nation and its repercussions in terms of homeowner equity.
The piece points out that in the U.S., home equity has doubled over the last five years!
It’s hardly news that home values have been steadily on the rise—that’s been a trend long seen in the asking prices in Delaware and our Delaware listings. But the idea of homeowner equity actually doubling could be hard to believe.
That’s a claim that sounds a like quite an exaggeration…until you stop to think about what is actually being said. When a Delaware homeowner sees that their home’s “equity” has doubled, what it doesn’t mean is that its value has doubled.
Here’s a simplistic example. Suppose a Delaware homeowner’s vacation cabin was estimated to be valued at $100,000 in 2011. Doubling the owner’s equity doesn’t mean that today the cabin would be worth $200,000. The “equity” in the property is the amount of investment value currently owned: the difference between its market value (in this case, the original $100K) and the amount owed on its mortgage. So if there were a $70,000 mortgage outstanding on the cabin five years ago, its equity at that point would have been the difference: $100,000-$70,000—or $30,000.
Using CNBC’s calculations (actually, they relied on research from CoreLogic), for our example property to match the national average, today its owner’s equity would have had to have doubled to $60,000.
For many Delaware real estate owners, that’s not much of a stretch.
Keep in mind that as time moves on, for all mortgage loans other than interest-only loans, the amount owed is reduced with each payment. If the principal portion of the payments had averaged just $200 a month, the amount owed would now be down to $58,000. For the owner’s equity to have doubled to $60,000, the market value would only have to have risen to $118,000: and that’s a mere 18% rise, which works out to an average of 3.6% per year. That wouldn’t be unusual, considering the steady gains we’ve seen. Long story short: voila—investment equity doubled!
The moral of the story isn’t just that there are many happy Delaware homeowners—but that the investment value of owning a home continues to be what it has been for as long as real estate has been bought and sold: a very canny investment. If you are planning on adding to your own personal Delaware real estate investments, I hope you’ll consider using my services as a key part of your strategy. Do call me! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.