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The famous quote by Mark Twain in the title of this article can be used to describe home ownership in America today. Last week, the Census revealed that the percentage of homeowners in the country increased for the first time in thirteen years.

story in the Wall Street Journal gave these new home ownership numbers some context:

“The annual increase marks a crucial turning point because it comes after the federal government reined in bubble-era policies that encouraged banks to ease lending standards to boost home ownership. This time, what’s driving the market is a shift in favor of owning rather than renting.

‘This is market, market and market…There’s no government incentive program in sight that is having this effect,’ said Susan Wachter, a professor of real estate and finance at the Wharton School at the University of Pennsylvania, ‘This is back to basics.’”

In a separate report comparing the rental population in America to the homeowner population, RentCafé also concluded that the gap is now shrinking.

“Undoubtedly, the recession had a great impact on home ownership…However, it looks like it takes more to discourage Americans from buying a house than that.

As the years go by, it seems more and more certain that the fact that renting has seen a sudden gain in popularity is more a reaction to the economic crisis than a paradigm shift in the Americans’ attitude toward housing.”

America’s belief in home ownership was also evidenced in a recent survey, by Pew Research. They asked consumers “How important is home ownership to achieving the American Dream?”

The results:

  • 43% said home ownership was essential to the American Dream
  • 48% said home ownership was important to the American Dream
  • Only 9% said it was not important

Bottom Line

Home ownership has been, is and will always be a crucial element of the American Dream.

“Between 2009 and 2015, the number of renters aged 55 or above rose 28 percent, while those aged 34 or younger only increased 3 percent… Meanwhile, more than 5 million baby boomers across the nation are expected to rent their next home by 2020, according to a 2016 analysis from Freddie Mac.”

    This makes sense in the short term for many reasons. If you are moving to a different part of town or a new region of the country, you may decide to rent until you pick the perfect home in an area you love. However, is renting a good long-term strategy?

A mortgage payment remains fixed. Rents, however…

The Census Bureau recently released their 2017 third quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether you should rent or buy your next home, you should take this into consideration.

Bottom Line:

One way to protect yourself from rising rents is to lock in your housing expense by buying a home instead of renting. 

Blessed to be Neighbors

by Adam Watkins

     Here we stand with 2/3rds of 2017 in our rear view mirrors, and what a year it has been so far!  Does anyone else feel like we've lived a decade in just 8 months?  From the inauguration of a new President in January on the national level, to the locally dramatic impacts of a huge tornado ripping through the cities of Hattiesburg and Petal the very next evening! Fast forward to August where we experienced the excitement of the first total solar eclipse in decades, witnessed over almost the entire continental United States, and then days later, the arrival of Hurricane Harvey to the Texas Gulf Coast.  The damage and torrential flooding from that storm is still not fully known at this writing.  It's been an exhausting year in many ways.  Our thoughts and prayers remain with so many who have been impacted by this storm.  

     It can be easy to become discouraged and angry if you spend too much time watching the news recount and opine on these events and hundreds of others that I will not take the time to detail.  Suffice it to say, there is a lot of turmoil in our world, in our country, and in our communities - both real and imagined - precipitated by the activities of nature and man.  Recently, Amelia and I made the decision to reduce our intake of the news media because we recognize that regardless of what is being reported in the media - both on television and online - that it's no where near the full story.  It often ignores the good that we can find all around us, and it leads us to a place where we are tempted to begin viewing our neighbors as our enemies as opposed to our friends. Good news and good people/neighbors are out there, mind you - I guarantee it!

     How do I know?  Because the simple goodness of people and their desire to serve others was on full display in January when thousands of volunteers flooded our Hub City to give us a helping hand after many had lost everything in January's tornado.  Our family worked alongside those coming to the aid of those in our community, and many of them camped out in our church's parking lot for weeks afterward.  They loved us and wanted to help.  Most of you have similar memories of those days 8 months ago, I'm sure.  It's often in these of times of utter devastation that we're shaken from our television sets and mobile devices, and we discover who our neighbors are and learn to love them in spite of differences (real or perceived) that may exist.

     Right now, thousands upon thousands of volunteers are on their way to the aid of millions impacted by the affects of Hurricane Harvey.  By the time you receive this issue of the Star Chat, most of you will have already heard testimonies of the work that is taking place there.  Some of you may be amongst that number of volunteers, and many of you will know volunteers who left with only a moment's notice to aid victims of this latest disaster.  It's uplifting to witness, and I encourage you to focus on and engage in those efforts.  It can help balance our perspectives and force us to look beyond our "screens and stereotypes," and into the lives and hearts of others.  What a novel idea.

     REALTORS will be a part of this effort as well!  The Mississippi REALTORS Disaster Relief Fund was established after Hurricane Katrina to provide aid to property owners who've experienced damage and displacement from their properties as a result of disasters such as this one.  Since 2005, it has distributed more than $4 million dollars in aid to those impacted by various disasters both in Mississippi and other states, including aid to victims of flooding in Louisiana last year.  No doubt, REALTORS from all over the country will engage with this current disaster in similar ways, as they always do!  REALTORS view ourselves as caretakers of communities, and we are both obligated and honored to put that belief into action!

     It's a good time to reflect on the relationships we have with our neighbors, and the silver lining of the opportunity to serve your fellow man in a time of need and witness and experience the good of others.  It's out there!  At the end of the day, we have been blessed to call the finest land on earth our home, and we at The All-Star Team, REALTORS, are so thankful to serve you as our neighbors.  May God bless you all...wherever you may be...and in whatever circumstance.  We are thankful for you!

Adam and Team

Again… You Do Not Need 20% Down to Buy NOW!

by The KCM Crew

survey by Ipsos found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. There are two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 40% of consumers think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO® Scores 

The survey also revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in February had a credit score of 752, while FHA mortgages closed with a score of 686. The average across all loans closed in February was 720. The chart below shows the distribution of FICO® Scores for all loans approved in February.

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, call The All-Star Team, REALTORS, will over 300 years experience and over 5,000 properties bought or sold, we can help you every step of the way.

 

1,500 Properties Later...

by Adam Watkins

       Although, I've been a part of The All-Star Team since late 1999 (almost 18 years), this past month marked a milestone in my real estate career as I completed my 15th year as a real estate licensee and REALTOR (I write it that way because those two are not one in the same)!  A lot has changed in our market, on our team, and in our lives during these years.  There's also a lot to be thankful for in those 15 years - most of all, those of you who took the chance on a young 22-year-old guy in those early days who had a big dream and a desire to be an ambassador for the community he loves.  Now, close to 1,500 properties later, I can say that I've not only gained experience, but most importantly friendships that continue to bless my career as well as my life.  I'm also grateful for those members of our team who've been a part of the journey - those who are currently serving along side of me, and those who've served alongside me on this journey.  Thank you to DeLois and our team of agents and staff - both past and present who have supported me along the way.  Thanks of course to my wife, Amelia, who has been able to work alongside me daily in this business for the last 10 years and who will celebrate 14 years of marriage with me in May.  Most importantly, thank you to God for blessing my life with the ministry of this career.

       I've always been a little bit of a statistics junkie.  When I first started in the business, I would truly get lost in them.  In fact, for years before I was licensed, I did the research for our team's monthly market updates (like the ones we provide with this newsletter each month).  Calculating the supply and demand for each price range was something I looked forward to doing.  One time I created a chart showing the change in supply and demand over a period of several years!  Add a couple of kiddos and managing a real estate team, and it gets a little more challenging to devote the time it takes for me to produce these things manually these days.  Plus, technology and our MLS systems are more robust to do these things automatically now, which helps.  It always intrigued me how quickly our market levels could change, though.  That's why when folks ask me how the market is, it's important to realize how complex markets are and how quickly they change in order to answer such a question.  For instance, a major disaster, sudden economic downturn, or other factors can quickly impact a market.  Many of you recall the days after Hurricane Katrina and how our market became under supplied for a period of time. Nearly 2 years later in August of 2007, the exact opposite was true as the supply of new construction homes that were listed in the MLS system increased by approximately 400% in only 30 days time (end of July to end of August 2007). Suffice it to say that real estate markets can be compared to the weather in Mississippi.  They can change quickly and vary from location to location!

       So what about now?  Well in general, and for many of our locations (Petal and Oak Grove in particular), we've been experiencing low supply levels in the price ranges between $100k and $200k in our market.  This is partially due to the reduction in inventory in these price ranges following the January 21st tornado.  Several homes that would have been in this price range were removed from the market, and the need to replace those homes increased.  As we migrate to the $200k to $250k ranges, the inventory is abundant in the City of Hattiesburg, but in the 4 to 5 month range in Oak Grove, Petal, and Sumrall, again underscoring the principle that markets are local in nature and driven by specific factors within each market.  Where there is agreement in our market is once you go over $300k, where our supply levels are quite high and our selections are abundant.  We began noting the oversupply in these price ranges particularly in the $300K to $500K range in the first and second quarters of 2016.  For a while we were trying to determine why this was. The fact is that purchases in this price range are driven by strong employment in job sectors where income levels are high relative to the median incomes in our market.  After reviewing previous years sales activity, we were able to pinpoint the oil and gas industry as one job sector that produces jobs meeting this criteria which has experienced difficulty over the last 18 to 24 months.  And, as a result, the number of buyers entering this price range has been reduced when compared to the years prior to 2015.  

       Perhaps some of your eyes are glazed over by the discussion of statistics, but I thank you for sticking with me (assuming you have).  For those who are curious, hopefully your understanding of our market at this moment has been increased.  Either way, I hope what you will see in our team a desire to understand and study our market in such a way that when you hire us, you're hiring a group who values understanding these factors and how they impact your property investments.  When you're recommending REALTORS to others, or choose to hire us to serve you, please know that we make it our business to understand our markets so that we can best counsel and advise.  Our mission is to serve you again...and again with the best service and knowledge in our marketplace.  Have questions about our market update?  Feel free to e-mail me at adam@allstarteam.com.  I'll be happy to discuss it with you. It's just one of the ways in which we strive to be your Greater Hattiesburg Market Experts.

 

Looking to move up to a luxury home? Now's the time!

by The KCM Crew

If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.

The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer, or can be found at a discount.

Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.

The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

But not all who are buying luxury properties have a home to sell first.

In a recent Washington post article, Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:

“Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”

Bottom Line

The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs, and are looking to step into a luxury home… Now’s the time to list your house for sale and make your dreams come true.

 

A Few Things Home Sellers Should Never Do

by Realty Times

When you prepare to put your home on the market, you hope that everything will go the way you imagine and that is your home will sell for over listing price the very first day it goes on the market.

The reality isn't so rosy. The market may slow down. Your home may get few showings or no offers. You may have to lower your list price. Or, your home may not sell at all because you made a big mistake.

So if you're thinking of doing any of the following four no-no's, stop yourself right now.

Don't ignore the market. Every market is different and those differences can impact the sales price of your home, the number of days your home spends on the market, and whether your home sells or not. You have to face the reality of market conditions to influence the success of your home's sale. If home prices are going up, you'll do well, but it will be more expensive to purchase your next home, unless you move to a less expensive market or home.

And if prices are going down, you may not net what you were hoping for, but your next purchase may be a bargain, if you stay in the same area.

Don't hide problems the home may have. If you've had a major water leak or had your foundation fixed, you need to disclose that in a formal seller's disclosure form for all potential buyers to see. While it may be tempting to check the I-don't-know box, remember that any lie can come undone. You don't want to face legal problems because you tried to hide the truth. And if your buyer wants to know more, you can show the receipts for what you did to fix the problem.

Don't overprice the home. When your home is overpriced, it's underdressed for the party. Everyone notices that it doesn't quite fit in. Buyers who can afford your home quickly notice that your home doesn't quite measure up to others in the same price range. Buyers who could afford your home if it were priced correctly are unlikely to make offers because they'll be searching in a different price range.

Don't ignore your agent's advice. A real estate agent is a professional. When she or he tells you that you'll get a better offer more quickly if you'll declutter, stage your home, make certain updates or repairs, it's a proven truth. Buyers are more negative when they see homes that need work, and tend to make offers or withhold offers based on their feelings.

If your agent showed you a comparable market analysis, he or she may have suggested a listing range to price your home. If you go over that, you're risking a negative response from the marketplace, long days on the market, and probable price reductions.

Do things right from the beginning and you'll have a smoother, easier, and more profitable transaction.

        For decades our team has had the privilege of serving and growing as the Greater Hattiesburg Area has grown.  Since the late Nineties and Early 2000’s, we’ve spent significant efforts growing our unique team model to serve the residential needs of thousands of clients throughout our region, extending our specialities into the Hattiesburg, Oak Grove, Petal, and surrounding markets during that time.  Along the way, we’ve spent thousands of man hours developing systems to deliver unparalleled service to our clients - sellers, buyers, and also many investors of residential real estate in the Pine Belt.  Increasingly, DeLois and I began exploring the idea of using those well-developed support systems to provide service in the area of commercial real estate sales and management.  After all, we have hundreds of clients who have commercial interests that warrant the best possible representation - and we certainly have clients with the need to include commercial real estate in their investment portfolios. In considering the possibility of developing a commercial division, there were several things we were certain we needed when selecting the appropriate broker to lead its development - experience, integrity, and the desire and excitement to work as part of a team.  We believe we have found all of those attributes in Steve Floyd.

       Many of you are familiar with Steve’s work.  He is no stranger to Hattiesburg or commercial real estate, opening Steve Floyd Properties in 1997. For nearly 20 years, Steve has represented sellers, buyers, tenants, and owners of commercial real estate both in the Greater Hattiesburg Area, Mississippi, and around the country.  So, it is with great excitement that we announce our newest Broker Associate and team member who lead in the building and growth of our Commercial Sales and Leasing Division.  We believe that combining Steve’s wealth of experience and contacts with our unmatched support system and established client relationships will be a win for him, our team, and our clients.  He and his wife, the former Toni Tadlock, make their home in Oak Grove.  You could say real estate is a family business for them.  In addition to Steve’s many years in commercial real estate, Toni is the daughter of Joyce Tadlock, a long time broker and fixture in our area’s real estate market.  So, we feel quite honored to welcome the Floyds to our team!

        In the coming months, you will begin seeing evidence of the launch of our commercial division as we begin integrating Steve’s currently listed inventory along with a newly developed commercial brand on the “For Sale” signs of commercial properties throughout our region.   Our website will also feature an added segment devoted to commercial real estate and its associated investment opportunities.  Additional features will be included in our publications and our social media presence.  Our mutual goal is to take something great and make it excellent, and we’re confident that Steve’s experience will bring an entirely new set of opportunities to all of our clients as we achieve this goal.

        Perhaps you have felt the need to add commercial real estate to your investment portfolio or know someone in need of professional assistance in this area.  Currently, Steve is preparing to close sales on several multi-year lease properties with reliable returns for investor clients he represents.  Perhaps such an opportunity is worthy of your consideration.  Or, maybe you have a piece of commercial property in need of maximum exposure or management.  Either way, it’s exciting to finally be able to extend our reach into a new area with someone as capable as Steve on our team to lead the effort.  So, if you or someone you know has need of commercial real estate services - purchasing, selling, leasing, or investing (both in and out of state), we are ready and able to provide the same All-Star Service you’ve come to expect.  Simply let one of our team members know so they can connect you with Steve, or reach out to Steve directly.  Our mission in residential, and now in commercial real estate, is the same as always: to serve you again....and again!

Excited about the future,  Adam & Team

The Importance of Using an Agent to Sell Your House

by keepingcurrentmatters.com

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online, but then depend on an agent to find the actual home they will buy (53%), or to negotiate the terms of the sale & price (48%), or to help understand the process (60%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious, as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Tax Time Can be a Dream......

by DeLois Smith

Dear Friends,    

      Serving as your Realtor continues to inspire, challenge, restore friendships, create new relationships, bring adjustments, change communication styles, and genuinely make me excited about the opportunity to begin a new day. As I am near the completion of my 43rd year serving this community as a Realtor, I can sincerely say, I love “bringing you home . . . again and again.”

    Our 2016 open houses have provided opportunities to see and visit with several of you who are discussing making a move – either for more or less living space, more or less property to care for, shorter commute distances, a change in school districts etc. Several have asked questions about tax consequences for moving. 

     Tax time can be a dream for home buyers! One of the oldest deductions itemizing homeowners can take advantage of is the mortgage interest deduction. (This is an advantage continuously fought for by your local, state, and national Realtor organizations.) To get this mortgage interest deduction, your mortgage must be secured by your home, and your home can be a house, trailer, or boat as long as you sleep in it, cook in it, and it has a toilet. Interest you’re paying is deductible when you use the loan to buy, build, or improve your home. If you use loans secured by your home for other things – like sending your kid to college – you can still deduct up to $100,000. 

       If you bought a house in 2015, check your settlement statement for property taxes or prepaid interest you paid at closing. Of course, property taxes paid on your home are deductible. Since 2007, you may also deduct the cost of private mortgage insurance as mortgage interest if you itemize your return.  

      Tax time can be a dream for home sellers!  Many home sellers know they can exclude up to $250,000 ($500,000 for married couples filing jointly) of their capital gain from taxes. This is no longer a once in a lifetime exclusion. In order to qualify for the whole exclusion, you must have lived in the home for two of the five years (730 days) previous to the sale – the ownership and use test. You may still be eligible, however, to a whole or partial tax break even if you don’t meet this test.   

       Capital gain is not just simply the profit of the sale – selling price minus the original purchase price. Your gain is actually the home’s selling price, minus deductible closing costs, selling costs, and your tax basis – the original purchase price, plus purchase expenses and cost of capital improvements, minus any depreciation and casualty losses or insurance payments – to the property.

       You are still eligible for a partial exclusion even if you haven’t lived in your home for two of the last five years as long as you sold your home due to a change in employment, because of a divorce, for health reasons, or for unforeseen changes like multiple births or a death in the family. If you moved for any other reason, you can get a partial break based on the portion of the two-year period you lived in the home.

       For example – After living in the home for a year, an unmarried, single taxpayer sells their home due to a reason not qualified by the ownership and use test exclusions and makes a $100,000 capital gain.  The entire amount could still be excluded. Since they lived in the house for half of the two year period, they can exclude up to $125,000 (12/24 x $250,000 = $125,000), which will cover the $100,000 gain. For those who move into a nursing home the use requirement is lowered to one year out of five. Additionally, you can count the time in the nursing home counts towards the ownership and use test. 

       Marriage and divorce allow for a greater exclusion, but also more requirements on the ownership and use test. A married couple can exclude up to $500,000 ($250,000 for each spouse) if either spouse owned the residence (either before or after marriage), both spouses meet the two year use test, and neither spouse has sold a separate residence within the last two years. Divorced taxpayers may count the ownership and use by their ex-spouse. For example, a wife remains in the house owned by her former husband until she sells it and they split the profits 50-50. As long as the husband has owned the home for at least two years and she has lived in it for the same amount of time, then they may each exclude up to $250,000 of capital gain.

This information is meant only for informational purposes for general planning. Always seek advice from a CPA or other professional tax advisor for a specific tax-related matter.

       Our team has been involved with several 1031 exchange transactions, numerous estate sales, and other complex real estate transactions. Our community is well served by our lending  institutions, title companies, tax attorneys, and other professionals to complete these transactions.        

       Even considering the trauma created by the October 3rd Dodd-Frank Act. Realtors, lenders, title companies, buyers and sellers are all adjusting to the changes and additional restrictions with grace. Your Realtor team is keeping the pace of closing a sale every 24 hours or less. Thank you for your continued kind words of appreciation and encouragement.  

                                                                                                           Gratefully, DeLois & Team

Displaying blog entries 1-10 of 16

Contact Information

The All-Star Team, REALTORS®
Bringing you home...again and again!
4 Willow Bend, Suite 2A
Hattiesburg MS 39402
601.545.3900
800.335.6477

The All-Star Team, REALTORS brings you over 200 years of accumulated experience along with the most innovative marketing strategies in the real estate industry. We specialize in the real estate properties located in Hattiesburg, Oak Grove, Petal, Sumrall, Purvis, Columbia, and the entire Pine Belt region. Put The All-Star Team, REALTORS® to work for you as you consider your next home sale or purchase. Experience the team approach to real estate and make us your REALTOR® for life! See how The All-Star Team, REALTORS® really is bringing the Pine Belt home again and again.